This is a guest contribution by Cory R. Levi B.A., LL.L., J.D. is a Quebec and Ontario licensed Attorney with the Montreal based law firm of Lazarus Charbonneauand works in the Gaming and Corporate law departments. If you would like to submit a contribution please contact Bill Beatty for submission details. Thank you.

The law in Canada, as it relates to online gambling, is somewhat grey. While there does not exist actual language that specifically governs the legality of online gaming websites, Canadian authorities have loosely interpreted the relevant language found in the Criminal Code of Canada to apply to them, and in this regard, the law is quite clear – only provincial governments can legally own and operate gaming houses, whether land-based or online; this extends to poker, casino and/or sportsbooks alike.

So how can it be, therefore, that “offshore” operators accept Canadian facing business without suffering any legal consequences, unlike several of them did a few years back in the United States? The answer is simple – by way of the “Foreign Operators Principle”. The Foreign Operators Principle provides that as long there are no substantial links with Canada, whatsoever, (referred to as a “nexus” by Canadian courts), Canadian authorities have no jurisdiction over these offshore operators, and therefore, cannot enforce Canadian law, permitting them to continue to operate and earn revenues that, in the eyes of the various provincial governments, belong to Canada.

Governments: Online Operators vs. Online Regulators