I-Gaming Advertisers Face Canadian Cold Front

Advertising restrictions are nothing new for online gambling operators--especially those targeting North American players--but the latest crackdown places Canada on a battle front previously held firmly by the U.S. Department of Justice.

In response to the recent barrage of dot-net promotional campaigns (in which online gambling operators draw players to their free-play sites), some in Canada are urging the government to impose a full ban on I-gaming ads on television.

As is the case in the United States, Canadian broadcasters are enjoying an increase in ad revenues thanks to the influx of online gambling dot-net advertisers. The Criminal Code makes it illegal to advertise Internet gambling in Canada, but the dot-net ads are permissible because they are for "online services" instead of gambling operations; the play-money sites don't allow real gambling, but use e-mail to refer interested consumers to sites where they can actually gamble.

Nearly all of the major players in the online poker industry, for example, have sponsored broadcasts of poker tournaments throughout Canada, gaining yet another entryway into homes across the country.

The campaigns have been hugely successful, and now adversaries of I-gaming are calling for a ban on the free-play ads.

Rick Broadhead, a Toronto-based Internet consultant, told the Globe and Mail that television regulators in Canada are getting heat from a number of religious and problem gambling groups to cut out advertisements for any site "affiliated" with online gambling companies.

"They're making a mockery of the laws and the regulations here because what they've found is a loophole that allows them to advertise a site that is clearly--in a covert kind of way--promoting gambling with real money," Broadhead told the publication.

In addition to harvesting e-mail addresses, Broadhead added, operators are trying to inject their brand into the mass markets, hoping that consumers will remember their names and type in "dot-com" (where the real-money sites reside) rather than "dot-net."

All television commercials in Canada are submitted to the Telecaster Services by the broadcasters prior to airing. Telecaster, which is run by the Television Bureau of Canada, has approved seven advertising this summer for free-play sites.

Jim Patterson, president and chief executive officer of the Television Bureau of Canada, said Canada's approach to regulating the I-gaming ads is similar to that of the United States.

"We would only give an approval if there is nothing on the commercial that says 'play for cash' and nothing on the site that says you can play for cash," Patterson explained.

Nevertheless, David Kelly, executive director of the Ontario Federation of Community Mental Health and Addiction Programs, said advertisers and broadcasters appear to be "violating the spirit" of the law by permitting ads for play-money affiliates of gambling Web sites.

The dot-net approach isn't anything new, but it really took off following the advertising crackdown in the United States in which the Department of Justice informed the American Broadcasters Association in 2003 that that any ABA members accepting advertising from online gambling sites could be aiding and abetting illegal activity.

The letters were followed by numerous subpoenas handed out to operators and advertisers, but no prosecutions have ensued. Likewise, the Illegal Gaming Unit of the Ontario Provincial Police said charges related to the advertising of gambling have never been laid in Canada.

Even Patterson thinks it is unlikely that such charges will be brought against advertisers or broadcasters.

"If the commercial says go to Interpoker.net and play for free . . . then there's nothing illegal about that," he said. "If a person makes a mistake and goes to another site, it's not really our responsibility."