Criminal Code Section 207 is the federal provision that governs all Canadian gambling. It works by carving out specific exceptions to what would otherwise be a blanket criminal prohibition under Part VII of the Criminal Code. This page explains how that structure works, covering the definition of “lottery scheme,” the authority provinces hold to conduct and manage gambling activities, the 2021 amendment that legalized single-event sports betting, the other permitted categories, and the penalties that apply when someone operates or participates outside those boundaries. By the end, you’ll have a clear enough understanding of the provision to assess how it applies to a particular activity or situation.
The Default Prohibition and the Role of Section 207 as an Override
Gambling in Canada is criminally prohibited by default. Part VII of the Criminal Code establishes a broad set of gaming and betting offences that make the conduct, management, and facilitation of such activities unlawful unless a specific statutory exception applies. Section 207 is that exception. It doesn’t create a positive right to operate gambling activities. It carves defined categories of conduct out from the surrounding criminal prohibitions that otherwise remain in force.
The operative structure is signalled by the opening words of s. 207(1): “Notwithstanding any of the provisions of this Part relating to gaming and betting, it is lawful…”. That “notwithstanding” construction confirms the provision’s function as an override to the default prohibition rather than a freestanding permissive grant. Any activity that falls outside the authorized categories remains captured by the underlying Part VII offences.
The Defined Term at the Core of the Provision
The entire operative scope of section 207 turns on a single defined term set out in subsection 207(4): “lottery scheme.” Without that definition, the exception created by s. 207(1) would have no fixed subject matter. The definition doesn’t stand on its own — it operates by cross-reference to another provision of the Criminal Code and at the same time carves out specific activities that remain outside the permitted scope. Reading s. 207 in isolation gives you an incomplete picture. The boundary of what a province or licensee may lawfully conduct is set by what s. 207(4) both incorporates and excludes.
What Falls Within the Statutory Definition
Section 207(4) defines a “lottery scheme” as a game or proposal described in any of paragraphs 206(1)(a) to (g) of the Criminal Code, whether or not it involves betting, pool selling, or a pool system of betting. This drafting choice has a real consequence: the permitted scope is not self-contained within s. 207. To identify what activity can be authorized, you have to trace back to the underlying gaming offences listed in s. 206(1)(a) to (g), which set out the general prohibitions on operating gaming houses, dealing in lottery tickets, and running games of chance. The express inclusion of activities “whether or not” they involve wagering also confirms that the category extends beyond bet-based games to cover proposal-based schemes like draws and raffles.
Activities Categorically Excluded from the Definition
Certain activities are excluded from the s. 207(4) definition entirely and cannot be authorized under s. 207, regardless of any provincial licence or Crown corporation involvement. These exclusions mark the outer boundary of lawful lottery schemes and preserve the reach of the general Part VII prohibition, and in one case a separate federal regime, over the specified activities. The following categories fall outside the definition:
- Three-card monte — excluded street-game category preserved under the general prohibition.
- Punch boards and coin tables — excluded mechanical and paper gaming devices.
- Bookmaking and pool selling — excluded intermediary betting activities.
- Bets on horse races or fights — excluded and channelled instead through the separate federal pari-mutuel regime under s. 204, expressly preserved by s. 207(5).
The Provincial “Conduct and Manage” Authority
Section 207(1)(a) is the operational core of the provision. It permits a provincial government, alone or jointly with another province, to conduct and manage a lottery scheme in that province in accordance with any provincial law. This single paragraph is the statutory basis on which the entire modern Canadian gambling industry, including land-based casinos, retail lottery products, and provincially regulated online gaming, is built. Every other actor permitted under s. 207(1), from charitable licensees to fair boards, operates within a narrower category. The provincial authority under paragraph (a) is the one on which the commercial market rests.
The Meaning and Operational Weight of “Conduct and Manage”
The phrase “conduct and manage” is not incidental drafting. It imposes a binding operational requirement: a province cannot discharge its s. 207(1)(a) authority simply by licensing or authorizing a private operator to run a lottery scheme. The province itself must genuinely conduct and manage the activity, and the entity holding that statutory role must be identifiable as the responsible actor.
In practice, provinces meet this requirement by establishing Crown corporations and dedicated gambling regulators, provincial agents that hold the conduct-and-manage role in law. Private operators typically function as suppliers or service providers under the operational control of the provincial entity, delivering platforms, games, or ancillary services on behalf of the Crown agent. FINTRAC applies the same “conduct and manage” concept when identifying the entity legally responsible for casino gaming under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. Where the standard is not genuinely met, the s. 207 exception does not apply, and participants remain exposed to criminal liability under the general Part VII gaming and betting offences.
How the Provincial Authority Extends to Online Gambling
The conduct-and-manage authority has been interpreted as extending to internet-based gaming operated by provincial entities. That interpretation is what allowed provinces to build regulated online gambling markets on the s. 207(1)(a) foundation, with a Crown agent conducting and managing the scheme and private operators supplying games and platforms under contract.
The constitutional and interpretive limits of that extension were tested in a 2025 reference proceeding examining a provincial online gaming regulator. An appellate court considered whether a provincially run internet gaming scheme could lawfully link players in the province with users located outside Canada while remaining within the “conduct and manage” boundary (Reference re iGaming Ontario, 2025 ONCA 770). A majority read the provision as permitting such cross-border linkages. A dissenting judge concluded that pooling players across jurisdictions would take the scheme outside the geographic and operational scope of s. 207(1)(a). Further appellate consideration remains possible.
Federal-Provincial Division of Authority and Historical Amendments
Canadian gambling law divides responsibility along a clear axis: the federal Parliament defines the criminal boundary through Part VII of the Criminal Code, while the provinces exercise operational authority within the narrow exception carved out by s. 207. Provincial governments don’t create the underlying permission. They occupy the space that federal criminal law opens for them.
Two amendments shaped the current allocation. In 1969, Parliament amended the Criminal Code to exempt federally and provincially conducted lottery schemes from the general prohibition, shifting Canada from outright criminal prohibition to a regime of regulated oversight. In 1985, further amendments removed the federal government’s authority to conduct and manage lotteries, leaving that authority exclusively to the provinces. Together, these amendments produced the present structure in which provincial Crown agents are the only governmental actors capable of conducting and managing a lottery scheme under s. 207(1)(a).
The 2021 Amendment and the Scope of Sports Betting
Until 2021, the definition of a permitted lottery scheme in s. 207(4)(b) expressly excluded betting on a single sport, athletic contest, or event. The effect was that provincially conducted sports wagering was confined to parlay-style products requiring the combination of two or more outcomes on a single ticket. Single-game wagers on individual matches or contests fell outside the s. 207 exception and remained subject to the default criminal prohibition in Part VII.
Parliament removed that limitation through the Safe and Regulated Sports Betting Act (Bill C-218, S.C. 2021, c. 20). The Act received royal assent on June 29, 2021, and came into force on August 27, 2021.
What the Amendment Changed and What It Preserved
The Safe and Regulated Sports Betting Act struck the single-event exclusion from s. 207(4)(b). With that carve-out removed, the definition of a lottery scheme now covers wagers placed on the outcome of a single sport, athletic contest, or event, provided the wagering is conducted and managed by a province under s. 207(1)(a).
The amendment did not change the treatment of horse race betting. Wagers on horse races remain outside the s. 207 lottery scheme framework and continue to be governed by the separate federal pari-mutuel regime under s. 204, which is expressly preserved by s. 207(5). That preservation is unaffected by the 2021 change.
The practical result is a split structure: single-event wagering on team sports and most athletic contests now falls within provincial conduct-and-manage authority, while wagering on horse races continues through a distinct federal pari-mutuel channel administered under s. 204 rather than s. 207.
Other Permitted Categories Under Section 207(1)
While paragraph (a) gives the primary conduct-and-manage authority to the provinces, s. 207(1) also carves out a set of narrower actors and activities under paragraphs (b) through (h). Each of these categories operates within tightly defined parameters. Most depend on a provincial licence, and the remainder are confined to specific statutory limits. The paragraphs identify who may lawfully conduct a lottery scheme outside the provincial Crown structure and the operational scope attached to each.
- Licensed charitable and religious organizations — permitted under s. 207(1)(b) to conduct a lottery scheme where proceeds are used for a charitable or religious object, subject to provincial licence.
- Boards of a fair or exhibition — permitted under s. 207(1)(c), subject to provincial licence.
- Concessionaires at licensed fairs or exhibitions — permitted under s. 207(1)(d), subject to provincial licence.
- Any person authorized by provincial licence — permitted under s. 207(1)(f) to conduct a lottery scheme other than one reserved to the province, subject to defined limits.
- Any person, for private gaming purposes — permitted under s. 207(1)(e) within narrow non-commercial parameters.
- Cross-border materials production — under s. 207(1)(h), permitted for any person in Canada to make, print, or transport gaming-related materials for use in jurisdictions where such use is lawful, including foreign jurisdictions.
A Separate Statutory Exception for International Cruise Ships
Section 207.1 sits alongside the primary provision as a discrete statutory exception, permitting lottery schemes to be conducted on board international cruise ships without relying on the provincial conduct-and-manage authority in s. 207(1)(a). An “international cruise ship” is defined in the Criminal Code as a passenger ship suitable for continuous ocean voyages of at least forty-eight hours duration. The exception is conditional: the ship must be engaged on an international voyage, the scheme must be operated on board only, and the on-ship scheme cannot be linked to any lottery scheme located off the ship. This last condition, the prohibition on off-ship linkage, was expressly noted by the Ontario Court of Appeal in Reference re iGaming Ontario as an example of a linkage restriction that Parliament imposed in s. 207.1 but did not impose in s. 207(1)(a). The result is a narrow, self-contained authorization that is operationally distinct from the provincial framework governing land-based and online gambling.
Penalties for Unauthorized Conduct or Participation
Section 207(3) of the Criminal Code sets out the criminal consequences that apply when conduct or participation in a lottery scheme falls outside the authorization framework established by the rest of s. 207. The subsection is the enforcement counterpart to the exception mechanism: any lottery scheme activity not covered by a valid provincial conduct-and-manage arrangement, a valid provincial licence, or one of the narrower permitted categories reverts to criminal exposure. That exposure is not uniform. Section 207(3) calibrates liability according to the actor’s role in the scheme, drawing a statutory line between those who run an unauthorized scheme and those who merely take part in it.
Offence Categories and Maximum Penalties
The offence structure under s. 207(3) draws a line between those who conduct or manage an unauthorized lottery scheme and those who merely participate, with different maximum exposures for each. The table below sets out the two conduct categories, the offence classification attached to each, and the corresponding statutory maximum penalty.
| Conduct Type | Offence Classification | Maximum Penalty |
|---|---|---|
| Conducting or managing an unauthorized lottery scheme | Indictable offence, or offence punishable on summary conviction (Crown election) | Imprisonment not exceeding 2 years on indictment |
| Participating in an unauthorized lottery scheme | Offence punishable on summary conviction | Summary conviction penalties |
Reading Section 207 as an Exception-Based Framework
The 2021 single-event sports betting amendment is more than a regulatory update. It fundamentally redraws what provinces can authorize, making it the most significant recalibration of Section 207’s scope in a generation. That matters because Section 207 doesn’t grant permissions. It carves narrow exceptions out of a standing criminal prohibition, and that distinction shapes every operational decision that flows from it. Provincial authority under s. 207(1)(a) remains the practical cornerstone of lawful gambling in Canada, but its boundaries shift as legislation evolves. If you’re working through the compliance implications for a specific operation, reviewing the consolidated statutory text alongside your provincial regulator’s current guidance is the clearest path forward.
