Ladbrokes has made the decision to remove operations in Canada, in the latest in a series of hiccups for the Canadian online gambling market.
The gambling giant announced its plans in September, informing customers that they could no longer play there. In addition, all customers were warned that their funds should be withdrawn by October 1st, the official cease date of Ladbrokes in Canada.
This withdrawal from the Canadian market by Ladbrokes follows an apparent trend which began last year with the removal of other operators from the country. Big operators like Matchbook and BetFred pulled out of the Canadian gambling market in 2013, followed by payment processor Skrill. Skrill is an e-wallet system, much like PayPal, which is commonly used by those who play and deposit to online casino sites, so news of its departure raised more questions over the future of the gambling and iGaming industry in Canada.
Although there are quite strict regulation and restrictions on online gambling operators in Canada, with new laws about to come into force in the UK, Ladbrokes insists that the decision to withdraw is not a response to any regulation issues. However, this move will help the company avoid any issues regarding the new UK Gambling Commission (UKGC) rules about outside revenue.
The regulations, which came into force in October, insist that any online gambling operators should have less than 3% of total revenue from a country outside their main operational base in the UK. In Ladbrokes’ case, they would have to earn less than the required revenue in Canada, which would impede growth in this market.
However, the true figure before closing operations suggests that Ladbrokes only garnered 0.5% of total revenue from the Canadian market. This then suggests that the new UK regulations were not a part of the reason to close, however the restrictions imposed by the Canadian government might have proved to be the trigger.
It could be construed as both a convenient and prudent move for Ladbrokes to withdraw as there would be much scrutiny and tax requirements to be met on both sides of the Atlantic, with regional taxes also imposed in Canada, proving an issue not only for Ladbrokes themselves but also for other remaining gaming and gambling operators in Canada.
This is because the Government run the legal lottery and racing corporations and commissions in Canada, but there’s much of a grey area surrounding offshore gambling and betting. There is however a major law forbidding any offshore gambling companies from advertising any of their real money products, or something related to their real money products. Companies wishing to remain operational in Canada then must stay under the radar with pretty limited operations or room for growth, as advertising is prohibited.
However despite these new regulations in both the UK and Canada, it looks as if it’s not quite the crisis for the Canadian gambling industry that many first thought. While it’s true that Ladbrokes is one of a few big names to pull out of Canada, alongside the likes of BetFred, there are many large gambling operators still remaining in the country with limited operations such as Bet365, William Hill and Betfair. Granted these sites have a higher base and revenue than Ladbrokes did, so it seems it’s less of a financial loss or risk to stay in Canada, meaning Canadians can still enjoy great online casino games.