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Canadian Sports Betting

Is 2016 the Year?

Canadian Sports Betting

Canadians can legally bet on sporting events. They just can’t do it on the outcome of one game; they must make “parlay” bets (bets on the outcome of two or more games) with the provincial lotteries. Parlay bets are not particularly attractive propositions to players, and hence, Canadians spend significant amounts either placing wagers with illegal sports books or wagering over the internet. It is estimated that over billion is wagered on the internet by Canadians on single- event sports, all of it illegal, and none of it regulated or taxed. 

A couple of years ago, a Private Member’s Bill (C-290) was submitted by Joe Comartin, a leader in the NDP party. The bill passed the House of Commons on a voice vote (an indication of solid support) but then languished in the Senate for three and a half years. Hearings were held, but the bill was never brought up for a vote.

However, with the election of a Liberal government, there are some who now see the potential for a government bill being brought forth to replace C-290 in 2016. The opposition to the proposed bill tends to follow two lines:

• That legalizing sports betting of this nature increases access to gambling and creates additional social problems.

• That legalizing sports betting will increase the problem of match-fixing (i.e., it is harder to fix two or more games in a parlay bet than it is to fix a single sports event).

Notably, these two concerns ignore the fact that Canadians are already gambling on single-event sports online, on offshore websites. No one has been charged with illegal gambling online and no offshore company has been brought to task for accepting such bets.

To bring such prosecutions requires the application of fraud provisions, and as of yet, no prosecutor has ventured into this arena. This lack of enforcement reflects the difficulty of prosecuting across jurisdictional boundaries. In addition, it is widely held that laws against match-fixing in Canada are weak and antiquated. These laws were developed in an era before the internet, and are not effective in today’s environment.

Canadians already have access to illegal websites that take wagers on Canadian football, NHL games and Canadian soccer. So, these events are already subject to large betting volumes, albeit on offshore websites. Therefore, the incentive for match-fixing already exists. Today, the only significant form of protection, for players and the sports, is the vigilance of the offshore operators eager to make sure games they are taking wagers on are indeed not subject to match-fixing.

From the perspective of the federal and provincial governments, the benefits of C-290 are obvious:

• Increased revenue for provincial gaming operators that can now compete both online and in land-based casinos for single-event sports wagers, and tax them appropriately. Border casinos such as Casino Windsor, Fallsview and Casino Niagara in Ontario, for example, would suddenly have a significant competitive edge over their nearby U.S. competitors.

• Increased protections for consumers by bringing this activity into the “light” by ensuring fairness and the application of problem gambling protection protocols implemented by provincial governments in their online and land-based offerings.

• Increased protections against fraud, money laundering and match fixing.

• Legal clarity in this “gray” area.

Proponents have tied the passage of single-event sports wagering to a call for more robust laws against match-fixing, with the major goal of protecting the integrity of sports. Indeed, only by bringing single-event sports wagering into the legal gaming arena can this be achieved.

As Paul Burns, vice president of the Canadian Gaming Association—a leading proponent for changing the Criminal Code—noted, “There is a strong appetite among Canadians for single-event sports wagering across Canada.”

This is not going to go away, and better that the government regulate it to protect consumers and reap the benefits from the incremental tax revenues it would generate. It is thought that the sports authorities are also generally in favor of this bill, but with the caveat that there also must be a significant effort to protect the integrity of sports codified within the bill or in accompanying legislation.

If the bill should be brought forth in 2016, it appears that there is significant support for it, certainly among the players, but also from law enforcement, provincial gaming operators and Canadian sports associations. Ontario is one province that has come out in support of single-event sports wagering, and if the Criminal Code is amended, they plan to offer such wagers.

There is no guarantee that such a bill will be forthcoming. However, the drumbeat of support is growing, and may be hard for the newly elected federal government to ignore for long. This raises the question of what long-term effect this development could have on the debate in the U.S.

Paul Girvan is a partner and managing director of the Innovation Group, in charge of its New Orleans office. Girvan has been providing feasibility analyses to the gaming industry since the early 1990s and in the last five years has increasingly focused on iGaming. The Innovation Group is co-producer of the iGaming North America Conference held in Las Vegas each March.

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