I-Gaming in the Cards For Canada?

20 May 2002

Legislation that would amend Canada's criminal code to allow legal Internet gambling could be introduced by fall.

Dennis Mills, a House of Commons member who represents the Toronto-Danforth area, told delegates at the Global Interactive Gaming Summit on Tuesday that the departments of Justice and Heritage have been studying the I-gaming industry for the last six months. Mills said it is his hope that by autumn, the departments' efforts will culminate in a pro-Internet gambling bill.

Mills said although Prime Minister Jean Chretien is open to the idea of legalized I-gaming, neither Chretien nor anyone else in government has come out in favor it.

"I want to be precise, (Chretien) is not cheerleading this by any means," Mills said.

Revenue from legalized Internet gambling could aid a number of social causes in Canada, including amateur sports and health care. Mills said the profitability of the industry should not be ignored by Canada.

"The realm is going into the billions, so to pretend that we don't know this exists is not the way to go," he said.

Mills, who is the chairman of the Sub-Committee on the Study of Sport, said he is optimistic about such a bill's prospects because of Canada's technological infrastructure.

"I think over 60 percent of people have Internet at home, so I think that can be a force," he said.

During a question-and-answer period following Mills' presentation, a representative from Sunny Group-owned Casino Fortune asked Mills how a bill to amend the criminal code in Canada to allow Internet gaming would affect licensees of the Kahnawake Gaming Commission.

In late March and early April, Sunny Group and its former software provider, Microgaming, experienced a very public break-up. Both sides issued press releases alleging misconduct on the other's part: Microgaming said it dumped Sunny because it was late with payments, and Sunny said it cut ties with Microgaming because it suspected the software was rigged to make players lose more.

The Casino Fortune rep caused confusion on the panel, which included Frank Catania, a former gambling regulator from New Jersey, who has been tapped by the Kahnawake Gaming Commission to investigate the Microgaming-Sunny feud. The questioner asked Mills to comment on her company's situation with Microgaming and Kahnawake. Mills replied he "would never recommend anyone get involved in pure Internet gaming until the criminal code in Canada is amended."

Catania then told the questioner that he would not address the status of investigation in front of the entire Summit audience.

Mills later that day issued a letter addressed to the conference delegates, which was read aloud before the next morning's conference. In the letter, Mills expressed that his comments before the
conference gathering were not meant to reflect badly on MIT or the Kahnawake Gaming Commission.

"As I said in my remarks today, the online gaming industry is a new industry in Canada and to reach its full potential here will require changes in federal legislation." Mills wrote. ".Nothing I said
today should be construed in any way to diminish the superior work and credibility of MIT, Grand Chief Joseph Norton or the community."

During his speech, Mills acknowledged that one of the main sources of opposition to the proposal will be the Canada's provincial governments, which since 1979 have had control of the country's gaming industry.

"They are going to say, We're getting 100 percent of the gaming action right now, why should we share it?" Mills said.

Michael Lipton, a barrister with the Toronto-based firm Elkind, Lipton and Jacobs, said the provincial governments closely guard their ability to conduct lotteries via computer. An attendee of the
conference, Lipton predicts significant opposition on the part of the provinces.

"What is going to be required is to significantly alter the landscape, in particular the regulatory landscape in this country, and I think that depends on a few things," Lipton said. "First of all, is the public well-served by permitting Internet gaming, and second of all, how can you protect the public through regulation, and is the technology available to ensure the public is protected."

Mills said the technology exists to both monitor I-gaming sites to make sure that underage players and players from jurisdictions that don't allow Internet gambling aren't allowed access to the games and to keep track of players' locations so the appropriate province can be given a royalty payment.

In 1997, Mills introduced a bill that would allow for legalized Internet gambling in Canada. The bill passed the House of Commons in one day, but later died during the course of an election.

Related Links
Global Interactive Gaming Summit & Expo (GIGSE) 2002

Anne Lindner can be reached at anne@rivercitygroup.com.