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Kevin Smith

Ontario Racing Commission Challenges Legality of Woodbine Site

8 September 2004

Hoping to get clarification for Internet wagering in Canada the Ontario Racing Commission filed papers with the Federal Court asking it to decide if a horseracing-wagering site is legal.

Officials with the ORC filed the case on Aug. 24 and are questioning the legality of Woodbine Entertainment Group's HorsePlayer Interactive site that launched in January of this year.

Don Bourgious, Senior Legal Counsel for the ORC, explained that the case came about not because the ORC has any issues with Woodbine, but is more concerned with making sure the letter of the law is followed by the companies it regulates.

Woodbine was able to launch this year after a change was made to gambling regulation in Canada. Pari-mutuel betting is allowed in Canada through the telephone. The only problem is that the word "telephone" was never defined in the statute.

Last year Lyle Vanclief, Minster of the Agriculture Department in Canada, which oversees the betting industry, amended the regulation to expand the definition of "telephone" to include any "telecommunications device," which would include PDAs, Blackberries, or even PCs.

That definition isn't even the issue, said Bourgious, but whether or not the minister had the right to amend the definition in the fist place. He said some parts of the Criminal Code are written with clauses that allow ministers to define certain parts of them.

"A lot of tax codes are written with a specific wording that allows for those actions to be taken," he said. "Ministers are there to use their expertise in certain issues to make the laws as clear as possible."

Unfortunately for Vanclief, and possibly Woodbine, the betting statue that was amended didn't have a clause in it that allowed ministers to make definitions for key parts, according to Bourgious.

The commission filed an application with the court to have it determine if HorsePlayer Interactive is legal or not. In the application the commission said "there is good reason to believe that the regulation is . . . invalid."

Unlike provincially run casinos and lotteries, horseracing is regulated by the Canadian Pari-Mutuel Agency under the federal Agriculture Department. The agency argues that telephone betting has been allowed for years, and that the change simply allowed players to do on a computer what they were doing by phone.

Bourgious said the ORC isn't concerned with the argument of whether or not Internet betting should be allowed.

"Is this inside the law or outside the law?" he asked. "This issue isn't with one track or one company. We just want to make sure those with a betting license are operating within the criminal code."

Initially officials with Woodbine had sharp criticism for the ORC. "We're absolutely flabbergasted and, frankly, offended that the Ontario Racing Commission has filed the application in an area over which they don't have jurisdiction," Nick Eaves, senior vice-president of marketing and business development, told the Toronto Sun Times.

When reached for further comment by IGN about the issue Eaves said the company was "pursing its options," but was unable to comment further since it was a matter that seemed destined to end up in the Canadian courts.

Bourgious said that while the Canadian Pari-Mutuel Agency regulates horseracing, the ORC is responsible for licensing Ontario racetrack operators and ensuring they act in accordance with the law.

Part of that mission means the commission can investigate if a company with a betting permit is operating outside of the laws granted it.

"That is part of the job of the director," he said. "If an operator can't pass the statutory test, or the director feels they are operating outside of the law he is obligated to do something."

Eaves told the Sun Times that the commission should be looking out for the best interest of racing, not trying to hamper business.

"I mean their mandate is to do that which is in the best interest of Ontario racing," he said. "And essentially, what they're doing is being the instigator in an action which, if successful, would have the effect of discontinuing one of the only recent services in the Ontario racing business that's actually attracting new customers and really performing in a way that our customers have told us they want."

Eaves said the CPMA went through the proper channels in expanding the gambling law to allow for Internet wagering. HorsePlayer Interactive has generated nearly $1 million a week in turnover for Woodbine since its inception.

No decision is expected in the short term on the case, Bourgious said it could be resolved in six months but could drag on as long as two years or more.

Ontario Racing Commission Challenges Legality of Woodbine Site is republished from
Kevin Smith
Kevin Smith