For a long time, many forms of gambling were illegal in Canada, with some exceptions for the likes of tribal land-based casinos. But in recent years, legislation has really changed the gambling scene.
It has opened up the possibilities of moving into the online gambling world with mobile sports betting apps and iGaming sites currently up and running in some states. This black diamond casino review, for instance, takes a look at how much fun online casino can be. But where did it all begin and how can it benefit Canada’s economy?
A brief history
For a long time, there had been strict rules around gambling in Canada, especially with regard to single-event sports wagering. However, in August 2021, Bill C-218 was passed which lifted restrictions and ended the prohibition on that specific activity.
The reason for its passing was due to record spending from the Canadian and local governments combating the global coronavirus pandemic. Support was offered to businesses and citizens alike but with so many restrictions in place, money was being borrowed in order to cover these costs that couldn’t be covered by tax revenues which had sharply fallen.
Taxes couldn’t just be raised once the pandemic was coming to an end and lockdowns were lifting, as there would’ve been a backlash. People had already endured a tough couple of years and doing this would only make things worse. But, the launch of a new gambling industry had the potential to fix several problems to improve the Canadian economy.
The benefits of legalization on Canada’s economy
Having watched a number of states over the border in the US legalize different forms of gambling from sports betting to online casinos, it was evident how profitable such an action could be. Thus, giving birth to the idea of doing the same in Canada and leading to the foundation of new online casinos.
But what were the economical benefits of doing so?
New industry = New jobs
As would be the case with the launch of any new industry, whether that be the manufacturing of electric vehicles or launching online sportsbooks, it creates new jobs. New jobs mean that unemployment rates fall, and tax revenues increase.
This has a huge impact on the wider economy though. More than just increasing tax revenue for the state. With people back in employment and earning, they can begin to spend again. Disposable income was at an all-time low during the pandemic and people were cutting back on luxury expenses that they didn’t need such as eating out in places like British Columbia.
With the ability to now do this again, it meant that citizens in Canada were going back to dining out, visiting cinemas and taking part in many other activities. As well as purchasing the luxury items such as new phones and video game consoles that they put off purchasing previously.
This generates economic growth, with money once again flowing around the economy. Because businesses begin to do better, and this again can create further jobs, allowing more people to have funds that they too can spend and so the cycle goes.
Taxed from all angles
Another benefit to the Canadian economy is the lack of a need to increase things such as employment taxes, making citizens feel better off. This leaves them in a better place mentally, and it can all be afforded through the legalization of the gambling industry in Canada.
That’s because there are so many sources of new tax revenue. We’ve covered one above, in the form of taxes paid by those employed by casinos. But there is more.
The casinos themselves pay for gambling licenses, fees will differ from state to state. That is one source. Then, when these businesses make a profit, that is taxed also. There are two sources of revenue previously that were non-existent.
The third source of new tax comes in the form of taxing bettors’ winnings. Like in the US, the Canadian government does declare winnings above a certain amount as a form of income. Therefore, once the thresholds are met, players must pay taxes on winnings. So no matter if the house wins or the player, the state wins every time.
Lowers crime rate and state spending
Despite the activity being illegal, it didn’t stop people in Canada from gambling. Much of this was done through illegal operators and through back-alley bookies who would charge astronomical amounts of interest on the money owed. These forms rarely looked out for the interests of players.
But being legalized and regulated, it has directed players to now only gamble through legal means. Cutting the crime rate, and reducing the money spent on operations to tackle these illegal activities by local and national crime agencies.
But, it will also lead to a cut in spending on funding charities that operate to help combat problem gambling. Because these new legal operations as part of their licenses must promote responsible gambling, and help fund charities that aim to help those who have fallen victim.
Meaning that the government has freed up funds to spend elsewhere on areas such as healthcare and education. Showing just how much good can actually come from the legalization of gambling and sports betting to the wider economy.
So, as we can clearly see, there is a lot of good to come from the legalization of this new industry in Canada, and it has massive benefits for the economy. Falling unemployment rates, increased tax revenues, and cuts in spending, it tackles numerous problems all at once.
It is only likely to get better as well, as more forms of gambling become legalized and more Canadian states jump on board and take advantage of the benefits. However, it won’t have an instant impact overnight, it will take time for these benefits to pay off, but slowly they will get there, and the Canadian economy will recover from the damage caused by two years of a global pandemic.