With parts of Canada opting to establish their own online casinos, it was only a matter of time before they started weeding out the competition. After all, governments don’t like competition from the private sector. Starting tomorrow, September 24, groups of online gambling sites will no longer allow Canadian customers to download and play their games.

Though more companies are likely to join the ban, so far only Paddy Power, bwin and Casino Club have stated that they will no longer allow Canadians to download and play their games. All three companies use software developed by Boss Media for their download casinos, but also have no-download streaming versions of their games that were developed by other companies. Interestingly, though the online gambling sites explained that Canadians can no longer download and play their games, there is nothing preventing those same customers from playing the no-download games. For that reason, the speculation is that the Canadian ban was decided by Boss Media.

But why would Boss Media make that call? Likely at the urging of the Canadian governments, specifically the British Columbia Lottery Corporation, the Atlantic Lottery Corporation and Loto-Quebec. To shed a little light on the move, Casino Club released a statement saying that due to new regulations by the aforementioned lottery corporations, “online gaming products in Canada are prohibited. Unfortunately we are required to add Canada to our list of excluded countries.”

If the Canadian lottery corporations are strong-arming companies into banning Canadian customers, you can bet that those three companies won’t be the only to release a similar statement. If you live in Canada, you may soon have no choice but to play on the province-run online casinos.

British Columbia’s controversial online casino is back up and running. At 7:00 PM last night, the British Columbia Lottery Corporation’s PlayNow.com website was re-launched, giving players in the Canadian province the first opportunity in more than a month to play their favorite casino games online.

The online casino was the first launched in North America but it only lasted a couple hours before a security breach caused it to be shut down. A glitch in the software allowed some players to use the accounts of others, wagering with someone else’s money. For security reasons, the website was quickly shut down and only re-launched after an investigation concluded that it was safe.

Following the shutdown of the online casino, the Lottery Corporation went to work investigating the incident, along with an independent investigation from the Office of the Information and Privacy Commissioner and another review by a private consulting firm, Deloitte. At the end of the investigation, those involved concluded that the problem was caused by a software glitch that would have been “almost impossible” for the BCLC to foresee.

Is that supposed to make me feel better? Right now I’m wondering if there are any other glitches that are almost impossible to see. I don’t know about you, but if I was a resident of British Columbia, I’m not sure I would feel comfortable gambling at their online casino. This debacle is yet another in a long list of examples of how government has never been able to run a business as well as a private enterprise. British Columbia residents should demand private casinos, separate from their bumbling government.

The British Columbia Lottery Corporation estimates that each day the website was shut down they lost $150,000 in revenue. In total, they estimate losing $5 million while the online casino was shut down. PlayNow.com is the first online casino to be launched in North America, though Quebec expects to launch one of their own this fall and Ontario plans to follow by the year 2012.

On Monday, when I reported on the fact that Canada’s first online casino had been shut down, like everyone else I reported the reason as too much traffic for the servers. Now it seems that may not be the truth.

On Friday, only hours after PlayNow.com was launched as Canada’s first online casino, the site went down. At the time, a spokesman for the British Columbia Lottery Corporation said that the site was down because of too much traffic to the site. Well, I should have known better than to take the word of a government employee.

On Tuesday, the Lottery Corporation admitted that a security breach was the reason for the website being shut down. It seems that on Friday, twelve gamblers playing on the online casino website had their private information accidentally shared with other users. The Lottery Corp. assures everyone that nothing as sensitive as credit card information was shared, but members did get access to the user names, session time, money spent during the session and account balance.

This happened because of a type of loading glitch called a “data crossover.” When members logged into the online casino, they inexplicably found themselves accessing someone else’s account. Everyone affected by the security glitch has been notified by authorities and are taking the proper precautions to protect themselves. However, the casino website won’t be re-launched until the Lottery Corp. is certain that the glitch has been corrected and that no such security breach will occur again. In the meantime, Canadians who want to play casino games are out of luck.

So why did we first hear that overloaded servers caused a crash of the website, rather than it purposely being shut down because of a software problem that poses a security risk? Well, it certainly sounds better, doesn’t it? Would you rather say “our business is so successful that we couldn’t handle the demand” or “we accidentally shared sensitive account information with other players?”

Some critics have said that the Lottery Corp. rushed the website before it was ready to launch. Though the BCLC insists that’s not the case, the severe security glitch begs to differ. Sometimes it’s best to let the pros, who have been running online casinos for a while, run the casino business. Governments tend to ruin everything they touch, as may be the case here. Legalizing online gambling in the province is a good move, but having the government run an online casino may be too much for them to handle. Admittedly, I don’t know a whole lot about Canada’s governments, but I know governments in general, and they tend to be horrible at running businesses.

The online casino at PlayNow.com was the first online casino established in North America, at least for a couple hours. Other provinces in Canada, such as Quebec, are considering following British Columbia’s lead and opening their own casino for additional tax and permit revenue.

As I reported last week, the Canadian province of British Columbia became the first jurisdiction in North America to legalize and regulate online gambling when they launched a casino on Thursday. British Columbia’s Lottery Corporation launched an online casino on their PlayNow.com website.

Now I have good news and bad news. The good news is that the new online casino has been wildly popular. The bad news is that the website is currently down. That means that online gamblers who want to play now, can’t do it at PlayNow.com.

Within a couple hours of launching the new government-run online casino, the server crashed due to being overloaded by visitors. The Lottery Corporation didn’t have an infrastructure that could handle the massive increase in traffic volume at the site. Due to that, the website is currently down and Canadian citizens eager to play their favorite online casino games can no longer do so, unless they go back to the foreign operators.

While it’s bad news that the website is down and the Lottery Corp. couldn’t handle the traffic, it’s good news that the site was so popular. Online gambling is often seen as a small issue, and in the grand scheme of things maybe it is. However, the crashing of the B.C. server shows just how popular that activity is, which is a good reason to push for further legalization throughout the rest of North America.

There is no timetable yet for a re-launch of the website. Whenever it does get back up and running, though, the Lottery Corporation can expect a large number of deposits and wagers from British Columbia residents.