Insights: Ontario's Scenarios

Ontarians are reportedly spending an estimated $300 million a year on Internet gambling, and the Toronto Star reported last week that federal and provincial Ontario government officials met with representatives from local casinos and racetracks to discuss remedies for the rise in illegal Internet gambling and its effects on the casino and racing industries.

According to the article, three solutions were discussed at the meeting: stopping the advertising of gambling sites, going after the operators with criminal charges and setting up government-run Web sites to keep the revenues in Ontario. The group will meet again in May and will be joined by representatives of the Ontario Provincial Police and the Royal Canadian Mounted Police.

To gain a better perspective on the feasibility of the proposed solutions, IGN asked a pair of Ontario-based lawyers:

Of the three solutions suggested for dealing with gambling revenues in Ontario lost to foreign operators, which is most likely, and which is most practical?

Setting up a government-run Web site would only apply to Ontarians, because provinces cannot rule over each other. I think in order to do that they'd need to get all of the provinces together to deal with it.

Michael Lipton: They have a long way to go.

In terms of stopping the advertising of online gambling Web sites, although there may be provisions in the Criminal Code, the ads are for play-for-free sites, which aren't illegal and cannot be stopped. And as far as dot-com ads go, I don't think they have the appetite to do that. They have bigger fish to fry.

With respect to going after operators with criminal charges, the government would have great difficulty prosecuting outside of the jurisdiction. And to those sites within Kahnawake Reservation, there is already some question as to whether it is legal under Section 35 of the Constitution.

Michael Lipton is a barrister with the Toronto-based firm Elkind, Lipton and Jacobs. He specializes in gaming law and government relations and has served on the Interactive Gaming Council.

Alex Igelman: I think all the options are in play. I would lean more towards a ban, but the government could surprise us. Whether it takes form as an advertising ban or Criminal Code amendment/enforcement is not clear.

I would lean more towards a ban, but the government could surprise us. Whether it takes form as an advertising ban or Criminal Code amendment/enforcement, is not clear.

The government realizes that huge revenue is being lost here and that they face big challenges in dealing with implementing any type of ban from legal challenges of all sorts (among other things).

The Ontario government (and generally most provincial governments) are quite unique in the global gaming arena, as they both regulate and operate gaming of all forms in their respective domains. These governments now have an opportunity to deal with the larger issues in a business-like and professional manner and embrace, regulate and operate games of skill/chance on the Internet.

Alex Igelman is a lawyer with Goodman and Carr LLP in Toronto, Ontario. He practices gaming and entertainment law exclusively and has extensive experience in the combined fields.