Canadian Licence: Launch a Tax-Free Casino in the Jurisdiction
Canada is famous for its tolerance to almost all branches of commerce. The casino industry is no exception ― the regulator not only legalised all types of gambling but also introduced a special tariff scale where there is no need to pay taxes on winnings.
In this article, you will find information on how to obtain a casino licence in Canada, its price, and the specifics of the industry regulation at the domestic level.
The local casino niche is clearly divided into land-based and digital segments, and it is worth noting that virtual gambling has started to develop rather recently.
Attempts to prohibit all types of games for money in the country were made back in the era of colonial conquests (1380).
Speaking about more modern legislation, the ban on playing games for money was stated in the Criminal Code of 1892. And only by the 1900s, the regulator began to soften the demands. For example, since 1969, bingo and lottery drawings have been legalised but they could be organized only for charitable purposes.
In 1989, the first commercial casino was opened in Winnipeg. And only 10 years later, gambling was legalised.
Since 1999, businessmen have been able to open land-based bookmaker’s offices, slots, and other types of offline entertainment. Moreover, it was decided that the nuances of the industry regulation will be controlled by local provinces.
Digital business is controlled by the same articles of the Criminal Code as the offline industry. Responsibility for the provision of gambling services lies with the organisers.
It has been possible to officially launch licensed online casinos in Canada since 2009. But the government is so loyal to the market representatives that it does not impose penalties for working with offshore certificates.
An interesting historical fact is that in 2007, one of the most famous gambling jurisdictions in the world, Kahnawake, was sanctioned. The local regulator had to pay 2 million dollars for the illegal work in the online segment.
The reservation paid the fine and continued its activity. There were no other sanctions from the government.
The first official virtual platform was launched in 2010 in British Columbia.
Casino permits are issued by the local authorities. Each of the regions sets its requirements for the applicants and the rules for organising startups.
The existing legal framework determined the non-linear development of the sector. For example, in some regions, it is possible to play casino games from the age of 18, and in others, you can offer customers only lottery drawings or slot games.
A quick review of the market in several provinces
Land-based and virtual casinos, betting shops, and offline lotteries are legally offered to gamblers on this territory.
Digital drawings are monopolised by the state. All cash games are available to users over the age of 19
The Canadian permit allows entrepreneurs to organise any type of entertainment in this province, including poker rooms and sweepstakes.
It is possible to start playing these games from 18 years old
Persons over 19 years old can legally visit:
Digital lotteries are considered a local monopoly controlled by the British Columbia Lottery Corporation
The age limit in this province is 19 years old. Locals and foreign gamblers can place bets on horse racing and play lotteries. The latter is the local monopoly
In this jurisdiction, you can legally open a casino, a betting shop or an offline lottery business. Digital lotteries are under the control of the local monopoly.
Casino games can be played from the age of 19
The province issues permits for the provision of all types of entertainment, including online lotteries. But casinos that operate on a permanent basis must be registered as charitable enterprises and transfer part of the profits to programs developed for the country’s population.
Businessmen can work with local and foreign audiences of 18 years old or more
Canadian provinces are both industry regulators and holders of licences (local state operators).
There are only a few legal regulations that are considered common. Their aim is to ensure safe and transparent play. They include programs that protect the population against the negative consequences of gambling, centralised control systems, etc.
The only industry that is controlled together with the federal authority is horse racing. On the basis of the Ministry of Agriculture, a special subdivision has been created ― the Canadian Sweepstakes Agency. The regulator is developing a unified legislative framework that is relevant for all regions.
Casino licensing in collaboration with the local law enforcement agencies is a very common practice. Lawmen not only take part in the formation of the legal framework but also monitor the operation of some areas of the industry (for example, compliance with the age limit).
The Canadian licence allows you to legally cooperate with the local community. According to statistics, about 20 million Canadians regularly play casino games. This is a huge volume of traffic because the country’s population is 37.95 million.
No taxes are collected from the winnings of customers. The only case when users have to pay a part of their profit to the state is if they recognise themselves as professional gamblers and make it their profession and the main source of income.
The document is issued separately by each province. Applicants can turn to one or more authorities at their discretion.
Even the very concept of the “Canadian gambling licence” is not entirely correct. Local work permits are issued in the form of cooperation agreements between a private individual and a regulator since the latter is the one who provides services.
Each region has its rules and requirements for the applicants. For example, in British Columbia, operators can obtain one of four types of permits. They differ in terms of the earned income. Each of the documents is valid only for 12 months.
For more detailed information on how to obtain a licence in a specific region of Canada, please contact our managers.
Given the different regulatory programs in each of the provinces, we offer you to consider the cost of casino licensing with the help of the following example ― Kahnawake. It is one of the most recognisable and popular jurisdictions.
The online casino industry in this province is regulated by a single official document ― the Interactive Gambling Licence. 22 years ago, Mohawk Internet Technologies received this permit.
According to the certificate, the brand can:
- manage the local data centres;
- provide digital services in the sublicence format.
There are several types of the sublicenses of Kahnawake:
- CPA. Local online casinos must be hosted on the servers of the data centre of a local monopoly company. Applicants receive the status of an authorised supplier and keep the right to use a unique brand.
- CSPA. The document allows you to work with local data centres and is designed for software vendors. Licence holders cannot offer solutions directly to the users ― only services for the development, supply, and debugging of equipment and software.
- LDSA. The certificate can be obtained by the developers of live content. Licensees can organise broadcasting studios for foreign markets and provide services to locals.
- IJA. This is a permit for the placement of equipment in the territory of the jurisdiction for those operators who already have licences issued in other provinces.
- Key Person Permits. This is a program for people who work in a casino as managers.
To purchase a casino licence in Kahnawake, operators will need to pay the following amount of money to the public treasury:
- 35 thousand dollars for the consideration of an application (the price includes the first annual fee for the maintenance of a permit);
- 5 thousand dollars for each person included in the Key Person Permits program;
- 20 thousand dollars ― a compulsory annual fee for the maintenance of the licence;
- 1 thousand dollars ― the annual maintenance of the Key Person Permits certificate;
- 5 thousand dollars ― the cost of the extension of the document;
- 2,500 dollars for the renewal of the certificate for the performance of management functions.
A separate item of expenditures is the verification of the operator's compliance and the audit of the technical capacities and security programs. The bill for the service is presented on an individual basis.
Features of the jurisdiction:
- the local permit covers all markets except the US;
- the regulator has rather flexible requirements for applicants;
- in Kahnawake, representatives of the gambling business should not pay corporate taxes or additional fees.
The document is valid for 5 years.
Despite the non-linear development and some legal nuances, the local market is growing rapidly. In 2020 alone, the total turnover of the industry reached 2.65 billion dollars, of which 1.2 billion came from the online sector.
- The niche is controlled at the level of provinces. Each region sets its rules and tax rates. The only type of gambling controlled at the state level is horse racing.
- Only skill games are considered legal in the country. In practice, to win legally, users must solve a simple mathematical problem before launching the game session. Besides, in Canada, it is incorrect to use the term “drawings” in relation to lotteries. They are called “contests”.
- Canadian residents pay no taxes on their winnings. Deductions must be paid only by those users who recognise themselves as professional gamblers.
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