Alberta Bet Big on Oil. iGaming Taxes Are the Backup Plan

^{Alberta, seen here against the backdrop of the Rocky Mountains, has long been a land of oil and gas, and only recently has embraced online gambling as a means to pump up its economy. (Photo: Michael Interisano / Alamy)}

Alberta’s push to open its online gambling market came at the same moment as a landmark deal to construct a new cross-country pipeline for its all-important energy industry. A noted Canadian economist and other industry analysts say the timing isn’t a coincidence – it’s diversification. 

"No other province in Canada is as reliant on revenues from a single sector," Dr. Kent Fellows, an Assistant Professor of Economics at the University of Calgary, told Casinos.com. 

Fellows, who has previously advised the provincial government on its energy policy, says iGaming is one of the few new revenue levers Alberta has left to pull.

The oil-rich province is tethered to the energy markets in ways that can prove deeply expensive. The emergence of iGaming as a new source of taxation represents a way to diversify the province’s portfolio.

The launch of the fully regulated Alberta online gambling sector in July had been hotly anticipated for years, and with more than 20 operators now live and plenty more to follow, industry confidence in the revenue potential of the province is clearly high.

Pipeline Politics Overshadow iGaming's July Debut

For most Albertans, the biggest business news of the month was not the advent of regulated iGaming, it was instead a deal with the federal government to secure the creation of a major oil pipeline.

At the end of a complex series of negotiations mediated by Canadian Prime Minister Mark Carney, Alberta has secured backing for a pipeline that will take bitumen from its northern oil sands 1,200km across the country to ports in Vancouver. 

From there, Canada intends to sell its oil to growing economies in Asia and, in the process, reduce the nation’s dependence on its increasingly unreliable trading partner to the south.

For Alberta Premier Danielle Smith, the hope is that after an initial injection of capital, some of which will be covered by the federal government, the pipeline project will begin generating high income for the province.

Gambling tax revenue, too, will serve to help manage a government deficit which had spiraled to C$9.4 billion at the time of the provincial budget earlier this year, prompting dire warnings of financial collapse.

“The kind of spending growth now appearing in provincial budgets like Alberta’s is exactly the behaviour that pushed Canada into a fiscal crisis three decades ago,” warned Jay Goldberg, a fellow with the Frontier Centre of Public Policy.

According to the government’s own estimates, every $1 shift in the price of oil moves Alberta’s annual provincial revenues by as much as $680 million, which explains why Edmonton is looking for revenue that doesn’t move with the price of crude. 

Renewable Revenue

These fluctuating fortunes demonstrate why the Edmonton government continues to face accusations that the province’s economic fortunes are too dependent on energy sector factors largely out of its control.

As oil prices soured, in part due to the closure of the Strait of Hormuz, that projected deficit shrank so much that it disappeared completely. However, with oil prices falling again as US-Iran peace talks resume, those debts could yet reappear. 

Around 20-25% of Alberta’s public revenue comes from resource royalties, said Fellows, who in addition to his work at the University of Calgary, also serves as an energy policy advisor for the C.D. Howe Institute. 

Albertan politicians also have a powerful aversion to raising taxes and cannot even introduce a sales tax without a referendum.

That leaves the government massively dependent on the fortunes of its oil sands, meaning that the addition of tax revenues from iGaming provides a welcome escape valve, releasing some of the pressure built up by the province's dependence on energy markets.

“In considering gaming revenues,” Fellows said, “movements in this direction are more likely the result of a general desire to increase public revenues without increasing taxes.”

There’s good reason for officials to believe that online gambling can provide a meaningful cash influx.

The Alberta online gambling market is projected to generate revenue of C$1.7 billion (US$1.2 billion) by 2029. At a 20% tax rate, that means $340 million of income for the government, although a small portion of that figure is earmarked for gambling addiction treatment and economic reparations for First Nations communities.

The prime example of Ontario’s still growing online gambling market has officials hopeful of an even larger long-term windfall.

Since its launch in 2022, Ontario’s provincial government estimates it has earned $2.04 billion in tax revenue from the iGaming sector. And Ontario's iGaming market has continued to accelerate into 2026. 

Q1 alone brought in $1.13 billion in operator revenue and an estimated $226 million in provincial tax, putting the fiscal year on pace for nearly $1 billion in iGaming tax revenue, four times what the market generated in tax in its first full year.

The Human Factor in iGaming

There’s an undoubted fiscal benefit in licensing and taxing what was previously a flourishing grey market. Money spent on iGaming by Alberta’s residents before this July had been disappearing offshore.

However, at least one veteran of Canadian gambling regulation believes that protecting the province’s citizens was also a major motivating factor in the province’s decision to re-regulate. 

Former general counsel for the Alcohol and Gaming Commission of Ontario, Don Bourgeois, told Casinos.com that he believes the human element is at the core of Alberta’s project.

“While the revenue issue is obviously a factor, the primary motive was to bring the operators, suppliers and product into a regulated market to protect Alberta consumers,” he said.

“Doing so brings the transactions into the Canadian anti-money laundering process and into Alberta's responsible gambling and self-exclusion programs.”