Blame Ontario; Internet gambling ads under attack

The Liberal Party, which controls the provincial legislature, introduced the measure last last week in a larger omnibus bill aimed at strengthening consumer protection and bolstering public safety.

"This is a ban on advertising that promotes illegal websites," said Paul de Zara, spokesman for the Ministry of Government Services. "If networks up here want to carry the World Poker Tour or things like that, the legislation doesn't prevent that. This is strictly Ontario-based advertising.

"For example, the Toronto football team would not be permitted to put Pokerstars.com or any of those pay-to-play websites are on the field."

De Zara stressed that the legislation won't apply to advertising for free-play sites.

"If a dot-net site is not pay to play, there's no problem," he said. "So Partypoker.net (advertisements) wouldn't be outlawed. Basically, no pay, no problem."

Most advertisements for Internet gaming sites are already for dot-net properties, where no real-money wagering takes place. Online gambling companies that deal in the North American market began creating .net sites in late 2003 after the U.S. Department of Justice threatened to charge advertisers with aiding and abetting an illegal activity.

"You don't see a lot of dot-com's (advertised in Canada) " said Michael Lipton, a gaming lawyer with Toronto law firm Elkind & Lipton. "But you see a lot dot-net (advertising).

"They want to barricade the doorway, but they are leaving room for lots of air to come in and that air is .net. And you know where you go from dot-net," Lipton added.

Most dot-net sites have companion dot-com sites that allow real-money wagering.

De Zara identified complaints from Ontario's horse racing industry as one of the main reasons the measure was introduced.

"We've identified 130 sites that bet on our races without paying for it," said David Wilmot, CEO of Woddbine Entertainment Group. "Our wagering in the last three years, which is really when this stuff starting taking off, is down over $100 million dollars, and we attribute all of that to the online gaming sites."

Federal law prohibits Canadian companies from operating Internet casinos and poker rooms. But the government hasn't moved to block transactions with offshore casinos, which continue to offer their services to Canadians. Woodbine, which operates horse tracks and wagering, would like the ability to compete with online casinos.

"We want to set up a poker room, casino, betting exchange and sports book and we want to brand it Woodbine, and we want to do what they're letting everybody else do in terms of taking bets from Canadians," said Wilmot. "We simply want the ability to compete for our customers' business.

"The federal government is not enforcing its laws, so the province of Ontario, which does not have jurisdiction over criminal law but does have jurisdiction over consumer protection legislation, is trying to put some teeth into what it feels is out of control advertising of these sites," he added.

The Ministry of Government Services is also concerned with the impact of Internet gambling on young people. Internet gambling among 18-24 year-olds in Ontario increased from 1.4 percent in 2001 to 5.5 percent in 2005 according to a study completed last month by Ontario's Responsible Gambling Council. Overall participation in Internet gambling in Ontario rose from .7 percent in 2001 to 1.7 percent over the same period.

Controlling advertisements appears to be the extent to which provincial legislators can deal with the online gambling issue.

"Government Services Minister Gerry Phillips wrote a letter to the federal Justice Minister in September asking him to look at this issue and we've yet to receive a response," said de Zara. "What has been indicated from media reports it that it wasn't a priority for the federal government here in Canada, but we wrote the letter nonetheless and we still hope for a response."

De Zara says the government would like to see the modernization act pass before Christmas.