Unlike many other industries, online gambling is an industry that did not suffer many financial losses from the Covid-19 crisis. In fact, this industry saw unimagined growth in recent years.
Furthermore, the gambling industry contributed a lot financially during the Covid-19 crisis in the country. In this article, we will discuss the ways the gambling industry has contributed to the Canadian economy during the Covid-19 crisis.
How Online Casinos Earn
By looking at the earning structure of an online casino, we can understand how they may have helped the country’s economy during the Covid-19 pandemic. As you know, many people play at an online casino to have fun and pass the time. This is what enables online casinos like Casumo to earn money. They get paid by the money we lose while gambling on one of their casino games.
Though most legitimate online casinos have licences, regular third-party testing, and use RNGs (Random Number Generators) to ensure the results of games aren’t rigged, the house will still always have a statistical edge on any game you play, including online games. This ensures that the casino will always win over time and have a source of income to keep operating, even when an individual player wins big.
For a player to make profits from an online casino would require them to have a tremendous amount of luck and guts. Since beating the odds is quite rare, usually online casinos end up making a lot of money off of their players. But this money is not all pure profit. The major part of this money is spent on licence fees and casino promotion.
The gaming institutes like UKGC, MGA, Gibraltar, Kahnawake, and others charge tremendous amounts of money to maintain their licence. This is a yearly charge, so if the online casinos miss out on a payment, they lose that licence. This is problematic for the casino since the licence is what allows players to trust the casino and ensure they aren’t being treated unfairly.
What Happens When You Win a Lot of Money From Casino Games?
Even though winning a lot of money at an online casino is very rare, it still occurs every now and again. Winning a lot of money through an online casino generally happens when you win a jackpot game. When this occurs, you can easily withdraw your winnings from the online casino by visiting the cashier’s section and choosing the banking method that works best for you.
If you win a significant amount of money from gambling or even manage a smaller win at an online casino you can still help the Canadian economy by spending it on goods or investing it on projects based in Canada. In short, if you deposit your casino wins into banks, invest it in stocks of a company that is based in Canada, and buy goods or services in Canada, you can help the economy grow in the middle of the crisis.
The Gambling Tax
Countries like Canada do not levy taxes on gambling winnings as the government considers it a win by luck, and it is not a constant source of income. Unfortunately, this means the government is losing out on taxes that could have been used to help out the economy during the Covid-19 crisis.
However, if the winning amount is big and you deposited it into a bank account or invested it in stocks or any other industry, you must declare the profits you gain from it on the T5 form. If you fail to do so, you will be fined heavily. This law by the Canadian government is adding to the economy in the time of the Covid-19 crisis by utilizing the tax collected from big casino wins and using it on the development and welfare of the country.
Furthermore, if you are a professional gambler, which means your primary source of income is from gambling, you are liable to pay taxes on your winnings. Professionals who play poker, blackjack, or other casino games are considered freelancers who run their own private companies. So, they have to pay taxes according to Canadian law.
Does the Increase in Gambling Really Equal More Money for Covid-19 Relief?
During the Covid-19 crisis, the whole world was in a year-long lockdown, and people had nothing to do at home. Even new hobbies became boring after a few months. That is when many people turned towards digital entertainment. All digital entertainment sectors, including the online gambling industry, saw a tremendous surge in new customers.
This customer surge led to a surge in profits. Casinos started providing unimaginable bonuses to attract new customers, and they succeeded in doing so. Bored people who had nothing else to do started spending a lot of time playing casino games. This led to a stable income for online casinos.
Canada is also part of this trend as more people now spend their cash at online casinos. Unfortunately because of this, a lot of money is being funnelled out of the country and economy every time a Canadian player loses a casino game. Canada does not have a licensing authority for online gambling right now.
Because of this, Canada can’t regulate online casinos played in its borders and is losing out on a lot of money that comes from providing gaming licences to casinos. The intensity of people losing money on online casinos has only increased since the start of the pandemic, mainly going to offshore sites. This money could have instead been put to good use helping fight the effects of the Covid-19 crisis.
In the end, we can conclude that online casinos and gambling may have contributed a bit to the economy during the Covid-19 crisis. However, we also can’t deny the fact that Canadians have lost a lot of money to offshore online casinos. This money could have been circulating in the Canadian market to make the economy stronger during much of this crisis.