Proceedings of the Standing Senate Committee on
Legal and Constitutional Affairs

Issue 24 - Evidence for October 24, 2012

OTTAWA, Wednesday, October 24, 2012

The Standing Senate Committee on Legal and Constitutional Affairs, to which was referred Bill C-290, An Act to amend the Criminal Code (sports betting), met this day at 4:15 p.m. to give consideration to the bill.

Senator Bob Runciman (Chair) in the chair.


The Chair: Good afternoon, and welcome to the Standing Senate Committee on Legal and Constitutional Affairs on the CPAC television network.

As members of the committee know, I am the sponsor of the bill that is before the committee today. As such, I will be leaving the chair. Given his outstanding performance in this role a couple of weeks ago, I will call on Senator Boisvenu to preside over today's meeting. I ask him to take the chair.


Senator Pierre-Hugues Boisvenu (Acting Chair) in the chair.

The Acting Chair: Good morning, ladies and gentlemen. If I may, before starting the meeting, I would like to go around the table and invite my colleagues to introduce themselves, beginning on my left.


Senator Baker: George Baker, Newfoundland and Labrador.

Senator McIntyre: Paul McIntyre, New Brunswick.

Senator White: Vern White, Ontario.

Senator Patterson: Dennis Patterson, Nunavut.

Senator Runciman: Bob Runciman, Ontario.

Senator Ngo: Thanh Hai Ngo, Ontario.


The Acting Chair: Senator Pierre-Hugues Boisvenu, Quebec. Welcome.

Colleagues, we will continue our consideration of Bill C-290, an Act to amend the Criminal Code (sports betting). This bill was first introduced in the House of Commons by Mr. Joe Comartin, MP for Windsor—Tecumseh, on September 28, 2011.

Bill C-290 would make it legal to accept bets on a single sporting event, thereby allowing legal operators of ``lottery schemes'', such as the government of a province, to benefit from the market which to date is dominated by illegal bookies and foreign jurisdictions where it is permitted.

It has been estimated that the economic value of single event sports wagering in Canada is in excess of $10 billion per year. This is a very significant amount of money considering that only $450 million is wagered through provincial sports lotteries.

If Bill C-290 is adopted, the provinces will need to amend their provincial legislation regulating lotteries to allow for betting on a single sporting event, should they wish to do so. Bill C-290 was adopted as amended and subsequently sent to the Senate and referred to this committee by the Senate on May 16, 2012.

These hearings are open to the public and also available via webcast on the website. You can find more information on the schedule of witnesses on the website under ``Senate Committees.''

Today, we are welcoming a panel. I am pleased to welcome Mr. Paul Beeston, President and CEO of the Toronto Blue Jays. Mr. Beeston was also the president of Major League Baseball from 1997 to 2002.

With him are Mr. Thomas Ostertag, Senior Vice President and General Counsel for Major League Baseball, and Mr. Matthew Shuber, Vice President and General Counsel for the Toronto Blue Jays.

Mr. Beeston, you have the floor.


Paul Beeston, President and Chief Executive Officer, Toronto Blue Jays: I am currently President of the Toronto Blue Jays. I have held the position of President of Major League Baseball. In addition, from 2006 to 2009 I was Chairman of the Board of Trustees of the Centre for Addiction and Mental Health.

I appreciate the opportunity to appear before you today, and I am here on behalf of Major League Baseball and Commissioner Allan H. Selig, in addition to the Blue Jays. With me today is Mr. Thomas Ostertag, Senior Vice President and General Counsel of Major League Baseball.

Major League Baseball and the Toronto Blue Jays strongly oppose the passage of Bill C-290, which would have the effect of removing the prohibition of single event sports betting that currently forms part of the Criminal Code of Canada. The very intense feelings with which I approach the problem of betting on Major League Baseball might best be understood if one remembers that the Office of the Commissioner of Baseball was created in direct response to the 1919 Black Sox scandal. Major League Baseball has remained unalterably opposed to legalizing sports betting. Protecting the integrity of the game is the primary job of the commissioner's office.

Government-sponsored sports betting runs the real risk of undermining public confidence in the honesty of what transpires on the field. We understand the appeal of it all to those who desire to raise revenues without raising taxes. However, no government should be permitted to create an environment that sheds doubt on the integrity of the game. We are well aware that sports betting is a large industry — largely illegal. We know all too well the extent to which citizens engage in gambling on sports. However, there is a fundamental difference between illegal sports betting, which Major League Baseball tries to monitor and contain, and government-sponsored betting, which confers public approval of a system that is inherently corrupting.

Please bear in mind that when gambling is permitted on team sports, winning the bet may become more important than winning the game; the point spread or the number of runs scored may overshadow the game's outcome and the intricacies of play. If large numbers of our fans come to regard baseball only or even partially as a gambling vehicle, the very nature of the sport will be altered and harmed. We want fans to root for the home team to win. Likewise, we want our athletes to know that they are being cheered to win.

We believe the net effect of legalized single event sports betting will be to increase the overall volume of betting. Those who bet with illegal bookies and via the Internet are likely to continue to do so because they receive different betting formulas, greater odds, betting on credit and the ability to hide income. Once the moral status of single event sports betting has been redefined by legalization, many new gamblers will be created, some of whom inevitably will gamble more frequently and with higher stakes and more serious consequences. Gambling is highly addictive and sports gambling that has been given the sanction of any government can be expected to create more problem gamblers.

Moreover, by promoting sports gambling, we do not want any government to send to impressionable children the harmful message that sports gambling is legitimate — indeed, something the government encourages and rewards. We do not want any government to teach children to gamble on their heroes.

Additionally, the legalization of single event sports betting by any government would increase the chances that persons gambling on games would attempt to influence the outcome of those games. High rollers have high incentives to induce players to fix games or to shave runs or points. Losing bettors and fans in general may become suspicious of every strikeout or error, and the game's integrity would be open to question play by play, day after day.

For its part, Major League Baseball maintains extremely restrictive policies against involvement with gambling. Major League Rule 21, enacted in 1928, mandates the suspension from baseball of any player, umpire, league or club employee who bets any sum on a baseball game. This rule is clearly posted in every clubhouse. In addition, Major League Baseball employs agents in every major league city who monitor gambling and other illegal activities.

I have one last point. It is a painful fact of life that those involved in gambling are often involved in illegal drug activity. Athletes can become particular targets of these underworld figures and may be supplied drugs in exchange for information or selective effort on the playing field.

In conclusion, while Major League Baseball and the Toronto Blue Jays sympathize with the need of governments to increase revenues, the answer is not to compromise the integrity of professional sports by legalizing single event sports gambling. After all, baseball is not simply a game. The identification by fans in all sports for their heroes and their teams is unique. It would be tragic if the importance of that identification were overshadowed by betting odds and government-sanctioned gambling.

We urge, in the strongest terms possible, may I add, that this committee recommend to the Senate that it vote against Bill C-290 and retain the existing Criminal Code prohibition on single event sports betting.

Mr. Ostertag wishes to speak.


The Acting Chair: Thank you, Mr. Beeston. Mr. Ostertag, you have the floor.


Thomas Ostertag, Senior Vice President and General Counsel, Major League Baseball: I am the Senior Vice President and General Counsel of Major League Baseball. I work directly for the current Commissioner of Baseball, Allan H. Selig. I have worked for the commissioner's office since 1985.

Mr. Beeston's statement accurately represents the position of Major League Baseball with respect to the potential legalization of single event sports betting in Canada. This is a serious and important matter to us. As I am sure you know, our World Series starts tonight. It is the culmination of our season, and I would be in San Francisco if I were not here. That is an indication of how important this issue is to Major League Baseball.

I thank this committee for the opportunity to answer questions and provide any information that may be of assistance in its consideration of this matter.

Senator Baker: I thank the witnesses for coming here and for their presentations. Bill C-290 has passed the House of Commons, where no one voted against it. We should note that a vote did not take place in the House of Commons, but it passed through all of the legislative stages necessary on its way to becoming law. It is now before the Senate at its final stage.

Your evidence is striking because all that we have heard to this point is praise for this proposed legislation and that people in Canada should be allowed to bet on a baseball came, a hockey game, a boxing match or an Olympic event. People should be allowed to bet on any event.

Would you verify for the people of Canada that this is not permitted to take place in the United States of America? If it were to become law in the U.S., what would be the result?

Mr. Beeston: For such questions, Mr. Ostertag could respond because he is our legal representative with respect to all matters in the United States. He is here today to answer that specifically. When you have those types of questions, I will defer to him.

Mr. Ostertag: I am happy to try to answer that.

The legal landscape in the United States includes a federal statute called the Professional and Amateur Sports Protection Act, 1992. It prohibits states from conducting and/or authorizing betting on sports, but there are a few exceptions. For instance, Nevada and three other states have limited exceptions. That is it. It otherwise prohibits betting on sports.

Senator Baker: We had such a federal scheme prior to about the mid-1980s, when an agreement was reached and the responsibility for such a measure that we are talking about today shifted to the provinces, but the Criminal Code section has to change at the federal level in order to facilitate that change.

Are we to assume that most if not all persons involved in the sports that, if this legislation passed, would be legal to bet on do not want this legislation to pass?

Mr. Beeston: It is safe to say that. Our professional colleagues would say the same thing. I can only speak specifically to baseball, Senator Baker. I can speak to nothing else. Nothing could be more further from the truth. If the union and the baseball ownership have an adversarial relationship, they do not have an adversarial relationship when it comes to sports betting on single games. We could get the union here. It is taught to the players from the day they sign their first professional contract.

What concerns me, from what I have just heard you say, because I had not focused on this before, is that this would mean that for our half season A club, which is professional baseball in Vancouver, that there would be betting on that?

Senator Baker: Any game.

Mr. Beeston: I do not know if they are amateur or professional, but to me that makes it even more egregious and makes me more compelled to say that I am totally against it as a citizen and as a member of professional baseball. We cannot have betting on minor league games starting whenever they are and entering into professional baseball.

Senator Baker: Your evidence is that if this law were passed, it would be against the advice of those people who play the game?

Mr. Beeston: Yes, to the best of my knowledge.

Senator Runciman: Mr. Beeston, you talked about a couple of things here with respect to problem gambling. You indicated in your presentation that you feel that this will encourage more people to engage in this activity and more problem gambling down the road. We have had some experts appear before us in the last couple of weeks, such as Professor Derevensky, who is an internationally recognized expert on gaming, the CEO of the Responsible Gambling Counsel, and The Ontario Problem Gambling Research Centre. They do not share that view. I am wondering how you arrived at that conclusion. Is there any empirical evidence to back that up, or is this just a supposition on your part?

Mr. Beeston: No, I get it anecdotally, you might say, from our resident agents and security people. Our feeling is that people who are currently betting at the present time through the Internet and illegally will continue to do that. We will just introduce new people to gambling at this present time.

Senator Runciman, I would encourage you to invite the people from CAMH, the Centre for Addiction and Mental Health, who have a betting or a gambling addiction program. They will tell you the numbers because they do have the facts about the people who are lined up to get into the gambling program. There is not enough money for mental health and addictions right now. From my time there, I know a bit about it. I do know that they are doing the best they can do. In talking with Dr. Selby, they would welcome the opportunity to appear before you to explain what it would be from an addiction point of view and the prevalence of gambling.

To think that it will not add people does not stand the test of reason to me — not that I have any evidence for it, but I do not believe it. If I were betting through bookies or the Internet or offshore, I would probably continue to do that for the reasons I made in my statement. However, I do believe that 18-year-old kids will start when they started from PRO-LINE and say, ``We have the New York Yankees playing against the Boston Red Sox tonight, and I will get a bet down there based on pitching.'' It makes no sense to do this, in my mind, because it leads to something else. I do not have the evidence. I will undertake, senator, to find out if there is any evidence, and we will get back to you and confirm that. However, based on what I know, I think it stands to logic. I apologize for not having any firm evidence.

Senator Runciman: We would appreciate that because the experts from whom we have heard have not shared that perspective.

You talked about monitoring activity, and one of the arguments for moving ahead with this legislation is putting it in a transparent and regulated environment. It will be easier to monitor unusual activity and raise suspicions with respect to something untoward occurring. You referenced that you engage in monitoring now. How do you do that?

Mr. Beeston: Each team has what we call a resident agent. There are 30 teams and 30 resident agents. They work with the police force. Most of them are indeed members of the police force of the individual cities that they are in. Those individuals address the players. They work with, I would say, the intelligence — maybe that is the right group of the individual police force — to find out if anything is undertaken in the community. We watch the players. We keep our eyes and ears open to anything, whether it be drugs, alcohol or gambling. That is the purpose of the resident agent program.

Senator Runciman: Do you have any information-sharing agreements with offshore sports books?

Mr. Beeston: I cannot answer that, but I will get back to you on that, sir.

Mr. Ostertag: We do not. I checked on that before coming up here, and we do not have any information-sharing programs with any casinos or betting organizations.

Senator Runciman: Including Nevada?

Mr. Ostertag: Correct.

Senator Runciman: Mr. Beeston, you did not specify single event sports betting. You said, and I wrote it down, ``unalterably opposed to sports betting.'' I see on your website you have something called a million dollar pickup, which has a $1 million prize if you are the first to correctly predict all matchups on a Tuesday and Friday of the same week. How do you balance that with indicating that you are opposed to sports betting? The MLB is actually operating a betting website.

Mr. Beeston: That is fair question, but I would say that is a contest. There is a fair amount of luck involved. You have to predict all of the games. That is completely different from a single game. We are talking integrity issues here, and the integrity issue is being able to get to someone where you can alter the result of the game. A single game is what is the most critical, Senator Runciman. I would say to you, and you may take issue with it, but we look at that as a contest.

Mr. Ostertag: I believe it is free. There is also a fantasy game on our website, but it is free.

Senator Runciman: This is free as well? I think there is a fee.

Mr. Ostertag: Maybe there is an administrative fee. I have not played it myself. I know the fantasy game is free.

Senator White: We have heard the argument that Internet gambling or that single sport gambling in a more open concept would actually add to the integrity of the game. This is for you, Mr. Ostertag, if you do not mind. I read a letter from 2007 that you signed, as well as signatories from all the major sports, as well as the NCAA, that actually rebuts this in some way. I want to confirm whether you, representing Major League Baseball, as well as other sports teams or sports leagues would still agree. It reads:

. . . we have heard the argument that internet gambling can actually protect the integrity of sports because of the alleged capacity to monitor gambling patterns more closely in a legalized environment.

You go on to state that it was discounted in 1992, and you ask that that the U.S. Congress discount it at this point as well in 2007.

We are five years later, and we have heard a number of witnesses who would argue to the affirmative, that in fact it will make for a cleaner sport or at least cleaner monitoring. I am sure you have had discussions with other major leagues. Can you confirm that you would still discount that and do not believe that it will make for cleaner and more legitimate gambling?

Mr. Ostertag: Yes, I can absolutely confirm that. I can also tell you that in our office we have a Department of Investigations and also a security department. We have both. The Department of Investigations is the one that is mostly involved with monitoring and trying to watch, follow and contain gambling to the extent possible and keep it separated from our players and our game. They firmly believe that the legalization of sports gambling will create more gamblers who will eventually graduate to illegal gambling because there are better odds and you can make more money through illegal gambling and also hide your earnings from the tax authorities, and other reasons.

Our office firmly believes that. Yes, I can confirm the contents of that letter still.

Senator White: In reading those documents, I cannot imagine that Major League Baseball, the National Hockey League, the NBA, the NFL and in fact your own team, Mr. Beeston, would not have a lot to gain financially by going to single sport betting in Canada and everywhere in the world; yet you are saying that does not override the importance of the integrity of the game. Is that correct?

Mr. Beeston: That is 100 per cent correct. The integrity of the game is paramount so that people know that what they are seeing on the field is pristine.

Senator Joyal: Mr. Beeston, I think my father would be very happy to meet with you today. He is 97 and is a former player of the Royals in Montreal, a different baseball game than you might have known. Maybe you were too young.

Mr. Beeston: No, I was not too young.

Senator Joyal: He is still watching the game and he would be with Mr. Ostertag tonight if he were able to travel to San Francisco. I am not in a conflict of interest because he has been out of the field for the last 60 years or so.

I had a word with him about this, as someone who has experience of the field, if I can use that expression. His concern would be that in fact people would soon be tempted to bet on players.

Let us take another example, the Montreal Canadiens, to bet that Maurice Richard would score his 130th goal tonight. It would open the door for players to be the object of pressure to try to influence the outcome or to try to influence how a player professionally behaves on a team. Could you confirm or corroborate that as a fear, or do you think it is far-fetched in terms of interpretation?

Mr. Beeston: I do not think it is far-fetched. I cannot confirm it. We all like to think that our entire major league rosters would not be subject to any type of bribery or any type of change or that people are going to bet on something where that could be affected, but I think people will bet on it. I think people bet in the stands right now on whether or not they will score a run in that inning. Legalizing it leads to the inevitable event of corruption somewhere. I just believe that will happen. When you start betting on games, you start bringing in the different types of people that you do not want part of that game.

When you say whether Maurice Richard will or will not score his goal, I do not think you could stop him because once he hit the blue line he only saw one thing, and that was a red light. I do not think it stopped right there; that is all he saw. I do not think it would matter there and I do not think many players are corruptible, but you would hate to think that is where it would lead because the more we bet, the more we open the door to the possibility that we will have problems.

Senator Joyal: Did you make any representations to the provinces? As you know, if this bill passes, it will be up to each province to decide how they will exploit the opportunity afforded to them and how they will regulate the gambling opportunities they would have. Did you make any consideration of that?

Mr. Beeston: We have not at the present time. This is the first presentation we have made. I will say that when PRO- LINE first came in on a vigorous basis we fought baseball being involved in it. If you look at PRO-LINE, it is by city and not by team name. It is the same with all of the sports.

We were consistent in our position right from the beginning. We fought whether or not we could be in line with PRO-LINE. This is our first presentation and we appreciate the opportunity to be here.

Senator Joyal: In the context of the other sporting organizations, did you have specific contact with them to share your views or to see what they think and how this would impact them?

Mr. Beeston: I will let Mr. Ostertag answer that question because he has had a couple of conversations recently.

Mr. Ostertag: I have. It is true. This is something that came to our attention only a few days ago, literally the end of last week. We hustled to put together our own presentation and to be here.

I do not want to speak specifically for the other sports, but I can fairly say in general that they are opposed as well. Beyond that general statement, I will let them speak for themselves.

Senator Joyal: Are they opposed on the same grounds as you or do they have other perceptions about the kinds of situations we may find ourselves in?

Mr. Ostertag: I think all sports are afraid of the same things we are. Again, it is only fair to let them speak for themselves in particular. I know some of them will be here at a later date. That is my understanding, anyway.

Senator Joyal: On page 3 of your brief, the second last paragraph, you say:

High rollers have high incentive to induce players to fix games or to shave runs or points. Losing bettors and fans in general may in turn become suspicious of every strikeout or error, and the game's integrity would be open to question play by play, day after day.

You mentioned that you had spoken to your own players about this. Could you share with us what they told you?

Mr. Beeston: I should not say I was speaking about this particular aspect of it. They are spoken to at the beginning of each season down at spring training. We bring in a resident agent, but we also bring in a representative of the DEA.

Mr. Ostertag: Yes, the U.S. organization is the DEA.

Mr. Beeston: They come in and speak to the players. It starts when they first come into professional baseball as 18- year-old players. The rule is put up in the clubhouse. The rule specifically addresses gambling, the problem with it, and their lack of association and non-association with anyone who could be associated with gambling.

It is just indoctrinated. Baseball in general has been very successful. In Canada, I think we have been shielded in a lot of ways. For the bout that we can bet here, it is illegal in some respects where illegal gambling is going on, but we have done a pretty good job. I would hate to think we would get ourselves into a position that soccer gets into or cricket gets into. It leads to the question you are asking here.

For baseball, because of the Black Sox scandal in 1919, the Office of the Commissioner and the commissioner himself were established for the purpose of protecting the integrity of the game. Recognize that back in 1919 it was all about not being able to get to the players. They did not get to one player there. Mr. Ostertag is a historian, senator, so he can fill you in on the facts, but eight players were alleged to be complicit in fixing some games. We have to protect that and I strongly believe in it.

Senator Joyal: Your comments lead me to another question, which is always very touchy: the use of drugs in the sport. If this bill is passed and betting would be open to everyone in any kind of sport and game, do you think that could put pressure on the players to perform with all the illegal means that are available and that we have seen with Lance Armstrong, unfortunately, in the last few days? Do you think that could have an impact or pressure at all?

Mr. Beeston: It could. I do not want to get into what has happened with the drugs. As determined as we are to work against the gambling, we are just as determined to eradicate our sport of any type of illegal and performance-enhancing drugs. I think we have done a good job of it. We are getting to do a very good job of it. It started in 2002. We have moved and in conjunction again with the union and Commissioner Selig and have put ourselves in the position where we are trying to ensure we can have a fair game on the field, done in a pristine manner. Therefore, I think it is something we are all aware of.

It all comes back to that one word, ``integrity.'' If it is drugs, we are against it. If it is gambling, we are definitely against it. Recognize what I said earlier: If it is drugs, you could get a 60-day suspension. A second or third offence, and I cannot tell you exactly what they are, but you could be out for a year and then out for life. With gambling, you are out immediately, suspended and gone from the game forever. That is it. If you are caught betting on a game, you are gone.

Senator McIntyre: As Senator Baker has already indicated, this bill has already passed in the House of Commons. It is now before the Senate, and we have to deal with it.

Assuming Bill C-290 becomes law, should any specific control mechanism, such as barring players, officials and referees from playing bets, accompany this new legislation? That is on the assumption the bill goes through.

Mr. Ostertag: I am sorry; I am not sure I understood the question.

Senator McIntyre: Should specific control mechanisms accompany this new legislation, such as barring players, officials and referees from playing bets?

Mr. Ostertag: We have not given any kind of consideration to those details because we are opposed to the entire bill. I do not see us ever concluding that those kinds of changes to the bill would make it okay. I cannot see that being acceptable to Major League Baseball. We are opposed to the idea of betting on baseball. We want to keep the two as separate as we can.

Mr. Beeston: If I might add, I think it would a redundancy. Baseball will not change the rules on this one. This is how the start was in 1928 when the rule was promulgated. Baseball will not change.

You can put any rules you want on this, but baseball's rules will be overridden and be more stringent than anything that could be done in the Criminal Code, I believe.

Senator Frum: Mr. Ostertag, it is extremely good of you to be here during World Series week. We appreciate your being in Ottawa today.

We know about the case in New Jersey that Major League Baseball is pursuing now. New Jersey wants also to introduce legislation like this and you are fighting it.

We know the Province of Ontario is one of the most interested parties in this whole business. In the event this bill goes through, the Blue Jays will become a team in a jurisdiction where this would be legal. It would be the only team in Major League Baseball in a jurisdiction where this is legal. What fallout will that have for this team? What effect will it have from Major League Baseball's point of view? The team will be in contravention with your bylaws, right?

Mr. Ostertag: We say in contravention of our bylaws. We do not have a rule that says a team cannot be located in a state or province that conducts betting on sports.

We have not really given any thought to what comes next if this happens. We are just opposed to it today and hope it does not happen. We have not taken that next step of considering what happens next. I just do not know how to answer that.

Mr. Beeston: Let me take a shot at this. We will not lose our team, trust me there. That will not happen, and we will stay in Toronto. We will have to put up more roadblocks. I suspect we will watch more closely from New York as to what we will do.

If we are going to put a minor league team in Ontario, it is probably a little riskier or more difficult to do. It certainly will not be positive, but I would not want to put a scare tactic out there that the Toronto Blue Jays would go out of existence. I do not think that will happen. I think we can do it and we will proceed the way we have proceeded before. We will operate within the rules of baseball, within the rules of our country, but at the same time hopefully develop something that will be explained as a model type of an operation.

Senator Frum: Not a lawsuit, either, from Major League Baseball?

Mr. Beeston: I will turn it over to our chief legal counsel. We are lucky to have him here.

Mr. Ostertag: Again, I do not know what would come next. I do not know what sort of lawsuit might be possible. I have not given that any thought at all. The best answer I can give you is that I do not know.

Senator Frum: In answer to Senator Runciman you made the point that you do not monitor the activities of the betting happening offshore. We have heard that one of the benefits of this would be that if you have legalized single- sport betting, because it happens anyhow, you at least give the opportunity to organizations like yours to monitor the bets and therefore tip you off to potential nefarious activity. What do you make of that argument?

Mr. Beeston: I think we are just adding more betters, more people who will be at the tables. I do not think it will change offshore or Internet betting. I think we will introduce a whole new group of betters who will grow up and become wealthy. The more they get into it, the more they will lose and be financially bankrupt at some point in time. You cannot win at this game. You cannot win at betting. To introduce them at a young age, I think, will create some real problems.

I could argue that kids who are four and five years old can use the Internet these days and have their own phones. Those kids could therefore make bets. I am not sure we are doing anything. However, I think we would be creating ourselves more problems to introduce it. It is not about monitoring it. Who is betting? What are their ages? Presumably they will have to be over the age of 18, although I have not seen that part. We will put ourselves in a problem. What is the payoff? We will watch the payoff. To me, it is just increasing or exacerbating the problem.

Mr. Ostertag: To add one thing to that, we do not have any formal sharing of information arrangements with any betting organizations today. Clearly, our staff monitors betting anywhere they think it is important to monitor it. If they have some tip or other information that they should monitor something, then they do.

However, even if we somehow receive more information because of the legalization of sports betting, that would not be a good trade-off for us. We would consider that as being more information, but on the other side of the ledger there is sports betting. That is much worse than the positive aspect of having more information.

Senator Frum: You have a problem created that you now get to monitor.

Mr. Ostertag: That is a good way of putting it.

Senator Frum: On the argument that all those people currently betting illegally offshore, that they would now want to bet legally inside Canada, do you think that is a logical sequence of thought? If your odds are better illegally offshore you will prefer to take the legal route in Canada because you want to be included in legal activity? Do you think that argument makes sense?

Mr. Ostertag: Not to me, at all.

Mr. Beeston: I think you answered the question.

Senator Patterson: You have acknowledged that a lot of illegal gambling is now going on. I am just wondering if you believe this may already be hurting baseball, compromising its integrity, as you say.

Mr. Beeston: I think the answer to that is it does not, from the point of view of the best we can monitor it. We have no reason to believe, other than the one or two incidents that were well publicized in the last little while, that we have any type of problem. I think it comes from the education portion of it and from the fact that there is not legal gambling on the games and the outcome of a singular game.

That is the concern, that we do not put ourselves in a position where someone can be enticed to make a decision because of circumstances that you and I and everyone at this table cannot figure out today. For me, I think that we are okay, but you never know. I think before steroids it was said that the way was better health, better trainers, better everything else, and then we realized we had made a mistake.

On this one here, we are judicious and relentless in making sure we uphold our standards with respect to gambling.

Senator Patterson: I am curious. You are very clearly against this bill and the expansion of betting. Would you have any opinion about whether our government should instead try to regulate or prohibit the illegal activity that is now going on?

Mr. Beeston: Boy, if they could, I think it would be terrific. I think the police forces around Canada are trying to do what they can. It is not what you would call a very appetizing crowd that is running some of this. There are some who, I guess, are probably out and out businessmen, but there are some who probably are not. Anything that the governments could do to ensure that we could take away illegal gambling would be better. It just takes away the chance of that one event that could not only hurt professional baseball but also all sports. We are all in this together. This is an effect on Major League Baseball to be sure, but it would be a reflection on every professional sport and on all athletes.

Senator Patterson: I was intrigued to hear that you also had experience as Chair of the Board of Trustees for the Centre for Addiction and Mental Health. Could you tell me if the addictions dealt with included gambling and if that is how you gathered some of your opinions about gambling's compulsive nature and the increasing propensity of victims to gamble?

Mr. Beeston: You are absolutely correct: I have experience with the Centre for Addiction and Mental Health. I was the chair. Addictions were a big part of it. Whether it was alcohol, tobacco, drugs or gambling, it was getting to be a more serious problem in the gambling section. The gambling section is still considered to be a big problem.

There is real evidence there, and I appreciate your raising the question. Having a professional that could give you the evidence that you want of the cost of running the addiction side of the gambling addiction side would be very important for you to hear. It is growing. There is a waiting list. It is only an out-patient program right now. It was an in-patient program. Costs cut it back, but that did not take away from the prevalence.

If you could talk to one of the doctors there, the psychiatrist, the social workers and the addiction people, who recognize what gambling is about, you might have a different perspective, too.


The Acting Chair: Professional sports are made up of a network of subsidiaries. They have a highly organized structure. As far as the purity of sports is concerned, do you see the same thing in minor leagues as you see at the professional level?

We know that professional salaries have become very desirable now. Is there a connection between the salary level of professional players and the temptation to gamble, to bet in order to improve their income?

I presume that players, who made $30 or $40 a week 50 years ago, were more tempted to gamble to improve their income than someone earning a million dollars today.

Within the structure of the Toronto Blue Jays or of another professional sports organization, are there gambling problems at lower levels compared to the higher levels? Could one suggest there is a link between the players' salary level and the presence of gambling?


Mr. Beeston: I appreciate that question. No, I do not think there is a problem with the Toronto Blue Jays organization at the minor league level. Part of it is education, which is very important. From the day that you sign to the day that you make the major leagues, it is reinforced and reinforced with respect to gambling. When they get to the major leagues, they know it. It has been drilled into them. As often as they take 100 balls a day at shortstop, they hear about the facts and effects of gambling.

You raise an interesting question with respect to the difference between the top-paid players and the role players in terms of $10 million or $20 million. It is the same player doing the same job every day. Temptation is there, I suspect, but I do not think it has ever been accessed as a game that we know of. We are proud of our monitoring and what we are doing. We have to take some confidence on a regular basis knowing that we are watching this and we are not finding anyone — the system is working but it will be broken sometime. There will be that difference. We have to watch it. Why will that be? It will be because someone has bet on the game, like the Black Sox scandal. That is the scandal in soccer and cricket. Those scandals happen when money is bet on the games.

We can do all the education we want, but there will be someone who will have a problem at some time that will affect the integrity of the game; and that is what we want to protect ourselves against. We have to be vigilant, consistent and relentless. At the end of the day, you cannot let up because you know that one aspect will do it. That is my answer to your question.


The Acting Chair: Since 1919, one event has been really sensationalized in the media and has even been the subject of a movie. The Pete Rose episode had an impact on major league baseball as far as its credibility is concerned. Following such an event, how did major league baseball react in terms of improving its oversight? I understand that cultural aspect exists. In the National League, we begin educating young players very early on as far as gambling is concerned. There is a kind of culture of non-integration of gambling in professional sports. How did the league react to the Pete Rose episode in terms of improving its contracts?


Mr. Beeston: I will let Mr. Ostertag answer that because he was in the Office of the Commissioner at the time and is fully versed on that.

Mr. Ostertag: In 1989, information came to our office that Pete Rose had been betting on baseball. He was a manager at the time, perhaps a player/manager. However, he was not playing, we do not believe, when he was betting. The information turned out to be correct. There was a large investigation conducted by our office and that was the information we uncovered.

I could take you through the legal proceedings, but in August 1989, through agreement with Mr. Rose, he was made permanently ineligible from baseball. The agreement gives him the right to apply for reinstatement, but he was made permanently ineligible from baseball, and he remains in that status today.


The Acting Chair: We can therefore conclude that a lifetime ban is capital punishment for a professional athlete.


Mr. Ostertag: Our Rule 21 calls for permanent ineligibility for betting on your own team. The rule is posted in every clubhouse. The rule is probably disseminated and underscored more than any other rule in baseball. You cannot bet on the sport. I do not know how else to say it. It is the strongest and most important rule that we have when it comes to the integrity of our sport.

Senator Baker: This change of law will include making it legal to arrange bets on any race, fight, single sporting event or athletic contest.

The way you have put it to us, this is a major change in the law. However, I cannot understand something about this and am a bit confused. You learned about this proposed change in the law a couple of weeks ago. The NHL and the NFL know about it just now and are anxious to appear before this committee in opposition to this bill. I wonder how you see it, Mr. Beeston. How could a law be passed through the House of Commons at all stages with no press coverage whatsoever, anywhere, as if it is in secret. Were you asked to appear before the committee of the House of Commons when this went through?

Mr. Beeston: Absolutely not. When I heard about it a week or a week and a half ago, it was for the first time. I am as astounded as you are. We would have been there. If it had gone to committee, we would have made representations. Certainly, we would have written letters. We would have done everything to ensure that as with the opportunity you have given us here today, we expressed our opinion to them before they passed the bill. The first time I heard about it was when it came here.

Senator Baker: All of our sports heroes in Canada appear to be opposed to this new law that you say affects the integrity of our sports in this country.

Mr. Beeston: Potentially.

Senator Baker: The argument for it is that because this is illegal to do in the United States — this is the evidence we have heard, and this is the main argument — that when we make it legal here, people will be rushing across the border. The casino in Windsor claimed they will have 200 new employees. The casino in Niagara claimed they will have 200 new employees just to handle these new bets. Do you think that that will be the effect of it? Does that justify a change in the law like this?

Mr. Beeston: Senator Baker, I cannot tell you how much you are making our case for us with that comment. If you can get 200 new employees just by having single game betting and that is what they are saying, then we have a real problem. We are creating a lot more bettors and a lot more societal problems. We are exposing all sports, not just baseball, to potential integrity issues. Trust me. If that is the case, if they are talking in terms of hiring 200 more people, then wow.

Senator Baker: I think you are suggesting that every error by the shortstop when he misses the ball or the catcher when he misses the ball or does not make the throw to first base will be suspect and that perhaps something dirty is going on. Is that what you are saying?

Mr. Beeston: That is possible, very much so. The umpire calls it. We all know what television can show now, and we still have umpires and referees who are human beings. We have seen it in every particular sport. At the end of the day, these games are called by referees that are the same as everyone in this room. They breathe the same and make mistakes, but they will always be suspect and we are opening it to that.

Senator Baker: Mr. Ostertag, certain U.S. states have tried to do this in the past and the professional sporting associations have gone to court. Would that not be the obvious grounds for potential court action in this country if this bill ever became law?

Mr. Ostertag: Again, it is hard to comment on particular litigation that we would bring. The litigation in the United States is in New Jersey because that state has taken steps to institute sports betting when there is a federal law that prohibits them from doing exactly that. The procedural posture here is a bit different, but we are as opposed to it here as we are in New Jersey.

Senator Runciman: When you were talking about officials, it struck me that Major League Baseball has had some well-publicized bad calls by officials in the last number of years, including an individual losing a no-hitter because of a bad call. There was an important one in a playoff game recently when an individual was called out and he was clearly not out, and all the replays showed that. When something like that happens that can change the nature of a game or the end result of a game, do you conduct any kind of investigation to see if there has been any activity? How would you do that?

Going back to what Senator Frum was talking about, we know that billions of dollars are being spent through offshore markets and illegally through organized crime channels. In professional basketball, we had a referee who was involved in those sorts of activities as well. If situations like that occur, how do you determine if something untoward occurred there? You do not have any information-sharing agreements with anyone. I am just perplexed.

You talk about integrity, and I understand your desire to ensure the integrity, but one of the big arguments with this bill is that by bringing it out into the open, it will bring it out of the shadows, if you will, and help to ensure the integrity of the game because you will be able to determine quickly whether something unusual is occurring.

Mr. Beeston: When I was in New York, one of the things we always tried to do was ensure that we had a relationship with our umpires and that we monitored how they lived and how they did at the game. They will make mistakes, senator. I know the two you are talking about. You are talking about the game in Detroit, Jimmy Joyce, and the game that just happened, and I think you are talking about the infield fly rule that was called in the Atlanta-St. Louis game.

Senator Runciman: Yes.

Mr. Beeston: Those are decisions that will happen, and umpires will make mistakes. I believe firmly in our commissioner and the office of our commissioner. They monitor that because they are concerned about integrity. You will have mistakes. Even the suggestion or perception that it could be something that was not done on the up and up is a concern for me.

I would say this to you: If you think we can monitor by adding more people to betting, I think we just exacerbate the problem. If we have one bettor or ex-bettors right now and two or three ex-bettors in the future, I think it exacerbates the problem, senator. I guess my concern is that we would make this prevalent. I understand what you are saying, because it is like the anti-money laundering bill or money coming out of banks. You can watch that type of thing.

Senator Runciman: I think all of us would share your concern if anything we were doing would dramatically increase the number of gamblers and problem gamblers, but I think the issue here is the fact that we are aware that there are billions of dollars that are going through a variety of systems, such as offshore and organized crime. You are suggesting you can monitor it, but there is no way. We cannot even put a handle on the volume of money that is being bet. If you can put this into a regulated and transparent environment, the odds are that you will have a much better chance of determining if indeed something untoward is occurring. That is the argument, and it has been one of the ones that certainly persuaded me to support the legislation in terms of having an impact on those illegal monies. I do not buy the argument that the Americans will flood over here to our casinos, either. What I have been persuaded by is the whole issue of having an impact on organized crime and putting this into an open and transparent environment.

In conclusion, when will you authorize the instant replay?

Mr. Beeston: That is very good. We have started, senator. As you know, we went fair/foul, and then we went down the lines. There have been a couple of other things. We will consider with the commissioner's on-field committee. We will get back to you. Before we make a release, we will let you know.

Let me say this about your point. I actually think that if we add more people and we monitor what you are talking about, we will deal with whatever we have to deal with, but we will fight it until the last point it is passed because of the integrity. I understand that we might get some more information, but it is not information that we want to have to assess. We believe that we do not want single sport betting. We fought it everywhere. We have been consistent for 100 years, and we will be consistent for another 100 years, even if this legislation passes. It is something that we did not believe in, and we do not want any of our players to ever have to be put into a position where they have to make that choice, so we will use your information.

Senator Runciman: We know there are areas around the world that do have legal single event betting, and we have not been made aware of any problems to the extent that you are talking about. If you have any research that can assist us in supporting the view that you put forward here today, it would be helpful.

Mr. Beeston: I would be happy to do so. I am not a technocrat so I cannot do it, but if you were to Google the soccer leagues in Italy, and I think there have been some cricket situations recently, will get a pretty good feel for countries that do allow betting and that there have been some problems. We will get that to you specifically, sir.


The Acting Chair: I would like to ask a supplementary question. If Canada were to adopt this legislation, the situation would be followed with great interest by New Jersey. I believe New Jersey is currently appealing, is it not?


Mr. Ostertag: New Jersey passed a law last January to authorize sports betting directly in the face of the federal statute that says they are not allowed to do so. They have taken a few regulatory steps to implement it. That betting will not be in place until January at the earliest. The four professional sports — baseball, football, basketball and hockey — and the National Collegiate Athletic Association have all filed a lawsuit against New Jersey, which is currently pending. The state has filed a motion to dismiss that lawsuit and has been briefed. There will be an oral argument in December. That is where it stands procedurally.

Senator Runciman: If New Jersey succeeds with respect to this, what do you anticipate happening? Will it open the floodgates?

Mr. Ostertag: If New Jersey somehow succeeds and institutes sports betting, it is quite easy to predict that other sports will follow suit; and we absolutely do not want to see that. The four professional sports and the NCAA have filed a lawsuit. We are adamantly opposed to what New Jersey is doing, and we will pursue that lawsuit as long as we can pursue it. We are confident we will win it.


The Acting Chair: If New Jersey is successful and if Canada passes such legislation, would this lead to other states doing the same thing?


Mr. Ostertag: I would predict, yes. It is very easy to predict that. States compete with each other, in particular states that are contiguous. It is easy to predict that other states would follow suit, yes.

Senator White: I have a question about compensation from the Red Sox, Mr. Beeston, but that would be unfair, so I will ask two questions that are unrelated but connected.

We talk about what happens in Canada, but let us talk about the one state in the United States that has single sports betting. Mr. Ostertag, do you see Major League Baseball putting a team in Nevada?

Mr. Ostertag: I do not. That is the commissioner's decision, of course, and I do not want to speak for him.

Senator White: You are doing okay. Canada had a second team, and many of us are sad that we lost the Montreal team and hope to get a team back. That is an important response for us.

We talk about this being a manner in which we combat illegal offshore online gambling, but there are alternatives. The Unlawful Internet Gambling Enforcement Act in the United States is not perfect; as no legislation is. However, on one day in July 2012 they received over $735 million from a number of those illegal gambling sites, along with making a number of other seizures, such as $34 million in 2009. There are alternatives to giving in, one being, I would argue, Mr. Ostertag, is to enforce the legislation and attack those offshore companies. In the U.S. case it was through the banking industry, which was not happy. It has not been totally unsuccessful, has it?

Mr. Ostertag: No. We were very happy to see that statute pass.

Senator White: In fact the value of one of those offshore sites dropped 60 per cent overnight when that legislation passed. I believe it was in Antigua. We are not that lost with alternatives, would you not argue?

Mr. Ostertag: No. There have been criminal prosecutions of people running offshore sites when they have landed in the U.S. and been arrested in U.S. airports. You are right: There are other ways. We are fully supportive of any enforcement efforts against illegal betting.

Senator White: I appreciate that each of you found the time to come here today. You could have sent us your tickets and one of us could have found a replacement for the committee and gone to the game.

Senator Joyal: Mr. Beeston, I was listening to Mr. Ostertag. Maybe the best course for us — and I speak for myself — would be to stand down this piece of legislation until the court in New Jersey has come to terms with their legal action. As the chair has said, if it ever passes, it would certainly trigger a lot of reaction among other states in the United States that would be tempted to follow suit. Of course, if the New Jersey law is declared unconstitutional, then the odds in Canada to maintain the status quo would be much higher. Would you concur with the proposal that it would be better for us to stand down this bill until there is an outcome to the lawsuit in New Jersey?

Mr. Beeston: I cannot speak for the committee. It is better than what it is right now, but I do not think that would change our position or the position of Major League Baseball. It might change the people here, what the government thinks and how it is enacted. We would still see the perils of single game betting, and we would still like to make representation, so you would hear us back here again. What you are saying is logical, though, especially as Mr. Ostertag talked about the contiguous states and what would happen.

If the idea is to bring people across from Michigan or from New York State into either Niagara Falls or Windsor, it is an economic matter. The reality of the situation is that there are too many perils that we would still like to make representation against.

Senator Joyal: As you know, we are dealing with a private member's bill coming from the other place. I am surprised, as my colleagues around the table are, to learn that you were informed of this bill only in the last 10 days or so.

Could you take it upon yourself to contact the sponsor of the bill in the other place? Apparently, the bill was not the platform of the respective party. That is what we were told, although I did not check that. Of course, if they put that in their party platform, maybe they did not take the initiative to consult the sports organizations represented by you and others. Maybe if they heard your arguments they would have a sober second thought about the bill and the outcome, especially with the situation in the United States. That would help the overall consideration of all the aspects that we have to take into account in this chamber when we oppose or delay a bill voted unanimously in the other place without discussion. I cannot say that it was snuck under the door; but it happens in the other place that they do that sometimes. They did that last week, and we are now considering in more comprehensive terms the implications of another bill in another committee of this place. However, it would help us if you could take it upon yourself to contact the sponsor of the bill and explain your motives as you expressed them today that are relevant to the adoption of this bill. That would help us to come to terms with this issue.

Mr. Beeston: As long as the protocol is right and I am not doing anything illegal, I would be honoured to do it. I would meet them tonight, tomorrow or whenever they want, but I do not want to do anything that would jeopardize our position. If you are telling me that I can make that phone call, you can be sure that phone call will be made tomorrow morning.

Senator Joyal: I am surprised that someone can want to legislate in that field with all the implications and the strong conviction that you seem to express to us today, which have not been taken into consideration when they went forward with such a proposal.

Mr. Beeston: I will be pleased to express those considerations. I will make sure that I can make that phone call. As long as I can make it, I think I know how to get the number.


The Acting Chair: I have a question for you. You know that, even if this legislation is adopted at the federal level, it is the provinces that would implement it. If the bill is passed by the Senate, do you intend to intervene with each of the provinces so that they do not implement this kind of betting?


Mr. Beeston: Yes; immediately. I would have to take counsel from both the Blue Jays counsel and from Major League Baseball counsel. The intention would be to write letters to each of the premiers of the provinces and to each of the Finance Ministers to say, ``This is our position, so before you enact it, we would respectfully request . . . .'' I think the other leagues would do so at the same time, that we would have the opportunity to speak to you. We hope it does not get there and that they do not have the right to do it.


The Acting Chair: A province like Newfoundland could allow this kind of betting, but the effect would be more significant if it were Ontario, for example, because there is a professional club there, would it not?


Mr. Beeston: I think it would be serious everywhere. It is like what Mr. Ostertag was talking about with respect to New Jersey. If it starts in Newfoundland, it may work its way across all the other provinces. Clearly, Ontario and B.C. would be there. I think we would end up with a situation where we would try to express ourselves on multiple fronts.

I just know that we would be doing something as soon as possible were this to pass. We believe firmly that if Newfoundland did it, we would like the opportunity to express ourselves as to why we think it is not a good idea.

Senator McIntyre: Gentlemen, since we started our study of Bill C-290, some witnesses have told us that single sports betting is a popular activity and that legalizing this activity would only bring to the surface an underground activity. By doing so, it would make it safer for both gamblers and operators to ensure the integrity of sporting events. Obviously you do not agree with this.

Mr. Ostertag, assuming Bill C-290 goes through, is it your view that it would make it easier for a Crown prosecutor and the Attorney General to enforce the law vis-à-vis illegal gambling?

Mr. Ostertag: I am not sure I have an opinion as to whether it would make it easier or not. Again, we believe that the legalization of sports betting would create more bettors, new bettors; that is, those who might not start out with a bookie. However, if it is legal down the street, especially for young people, they might be tempted to start and then they would graduate later to betting with better odds, better credit, and again the ability perhaps to more easily hide income from taxing authorities. As a result, it would just add gamblers that would maybe start out as legal gamblers and become, sometime down the road, illegal gamblers.

I mentioned earlier the Department of Investigations in our office. That is their firm opinion. They do stuff like this all day, every day. This is what they concentrate on, namely the integrity of the game, among many other problems that they look into. The integrity of the game is the core issue they have in mind in all of their work. They firmly belief that, and so do I.

As far as enforcement, I am not sure if it would make it easier or harder. I just think it would create more gamblers and in that respect make it harder.

Senator McIntyre: Last week we heard three representatives from the Ontario police force who seemed to suggest that in light of the fact that this activity is illegal, it is quite difficult for us to enforce the law when it comes to illegal gambling. However, if it was legal, they would have a better hand of the situation.

Mr. Ostertag: I think I would respond in a similar way. I just think it would create more gamblers.

One thing I did not mention in my last answer is that the government would probably advertise legal sports betting and would try to cause more people to notice the fact that there is now legal sports betting and how to bet on sports, where to bet on sports, and maybe other aspects of it that might be attractive to potential bettors, especially young bettors.

From a law enforcement standpoint or from any other standpoint, we do not think there is really any benefit to the legalization of sports betting. When the government sanctions something, when the government gives its official stamp of approval to something like that, it is hard to think of any benefit. We can think of many, many detriments.

The Acting Chair: Mr. Beeston, Mr. Ostertag and Mr. Shuber, we appreciate your appearance before the Standing Senate Committee on Legal and Constitutional Affairs. It was a privilege to receive you here. We wish you a very good end of season. I know your time is very precious at this time of the year, so thank you very much.

Mr. Beeston: Speaking on behalf of all of us, thank you for listening to us today. We are available should you have any follow-up questions that you would like answered. We will undertake to get back to Senator Runciman with the questions that you wanted answered. I do not know how it gets distributed, but we will get back to you so that everyone gets the information.

I will certainly make the call tomorrow to the honourable member from Windsor and discuss with him our feelings. All I can say is this came together very quickly and we sincerely appreciate the fair hearing we received here today.

The Acting Chair: Of course, if on your side you have more information to send to the committee, we would appreciate it.

Mr. Beeston: Thank you.


Honourable senators, this committee meeting is drawing to a close. I once again thank our witnesses. The next meeting is scheduled for October 31.

(The committee adjourned.)

Back to top