Section 207 of the Criminal Code: why provinces run gambling in Canada

The starting point: everything is prohibited unless permitted

Part VII of the Criminal Code, “Disorderly Houses, Gaming and Betting”, works by prohibition with exceptions. In 2004, Department of Justice counsel Hal Pruden described it to the Senate legal affairs committee this way: “The general scheme of the gambling provisions in the Criminal Code is to prohibit all forms of gambling except those that are specifically permitted by the code.”

The broad prohibition is in section 206(1). It makes it an offence to make, sell or advertise any scheme “for advancing, lending, giving, selling or in any way disposing of any property by lots, cards, tickets or any mode of chance whatever”, or to conduct or manage such a scheme. The offence is indictable, with up to two years’ imprisonment, or punishable on summary conviction. Almost everything legal about gambling in Canada exists because a later section carves it out of that rule. Section 207 is the most important of those carve-outs.

Section 207(1): “conduct and manage”

Section 207(1) opens with “Notwithstanding any of the provisions of this Part relating to gaming and betting, it is lawful”. It then lists who may run a lottery scheme. Paragraph (a) is the one that puts provinces in charge:

“(a) for the government of a province, either alone or in conjunction with the government of another province, to conduct and manage a lottery scheme in that province, or in that and the other province, in accordance with any law enacted by the legislature of that province;”

The other paragraphs are narrower:

• (b) charitable or religious organizations, under a provincial licence, if the proceeds go to a charitable or religious object or purpose;
• (c) the board of a fair or exhibition, or a concession operator leased by that board, where the province has designated the fair and issued a licence;
• (d) any licensed person at a public place of amusement, if each prize is no more than five hundred dollars and the price of a chance is no more than two dollars;
• (e) and (f) sales in one province of tickets for a lottery scheme authorized in another, by agreement between governments or with the consent of the authorizing body;
• (h) making, printing and shipping gaming supplies to places where their use is lawful.

“Conduct and manage” is the operative phrase. A province cannot simply license a private casino company under paragraph (a); the province itself must run the scheme. Where private companies are involved, as in Ontario’s online market described below, the provincial body must still be the one that conducts and manages. Alberta is the visible exception on the charity side. The AGLC describes Alberta as the only province where charitable organizations are licensed to conduct and manage casino events under paragraph (b). Our regions guide shows how each province uses these powers.

What a “lottery scheme” covers, and the dice-game change

Subsection 207(4) defines “lottery scheme” broadly, by reference to section 206, and then excludes three things. In the current text, paragraph (c) is the one that matters most:

“(c) for the purposes of paragraphs (1)(b) to (f), a game or proposal, scheme, plan, means, device, contrivance or operation described in any of paragraphs 206(1)(a) to (g) that is operated on or through a computer, video device, slot machine or a dice game.”

The words “for the purposes of paragraphs (1)(b) to (f)” do the work. Charities, fairs and other licensees cannot run slot machines, computer games, video devices or dice games. A province acting under paragraph (a) can. This is the legal basis for provincial VLTs, slot floors and online casinos. Subsection (4.1) makes one exception for charities: a computer may be used to sell tickets, select a winner or distribute prizes in a licensed raffle, including a 50/50 draw.

Dice were not always on the provincial side of that line. The Justice Department’s Senate testimony states that “a 1999 amendment to the Criminal Code permitted lotteries or gaming schemes that are operated by a province or territory through a dice game”, and the amendment history under section 207 lists S.C. 1999, c. 5, s. 6. Craps at a provincial casino rests on that change. The other two exclusions in subsection (4) still apply to everyone, provinces included. Paragraph (a) covers three-card monte, punch boards and coin tables. Paragraph (b) covers bookmaking and betting on horse-races.

The 1979 and 1985 federal–provincial agreements

Provincial control was negotiated as well as legislated. According to the Senate testimony, the 1969 Criminal Code amendments first allowed lottery schemes to be conducted by the federal government or by provincial and territorial governments. In 1979 the governments signed an agreement under which Canada agreed not to conduct lottery schemes, and in return it would receive what by 2004 amounted to some $50 million a year. In 1983, Parliament amended the Code to allow federal pool betting, and litigation followed.

The 1985 agreement on gaming resolved all of it. Ottawa agreed to put legislation before Parliament that would remove federal authority for lottery schemes and pool betting, and explicitly permit the provinces and territories to conduct lotteries, pool betting and other games of chance. The 1985 amendment also clarified that provinces could run gaming on or through a video device, slot machine or computer, but could not license others to do so. In exchange, the provinces and territories agreed to give the federal government $100 million for the 1988 Calgary Olympics and to continue the annual payments under the 1979 agreement.

Section 204: the pari-mutuel exception

Horse racing sits outside section 207 entirely. Subsection 207(5) says nothing in the section authorizes pari-mutuel betting on horse-races “other than in accordance with section 204.” Section 204(1)(c) exempts bets made through a pari-mutuel system on running, trotting or pacing horse-races at a race-course of an association, including races run elsewhere in or out of Canada. For a race outside Canada, the race’s governing body must be certified as acceptable by the Minister of Agriculture and Agri-Food or a designated person. Section 204(1) also exempts private bets between individuals not in the business of betting. That is why racetrack betting is federally regulated while casinos are provincial.

Bill C-218, briefly

Until 2021, paragraph 207(4)(b) excluded from “lottery scheme” any betting “on any race or fight, or on a single sport event or athletic contest”, according to the archived version of section 207 in force from 2018-12-13 to 2021-08-26. As a result, a province could not conduct and manage betting on a single game. Bill C-218, the Safe and Regulated Sports Betting Act, was a private member’s bill sponsored by Kevin Waugh. According to LEGISinfo, it received royal assent on June 29, 2021 as S.C. 2021, c. 20. It narrowed the exclusion to bets “on any horse-race”, so single-event sports betting became a lottery scheme that provinces may conduct and manage. Our sports betting page covers the market that followed.

Where offshore sites fit

Paragraph 207(1)(a) authorizes a province to conduct and manage a lottery scheme “in that province”. A site that no province conducts and manages is not covered by paragraph (a). Subsection 207(3) makes it an offence to do anything for a lottery scheme that the section does not authorize. For conducting or managing, that is an indictable offence with up to two years, or a summary offence. For participating, it is a summary conviction offence. Licences from other jurisdictions, such as Curaçao, Malta or the Kahnawake Gaming Commission, are not provincial authorizations under section 207.

Ontario shows how a province brought private online operators inside the section. According to the AGCO’s overview of internet gaming, iGaming Ontario was established on July 6, 2021, to conduct and manage internet gaming provided through private operators “in accordance with Canada’s Criminal Code”. The market launched on April 4, 2022, and iGaming Ontario became an independent agency on May 12, 2025. The model was tested in court. iGaming Ontario’s 2023-24 annual report says the Mohawk Council of Kahnawake applied to the Ontario Superior Court for a declaration that Ontario does not “conduct and manage” online lottery as section 207(1)(a) requires. The court dismissed the application on May 13, 2024, and the Council announced on May 22, 2024 that it would not appeal.

One further exemption is section 207.1, which allows gaming on international cruise ships if, among other conditions, all participants are on board, the game is not linked to anything off the ship, and it is not operated within five nautical miles of a Canadian port of call.

What this means in practice

1. Every lawful casino, lottery and online casino in Canada traces back to a paragraph of section 207(1), to section 204 for horse racing, or to section 207.1 for cruise ships.
2. Slots, VLTs, online games and dice games can only be run by a province under paragraph (a). Charities and fairs are excluded by paragraph 207(4)(c).
3. In Ontario, the AGCO regulates registered online operators and iGaming Ontario conducts and manages their games.
4. A licence from outside Canada is not a section 207 authorization. Complaints about such a site go to the body named in its licence.
5. Before depositing anywhere, check which provincial body, if any, conducts and manages the site. Then read our responsible gambling page for limit-setting tools and help lines. In Ontario, ConnexOntario is at 1-866-531-2600.