Supreme Court Canada: Ontario International iGaming Plan Faces Skepticism

• The Supreme Court of Canada is scrutinizing Ontario's plan to allow its online gambling platform to "pool liquidity" with international players.
• The Atlantic Lottery Corporation is challenging Ontario's proposal, arguing it encroaches on their market and violates Canadian gambling law.
• While the Ontario Court of Appeal previously deemed the international expansion lawful, Supreme Court justices expressed skepticism, aligning with a dissenting view that elements of the operation would not be managed by Ontario.
• Canadian law permits provinces to run gambling operations within their borders but is silent on international participation, leading to a debate over whether unmentioned activities are prohibited.
• The case carries significant financial implications for Ontario, which generated billions from $61.3 billion in wagers in 2024-25, and raises concerns from addiction experts about increased gambling access.

The Supreme Court of Canada's ultimate decision will therefore not only clarify the legal boundaries for provincial jurisdiction over cross-border online gambling but also dictate whether platforms can legally engage in pooling liquidity online gambling Canada with international players.

The Supreme Court of Canada recently expressed considerable skepticism regarding Ontario's ambitious proposal to open its online gambling platform to international participants. During a recent hearing, the nation's highest court closely examined the province's plan, which would permit residents to place wagers against players located outside of Canada. This scrutiny follows a legal challenge brought by the Atlantic Lottery Corporation, an entity representing a coalition of Canadian lotteries and various provinces. They contend that iGaming Ontario, particularly with its integration of international betting companies, would unlawfully infringe upon the established market share of their own clients. The outcome of this case will significantly shape the future of online gambling jurisdiction across Canada.

Ontario initially launched iGaming Ontario in 2022, establishing an online gambling market that licenses private operators for internet games and sports betting. This initiative aimed to regulate an industry that had previously operated outside legal frameworks, thereby generating substantial revenue for the province. At its inception, Ontario stood as the sole province to implement such a platform, though Alberta subsequently followed suit. In contrast, other Canadian provinces typically restrict online gambling to their government-owned websites.

Ontario's forward-looking strategy included a planned expansion in 2025, which sought to enable "pooling liquidity" with international players for popular games like poker and fantasy leagues. However, games involving liquidity pools outside of Ontario are currently prohibited, meaning the 'closed liquidity' model, where all players must be physically located within the province, remains in effect. The Attorney General of Ontario proactively sought clarification from the province’s Court of Appeal regarding the legality of this proposed new model. Ananthan Sinnadurai, representing Ontario, clarified the province's stance, asserting that the provincial agency would maintain oversight of the platform. He stated, "We choose who we partner with. We still run the system in this province, and fundamentally we control the experience of people in Ontario, because that’s the concern," further adding, "Here, we’re conducting and overseeing the lottery that Ontarians experience."

The legal framework governing gambling in Canada permits regional governments to operate gambling activities in accordance with local regulations, yet it conspicuously lacks specific provisions addressing international gambling. This regulatory void became central to the dispute. In November 2025, the Ontario Court of Appeal ruled that the new market model was lawful. This decision was predicated on the absence of an explicit prohibition against international play within section 207(1)(a) of the relevant legislation, interpreting this silence as granting provinces the freedom to regulate their own lotteries.

However, Matthew Milne-Smith, counsel for the Atlantic Lottery Corporation, argued before Canada’s highest court that this interpretation was "backwards." He contended that since gambling is generally illegal in Canada, "everything that is not expressly permitted is prohibited," and that both the text and historical context of the provisions support this conclusion. Justice Mahmud Jamal of the Supreme Court appeared to concur with this assessment, remarking that the majority’s reasoning in the lower court seemed to have been "done back-to-front." Furthermore, Justice Katherine van Rensburg, in her dissent from the Court of Appeal ruling, maintained that the proposed model would be illegal because certain operational elements of the gambling activity would not be conducted and managed directly by Ontario. The Supreme Court justices seemed to align with this dissenting view, raising questions about Ontario's capacity to enforce its regulations on international participants and whether such an arrangement would contravene Canadian law, which stipulates that governments may only run gambling operations "in that province."

The financial stakes in this legal battle are substantial, with Ontarians having wagered an impressive $61.3 billion during the 2024-25 fiscal year, generating billions of dollars in revenue for the province. Beyond the immediate legal questions concerning Canada Supreme Court online gambling jurisdiction and Ontario iGaming international players legality, the iGaming platform has drawn significant criticism from addiction experts. These specialists have voiced concerns regarding the increased accessibility of gambling.

A recent study underscored these worries, revealing that emergency room visits related to gambling disorders have nearly doubled since the launch of iGaming Ontario. The Supreme Court of Canada's ultimate decision will therefore not only clarify the legal boundaries for provincial jurisdiction over cross-border online gambling but also dictate whether platforms can legally engage in pooling liquidity online gambling Canada with international players. This ruling will profoundly impact future expansion strategies and compliance requirements for online gambling operators across the country, making it a critical development for those advising within the Canadian provincial gambling regulation landscape.

Lawyers advising online gambling operators in Canada should closely monitor the Supreme Court of Canada's decision, as it will clarify the legal boundaries for provincial jurisdiction over cross-border online gambling and dictate whether platforms can legally pool liquidity with international players, impacting future expansion and compliance strategies.

Source: Reporting based on Courthouse News coverage