Unregulated Internet Gambling Firms Stripping Millions from Canadian Economy

Bad news for Canadian taxpayers: Bodog is now accepting bets from online gambling patrons who live in Canada.

"Bodog offers Canadian players safe, secure and simple access to sports betting, a thriving and dynamic poker community, and a full Vegas-style casino with more than 80 web-based and downloadable games," Bodog said in a recent release. "The Sportsbook also has a particular focus on Canada's most popular sports, NHL hockey and CFL football."

Bodog is the online gambling empire created by former Vancouver resident Calvin Ayre. It was originally based in Costa Rica, but operated marketing and call-centre functions in Vancouver. Ayre also maintained a multi-million-dollar penthouse in Yaletown. To avoid conflict with Canadian authorities, Bodog didn't accept bets from Canadians.

More recently, however, Bodog moved its servers to the Kahnawake Reserve in Quebec, beyond the purview of the Canadian government. It also disbanded its Vancouver operations, and Ayre also sold his Yaletown condo.

Insulated from prosecution, Bodog has now joined a host of other offshore Internet gambling companies that are stripping millions of dollars from the Canadian economy every year.

As I argued in my Aug. 21 column, when it comes to Internet gambling, the genie is out of the bottle. There is no sense trying to eradicate it. The most sensible approach is to regulate it. That way, we can make sure the games are fair, operators are of good character, and taxes are collected.

I am pleased to see that some U.S. legislators agree. In May, Barney Frank, chairman of the U.S. House Committee on Financial Services, introduced the Internet Gambling Regulation, Consumer Protection and Enforcement Act, which would permit licensed gambling operators to accept wagers from U.S. residents. It would also include important consumer safeguards.

A companion bill, the Internet Gambling Regulation and Tax Enforcement Act, would ensure that personal and corporate taxes, as well as licence fees, are collected. According to a PricewaterhouseCoopers analysis, tax revenue from Internet gambling would amount to nearly $63 billion US over the next decade.

Several days ago, another Democratic senator proposed an amendment that would see gambling proceeds used to offset the cost of health-care reform.

It's time that Canadian politicians accepted the reality of the situation and developed similar legislation to gain control over this outlaw industry and capture whatever benefits it can provide.