Canada Supreme Court expresses doubt over framework for iGaming Ontario’s international players

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The Backstory

Ontario’s liquidity plan put a national fault line before the court

The Supreme Court of Canada case over iGaming Ontario’s international player model is the latest test of how far provinces can go in expanding online gambling under a Criminal Code framework built around provincial control. Ontario’s model has been watched closely because it could determine whether provincial platforms may lawfully connect local players with players outside Canada while still being considered a lottery scheme “conducted and managed” in the province.

The issue grew out of Ontario’s effort to add pooled liquidity to its regulated internet gambling market, allowing residents to participate in games involving international users. That change marked a significant shift from the earlier model, under which operators had to verify that players were physically located in Ontario. The policy was designed to make games more competitive and commercially attractive by increasing the number of participants, a key factor in poker and other peer-to-peer products.

Provincial lottery corporations outside Ontario have challenged that approach because it could reshape Canada’s regulated gambling map. The Atlantic Lottery Corporation, British Columbia Lottery Corporation, Manitoba Liquor and Lotteries Corporation and Loto-Québec have argued that Ontario’s plan risks pushing beyond the limits of provincial authority. A previous article on the Supreme Court’s decision to hear the appeal traced the case to Ontario’s 2024 reference asking whether international participation would remain lawful under the Criminal Code.

The Ontario Court of Appeal answered that question in Ontario’s favor in November 2025, with a majority finding the model lawful. A dissenting judge concluded Ontario’s role in the international liquidity aspects would fall outside the Criminal Code exemption. That split made the issue a natural candidate for a national ruling, and the Supreme Court hearing now places Ontario’s market design against the traditional monopoly role of provincial lottery corporations.

A rapid Ontario buildout changed the competitive baseline

Ontario’s online gambling market launched in 2022 and quickly became the country’s largest open, competitive regulated market. Its structure differs sharply from most other provinces, where government-owned lottery corporations remain the legal online gambling provider. That contrast has created commercial tension, especially as Ontario-licensed brands advertise heavily across Canada even where their products are not legally available.

Atlantic Lottery’s new president and chief executive, Dallas McCready, framed that tension as a consumer-protection and market-confusion issue in an interview about the corporation’s strategy. He said Atlantic Canadians continue to see advertising for gambling sites not legally available in the region, which can make unauthorized operators appear legitimate. In that discussion, McCready said Atlantic Lottery is not afraid of competition, but estimated about CA$200 million leaves Atlantic Canada each year through play on illegal gambling websites.

That revenue leakage is central to the stakes in the Supreme Court case. If Ontario can continue expanding player liquidity with international participation, its model could become more attractive to operators and players, widening the gap between open-market provinces and lottery-run jurisdictions. If the court restricts Ontario’s plan, provincial lottery corporations would gain support for a more limited interpretation of gambling authority, slowing the spread of liquidity-driven models.

The broader provincial landscape is also changing. Alberta launched regulated online gambling this year, adding another jurisdiction to a market long dominated by Ontario’s private-operator framework and provincial lottery platforms elsewhere. As more provinces weigh how to channel gambling into regulated systems, the court’s interpretation of “conduct and manage” could influence future policy choices well beyond Ontario.

Lottery corporations are coordinating against gray-market pressure

The court fight is not occurring in isolation. Provincial lottery corporations have been coordinating more aggressively to defend their legal markets against offshore and gray-market operators. The Canadian Lottery Coalition, which includes Atlantic Lottery, British Columbia Lottery Corporation, Loto-Québec, Manitoba Liquor and Lotteries and Lotteries and Gaming Saskatchewan, has made Bodog a focal point of that campaign.

In Manitoba, the coalition backed an injunction seeking to stop Bodog from doing business and advertising in the province. A report on the Manitoba court injunction against Bodog said the case targets Il Nido, Bodog’s operator, and Sanctum IP Holdings, owner of Canadian trademarks. The application argues Bodog promotes itself through misleading statements that suggest its platforms are lawful and safe.

The Bodog litigation and the Ontario liquidity case are different legal battles, but both turn on a similar concern: whether gambling activity can be kept within enforceable provincial frameworks. Lottery corporations argue that when gambling activity migrates to platforms outside provincial control, governments lose oversight of consumer protection, anti-money laundering compliance and revenue that funds public programs.

For Atlantic Lottery, the argument is especially direct. It is jointly owned by New Brunswick, Prince Edward Island, Nova Scotia and Newfoundland and Labrador, and its profits are returned to those governments. Its 2023-24 annual report showed CA$487 million delivered to the four Atlantic provinces, including CA$151.2 million to New Brunswick, CA$161.7 million to Nova Scotia, CA$26.8 million to Prince Edward Island and CA$147.3 million to Newfoundland and Labrador. That public-finance role helps explain why the corporation has taken a leading position in legal challenges involving market boundaries.

Compliance scrutiny has complicated the public-sector argument

Provincial lottery corporations have emphasized that government-run platforms provide a safer and more accountable alternative to offshore sites. But recent enforcement actions have complicated that message by showing that public-sector operators and their owners also face compliance risks.

Canada’s financial intelligence agency, the Financial Transactions and Reports Analysis Centre of Canada, imposed penalties totaling CA$631,538.50 on two government gaming corporations for anti-money laundering breaches. A report on FINTRAC fines against New Brunswick and Nova Scotia gaming corporations said the penalties were linked to Atlantic Lottery’s online gaming operations. New Brunswick Lotteries and Gaming Corporation was fined CA$399,712 for failing to file suspicious transaction reports, while Nova Scotia Gaming Corporation was fined CA$231,826 over reporting, procedures and risk-assessment failures.

The article also noted that Atlantic Lottery itself had been fined CA$212,025 by FINTRAC earlier for similar compliance failures. Those penalties do not erase the legal distinction between regulated provincial platforms and offshore sites, but they underscore the burden on government operators to meet the standards they cite in policy debates.

That context matters in the Supreme Court case because the justices’ concerns include oversight and enforceability. If Ontario’s platform permits play with international users, the court must consider whether the province can still credibly control the gambling activity that affects people in Ontario. The same governance questions raised by anti-money laundering enforcement — who monitors transactions, who bears responsibility and where control actually sits — are relevant to international liquidity.

Technology partnerships show provinces are preparing for a larger fight

Even as lottery corporations contest Ontario’s approach, they are investing in their own digital offerings. Atlantic Lottery and British Columbia Lottery Corporation selected Kambi Group as a national sportsbook partner through a joint request for proposal. The agreement covers sports betting services for Atlantic Lottery in Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador, and for British Columbia Lottery Corporation in Saskatchewan and Manitoba.

The multi-province Kambi contract showed how lottery corporations are trying to combine scale with jurisdictional control. The model allows provincial operators to share technology and trading infrastructure while delivering services separately within their own legal markets. That structure reflects the same balance at the heart of the Ontario litigation: gaining the benefits of larger pools and modern technology without surrendering the legal control required under Canadian law.

Kambi described the deal as part of its broader growth, while Atlantic Lottery framed it around trust, integrity and player protection. For the provincial operators, upgrading sportsbook technology is also a competitive necessity. Players accustomed to private-market products in Ontario or offshore platforms expect deeper markets, sharper pricing and smoother account features. Without comparable products, lottery corporations risk losing customers to unauthorized sites regardless of legal arguments.

The Supreme Court’s decision could therefore influence both law and business strategy. A ruling favoring Ontario may encourage provinces to explore more expansive models and deeper liquidity arrangements. A ruling against Ontario could reinforce a more territorial approach, strengthening lottery corporations’ position but leaving them to compete through technology, enforcement and consumer trust. Either way, the case will help define whether Canada’s online gambling market evolves as a patchwork of tightly bounded provincial systems or moves toward broader networks built on provincial authorization.