How a Legitimate Approach to Sports Betting Benefits Everyone
The Canadian government recently announced that it is looking at expanding the ability for people in this country to legally place bets on single events. This can’t happen soon enough. Not only is this a win for consumers, but it is a policy that will have a major effect on reining in the black market gaming industry. It’s rare for there to be a true win-win situation, but that’s exactly what the proposed legislation would create: a better experience for sports bettors, more revenues for the government, and a decrease in the black market that currently generates an estimated $10 billion each year in betting turnover with no regulatory oversight.
In many ways, this approach is similar to what is happening in the cannabis industry. For decades, cannabis was completely illegal in Canada, regardless of quantity or intention. We’ve all heard horror stories of people with chronic illnesses getting long prison sentences for using cannabis for medical purposes. About 20 years ago, the tide started to turn, and we started to see incremental progress. Finally, in 2018 the Canadian government made recreational cannabis legal.
Something similar is now happening in the gaming industry. With a few exceptions, sports betting in Canada was illegal until parlay bets were legalized. That was an important step, but the reality is that most sports bettors prefer to bet on single events rather than clusters of contests that have a lower probability of winning in combination. As a result, people who wanted to bet on the outcome of a hockey game, boxing match, or auto race either traveled to places like Las Vegas where sports gambling is legal, or turned to black market and grey market bookmakers. One of the main issues with this situation was that there can often be, depending on the licence jurisdiction, limited legal recourse for either party in the event of a dispute. After all, the legal system in Canada around online betting is not set up to resolve issues between two parties acting outside of the law.
This problem was only exacerbated by the advent of online gaming. For the first time, Canadians could place bets on sporting events from the comfort of their own homes. Unfortunately, most gaming sites are either illegal or operate in a murky grey zone. The proposed legislation – which has the support of MPs from several political parties – would allow responsible operators to offer single-game betting options in a government supported and taxed regulatory framework. Not only does this protect consumers, but it also allows Canadian companies to flourish.
Most people don’t understand the size of this market, but the numbers are truly staggering. In 2018, the United States Supreme Court struck down a law that restricted single-event gaming to the state of Nevada. Less than two years later, other states were reaping the rewards of a legal sports betting market. According to the CBC, “single-event legalization has unleashed a revenue boom for state coffers already. New Jersey casinos collected $4.5 billion in revenue last year alone.”
In Canada, it would be reasonable to expect total betting turnover in excess of $15 billion in the first year of legalization. That represents a lot of benefits to the country, ranging from job creation to extra tax revenues to sharply lower rates of criminal activity by illegal gaming operations. Again, it’s one of those rare situations that is beneficial to everybody involved. It’s no accident that the proposed legislation has such broad support from many across the country.
Even though efforts to legalize sports gaming have been underway for decades, the COVID-19 pandemic of 2020 may have been the final push toward parliamentary acceptance. Because of social distancing rules and restrictions on travel, casinos across Canada have suffered the worst year on record, and many are in dire financial straits. Legalizing single-event betting it’s going to be a major boon for an industry that is looking for good news.
As with any attempts to legitimize previously illegal businesses, there are probably going to be some wrinkles. It’s fair to expect several months of wrangling over the fine print as all parties try to figure out what the parameters of legalization look like. But the proposed legislation is going to undo a provision that has been on the books for far too long.