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Could Legal Online Casinos in Alberta Spell Doom for Charities? An In-Depth Look

Noah StrangNovember 19, 2024 1 min read

What the New Alberta iGaming Model Looks Like
How New iGaming Laws Could Affect Charities
On the Bright Side: Tax Change Could Reduce Impact

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Alberta is close to adopting a new Ontario-style iGaming law to regulate sports betting sites and online casinos in Alberta. The province’s new iGaming industry is expected to raise millions of dollars in tax revenue every year. It would be a boon to the local economy. However, local charity organizations say that legal online gaming in the province could kill grassroots charities.

What the New Alberta iGaming Model Looks Like

If you are in Alberta and enjoy responsible gambling online, you currently have two options. The first is to use offshore-based “grey market” sites. The second is to play online using the Alberta Gaming, Liquor, and Cannabis (AGLC)’s Play Alberta platform. This situation could change very soon.

In May 2024, the region’s legislature passed the Red Tape Reduction Statutes Amendment Act (Bill 16). This bill revealed that the province was researching a plan to bring legal online casinos to the province using a model like the one iGaming Ontario uses.

iGaming Ontario has been a huge success, with online casinos and sportsbooks making over $2 billion in revenue during the 2023-24 fiscal year. With its smaller population, the province won’t make nearly that much, but it’s proof that there is a lot of money in the market that the province is missing out on right now.

How New iGaming Laws Could Affect Charities

As profitable as Alberta’s new iGaming laws could be for the province itself, many charities worry that legal online gambling could spell doom for their organizations.

Michael Thompson, executive director of the Alberta Charitable Casino Operators, says brick-and-mortar casinos are a key source of revenue for charities in the region. Alberta online casinos could draw money away from in-person ones, which means less money for the charities.

The revenues that go to charities are completely dependent on revenues going to private-sector casino providers

Thompson explained. Casinos in the province raised $255 million for charities in the 2022-23 fiscal year.

Thompson also added that comparing Alberta and Ontario is unfair, and the iGaming Ontario model may not work in the province.

We think the Ontario model could be very damaging to casinos in Alberta, and charities will lose out significantly as a result. We think that’s going to be a disaster and they need to take the time to get it right.

Karen Ball of the Calgary Chamber of Voluntary Organisations (CCVO) is also worried about the potential change to the province’s iGaming laws and said:

We understand this is an area that the government has been considering. Organizations which rely on the charitable gaming model are always concerned about the sustainability of the model

However, Ball added:

Anything that might potentially impact the ability of brick-and-mortar casinos to earn revenue will have an effect on the ability of charities and their participation in that system.

On the Bright Side: Tax Change Could Reduce Impact

One of the reasons Thompson is so pessimistic about the impact of legal online casinos on charities is the state of Alberta’s current tax laws.

Gambling sites in this province pay an 83% tax rate. Ontario online casinos, in comparison, pay just 20%. This makes Alberta more likely to give money to charity. It also gives them less money to invest in developments that could make them competitive with casino sites.

Thompson says a lower tax rate would reduce the impact of AB online casinos on local casinos.

The tax structure has to be dealt with first, we’ve been asking the government to make modest adjustments to the tax structure of the land-based casinos so they can use additional monies to invest in their facilities and be more competitive.

Currently, there are no plans to lower the tax rate for online sites in the province. It’s also unclear whether the province plans to force AB casino sites to donate to local charities.