Tuesday, December 3, 2024

Ontario court reviews international gambling integration plan

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The future of Ontario’s efforts to integrate daily fantasy sports (DFS) and online poker with international players is now under review by the province’s Court of Appeal.

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The case, which concluded three days of arguments on 28 November in Toronto, involves significant legal and financial questions surrounding the intersection of Canadian law and global online gambling practices. 

A five-judge panel will rule on the case at a later date, according to Covers. It may take weeks or months before the court releases its decision, but the outcome is expected to have a major impact on Ontario’s online gambling landscape. 

Ontario, which is separating gaming regulator iGO from the Alcohol and Gaming Commission of Ontario, is asking the court to determine whether its plan to allow local users to engage in peer-to-peer online games, such as paid DFS contests and poker, with participants outside of Canada would remain legal under the Criminal Code.

The provincial government also seeks clarity on any restrictions that may apply if the proposal is deemed partially unlawful. 

This legal question is unique and largely untested in Canadian courts. Ontario’s goal is to expand its regulated sports betting and iGaming market, which already hosts numerous online casinos and sportsbooks, but lacks a substantial poker player pool and has no provincially regulated DFS offerings.

By integrating with international players, the province aims to enhance its gambling ecosystem and attract more participants. It also believes it can bolster consumer protections within its regulatory framework. 

Opposition from Canadian lottery operators 

Ontario’s proposal faces stiff opposition from other Canadian provinces. Members of the Canadian Lottery Coalition (CLC) have urged the appeals court to reject Ontario’s plan. 

Representing the coalition, lawyer Matthew Milne-Smith argued that the liquidity Ontario seeks from international players represents monetary exchanges between Ontario bettors and foreign participants, which could violate Canadian law.

Milne-Smith emphasised that these games are fundamentally interconnected, with winnings in one jurisdiction corresponding to losses in another. 

Critics argue that Ontario’s proposed model would effectively make the province a participant in gambling activities both domestically and internationally.

According to the coalition, such arrangements would contravene Canada’s legal framework, which prohibits provinces from engaging in cross-border gambling partnerships without explicit federal approval. 

Building a global gaming community 

Ontario’s proposed model for pooled liquidity remains in development and would depend on agreements with foreign regulators and operators.

These agreements, which have yet to be finalised, would allow Ontario-based players to compete directly with participants abroad, creating larger prize pools and a more competitive gaming environment. 

Supporters of the plan argue that integrating with international players would make Ontario’s regulated platforms more attractive, reducing the number of residents using unregulated or illegal gambling sites.

By offering a broader range of options within a controlled environment, the province hopes to reinforce its consumer protection measures and increase revenue from its gambling market. 

Implications of the decision 

The court’s ruling will carry significant consequences for Ontario’s online gambling industry and the broader regulatory landscape in Canada. A decision in favour of the province could pave the way for similar initiatives in other regions, potentially reshaping how provinces collaborate with international gambling operators.

On the other hand, a ruling against Ontario’s proposal could limit the province’s ability to innovate within its gambling market and maintain its competitive edge. It may also reaffirm the legal boundaries between provincial and federal jurisdiction in the gambling sector, influencing future regulatory efforts nationwide. 

For DFS and poker enthusiasts in Ontario, the decision will determine whether they can participate in globally connected games from the comfort of their own homes. More broadly, it will signal how Canadian courts view the evolving relationship between technology, international commerce, and domestic law in the gambling industry. 

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