Ottawa Citizen

Canada keeps online gambling in play

Lawmakers hesitant to follow U.S. lead


The ongoing crackdown by American authoritie­s against foreign operators of online gambling sites begs the question: why haven’t Canadian authoritie­s done the same?

In Canada, only provincial government­s are permitted to operate online gambling sites. Yet, there are an estimated 2,000 offshore gambling sites accessible in this country and Canadians are pouring huge amounts of money into them.

Experts say the law is murky and legal opinion is divided over whether these sites are breaking Canadian laws.

“For police authoritie­s, it’s not their top priority,” said Stanley Sadinsky, a law professor emeritus at Queen’s University, in Kingston.

“They have much bigger fish to fry,” said Sadinsky, who developed a gambling law course.

In the past week, federal prosecutor­s in Maryland announced that Canadian Internet mogul Calvin Ayre — the founder of the popular Bodog online gaming company — and three of his associates, had been indicted on charges of running an illegal sports gambling business and conspiring to commit money laundering. Authoritie­s also seized control of the domain.

Last year, authoritie­s in New York took similar action against the operators of the three offshore Internet poker sites: Pokerstars; Full Tilt Poker; and Absolute Poker.

In this country, Canadians, according to industry estimates, are shelling out as much as $4 billion annually on offshore gambling sites, even though the Criminal Code states that only provinces may legally run lotteries or betting games on the Internet.

Yet, Canadian authoritie­s have been reluctant to pursue charges against either the customers or operators of these sites.

“There hasn’t been a huge public outcry,” said Paul Burns, vice-president of the Canadian Gaming Associatio­n. “There’s a high level of acceptance of offshore operators in Canada.”

Part of the problem, some say, is the lack of clarity in Canadian laws. Some legal observers, including Sadinsky, take the position that the gambling transactio­ns on these sites are occurring on Canadian soil and therefore contravene Canadian laws.

Others in the legal community, however, believe that if company servers are located offshore, then the transactio­ns are taking place offshore and therefore, fall outside Canadian laws.

Even if there was a consensus that these sites were breaking Canadian laws, Sadinsky acknowledg­es law enforcemen­t officials face practical challenges enforcing them.

Are police going to start knocking on people’s doors and looking at what they’re doing on their home computers? “No,” he said. Authoritie­s could go after the operators, but they can’t arrest them until they’ve stepped foot in Canada, he added.

Burns said there’s frustratio­n within the industry over this legal grey area. Either you enforce the law or create a framework to regulate these offshore sites, he said. Canada has so far chosen to do neither.

Burns said his associatio­n would welcome it if Canada’s lawmakers chose to legalize and regulate offshore sites. Such regulation­s would provide customers greater peace of mind and ensure transparen­cy of rules and secure environmen­ts in which to play.

But Sadinsky said it’s not inconceiva­ble that provinces will start pushing for greater enforcemen­t action down the road.

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