Ontario Law Is Final - Dot-Net Is in, Dot-Com Is Out

Ontario's Legislative Assembly has passed new consumer protection legislation that contains amendments prohibiting the advertising of dot-com Internet gambling sites. The final version of the bill is a far cry from the one introduced in October by MP Gerry Phillips, which contained a blanket prohibition on advertising any Internet site (dot-com or dot-net) operating an Internet gaming business contrary to the Criminal Code.

Bill 152, which amends the Consumer Protection Act of 2002, would have banned the advertisement of so called dot-net (information-only) Internet gambling sites in Ontario, but the dot-net amendment was stricken from the measure.

While advertisements for dot-com (real-money) gambling sites is still prohibited, the definition of advertising has been narrowed to cases in which the advertising originates in Ontario or targets Ontario residents. The main impact of this provision is that it will exclude the majority of gaming sites, which are based outside of Ontario. Furthermore, the prohibition against linking to real-money gambling sites has been narrowed to exclude links generated by an Internet search engine such as Google or Yahoo.

The Assembly in late November held a two-day hearing on Bill 152 in which the Internet gambling provisions underwent a major overhaul between the first and second readings. After the hearing, the government adopted amendments ensuring that the new law does not restrict the advertising, promotion or corporate sponsorship by companies operating unlinked free-play dot-net sites. Bill 152 passed a third reading on Dec. 12 and received Royal Assent on Wednesday.

Toronto-based public affairs firm Hill & Knowlton is calling the result "a case study in how the industry can work in collaboration with government," looking for solutions, rather than approach the issue in an adversarial way.

The firm, which represented a coalition of online gaming providers formulated a strategy that focused on four main objectives: protecting the clients' ability to run and advertise unlinked dot-net advertising; protecting their ability to continue corporate sponsorships for dot-net sites; building a coalition of affected stakeholders such as professional sports teams, broadcasters and publishers and work collaboratively with government and legal advisors to reach a solution that satisfied both government and clients.

Troy Ross, Hill & Knowlton's gaming account director, believes that the government's willingness to consider the business impacts on the I-gaming industry validates the industry's legitimacy.

"Online gaming business are licensed and regulated in many other jurisdictions and provide a healthy source of tax revenue," Ross said. "As provincial governments in Canada learn more about the approach taken in these other jurisdictions, such as the United Kingdom, we expect that they will move toward a model to license, regulate and the tax online gaming industry."

Toronto lawyer Michael Lipton, who provided legal advice to Hill & Knowlton during the lobbying process, is also pleased with the outcome.

"We knew that from a legal perspective, we were on very solid ground," Lipton said. "What was especially gratifying was the government's quick understanding of the issue and its desire to ensure that Bill 152 satisfied the wide range of stakeholders it would impact."