The reason is simple, the government (in canada that means each province) owns the rights to gambling, except horseracing which is controlled by federal ministry of agriculture. Operating a gaming house in canada is a felony.
As long as they don’t take canadian bets, they can operate freely (but still subject to most US gaming laws, because of extradition treaties) in markets outside Canada.
While almost every country wants to control gambling at home, they seem ok with their citizens running gambling outside their own borders.
The success of the US in damaging the industry has the anti gambling forces in canada wanting similar actions. Canadian media is fervently ant-gambling. It appears to be a spring ritual here.