Part II: Canadian Gambling Takes Two Steps Forward, One Step Back (As Always)

Posted by: on Sep 13, 2016 | No Comments

Read Part 1 of this article


Quebec’s Parochial (Knee-Jerk) Reaction

It’s true that most governments need a lot of hand-holding before they get their policies right. The most common problem with the bureaucratic machine is that it is rarely integrated in terms of what the left and right hands are doing. While provinces like Ontario and British Colombia see the gains from allowing casinos to operate, the powers-that-be in Quebec have decided to clip the wings of outside players.

In May 2016, the Quebec legislature allowed the ministry of finance to block online gambling sites that compete with the provincial Lotto Quebec gambling corporation. The legislature passed Bill 74 giving the ministry of finance the right to block free market websites that compete with Lotto Quebec. Lotto Quebec’s website Espace Jeux has the freedom to draw up its own list of free market sites they wish to block.

To get a law such as Bill 74 passed despite its infringement on freedom of speech, tones of censorship and the fact that telecommunication is not a provincial matter but one of federal jurisdiction, it had to be clad in the proverbial sheep’s clothing. They called it the ‘Consumer Protection Act’ and Finance Minister Carlos Leitao has been very vocal about the need for controlling ‘those gamblers with addictive behaviors as an issue of public health’ by which he stated that the law was not a matter of constitutional debate as it dealt with ‘unlicensed gambling.’ The bill was based on the recommendations made by a working group on gambling. Meanwhile the liberal party is going to have a series of discussions with Quebec officials on how the bill will impact Freedom of Speech.

One Website to Rule Them All

Espace Jeux had a controversial start in 2010 when Lotto Quebec decided to go online. To overcome opposition to their move, Lotto Quebec quoted the fact that online gaming was already here to stay and there were more than 2,000 websites operating in the Canadian space with now regulations in place. To be fair, the Government of Quebec has had its share of lawsuits by compulsive gamblers and had to defend and even pay for the therapy of compulsive gamblers within the province.

The trouble is that given a comparison between land based casinos and online casinos in Quebec, most people prefer to play online. They have the advantage of comfort and privacy in winning which the highly public Lotto Quebec does not allow. Additionally, since it is run by the government, Lotto Quebec takes a bigger slice of the pie than online free market players who don’t have any such obligation to re-funnel some of their earnings into the community. By stopping others, Espace Jeux hopes it will get as much as $13.5 million in the coming year and $27 million every year following that in just advertising and some sort of franchise licensing model. Another twist in the plot is that as part of their select group of licensed private online operators that are exempt from blocking is the already long time licensed partner of Lotto-Quebec, Amaya Gaming Group.

Besides privacy, online casinos offer unlimited options in games that offer higher rewards and a richer experience. The absence of overheads faced by land based casinos and government lotteries result in bigger take home winnings for Canadians, no wonder their numbers online are increasing.

What’s With the Telecom and Net Neutrality Angle?

The exact wording of Bill 74 is as follows:

260.34. An Internet service provider may not give access to an online gambling site whose operation is not authorized under Québec law.”

ISP providers in Quebec are not too happy about that since it puts the onus of filtering sites on the ISP intermediaries who are naturally reluctant to decide what people can or cannot access. Furthermore, viewing sites is not illegal and currently the only government hardline on online blocking has been to prevent child pornography. In the US, two bills have been killed in the past which tried to stop access to overseas websites that sold stolen goods, the Stop Online Piracy Act and the and the Protect IP Act, due to public protest.

Then there are complications with those who might be using a network that is from outside Quebec while visiting the province. How is the government going to control that?

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