Single event sports betting is (finally) back on the table.
Canada's Federal government introduced single event sports betting legislation last week following an announcement by Federal Justice Minister, David Lametti. Under the proposed legislation, each of Canada's provincial and territorial governments will be given the discretion to conduct and manage singe event sports betting in their respective jurisdictions. If implemented, this change would open the door to wagering on single event sports in a legal and regulated environment, either online or in land-based facilities.1
Since 2011, gaming stakeholders and advocacy groups have been fighting to see the criminal prohibitions barring single event sports betting removed, with those efforts nearly paying off in 2015.
Similar efforts to decriminalize single event sports wagering in the United States have been met with success, culminating with the United States Supreme Court's overturning of the Professional and Amateur Sports Protection Act ("PASPA") in May 2018, which cleared the way for single event sports betting outside Nevada.2 In the 12 months following the US Supreme Court's PASPA decision, revenue in the sports gaming market increased by almost 65% to $430 million.3 This boon, however, has not been felt by Canadian gaming operators or governments.
Current Legislative Framework
In Canada, single event sports betting remains prohibited by Section 207(4)(b) of the Criminal Code.4 Since 2011, Members of Parliament have introduced two Bills before the House of Commons in an effort to lift this prohibition.5 Neither have succeeded.
However, on Thursday November 26th, a newly proposed amendment to the relevant Criminal Code provision was brought before the House of Commons in the form of Bill C-13.
The Proposed Amendment & Implications
Bill C-13, much like its predecessors, proposes to lift the prohibition against provincial and territorial governments conducting and managing single event sports betting. Among other factors, this is surely an effort to create a more competitive gaming market, bolster revenues, and erode the swelling 'grey-market' for single event sports betting in Canada. Currently, nearly $10 billion is wagered annually in Canada through the use of 'grey market' single event bookmaking operations.6 An additional $4 billion is wagered annually through offshore online sports wagering websites and applications.7 These figures dramatically eclipse the $500 million that is wagered annually through multi-event, or parlay, sports lotteries in Canada.8
Though Bill C-13 represents the third proposed amendment to the prohibition against single event sports betting in Canada, the surge in US state sports wagering revenue post-PASPA (together with the uptick in COVID-driven online wagering) has given the Bill's proponents new hope. Although some have pushed for a bolder re-thinking of the gaming provisions of the Criminal Code, the Bill suggests that Canada's provincial and territorial governments will remain central to the operation of single event sports betting.
The decriminalization of single event sports betting through Bill C-13 presents an enormous revenue opportunity for provincial and territorial governments across Canada. Using the US as a case study (although the US and Canadian approach will surely differ), state governments collected an aggregate of $10.2 billion in gaming tax revenue in 2019 - nearly $1 billion more than 2017's PASPA-restricted revenue totals.9
Finally, Bill C-13 will be the first time that lifting the prohibition on single event sports betting will be proposed via a government bill (and not a private member's bill like its predecessors). The distinction is important, as government bills must be introduced by a Minister or a Parliamentary Secretary.10 In this case, Bill C-13 is being sponsored by the Minister of Justice, David Lametti, meaning the proposed amendment likely has some level of government support, thereby bolstering its chances of becoming new law.11
Though Bill C-13's introduction to the House of Commons represents a crucial first step in amending Section 207(4)(b) of the Criminal Code, much remains to be done. In the weeks that follow, the proposed amendment will have to go through a second reading, followed by a committee review, and a third reading, before possibly being passed by the House of Commons and Senate of Canada. However, with multiple provincial members of parliament already expressing their support for Bill C-13, little opposition is expected.12
We will continue to keep gaming industry stakeholders appraised of any major developments in the coming weeks as they relate to single event sports wagering initiatives.
McCarthy Tétrault's Gaming, Lottery, and eSports Group is a national, multi-disciplinary team focused on navigating the opportunities and challenges of Canada's gaming sector. For more information on our group, please contact the authors or see our group page here.
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