Canada’s Online Gambling Failings Prompt Frank Reflection

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Canada’s Online Gambling Failings Prompt Frank Reflection
by No Luck Needed member ttwna2k for NoLuckNeeded.com

Canada’s Online Failings Prompt Frank Reflection
The United States’ staunch prohibition on online gambling has shackled all political desire to introduce a federal regulation of internet gambling north of the border in Canada, experts agreed yesterday. And with Barney Frank now looking to turn the tide in the US, there are now fears Canada may have the missed its opportunity altogether.
The Bush administration’s vehement opposition to internet gambling, evidenced most clearly in the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006, has held back any possible moves on the part of the Canadian federal government to introduce a national regulatory regime for internet gambling north of the border, a panel of experts agreed on the opening day of the Canadian Gaming Summit held at the Caesars casino resort in Windsor, Ontario.

Interprovincial online gambling is considered to be prohibited under Canada’s Criminal Code, but a lack of enforcement of that prohibition has led to a situation in which Canadians are spending up to a billion Canadian dollars annually gambling with websites based outside of the country, said Paul Burns, vice-president of the Canadian Gaming Association, adding that the regulatory void threatens to widen should moves initiated by Congressman Barney Frank gain traction in Washington DC.

“The situation in Canada is not sustainable for much longer,” Burns told delegates. “Countries all around us are getting their act together,” he added. “What is happening in the US, in public policy terms, is happening fairly quickly, and this flow of money outside of Canada will increase exponentially if the US finds its own regulatory solution [for online gambling].”

But with the climate in the US turning to one in which regulation can now at least be contemplated, it has, ironically, been the Bush administration’s prohibitionist stance that has prevented Canada’s federal government from seeking its own regulatory solution to the activity, said Danielle Bush, Toronto-based partner with law firm Chitiz Pathak LLP.

She suggested that the close ties between the Harper government and the previous US administration had effectively placed a roadblock on moves at a federal level in Canada.

Canadian politics has traditionally drawn influence from both sides of the Atlantic, but the current government has grown closer to the US in recent years on the gambling issue, rather than being guided by the UK, where internet gambling was effectively legalized by the 2005 Gambling Act. “The biggest problem, as always, is the politics,” she said. “We’re a lot closer physically to the US, but we’ve also gotten closer in terms of law enforcement.”

“I get the impression that firstly, internet gambling is just not a pressing issue for the federal government, and secondly, they don’t want to antagonize the ‘elephant’ on the other side of the border by introducing a regulated industry in Canada.

“Until the US backs off from its prohibitionist stance, this is going to continue to be a real big issue for us,” Bush told delegates attending the Canadian Gaming Summit’s ‘Innovation in Gaming’ conference.

Another obstacle, according to Burns, is the ruling Conservative Party’s lack of a clear parliamentary majority. “Until such a time as there is a majority government in Canada, I don’t think we can expect the federal government will wade in on this issue,” he said.

The impasse in Ottawa means it is down to the provincial governments to seize the initiative by specifically calling on the federal government to regulate, Burns said, adding that the Canadian Gaming Association hoped to have mapped out a way forward at the interprovincial level “by the Fall.”

Certain of Canada’s provinces are known to be preparing for a move towards internet gaming - with Nova Scotia leading the way - but doubts remain as to whether the provinces will actually be able to reach a consensus on a coordinated response.

And Congressman Frank’s renewed push in Washington DC, coupled with the intrastate online poker bills already circulating in Tallahassee and Sacramento, only add further urgency to debates in Canada, the experts agreed.

Terry Debono, founding partner of consultants Debono Group, said Canada now needed to swiftly draw up interprovincial guidelines to address online gambling regulation. “Canada’s door is locked but the windows are left open,” Debono said. “Soon our cousins south of the border are going to do something on this, and we will have then lost our opportunity to be first to the market.”

“There isn’t a coherent strategy yet,” Debono lamented. “This is causing major turmoil for regulators as well as consumers... How the hell did we let this happen in Canada?”