Supreme Court of Canada to consider legality of legal online gaming and sports betting

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The Backstory

Ontario’s cross-border question moves to the national stage

The Supreme Court of Canada hearing set for Oct. 7 is the latest step in a dispute that began as a technical question about online poker and daily fantasy sports but has become a test of how far provinces can go in modernizing internet gambling. At issue is whether a province can continue to “conduct and manage” legal online gaming under section 207(1)(a) of the Criminal Code when players in that province are pooled with players outside Canada.

Ontario sought clarity because global liquidity matters to peer-to-peer products. Poker and daily fantasy sports depend on large pools of participants to offer enough game selection, prize depth and liquidity. Without cross-border pools, regulated operators have argued that Canadian players may continue turning to offshore sites that already offer broader markets. That commercial reality helped drive Ontario’s push to confirm whether its regulated model could support international participation without breaching federal gambling prohibitions.

The Court of Appeal for Ontario gave Ontario the answer it wanted in November, when a majority found that the proposed model would remain lawful. That decision, described in coverage of the Ontario court’s approval of peer-to-peer gaming with players outside Canada, opened the door for Ontario residents to play games involving non-Canadian participants through regulated sites. The majority’s view was that Ontario’s role in operating the framework could satisfy the Criminal Code even if some players were located abroad.

Lottery corporations see a threat beyond Ontario

The appeal is being driven not by private operators but by provincial lottery corporations outside Ontario. Atlantic Lottery Corp., British Columbia Lottery Corp. and Manitoba Liquor and Lotteries Corp. challenged the Ontario ruling, with Loto-Québec later added as an appellant. Their concern is not only the legal interpretation of section 207 but the precedent it may set for provincial authority, competitive boundaries and enforcement against offshore operators.

Those lottery corporations operate in provinces where governments have generally maintained monopoly or lottery-led online gambling systems. Their position reflects a long-running tension in Canadian gambling: Ontario has embraced a competitive, private-operator market, while most other provinces continue to rely on government-owned corporations as the sole legal providers. If Ontario can connect its regulated platforms to global player pools, it may strengthen its market and widen the gap between Ontario’s model and lottery-run systems elsewhere.

Atlantic Lottery has been especially vocal about the consequences of blurred legal lines. In an interview with COMPLETE iGAMING, incoming President and Chief Executive Officer Dallas McCready said the corporation was not opposed to competition but remained concerned about illegal and gray-market operators. He said advertising from operators not legally available in Atlantic Canada creates confusion for consumers, a theme explored in the profile of Atlantic Lottery’s new president and its competitive outlook.

McCready said Atlantic Lottery estimates about CA$200 million leaves the region each year through play on illegal gambling sites. That figure explains why lottery corporations view the Ontario case as more than a jurisdictional dispute. If provincial control is interpreted broadly, it could help regulated markets compete with offshore platforms. If interpreted too broadly, opponents argue, it could weaken the territorial limits that have underpinned Canada’s provincial gambling system.

Ontario’s model reshaped the Canadian market

Ontario’s regulated igaming market, launched in 2022, changed the direction of Canadian online gambling. Instead of limiting digital gaming to a government lottery platform, Ontario created a licensing and conduct-and-manage structure that allowed private operators to compete under provincial oversight. The model quickly became one of North America’s largest regulated igaming markets and set the benchmark for other provinces considering reform.

That shift is why the Supreme Court case carries stakes beyond poker liquidity. The question of international player pooling arrives as policymakers and operators are debating whether Ontario is an exception or a template. Alberta has been expected to pursue a similar approach, although timing has remained uncertain. Industry figures identified Alberta’s potential launch, Ontario market maturation and the court fight over cross-border play as central issues in Canadian igaming storylines to watch in 2025.

For private operators, a ruling that supports Ontario’s interpretation could make regulated platforms more commercially viable. Larger pools can increase engagement, support tournament formats and improve product quality. For provinces still operating monopoly models, the same ruling could intensify pressure to either modernize their own frameworks or strengthen enforcement against sites that serve residents without provincial authorization.

The legal question also intersects with federalism. Gambling regulation in Canada depends on a federal Criminal Code prohibition paired with provincial exemptions. Provinces may conduct and manage lottery schemes, but the scope of that authority has never been fully tested against internet products that naturally cross borders. The Supreme Court will now have to assess whether the traditional territorial language can accommodate a digital market in which servers, operators and players may be spread across multiple jurisdictions.

Consumer protection and advertising add pressure

The court fight is unfolding alongside growing concern about gambling advertising, responsible gaming and consumer confusion. Ontario’s open market brought legal operators into mainstream advertising at a scale Canada had not previously seen. Other provinces, especially those without competitive markets, have complained that residents see ads for brands that may not be legally available where they live.

That concern has pushed the industry to adopt stronger voluntary standards. The Responsible Online Gaming Association released a marketing and advertising code setting expectations for legal-age protections, promotional disclosures, digital marketing and responsible gambling commitments. The code, described in the article on ROGA’s marketing and advertising standards, was framed as a way for regulated operators to build trust and distinguish themselves from illegal competitors.

Such standards matter to the Supreme Court case because consumer protection is central to the policy argument for regulated liquidity. Supporters of Ontario’s position say legal operators can better monitor play, enforce age and identity checks, provide responsible gambling tools and report suspicious transactions. If players are blocked from competitive regulated products, they may use offshore sites where Canadian provinces have limited visibility and little practical control.

Opponents counter that the conduct-and-manage exemption was not designed to let a province effectively host gambling with the world. Their concern is that international liquidity could dilute provincial control, complicate enforcement and create spillover effects in provinces that have not chosen Ontario’s model. The dissent at the Ontario Court of Appeal reflected that concern, finding that Ontario’s role in the international aspects of the proposed model would fall outside the Criminal Code exemption.

Compliance record complicates the public-sector argument

Provincial lottery corporations have long argued that government-run systems provide stronger oversight than offshore operators. That argument remains central to their public mandate, but recent anti-money laundering penalties show that public ownership does not eliminate compliance risk. Canada’s financial intelligence agency, FINTRAC, fined New Brunswick and Nova Scotia gaming entities a combined CA$631,538.50 over anti-money laundering breaches linked to government gaming activity. The enforcement actions followed a separate penalty against Atlantic Lottery earlier in the year, as detailed in coverage of FINTRAC fines against two government gaming corporations.

Those penalties do not decide the Criminal Code issue before the Supreme Court. They do, however, underscore the broader regulatory challenge. Whether online gambling is run through a lottery monopoly, a competitive licensing model or a hybrid structure, regulators must manage money-laundering risk, responsible gambling obligations and market integrity. The more online gaming expands across borders, the more important those systems become.

The case therefore arrives at a pivotal moment. Canada’s provinces are trying to channel demand into legal markets while protecting revenue, consumers and regulatory authority. Ontario wants flexibility to make its regulated market competitive with offshore alternatives. Other lottery corporations want the court to preserve clearer territorial limits and avoid a precedent that could reshape provincial gambling powers without legislative change.

The Supreme Court’s decision will determine more than the future of cross-border poker pools. It will signal how Canada’s decades-old gambling framework applies to a digital market that no longer fits neatly within provincial borders.