Jack Mintz: Online Gambling Growth Is Forcing Governments to Reconsider High Tax Rates

The Quick Take

• Economist Jack Mintz argues that online betting growth is creating tax avoidance by enabling gamblers to shift to lower-taxed international websites
• The rapid expansion of online gambling is pressuring governments to lower domestic tax rates on betting to compete with international platforms
• The piece raises a fiscal policy dilemma: higher gambling taxes yield declining revenue as consumers route activity offshore

Jack Mintz, a prominent Canadian fiscal economist writing in the Financial Post, raises the structural policy dilemma facing governments that rely on gambling tax revenue: as online betting grows rapidly, players can and do shift to lower-taxed international websites, effectively exporting the tax base. The argument is a digital-economy version of the classic Laffer Curve tension — when rates exceed the point at which domestic operators can compete with offshore alternatives, the tax base erodes faster than the rate increase yields incremental revenue. This dynamic has played out in multiple online verticals, from streaming to software, and is now reaching the betting sector.

For the online gambling sector, Mintz's argument is directionally favorable for publicly listed operators: lower domestic tax rates improve their competitive position against unregulated offshore platforms and could expand the addressable legal market. Companies including DraftKings, Flutter Entertainment, and BetMGM have all cited regulatory and tax environment as key variables in market entry and profitability decisions. Canadian provinces managing their own regulated betting platforms face a revenue versus market-share tradeoff if they maintain premium tax rates while international competitors undercut on effective payer cost.

Watch federal and provincial Canadian budget deliberations for any signal that gambling tax rates are under review — a rate reduction announcement would be immediately bullish for licensed operators. Track the Ontario iGaming market revenue data, which is the most transparent jurisdiction reporting on how tax rates affect handle and gross gaming revenue. Monitor Flutter Entertainment and DraftKings for any Canadian market investment acceleration, as lower tax clarity would accelerate the licensed operator expansion pipeline in the country.

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