Canadian Gaming Market Share

Early in Canadian history, gambling was prohibited under a decree from Britain’s King Richard III (1452~1485)—a ban that endured even after the nation’s confederation in 1867. The prohibition continued through the 1890s’ Klondike Gold Rush right up until 1969, when the Criminal Code was at long last amended to give provincial and territorial governments authority over gaming activities within their boundaries.

One after another, operators of legal gambling activities began to appear throughout the country, starting with lotteries, bingo halls and horseracing, and soon followed by the opening of full-fledged casinos. By the late 1980s, Canadians in Edmonton, Calgary and Winnipeg had become accustomed to playing slots, poker, roulette, blackjack, keno and other games of chance, with the exception of dice games, such as backgammon and craps, which remained illegal until 1999.

Electronic gaming made its appearance in Canada toward the end of the 20th century. It included not only Electronic Gaming Devices (EGDs) and Video Lottery Terminals (VLTs) installed in non-licensed establishments, such as bowling alleys and taxi stands, but also casino-type gambling via the Internet. In 1996, the Mohawk Territory of Kahnawake took a leadership role in regulating gaming websites, establishing the Kahnawake Gaming Commission to issue licenses to online casinos and poker rooms.

A Booming Industry

By 2001, Canada had 31,000 gambling machines (slot machines and VLTs), 59 permanent casinos, more than 32,000 lottery ticket retailers and some 1,880 licensed facilities for bingo, raffles, pull ticket sales and other gambling activities. Over the next ten years, those figures would increase to 87,000 gambling machines, 60 permanent casinos, 33,000 lottery ticket centers, and 25,000 licenses to run various temporary casinos, bingo halls and so on. Additionally, some 250 race tracks and teletheatres for live betting were also established.

According to statistics complied by the Canadian Gaming Association related to gross gaming win (wagering less prizes), the nation’s gaming industry almost tripled in size between 1995 and 2010, from $6.4 billion to about $15.1 billion. The composition shifted from a 50% reliance on lotteries to a more balanced dispersion, led by the expansion of casino facilities and the implementation of EGDs at facilities such as racetracks. Now casinos contribute about 37% of the win compared to 27% for lotteries, 29% for gambling machines and the remaining 7% or so divided almost equally between bingo and pari-mutuel betting. In the 7 years since 2010, those numbers haven’t shown any signs of slowing down, and this is an industry that always seems to be growing.

Meanwhile, Kahnawake continued to set the pace on the Internet, increasing the number of licensed online gaming operators based there from about 50 at the start of the new millennium to about 200 at most recent count. Of those, most support English and accept players living in Canada. There are also another 700 or so gambling web sites based outside Canada that are happy to welcome Canadian players.

Trends in the 21st Century

In a report prepared for the Canadian Gaming Association in 2011, HLT Advisory Inc. indicated that industry growth had slowed considerably since 2006. They attributed this deceleration to “a combination of industry maturity, the state of the economy, increased competition and the restructuring of a number of provincial gaming programs (e.g., certain provincial VLT programs).” They predicted that “slow growth will likely characterize the industry from a national perspective over the near term.”

Nevertheless, gambling has become firmly entrenched as one of the largest entertainment industries in Canada—“larger than television and movie rentals, and it is larger than the combined revenues generated by magazines and book sales, drinking places, spectator sports, movie theatres and performing arts” One estimate has put the average annual spending of each Canadian on gambling at close to $470. Another study has concluded that 82% of all Canadian households spend money on one or more legal gambling activity each year.

No longer seen as the “social vice” it was considered to be in the 1950s, gambling is now an important part of the fabric of Canadian society. A majority of Canadians approve of using funds generated from gambling sources to support charities, health care and other similar organizations, including sports. In fact, debate has recently renewed over legalizing single-event sports betting. Currently, only “parlay” bets are allowed on sports, combining three or more wagers.

According to Pierre Cadieux, President and Chief Executive Officer of the Atlantic Chamber of Commerce, “It is estimated that nothing less than $14 billion dollars of Canadian offshore and illegal betting goes under taxation radar every year… It would seem a no-brainer that to move forward to legalize this type of betting would be a win-win for the Canadian gaming industry, as well as for the Canadian taxpayer.”

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