Gambling Laws: How Does Canada Compare to the USA?

The gambling laws in Canada and the USA differ significantly. Looking at the gambling laws alone, you’d never guess these were neighboring countries. However, what they have in common is that their states and provinces have the right to regulate their own laws. That pertains to gambling, as well.

Generally speaking, gambling laws in Canada are laxer compared to those in America. Some recent changes have brought the US a step closer to creating a more permissive gambling environment, but there is still a long way to reach Canada’s level.


There is one significant difference between gambling regulations in these two countries — taxation. While Canadian land-based casinos do not tax gambling wins, the US does things a bit differently.

The imposed taxation depends on the US state you’re in, but the general amount you can expect to hand over to the IRS is 24-30% of your casino winnings. What makes this process somewhat easier in US brick-and-mortar casinos is that the casinos withhold the tax portion of your winnings straight away. You are only required to fill out the necessary information on a tax form and mail it to the IRS.

The process is a bit different in online casinos as they are still settling in. In case you didn’t know, the majority of states where online gambling hadn’t been allowed reversed the decision in May 2018.

Online Casinos

Although casino gambling is extremely popular in Canada, the law does not allow online casinos to work within Canadian borders. However, Canadian players are free to join offshore casinos with a license to operate in Canada.

At the moment, Canadian law only allows gambling in licensed land-based casinos or pre-approved websites. Naturally, both need to have licenses to operate in specific provinces.

Canadian gamblers can try their luck at any of the 88 licensed land-based casinos with table games. They can also enjoy electronic games in 32 regulated casinos. For players who prefer to maximize their winnings in online casinos, players can play on some of the Best online casinos regulated and licensed by the top gambling jurisdictions, such as the UKGC and the MGA.

Even though online gambling regulations in the US are more relaxed than they were a few years back, certain states still impose strict punishments for playing online casino games. Some states make it challenging for players to join online casinos by restricting payments according to the Unlawful Internet Gambling Act from 2006.

For that reason, it’s essential to check the local gambling regulations and laws before you decide to sign up in an online casino. This applies to both residents of a particular state and its visitors.


Since the US still has some restrictions on online gambling, not all operators are willing to go through the legal trouble of offering their services in the States. For that reason, Canadian players have access to a broader selection of online casino games.

Many top software providers opt to offer their services in Canada rather than the US. Also,  some of the best iGaming providers lack the necessary licenses to operate in the United States.

Those who meet all the requirements usually offer their services in more progressive gambling states, such as New Jersey, Colorado, and Nevada. Hopefully, other states will follow suit and keep up with the demand.


Canadian players might be able to go home with all of their winnings in their pockets, but operators and bookmakers need to pay taxes and generate revenue for the country.

In the USA, the gambling industry’s GDP increased between May and September 2019, from $2.51 billion to $2.65 billion. To narrow down things, New Jersey — one of the first states in the US to fully embrace online gambling, netted $85 million from it in August 2020 alone. Compared to August 2019, that is an increase of 120.9%. As a fully operative US state that brought numerous online sportsbooks closer to its residents, New Jersey reached revenues of $34.3 million only in sports betting. That is taken from total bets of $602 million.

As you can see from the numbers above, legalized gambling can be instrumental to the country’s economy. This industry can create millions of dollars every month. With more relaxed gambling laws in the United States, there’s a huge possibility that other states will follow New Jersey’s lead. However, we still believe it is crucial to check each state’s laws and regulations before setting off on your online gambling journey.

On the other hand, in Canada, the gambling industry is booming. $23 billion dollars is brought in every year, making Canada a growing market.