Canada’s Continuing iGaming Shift: Provinces Look to Repatriate Grey Market Profits

Canada's online gambling market continues to evolve, with each province charting its own course, but there’s no denying that, despite their individual tactics and maneuvering, most seem headed in the same direction.

Ontario led the way back in 2022 with a decision to open their online gambling markets licensed private operators and attempt to win back customers lost to offshore casinos. Alberta followed this past summer, and now New Brunswick is considering its next moves, with other provinces like Quebec and British Columbia also beginning to break out the maps and consider course corrections as new data comes in. 

And while there is a lot of consternation about damage to provincial lotteries or gambling monopolies already in place, the attraction is becoming harder and harder to ignore: Canadians spend hundreds of millions gambling with grey market companies which are unregulated and untaxed. 

That’s money that could ease provincial budget pressures and stay at home with locally based businesses, or at least with companies willing to invest in Canadian offices and infrastructure.  

Atlantic Canada's $250 Million Question

New Brunswick Finance Minister René Legacy recently confirmed that the province is exploring the possibility of allowing private online gaming operations similar to Alberta and Ontario, though no legislation or timetable has been forthcoming quite yet. 

That makes the timing all the more interesting when we look at what the Atlantic Lottery Corporation, the government-owned lottery for all four Atlantic provinces, said in its late-October report. They estimate they currently capture only about 35% of that region’s online gambling market, up just one percent from 34% the year prior. 

That means about two thirds of the overall region’s gaming market continues to take place offshore, with more than $250 million Canadian leaving the area’s economy annually. 

The Atlantic Lottery President, Dallas McCready even went so far as to call the disruption as unprecedented in the organization’s history, and stating that these offshore competitors are drawing hundreds of millions out of Canada without contributing at all, either in taxes, infrastructure or jobs. 

The company said it has invested in more live casino games, improved reward programs, and even personalization to entice more players; indeed, the company’s online profits grew by more than 15% in 2025-26, yet it still managed to gain only one percent in market share. 

Still though, there’s plenty more at stake, Atlantic Lottery returned almost C$500 million to its four different provincial owners last year, with New Brunswick alone seeing almost C$150 million. Protecting that revenue is understandably important as that province alone has a C$1.6 Billion budget deficit.

But as Ontario and now Alberta have shown, protecting existing lottery monopolies and maximizing provincial gambling revenues may not be the same thing. And with those grey market sites still taking in two thirds of every gambling dollar, it’s not hard to imagine that there might be a better way that will more fully protect the online gambling public, increase payout and competition, but still put more money back into the provinces where it is desperately needed. 

Ontario’s Lottery Thrives on Competition

When Ontario first opened its commercial iGaming market in April 2022, concerns emerged that dozens of new private operators would take business away from the Ontario Lottery and Gaming Corporation (OLG).

But four years later, OLG’s digital business is still growing. Proceeds increased from C$750 million in 2023-24 to more than C$882 million in 2024-25, showcasing that even stiff competition didn’t slow revenue. 

And the economic benefits extended far beyond just simple gaming revenue. A Deloitte study commissioned by iGaming Ontario found that the private commercial market contributed C 2.7 billion to the provincial economy in its second year and supported more than 15,000 direct and indirect jobs. 

But most importantly, Ontario now estimates that as much as 90% of its gambling activity now takes place inside the regulated market. Compare that with estimates before the changes, which showed channelization of as little as 17% of the total market.

Ontario’s recent experience suggests that opening the market to competition doesn't have to mean sacrificing the lion’s share of the provincial lottery business. 

Alberta Throws Its Hat in the Ring

Alberta became Canada’s second province to open up its gambling market to private operators in July of this year, and the early numbers suggest there’s still plenty of business to go around.

With more than 42 licenses granted so far, these sites generated more than C$2.89 billion in total wagers and something like C$122 million in revenue from 13 July till 30 September. And that doesn’t include the province’s longstanding Play Alberta platform. 

The province hopes to bring as much as 70% of the total market to the regulated side during its first twelve months of operation. It’s still early days of course, but considering that as much as 70% of the province’s gambling was taking place in unregulated markets in 2025, the opening numbers suggest plenty of appetite for regulated alternatives.

Fence Sitting in Quebec and British Columbia

British Columbia remains more cautious, with the provincial lottery defending its monopoly more ardently against commercial operators. B.C. Finance Minister, Brenda Bailey, has said she believes that PlayNow in the province may be capturing as much as 50% of the total market, which would be in huge contrast to other Canadian provinces. She acknowledges the difficulty of measuring what is, by definition, an unregulated and unknown market. 

Other surveys indicate that only 24% of online gamblers use PlayNow exclusively, so the truth probably lies somewhere in between. Even with optimistic numbers, her office believes more than C$440 million in grey market gambling occurs in B.C. every year, and that number could be much higher. 

Quebec, which has also been slow to act, may finally consider joining the party following October's provincial election. Both the victorious Parti Québécois and the opposition Liberals have expressed support for opening the online gambling market to private operators, potentially ending Loto-Québec's monopoly.

And there would be plenty at stake with studies estimating that nearly three quarters of the province's gambling takes place on unregulated sites, and may total more than C$2.3 billion. It's still early days, however, and neither party has yet proposed any regulatory framework let alone a timeline. Still, Quebec now has something it previously lacked, political support from both major parties to open up the gambling sector to more outside competition.

Loonies Closer to Home

It’s becoming clearer that the question isn’t whether Canadians should gamble online, but how provinces can best collect taxes, encourage local investment, and provide much better protections for players. But of course allowing foreign-owned operators into regulated markets doesn’t mean that every dollar will stay in Canada.

Still, Ontario has demonstrated one possible solution that seems to be working extremely well, and now Alberta is following, with others beginning to reconsider their options.

Canadians can keep gambling, and while some profits may still flow out of the country, they have far less reason to worry about being stiffed by unscrupulous operators or Caribbean sites owned by shady businessmen who never pay even a dollar in provincial taxes. Plus, they can be sure many of those dollars stay in the country, putting people to work and being reinvested in their own communities.