Ladbrokes Bails from Canadian Market as Bad Bet

September 25th, 2014 | by Kaycee James

Ladbrokes Poker will be leaving the Canadian market effective October 1. (Image: onlinegamblerslclub.com)

Ladbrokes is best known for its sports book, but the UK-based bookmaker also runs a fairly large poker room that’s a part of the iPoker Network. That site has been available in a number of countries around the world, even where Ladbrokes doesn’t have an explicit license to operate. But starting next month, there will be one less nation that can sign into the online operator’s poker room.

Ladbrokes has announced that it will stop taking deposits and wagers from Canada at its online gambling sites starting on October 1. Players will have the ability to withdraw their funds up to 30 days after this date, though all bonus funds and other pending promotional balances that are still in their accounts once the sites shut down will disappear.

Decision Based on Regulatory Review

According to Ladbrokes, the decision to end its Canadian operations comes after “a review of Canadian igaming regulations,” which could refer to the fact the company did not have a license to operate there and there are regulated Internet gaming jurisdictions in several provinces. However, the timing has created speculation that the move may have more to do with regulations in the UK than any Canadian laws.

A new online gambling licensing scheme is set to go into effect in the UK next month. In order to earn a license from the UK Gambling Commission, operators are required to share extensive financial information. In particular, they must provide information on their legal basis for operating in so-called “grey markets,” where operators aren’t licensed by local regulators if those markets generate more than three percent of a company’s revenues.

That means that Ladbrokes could be exiting Canada to reduce its exposure in such markets to ensure there are no problems with UK licensing. However, the company has downplayed such concerns, saying that Canada contributes less than 0.5 percent of the its revenues and that the move was part of a regular review process.

“We continually review the markets we operate in based on legal advice and Canada is not a material contributor,” Ladbrokes said in a statement. “The vast majority of our business is UK and Ireland, with a focus on Australia, Spain and Belgium for the future.”

Other Online Gambling Firms Also Leaving Canada, Grey Markets

Other major UK gambling firms have been making similar decisions. Earlier this year, William Hill pulled out of over 50 grey market nations, including much of Africa. However, it’s worth noting that the UK bookmaker did not leave Canada, and their online offerings remain available to Canadians to this day.

Companies such as Betfred and InterPoker have stopped allowing Canadians to play on their sites over the past year, and others have either followed suit or at least strongly considered making such moves. On the other hand, PokerStars has said that it will be staying in Canada even after their purchase by Amaya Gaming, a Canadian company that would presumably be sensitive to the regulatory situation in the country.

For many online gambling firms, the new licensing regulations in the UK have required them to make a decision over whether to stick with a legally murky worldwide approach or focus solely on gaining licenses in regulation markets. One of the main issues is whether company believe staying in the UK is worth the 15 percent point-of-consumption tax on online gambling activities by players there.