What Happened

Offshore gambling websites — those operating outside the frameworks established by Canadian provinces — continue to be accessible to and used by Canadian consumers. The scale of this activity is difficult to measure precisely; estimates are typically derived from payment processing data, survey self-reports, or traffic analytics, each with significant methodological limitations.

These sites operate under licenses from various offshore jurisdictions (Malta, Gibraltar, the Isle of Man, Curacao, and others), meaning they are not operating illegally in an absolute sense from the perspective of where they are incorporated. But they are not authorized to serve Canadian consumers under provincial frameworks, and consumers using them lack the protections that regulated operators are required to provide.

Why It Matters

The existence of a large grey market is a policy challenge for several reasons:

Consumer protection gaps: Players using offshore sites have no recourse through Canadian regulatory complaint mechanisms if disputes arise over withdrawals, account closures, or game fairness. The operator’s licensing jurisdiction may provide some recourse, but the practical ability for a Canadian consumer to pursue a complaint with, for example, Malta’s MGA is limited.

Responsible gambling tool gaps: Offshore operators are not required to implement the responsible gambling tools mandated by AGCO or other Canadian provincial regulators. Self-exclusion lists maintained by provinces do not extend to offshore platforms.

Fiscal implications: Revenue generated by Canadian consumers on offshore platforms does not flow through provincial regulatory arrangements.

Anti-money laundering considerations: Offshore platforms may have variable AML standards. Canadian players transacting with offshore sites may interact with payment channels outside domestic AML monitoring frameworks.

The Enforcement Problem

Enforcement against offshore operators serving Canadians is practically constrained. Without physical presence in Canada and without Canadian-domiciled assets, provincial regulators cannot directly impose sanctions. Approaches that have been attempted or discussed include:

  • Payment processor blocking: Directing financial institutions to decline transactions to known offshore gambling sites. This has been proposed in various provincial contexts with limited systematic implementation.
  • ISP blocking: Quebec’s approach (described separately) has faced legal challenges and questions about effectiveness.
  • Advertising restrictions: Some provinces restrict advertising by non-registered operators, though enforcement against foreign entities advertising digitally is difficult.
  • Criminal Code referrals: In theory, offshore operators providing services to Canadians may be violating the Criminal Code. In practice, cross-border enforcement is complex.

What’s Next

The competitive regulated market in Ontario is partly justified as a consumer protection measure — channeling players who would otherwise use offshore sites into a regulated environment. Whether this channeling objective is being achieved, and at what scale, would require transparent data that is not currently publicly available. Researchers and policy analysts have called for better measurement of offshore market activity as a component of overall gambling market assessment.

Sources