Canada cancels the Digital Services Tax: relief for the iGaming business and new market opportunities
The Canadian government has officially suspended the introduction of the Digital Services Tax (DST), a decision that does not go unnoticed by the iGaming sector. In a context of growing attention to digital service regulation, Ottawa’s choice to shelve, at least for now, a 3% tax on the revenues of digital platforms sends a clear political and economic signal, with tangible effects for online gaming operators, especially international ones.
A tax that concerned digital markets, including iGaming
The Canadian DST, announced in 2020, was inspired by similar measures already adopted in Europe by countries such as France, Italy and Spain. It aimed to target tech giants, particularly multinational companies generating significant revenue from Canadian users without a substantial physical presence in the country.
According to the proposed law, the tax would have applied at a rate of 3% on revenues derived from Canadian users exceeding 20 million dollars in a calendar year, with retroactive application starting from 2022.
However, the scope of the tax was such that it would inevitably have impacted other digital sectors, including iGaming. International online casino, betting and gaming platform operators based offshore or in other regulated jurisdictions could have faced a significant increase in operating costs linked to the Canadian market.
Concrete impact for iGaming operators: less fiscal pressure, more room for growth
With the suspension of the tax and the announcement of plans to formally repeal it through new legislation, online gaming operators can breathe a sigh of relief. The removal of the DST eliminates the risk of a potentially burdensome tax that could have limited competitiveness in the Canadian market.
Canada is already one of the most attractive iGaming markets globally, thanks to a digital-savvy population and an evolving regulatory framework. Ontario, in particular, with its regulated regime, has attracted numerous international operators, transforming itself into a testing ground for iGaming expansion in North America.
With fewer fiscal burdens and a more predictable environment, companies can now plan investments, launch new offerings and consolidate their presence in the Canadian market without having to recalibrate operating margins due to additional taxation.
A strategic decision, also for the United States
The suspension of the DST is closely linked to trade relations between Canada and the United States. The American administration, particularly President Donald Trump, expressed strong opposition to the tax, deeming it discriminatory towards U.S. companies. Trump even threatened new tariffs on Canadian products within the following week.
Ottawa’s decision to back down aims to foster dialogue and facilitate broader trade negotiations. Canadian Prime Minister Mark Carney and President Trump have set the goal of reaching a new economic agreement between Canada and the United States by July 21.
This political and economic context further enhances the appeal of the Canadian market for iGaming, as it reduces the risk of trade tensions or restrictive measures that could indirectly affect gaming operators.
Concrete opportunities for the iGaming industry
The absence of the DST, combined with ongoing regulatory developments in certain Canadian provinces, opens up interesting opportunities for iGaming operators. International companies will be able to expand their operations in Canada without the fear of additional digital service taxes that would have impacted profitability.
A more relaxed business climate could also facilitate new partnerships between local and global players. Resources saved from taxation can now be reinvested into marketing, technological innovation and the enhancement of customer experience. Ultimately, these developments are likely to strengthen the Canadian iGaming ecosystem, generating positive effects on employment, technological progress and local economic growth.
Considerations for the future
Although the suspension of the DST is positive news, the iGaming sector must continue to closely monitor the evolution of the regulatory and fiscal landscape internationally. The taxation of digital services remains a hot topic, with complex geopolitical and economic dynamics at play.
Operators and investors must adopt a strategic approach, considering the political implications and possible future developments. However, the direction taken by Canada clearly indicates that a collaborative approach and openness to innovation can foster the sustainable development of the iGaming market.
The suspension of Canada’s Digital Services Tax represents a significant piece in the global puzzle of fiscal policies impacting the iGaming sector. For online gaming operators, it translates into a concrete opportunity to strengthen their presence in a growing market, seizing the advantages of a more favourable economic environment and a more relaxed political climate.
This article was first published in Italian on 30 June 2025.
