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Bitcoin Gambling Legislation: Canada Rules and Regulations

For Canadian Authorities, Bitcoin Gambling is OK but Changes Maybe Coming

Canada has been a Bitcoin Hub for some time now, even a leader in a strong sense. The country has the second highest number of Bitcoin ATMs available in the world. They are only second to the United States. The popularity of bitcoin gambling has risen dramatically over the last couple of years too. The Canadian government has recently amended its criminal code regarding gambling and bitcoin gambling. The authority to gamble with bitcoins is left in the hands of the local governments, that is, Canadian Provinces, making it a federal grey area. Each province has its own gambling laws, and residents have enjoyable IP access to many Bitcoin online casinos.

However, it also seems as if the country is starting to take special interest on gambling matters with a team of commissions and departments each working hard to develop some guidelines or changing the current laws about Online Bitcoin gambling. There seems to be a growing fear that bitcoin funds are being used to launder money as well as fund terrorist organizations. As a result, that while the government deemed bitcoin trading as gambling, the government has nonetheless put forth a requirement on websites to be regulated and even audited by central bank regulators. This is one of the first countries in the world to consider bitcoin trading legal in this sense, though the news has had many popular financial giants call bitcoin “a form of gambling”.

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Government Bodies Regulating Bitcoin

At the national level, the federal Canadian government has the criminal code (amended) while the provinces have a number of hawk-eyed departments/commissions keeping tabs on the happenings in the gambling industry as a whole:

  1. FINTRAC (Financial Transactions & Reports Analysis Centre of Canada)

    This is the agency charged with the collection, analysis plus disclosure of all information pertaining to crime money and terrorism. Such information is expected to help in the detection and prevention of money laundering activities and funding of terrorist activities within and without Canada. As Canada’s financial intelligence center, FINTRAC keeps a close eye on online Bitcoin gambling casinos operating in Canada to ensure that none can facilitate suspicious betting activities.

  2. Kahnawake Gaming Commission (KGC)

    The KGC is the official regulating and licensing authority for land and online gaming activities within Kahnawake (Mohawk Territory). All online Bitcoin casinos, online sportsbook sites, and online poker rooms, as well as the three land-based poker rooms located within Kahnawake, have been licensed by the KGC. The commission is, therefore, playing an important role in ensuring that the welfare of Bitcoin gamblers in this area is well catered for by blocking illegal casinos.

  3. Canadian Gaming Association (CGA)

    This is a not-for-profit Canadian Gaming Association (CGA) advancing the evolution of the country’s gaming industry. Its mandate is to see that the huge economic value of Bitcoin (and others) gaming in Canada is realized. The body is working together with the provinces to build a harmonious regulatory framework for casino operators, gamblers, and other stakeholders.

  4. Bank of Canada

    In 2017, the Bank of Canada ran a blockchain piloting project code named “Jasper” to help evaluate whether time was ripe to deploy the technology in mainstream banking. Although the verdict was that it was a bit early, the Bank is a proactive player and doesn’t hesitate in taking a position. Even some which could fundamentally alter the Bitcoin and its pioneering industry. For example, in January, the Governor called bitcoin trading “gambling” and although this was dismissed by betting enthusiasts, it could be a hint into the future direction of the Bitcoin debate.

  5. British Columbia Gaming Policies & Enforcement Branch

    All gambling in British Columbia is legal. This should not be misunderstood, but in certain areas, Bitcoin gambling has increased regulation, especially with the region of British Columbia, where regulators are in place. The body allows British Columbia Canadians to participate in lotteries, slot machines, horse racing, and online casino games and has continued to invent new laws to maintain the integrity of online Bitcoin gambling in B.C.

  6. Nova Scotia Alcohol & Gaming Authority (NSAGA)

    In Nova Scotia province, the NSAGA is the designated authority responsible for licenses and regulations for lottery schemes including online Bitcoin gambling. Its other role is to monitor and report on specific aspects of online Bitcoin betting in Nova Scotia with the key focus being on strong players’ protection.

  7. Alcohol & Gaming Commission of Ontario

    For Ontario, the well-known Gaming Control Act (GCA) controls all lottery schemes and casinos. Under the existing legal status, operators are required to conduct business in a manner that guarantees honesty, integrity, and responsibility. Providers have also banned from promoting fraudulent games including online Bitcoin lottery scams.

What the Laws Mean Moving Forward into the Future

Stephen Poloz, governor of the Bank of Canada

Overall, it seems the existing and any proposed laws are targeting providers and not gamblers. In any case, most of the industry legislation seems to favor players and intends to make Bitcoin gambling safe with heavy penalties for operators not reporting suspicious Bitcoin gaming transactions. A common trend is that the concerned institutions seem to spend more time in research before adopting the laws. This can only be good news because it gives the players ample time to adapt and where necessary, engage the authorities or in extreme cases, look for alternatives.

Of major concern is the recent change of mind by major Canadian banks which, fearing the amendments in the anti-fraud and money laundering laws (amended criminal code), have started to withdraw from processing Bitcoin-related earnings; with the Toronto Dominion Bank being the latest to back out. Financial institutions are requested to follow the guidelines set forth by the Canadian government to fully understand what constitutes money laundering and fraud, as well as terrorist financing.

Canadian Banks have put a recent 2018 ban on the purchase of cryptocurrency using credit or debit cards. While this is primarily being enforced in Montreal, it sets a precedent for the courts to enforce such a law elsewhere. Yet, this is not harming the gambling industry or bitcoin gambling. All it prevents is a gambler or player making a separate purchase for altcoins or bitcoins using a financially backed bank card in Canada. Direct deposit transfers and using other altcoins for purchase is still available.

But, as you would expect, Canadian online Bitcoin casinos have already looked for other means with local exchanges seeing a spike in trade as a result.
And so even if it’s not yet clear what’s going happen, players can for the time being continue to cash in on their Bitcoin winnings.

Good but Cautious Outlook

For now, play continues but the government has brought about warnings of gambling as an addictive activity. And there is even hope that a recent landmark ruling in the US may belatedly spur the modernization of online betting across the country. You see, the U.S. Supreme Court recently struck down the federal law that barred most sports betting beyond Nevada. This means individual states can decide how to regulate gambling and betting on sports in particular. Such small wins have the potential to bring about change that stakeholders have been crossing fingers for. And who knows what the provinces will decide and if they will follow in American footsteps especially regarding online Bitcoin betting which is now legal for some US sports. More control and regulation is likely moving forward.

Conclusion

As other countries come down hard on online Bitcoin gambling, for Canada a strong feeling of freedom continues. According to a recent report from the Hon. David Eby, British Columbia’s Attorney General, “recent events in British Columbia have demonstrated that gaming operators are doing excellent work at identifying, collecting and reporting suspicious financial transactions, citing last month’s arrest of an international casino money-laundering suspect.”

The provinces and the regulatory authorities seem to be comfortable at the moment but for a few amendments here and there. However, a lot is in te court system as conversation and dialogue. No laws have been passed, yes. And with some emerging developments in the US, such as nationwide legal gambling and betting, there is a threat to the Canadian industry, but from a capitalist perspective only. There is even more hope for the future.

But again, no one can tell what any changes can bring considering some pronunciations such as the Bank of Canada governor’s labeling of Bitcoin as risky. So, its fingers crossed for everyone.

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