Exploring the differences between US and Canadian gambling laws: states regulations, taxes differ, and online gambling.
North America is becoming a real gambling hub over the last two decades. In fact, it’s hard to find people who don’t know what online casinos and sports betting are – which is one of the reasons gambling became legalized in North America. The British Columbia Lottery Corporation launched the first legal online casino in Canada in 2004, and Ontario online casinos became fully legal in April, 2022 as a result of the amended legislation. The history of gambling in America is fascinating – from colonial times to modern times. In 2011, the Department of Justice allowed US states to pass legislation concerning America online gambling. However, it wasn’t until 2018 that US Supreme Court overruled 1992’s Professional and Amateur Sports Protection Act (PASPA), overturning federal sports betting prohibitions, which PASPA previously upheld.
In simple terms, the North American gambling industry is experiencing tremendous growth. But in what ways do these two neighboring territories differ in terms of their gambling industries? Which country does it better – USA or Canada? Let’s find out!
Differences Between Gambling Laws in the USA and Canada
Wagering activities are regulated differently in Canada and the United States, and their laws differ significantly. Generally, wagering in Canada is regulated at the provincial/territorial level, with the federal government taking a limited role in regulation. In contrast, US gambling law is primarily a state matter – a fact familiar to anyone seeking gambling advice at American Gambling site when they first start playing in the US – although there are some federally regulated activities as well as some minimum standards required by all states (e.g., age limits).
Canadian policy toward North America online gambling market is more permissive than that in America. While online gambling in America is legal in 33 states, there are limitations on what types of games and activities are permitted. Winnings are also treated differently under Canadian and US laws. A Canadian’s casino winnings are usually not taxed, whereas a US citizen’s gambling winnings are taxed, and casinos must withhold a percentage of winnings.
Gambling Laws in The United States
As far as Federal Regulations in the US are concerned, there are a few laws that shaped gambling in America. These gambling laws in America are:
- The Indian Gaming Regulatory Act (IGRA) of 1988
- The Professional and Amateur Sports Protection Act (PASPA) of 1992
- The Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006
The first law defines tribal gaming operations that have become a significant economic force in many states, with revenues estimated to exceed $33 billion annually. The second one prohibited states from authorizing sports betting but was overturned in 2018, creating conditions for sports betting to be legalized and regulated by states. The third law UIGEA is not legalizing gambling, but certain forms of online gambling America offers are regulated and prohibited through it.
As far as state laws are concerned, laws and regulations vary from state to state, along with the legal types of gambling. In the USA, gaming boards or commissions regulate and license casinos at the state level. Each state regulates game types, age requirements, and other operational requirements.
Gambling Laws in Canada
The jurisdiction of each province and territory to regulate and license all forms of gambling within their borders is well established under Canadian law. Gaming types legal in different provinces include casino gambling, horse racing, charitable gaming (bingos), lotteries and sports betting. A gaming board or commission oversees the licensing and regulation of the industry in most provinces – the exception is sports betting which is only legal through parlay betting offered by provincial lottery corporations.
There are some provinces, such as British Columbia, Quebec, and Ontario which have launched their own online gaming sites. Moreover, Canada has a gray area when it comes to offshore sites. Companies cannot operate online casino websites from within Canada, but Canadians can play online at offshore websites outside the country. Finally, Canadians are generally allowed to gamble at 19 years of age, except in Alberta, Manitoba, and Quebec, where 18 is the legal age.
Comparing USA & Canadian Gambling Regulation
There are many similarities between betting regulations in the USA and Canada. In the US, casino gambling is legal at the federal level. However, each state has its own regulations and tax laws. Many states require all casinos to pay taxes on their gross gaming revenue (the amount wagered minus what was won), which is 24% on average across all states that have legalized the activity. State taxes may also be imposed on casino revenue ranging from a few percent to 50%.
A portion of player winnings will generally be withheld by casinos and remitted to Internal Revenue Service (IRS) if they exceed a certain threshold ($5K for table games/1K slots), which varies depending upon whether you’re playing in Atlantic City or Las Vegas! The America online gambling laws tax system also taxes nonresidents 30% of their winnings, while US residents get to pay according to the regular income tax rate.
According to paragraph 40(2)(f) of the Income Tax Act, Canadians are not required to pay taxes on winnings from activities such as horse racing, sports betting, lotteries, online casinos, etc.
In general, both the United States and Canada have implemented various measures to address the COVID-19 pandemic, which have had an impact on travel to casinos. These measures include restrictions on non-essential travel, quarantine requirements, and capacity limits on casino operations.
The answer is pretty clear. The United States has a much more developed casino industry than Canada by a wide margin. The U.S. has more legal forms of gambling than any other country in the world, including casinos on Native American reservations, state lotteries, horse racing tracks and off-track betting parlours (OTB), racetracks with slot machines and table games such as blackjack or roulette called “racinos”. Additionally, the States offer bingo halls that allow limited card playing but no dice throwing (“bingo parlours”), riverboat casinos on Mississippi River waters near New Orleans, tribal casinos operating under a federal law called IGRA, and even some of the best gambling sites North America has seen!