The federal government has made it legal to gamble on individual sporting events, bringing legitimacy to a murky industry that Canadians already spent billions of dollars a year on.
The news doesn’t open up the floodgates, however. The federal law — which will be in force as of August 27 — merely allows provinces to regulate sports betting as they see fit.
“Canadians will have the opportunity to participate in single-event sport betting in a regulated and safe environment, at the discretion of the provinces and territories,” Attorney General David Lametti told a news conference in Niagara Falls, Ont. on Thursday.
According to the federal government, Canadians spend about $10 billion a year on single sporting events as part of betting conducted illegally in the black market, by organized criminal networks. An additional $4 billion a year gets spent in the so-called grey market by Canadians in offshore jurisdictions where such bets are legal.
The new rules have the potential to bring that money back into Canada in a way that it can be monitored and taxed.
“Canadians have been betting on sports for a long time but there’s been a relic in the criminal code that has prevented betting on individual events,” said St. Catharines, Ont. MP Chris Bittle, who was also attended the event.
“We have an opportunity to regulate, control it and take the money out of the hands of organized crime.”
Widely expected move
Six provinces currently allow so-called parlay betting through provincial agencies, where bettors must bet on the outcome of at least three separate sporting events and correctly predict the outcome of all three for the bet to pay off.
WATCH | The push for single-event sports betting in Canada
The push to change sports gambling in CanadaThere’s a growing push to change how Canadians can legally bet on professional sports to help keep billions in gambling money in the country and catch up with practices found in other countries. 7:22
Betting on a single event — the winner of the Super Bowl, the Grey Cup or Game 7 of the Stanley Cup Final, for example — was previously impossible to do on any services regulated in Canada.
That’s why opening up the market to individual game bets is seen as the next step to more widespread adoption of the growing sports betting market.
Chris Lencheski, CEO of Winning Streak Sports and a professor at Columbia University in New York, says the move is long overdue.
“People want to know who they’re betting with,” he told CBC News. “It keeps the money inside the province or inside the country.”
Brian Eggers, a gaming analyst with Bloomberg Intelligence, pegs the total sports gambling market in Canada at about $11 billion currently and on track to roughly double within five years.
“The train [has] somewhat left the station already,” Lencheski said. “They’re playing catch up in Canada…Today’s legislation I think is just smart so that the Canadian marketplace can be governed by Canadians.”
Major betting deals
Big U.S. money had already moved in recent weeks to solidify its dominance over Canada’s sports-betting market. On Monday, Nasdaq-listed Penn National offered to buy up the shares of Toronto-based Score Media. At first blush, the $2 billion price tag Penn agreed to pay may appear exorbitant for a company like Score, which is forecast to take in less than $40 million in revenue next year.
But analysts who cover the sector call it a savvy move since Canada’s market is poised for rapid growth.
“The strategic rationale of this deal makes sense to us,” JP Morgan analyst Joseph Greff said.
Score owns the most popular sports app in Canada, putting it in a “strong position for the rollout of commercial
sports betting in Canada, Greff said.”
Eggers says he expects Score’s technology and first-mover advantage will eventually allow the company to gobble up about 20 per cent of the sports gambling market in Canada