Canada and US Gambling

Canada and US Gambling Overview

Both Canada and The US are undergoing an interesting period with regards to gambling, but for very different reasons.  Canada's regulatory framework is going through proposed changes to allow charities to utilize online medium for charitable raffles, While Obama overturned a longstanding U.S. policy that prohibited Internet gambling.  The Justice Department opinion opens the door for all U.S. states to sell lottery tickets over the Internet and to encourage varieties of online, web-based gambling.  It is the federal governments position that the U.S. Wire Act of 1961 applies only to bets on a sporting event or contest, but not to a state's use of the Internet to sell lottery tickets within it's borders.

Canada

Canadian gambling regulations have evolved from total prohibition of all forms of gambling in the Criminal Code of Canada, 1982 to the legalization of charitable games and raffles in 1900, to legalized gambling events in agricultural fairs and exhibitions in 1925.  A 1985 amendment to the Criminal Code allowed provincial governments to introduce gambling devices (VLT's).  The Criminal Code of Canada (Code) defines what types of gaming activities are illegal in Canada, and the provinces are assigned responsibility to operate, license and regulate legal forms of gaming.

Part VII of the Code prohibits gaming in general, while section 207 allows for a number of exceptions to the general prohibition. Specifically, it permits "lottery schemes" provided that they are:

  • Lottery schemes "conducted and managed" by the province in accordance with any law enacted by that province (s. 207(1)(a));
  • Lottery schemes "conducted and managed" by a licensed charitable or religious organization pursuant to a licence issued by a provincial authority, provided that the proceeds of the lottery scheme are used for a charitable or religious purpose (s. 207(1)(b)); and
  • Lottery schemes "conducted and managed" by a licensed board of a fair or exhibition or by an operator of a concession leased by that board (207(1)(c)).

(s.207(4)(c)) paraphrased means charities are not permitted to operate any charitable gaming activities including lotteries 'on or through a computer.'

This is somewhat of an antiquated law as it was written for VLT's, before the birth of the internet.  It is vitally important for two reasons:

  • Random number generators are not allowed to be used in Canada.  All lottery schemes have manual draws or lottery balls.
  • Charities are required to process and activate all sales manually and send customers their tickets by mail.

The 2014 Budget proposes to amend the Criminal Code to permit charities to conduct various aspects of lotteries through the use of computer technologies.  This may include ecommerce, processing and issuance of raffle tickets.  However at time of writing the Criminal code has not been amended as of yet.

As of early 2014 the Province of Saskatchewan with their regulatory body, Saskatchewan Liquor and Gaming has amended their charitable gaming terms and conditions to allow online gaming given their terms and conditions are met which includes technical specs of the online system and licencing from an independent laboratory.

For more Provincial specific raffle information:  http://raffle.expert/the-provinces/

United States

Historically, the power to regulate gambling activities in the U.S. belongs to the states, pursuant to Article X of the Constitution.  The federal government usually will not intervene unless the activity affects interstate commerce.  Most states allow for some form of legalized gambling.

Probably the most relevant provisions enacted to fight illegal gambling is the Wire Act of 1961.  The act states that anyone that knowingly uses any wire communication facility for the transmission of cross-border bets or wagers, or anyone who provides information in the placing of bets or wagers on sporting events or contests, or assists in the transmission of a wire communication containing a bet or wager, or gives information assisting such process will be in violation of said statute.

For US state information:  http://raffle.expert/us-state-raffle/

Disclaimer: While the information provided here has been checked for accuracy at the time of posting, readers are still cautioned to verify any information before acting on it.

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