Online Gambling In Canada vs. The US: How Does It Compare?

North America is often painted with the same brush for many people living outside the region. However, the United States and Canada (the two most prominent countries on the continent) are vastly different. 

Locals from both countries could get rather annoyed should they be lumped together, mainly because of these differences. From how their taxes operate to the culture of the residents, each territory is unique and works in its own way.

An area that is not exempt from these differences is online gambling. The industry, which has grown to incredible levels worldwide, operates almost oppositely between the two countries. There are, however, some main differences that gamblers should know about.

The Legality of Online Gambling

Online Gambling In Canada vs. The US: How Does It Compare?

The first and most crucial difference in online gambling between the two countries is how the laws surrounding online betting work. While the US is stringent in this area and doesn’t allow for any loopholes, Canadian laws have a grey area that players can take advantage of. 

In the US, the choice to allow online gambling resides with each state, and frustration reigns for players in many states that haven’t chosen to allow it. In fact, only six states do so: Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, and West Virginia. 

While others allow online lotteries, poker, and sports betting, full online casinos are generally prohibited. And in the six states that permit it, the online casinos must be licensed by the particular state to offer services. In most cases, the online casino must operate within the state itself.

In Canada, all gambling regulations are governed by the Canadian Criminal Code. Amendments have been made to this law that allow provinces to decide whether or not to allow online gambling individually.

These amendments have led to the formation of provincial regulators that license the online casinos that are legally allowed to operate within each province. However, players in other regions can’t access these casinos. Luckily, they aren’t stranded without the ability to play, as is true in the US.

Due to a loophole in the Canadian Criminal Code that doesn’t specifically mention online casinos and bookmakers, players from the country can still access online casinos without legal repercussions. The only condition is that the provider must be located outside of Canada.

Taxes and Regulations on Winnings

The next big difference between gambling in the two countries is how the system works should you be a lucky (and hopefully big) winner. Tax regulations are almost opposites of each other between the two territories.

In the US, any form of winnings gained from gambling is heavily taxed. As a standard, online winnings are subject to a W-2G tax declaration. This declaration carries with it a tax of a whopping 24%. The justification for this is that the state sees winnings as a form of income and, therefore, fully taxable.

Further north, across the border, things couldn’t be more different. Because winnings aren’t seen as a regular income and more as a once-off or occasional income, the Canadian government doesn’t levy any taxes on winnings. Therefore, anything you win will be yours to keep. 

Professional gamblers have different tax rules applied because winnings are classified as regular income—at least in the US. Because of this, winnings are taxed as an ordinary salary or wage. In Canada, the tax exemption is still applicable because there is no framework to define a professional gambler. 

Game Availability

Online Gambling In Canada vs. The US: How Does It Compare?

Because Canadian gamblers only access casinos operated outside of the country (unless they are staying in Ontario), they enjoy the latest games from some of the biggest developers in the world. These games can be found in the libraries of all the best casinos verified, licensed, and reviewed by real players

In the US, things aren’t as great when it comes to game selections. Because only casinos operated within the state can be accessed, these casinos can only list games from licensed providers. And if the state has not granted a license to a particular developer, their games cannot be offered. 

Only three leading casino game developers are licensed to provide games in the US: Real-Time Gaming, Betsoft, and Scientific Games. Missing from this list are names that Canadian players enjoy, like NetEnt, Playtech, Quickspin, and Pariplay.

Number of Players and Industry Worth

The last notable difference between the “maple leaves” and the “bald eagles” is how many people use online casinos and precisely what the industry is worth in each country.  

In the US, online gambling generates an industry revenue of up to $58.2 billion annually. However, this figure is only just above $14 billion in Canada. Therefore, it is clear that gambling in the US is far more advanced in terms of revenue.

Things are slightly different regarding the percentage of people in the country who are gambling. In the United States, around 60% of adults have gambled in the last year (a 15% drop from those who have gambled previously but not since then). 

In Canada, 64.5% of all adults admit to having gambled in the past year, with the number steadily growing as the industry evolves. 

Conclusion

Players living in areas where online gambling is widely accessible might take for granted how easy it is to log on and place a few bets. In the US and Canada, it certainly isn’t as easy unless you’re in a specific state or province or know what loophole exists in the law. 

However, aside from that, the two countries have many differences in how online gambling operates. And looking at the facts in black and white, online gambling is preferable in Canada.  That being said, online gambling is only one facet of gambling. While Canada has a variety of physical casinos gamblers can visit, America is still home to places like Las Vegas, Reno, and Atlantic City, which offer gambling enjoyment that Canada can’t rival. 

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