Online gaming is gaining more public attention in North America. The local online game industry is expected to exceed $54 billion by 2030. This reveals numerous opportunities for the United States and Canada. Both countries still have many restrictive regulations for gaming activities. But the situation is finally starting to change. National governments are now evaluating the financial benefits of online gaming for the national budget. Let’s see the current status of online casino operators in the United States and Canada.

Licensing Regulations

Licensing is a key distinction between online gaming in Canada and the United States. Ontario was the first Canadian province that allows international operators to target local players by offering diverse games, bonuses, and payments. Many games hold dual licenses from local and international jurisdictions such as Gibraltar or Malta. Other provinces remain more restrictive. For example, British Columbia operates local gaming platforms and issues no private licenses. Alberta is in the process of regulating online games in the province, but the project details are pending.

In the United States, licensing regulations are state-driven and often associated with land-based games or tribal operators. For now, only seven states, like New Jersey and Pennsylvania, have legalized local online games. International companies must collaborate with provincial operators to target the local audience. California, Texas, and Florida are considering the legalization of online gaming activities, but no regulations have been implemented so far.

Canada’s provincial approach under federal law grants local authorities full control over licensing methods. The U.S. has strict state regulations, creating a patchwork system with varying access.

Taxation of Casino Winnings

In the United States, all game winnings are taxable, with games and states able to withhold taxes. Non-residents face a standard federal withholding tax rate of 30%. Under the new rules that come into effect in 2026, only 90% of game losses are deductible, to the extent of online gaming winnings.

Canada doesn’t tax recreational gaming winnings. Only professional gamblers are liable, which is rare. The government raises revenue through registration fees and earnings from local gaming sites. This makes Canada more appealing to players. Meanwhile, the U.S. regulations heavily rely on taxing gaming income for public earnings.

Value of Sweepstakes Casinos

Sweepstakes games use virtual money, eliminating the need for real money deposits. Players buy “coins” to play games. In some cases, these coins can be exchanged for real money or special prizes. Operators argue that sweepstakes don’t belong to online gaming, though their experience closely mimics traditional online games.

In Canada, most provinces support sweepstakes games that follow clear advertising and gaming standards. Québec is the only province that completely bans sweepstakes. In Ontario, sweepstakes games struggle with serious competition from licensed operators. The U.S. doesn’t have a single policy for sweepstakes games. Several states ban them, leading to fines and even lawsuits.

Sweepstakes games show how online gaming activities challenge existing laws. Canada shows more tolerance, while the U.S. imposes quick restrictions.

Growing Market Revenue

In 2024, the U.S. online gaming activities generated over $10 billion. Online games contributed approximately $6 billion the same year. In 2025, online gaming sites earned part of all gaming revenue, showing 10% annual growth through the decade. New Jersey, Michigan, and Nevada are the only states that have legalized online games in the country. They are constantly expanding the gaming footprint in the country.

Canada’s gaming market is growing faster despite its small size. Gaming revenue reached almost $4 billion in 2024. According to the recent projections, it can hit around $9 billion by the end of 2030. Ontario stands behind much of this growth, reporting over $3 billion, mainly from online games. British Columbia relies on local gaming platforms, which bring limited revenue. Alberta plans to register a local licensing body to attract online game operators and contribute to the local budget.

Continuous Developments in Canada and the USA

By 2025, Ontario will be the most profitable gaming market in Canada. It continues to grow and attract international brands. Alberta is planning to adapt the gaming law. British Columbia focuses on online games run by the government. This shows the differences between Canadian provinces that either increase their competitive edge or stay under total state control.

In the United States, the gaming market is in the process of development. There are seven states that benefit from the gaming market revenue. Illinois, Colorado, and Indiana are gradually expanding their coverage of gaming activities.

Innovations change the world of online gaming in both countries. The decentralized betting mechanism, powered by crypto payments, is gaining huge attention. Gaming regulators aim to follow the recent trends, while foreign operators must follow the latest rule changes in the United States and Canada. The collision between the dynamic market growth and user safety is now one of the major issues in North America.