Regulating Crypto Betting in Canada: What You Need to Know

Gambling has always been popular in Canada and the population is affluent and tech-savvy which makes it a great choice for cryptocurrency betting in particular. However, the country has somewhat strict gambling laws and more importantly, the regulations are left to the state.

Gambling online, however, is quite common as long as the casinos are based abroad or in offshore zones. Online casino review aggregates such as CCN are a great source for finding which crypto casinos operating in Canada are safe and worth your while.

The Regulations

Laws regulating gambling are very strict in Canada. It’s not allowed to bet unless there’s an exception set up by the province. Some provinces don’t allow gambling at all and others have complicated regulations one needs to follow to open gambling establishments.

All of the laws regulating gambling in Canada were written long before any cryptocurrencies were invented, so there are regulations regarding how to use them to bet. The use of cryptocurrencies as investments is regulated by other laws and there are tax implications involved.

iGaming Market

In 2020 the government in Ontario made a big step towards modernizing its gambling laws and regulations. It opened a gaming market called iGaming as the only legal venue to provide online gambling in the country.

Companies started to register with iGaming in the fall of 2021 and they began to provide services in April 2022. That was the first time Canada allowed third parties to provide gambling services online within the country. The move comes after online players have been using crypto casinos based abroad for years. It’s supposed to regulate the market and provide revenue for the public.

The Agreement

The provider of online gambling services enters into an agreement with iGaming and therefore with the government. There are several areas that are regulated with this agreement and it happens in several steps. The casinos need to:

• Execute a Non-Disclosure Agreement (NDA) with iGaming;
• Execute a letter of agreement with iGaming;
• Set up and configure access to iGaming’s Secure Data and Information Communication Channels;
• Complete iGaming’s Anti-Money Laundering (AML) Information Submissions;
• Complete iGaming’s Financial Information Submissions;
• Participate in Operator Systems & Data Readiness Cycle with iGaming;
• Execute the Operating Agreement with iGaming.

Several of these steps can be taken simultaneously and they are also considered to be a regulation process, meaning that an online gambling establishment that goes through them is licensed to work.

Fees

Gaming operators are obligated to pay a fee for providing their services in Canada. Each website that provides gambling and sports betting services is considered to be a separate gaming operator. The fee is paid annually and it’s currently set at CA $100.000.

Gaming-related suppliers also need to pay a fee for providing their services. This includes the gaming development companies that provide the software needed to run gambling websites and games of luck. The amount ranges depending on the service from CA $3.000 to $15.000.

Know Your Customer Laws

Canada has what’s known as Know Your Customer Laws. This means that a gambling establishment has a right to know who their customers are and they can request that information from a player when they register for an account. This is a somewhat controversial law for those who use cryptocurrency casinos.

One of the most important features of cryptocurrencies is that they operate in a decentralized fashion and the users don’t need to provide real names or bank info to use them. However, when registering for a cryptocurrency casino in Canada due to Know Your Customer Law, the players need to provide an ID.

What Information is kept?

The casinos are obligated to keep and store important information about their users. Most of the data saved in this manner serves the purpose of providing the player with a better user experience. It can also be used to practice safe and responsible gambling, meaning to provide assistance to those who are struggling with gambling addiction.

The data includes:

• Deposit and withdrawal history, and current balance;
• Method and source of funds used for transactions;
• Date and time of previous login;
• Gaming event and transaction history (game session outcomes and game transactions) including, in sport and event betting, the date and time of past and current bets, the date and time at which past bets were settled, and information about current bets;
• Total amount of money wagered for session and/or period of time;
• Total amount of money won or lost for a session and/or period of time;
• Account balance at the start and end of the session.

There are also Canadian laws about what’s called “Politically exposed Persons” and casinos need to observe those regulations as well. The purpose of these laws is to prevent money laundering by public officials.

Difference between Games of Luck and Games of Skill

Canadian laws make a distinction between games of luck and games of skill. The regulations are tougher when it comes to dealing with games based on luck. The difference comes from how the outcome of the game is determined.

If the player can’t affect the outcome at all, it’s a game of luck, if the player is able to affect the outcome – it’s a game of skill. An example of a game of luck is therefore a game of slots and poker is a prime example of a game of skill. Crypto casinos are allowed to provide both, as long as the players are aware of how the game operates.

Casinos Based Abroad

Players based in Canada can still use the services of online casinos registered abroad. Cryptocurrencies are also available worldwide making it easy to make payments and withdraw winnings. The process is simple enough as long as the players are using VPNs and there’s an endless array of casinos to choose from.

The winnings that are made from these casinos are still taxable in Canada once they are transferred. This goes for funds transferred in cryptocurrency and the profits made when those are sold for fiat money.

The License Isn’t Enough

There are plenty of online casinos in Canada that provide cryptocurrencies as one of the payment options. The fact that the casino is operating legally and that it has the proper license is essential but it isn’t enough to make the players use its services.

Players should also look for a casino with a variety of different games, a good bonus structure, and a customer support system oriented towards the end users. This somewhat changes the pool of available establishments, but there are still plenty to choose from.

To Sum Up

Canada has long had restrictive gambling laws, but there were always exceptions made for individual states to make their own regulations. Since 2020, online gambling has become more widely accepted in Canada and also more regulated by the government. The casinos that provide crypto gambling services need to register with the government and pay the appropriate fee.

Some of the regulations regarding online gambling aren’t compatible with the features of cryptocurrency payments. The players are obligated to provide some personal information when using them and some players use crypto specifically to avoid this. It’s still possible to bet in online casinos based outside of Canada, however.