THE STANDING SENATE COMMITTEE ON BANKING, TRADE AND COMMERCE
EVIDENCE
OTTAWA, Wednesday, June 2, 2021
The Standing Senate Committee on Banking, Trade and Commerce met by videoconference this day at 6:30 p.m. [ET], in camera, to study the subject matter of those elements contained in Divisions 1, 2, 3, 4, 5, 7, 8 and 9 of Part 4 of Bill C-30, An Act to implement certain provisions of the budget tabled in Parliament on April 19, 2021 and other measures; and, in public, to study Bill C-218, An Act to amend the Criminal Code (sports betting).
Senator Howard Wetston (Chair) in the chair.
(The committee continued in camera.)
(The committee resumed in public.)
The Chair: I would like to begin by welcoming members of the committee, witnesses, as well as those watching on the web to the public portion of our meeting. I am Howard Wetston from Ontario and I’m the Chair of the Standing Senate Committee on Banking, Trade and Commerce. Today we are beginning our consideration of Bill C-218, An Act to amend the Criminal Code (sports betting).
I would now like to ask members of the committee to introduce themselves, starting with the deputy chairs.
Senator Wallin: Pamela Wallin, an independent senator from Saskatchewan.
Senator Smith: Larry Smith, deputy chair, Quebec.
Senator Marshall: Elizabeth Marshall, Newfoundland and Labrador.
Senator Wells: David Wells, Newfoundland and Labrador.
Senator C. Deacon: Colin Deacon, independent senator from Nova Scotia.
Senator Dagenais: Jean-Guy Dagenais, Quebec.
Senator Loffreda: Tony Loffreda, Quebec.
Senator Moncion: Lucie Moncion, Ontario.
Senator Klyne: Marty Klyne, Saskatchewan. I recognize and acknowledge that I’m on Treaty 4 territory, the homeland of the Métis in Saskatchewan.
Senator Ringuette: Pierrette Ringuette, New Brunswick.
Senator Bellemare: Diane Bellemare, Quebec.
Senator Cotter: Brent Cotter, Saskatchewan, and the most junior senator right now.
The Chair: Before we start, I would like to ask senators and witnesses to keep interventions as brief as possible to ensure every member can get in a question and hopefully a second round during the short time that we have with the witnesses. If time permits we can proceed with the second round.
On our first panel we have Paul Burns, President and CEO, Canadian Gaming Association, and Randy Ambrosie, Commissioner, Canadian Football League. Thank you for joining us this evening. I apologize for the short time frame in giving you notice to join us, but things move quickly and we are in the part of the year when we have to be flexible. Mr. Burns, I think you will begin, followed by Mr. Ambrosie.
Paul Burns, President and CEO, Canadian Gaming Association: Good evening and thank you for the opportunity to appear before you today. The Canadian Gaming Association is a national trade association representing leading operators and suppliers in Canada’s casino gaming, sports betting, eSports and lottery industries, a full spectrum of companies from land-based and online casino operators to providers of global premium game content and technology.
Canada’s $17 billion gaming industry returns over $9 billion annually to provincial and municipal governments and First Nations each year. It’s a positive contributor to the Canadian economy with an average industry salary of over $65,000 per year. Our industry supports over 180,000 jobs across Canada and contributes almost $19 million in value-added GDP. We purchase over $14.5 billion annually in goods and services, much of that from the communities in which we operate.
Our industry, like so many others, has been severely impacted by the pandemic. Many of our casino facilities have not reopened since March 2020, but when they were permitted, did so with limited capacity. Casino sector revenues represented over 50% of the $17 billion in annual revenue — approximately $9 billion — in 2019. In 2020, that number was $900 million, a 90% decline that is continuing as most of Canada’s casinos have been closed since the beginning of 2021.
Many of the 90,000 front-line employees have not been able to come to work this past year, creating significant and devastating [Technical difficulties].
This is one of the reasons that our industry continues to pursue the proposed amendment to the Criminal Code that you are studying. As we look toward recovery, having the ability to offer single-event sports wagering when we are able to reopen safely will be a tremendous benefit to Canadian gaming operators and their employees.
While we have been closed, respecting the directives from our local public health authorities, offshore online sports books and bookmaking operations run by organized crime continue to operate. Annually, Canadians place over $4 billion in wagers with offshore online sports books and approximately $10 billion through bookmaking operations run by organized crime.
In contrast, Canadians wager approximately $500 million through legal sports lottery products offered by the provinces. Canada has had legal sports wagering for decades. It’s time to level the playing field and give Canadian gaming operators the opportunity to offer the same product in a legal, licensed and highly regulated environment and have the benefits flow back to our communities and to the public good. Our industry, alongside our provincial government partners, has been requesting this amendment for over a decade. Through the parliamentary process, you have seen this amendment is supported by business and labour organizations, law enforcement professionals, professional and amateur sports organizations, municipalities and responsible gaming organizations.
In 1985, the federal and provincial governments agreed that the provinces would have the exclusive right to operate and regulate gaming within their jurisdictions. Over the past 35 years, provincial governments have worked to create safe and highly regulated gaming environments. We have developed and implemented world-class, responsible gambling programs that allow Canadian operators to deliver high-quality gaming experiences in safe and secure environments.
It is the provinces, through the provincial gaming regulators, who will work to ensure sports wagering is delivered with the proper level of control and oversight. The gaming industry expects that there will be clear rules and standards across Canada, such as: which sports will be permitted to be wagered on and the ones that will be prohibited, such as sports that involve minors or youth; age and identity verification to ensure minors cannot place wagers; ensuring responsible gambling tools like self-exclusion options are easily accessible; information and data sharing agreements between sports organizations, sports book operators, gaming regulators and law enforcement to protect the integrity of sport and athletes and prevent match-fixing; prohibition on players, coaches and officials from wagering on sports; standards for advertising and marketing, because sports and event wagering are entertainment activities that should be consumed only by adults and advertised and marketed accordingly to that audience.
In conclusion, only by regulating single-event sports wagering can we be sure that consumers are protected, that athletes and sports are protected, that the economic benefits stay in the provinces in which they are generated and that Canadian businesses can compete on a level playing field. Thank you very much.
Randy Ambrosie, Commissioner, Canadian Football League: Good evening, everyone. On behalf of the Canadian Football League, I would like to thank the committee for this opportunity and for your shared commitment to public service and to Canada.
I would like to acknowledge the deputy chair, Senator Larry Smith, who, as part of his devotion to community and country, has had a long and distinguished career in Canadian football as a CFL player, as president and chief executive officer of the Montreal Alouettes, and even as commissioner of the CFL. I’m sure that you as officeholders will understand that the longer we hold an office, the more we appreciate those that held it before us.
I’m here today to repeat and underline our support for Bill C-218. We support amending the Criminal Code to allow for single-event sports betting for two reasons.
First, this will move sports wagering out of the shadows and into the light of day where it belongs. Canadians already wager what is estimated to be billions of dollars each year through offshore sports books or illegal bookmaking operations run by organized crime. Bill C-218 will give provinces the ability to create strong regulatory standards and enforcement to ensure sports wagering is delivered with the proper level of control and supervision. This includes ensuring that minors cannot participate. There are ways to access tools that promote responsible gambling. Information and data are shared between sports organizations, sports book operators, gaming regulators and law enforcement to ensure fair and honest competition on the field, because the integrity of our game means everything to us, and we will work to protect it. We can do so much more with strong, transparent regulation and the cooperation and support of provincial authorities. With the regulation of wagering, we can bring sports betting out into the light so that fans are protected, bets are fair and all of the activity is safe.
The second reason we support Bill C-218 is to allow the economic benefits to stay in Canada for the benefit of provincial governments, Canadian businesses and local communities. In our case, this will provide us with an opportunity to partner with industry leaders to reach new fans in more markets, which will drive ticket and merchandise purchases, broadcast ratings and other engagement with our content.
Like so many Canadian businesses, we have been dramatically affected by the COVID-19 pandemic. We lost all of our 2020 season, and we have already had to shorten our 2021 season, although we are aiming to get back on the field this summer. The ability to grow our fan base has never been more important or crucial to our future. We know this bill can have a hugely positive impact on all of us in the sports and entertainment industries as we work to build our businesses back.
This legislation is long overdue, it has been long awaited, and it should be considered swiftly before the summer recess. With the possibility of a fall election in the news, we fear a delay means this bill could die on the Order Paper, and another year, or perhaps additional years, could be lost. Bill C-218 has enormous support among Canadians. It was supported in the House of Commons by an overwhelming majority of members. It has the support of sports and entertainment industries, and I can assure you it has the full support of the Canadian Football League, or CFL, and all nine member clubs. We urge the Senate to move swiftly to consider and support Bill C-218.
Thank you very much, committee members, and I appreciate your time tonight.
The Chair: Thank you to both of you.
Senator Wallin: I have a quick question for both of you. As you know, there is much discussion about this bill. There are some who want specific amendments. I wonder if either one of you have substantive concerns about an amendment that would explicitly state that match-fixing is illegal. I think everyone assumes it, but it is not stated. Would either one of you have a problem with that?
Mr. Burns: We firmly believe that there are already provisions in the Criminal Code that prohibit match-fixing, and there are cheat-at-play provisions in the gaming sections of the code. There are additional sections, and actually there’s case law in particular that went to the Supreme Court in 2015. It’s known as the Riesberry case. I’m not a lawyer and will not pretend to be one. However, the fact is that there are provisions in the code today. They have gone through the court system and been upheld by the Supreme Court. We believe that an explicit amendment is not actually needed at this point in time and that the code does cover that.
Mr. Ambrosie: If I may, I’ll add this. Like Mr. Burns, I am not a lawyer or a lawmaker. What I can tell you is we believe we have strong protections built into our existing ecosystem. Working with provincial regulators, we would work co-operatively to make sure that the integrity of the game is protected.
I would point to our league’s constitution, to section 10.08, which specifically provides for penalties up to and including a suspension for life for anyone who is found to be involved in game-fixing.
We have regulations, like the regulation in section 1(a), which specifically prohibit involvement in anything related to game-fixing. Our collective agreement with our players actually connects us to those two features, the one in our constitution and the other in our regulations. I am absolutely confident that our players and our players’ association will walk with us on this journey as we learn and grow to ensure the players play fairly and within the rules.
Senator Wallin: Thank you both.
Senator Smith: Welcome to our witnesses. Mr. Commissioner, I’ll start with you. Some have suggested this bill could increase the CFL’s viewership among younger Canadians who are using their mobile phones to make bets on a variety of sports. Opening up single-game sports betting could increase the exposure of the league to non-traditional fans, thereby increasing viewership, ticket sales and merchandise sales. Has the CFL considered how it would pivot to accommodate a potentially growing and diverse fan base should this legislation pass?
Mr. Ambrosie: Thank you, Senator Smith, for your question. We have been working with Paul Burns and his colleagues. We will be turning to experts in this area to help us understand how to reach this new fan base, how to activate the excitement of having a wager on the game and creating that connectivity and fundamental engagement.
We do see this as a tremendous opportunity to reach out to new fans and create that sense of connectedness to the game, where you’re not just watching the game, but you’re participating in it. We see tremendous evidence in sports leagues around the world that have taken advantage of single-game wagering as an opportunity to build those strong connections. This may be one of the single biggest opportunities that the Canadian Football League has faced, and it couldn’t happen at a better time. As I explained in my opening remarks, we’ve gone through a challenging environment with the pandemic. We see this as a recipe for a quicker recovery as we come out of it.
Senator Smith: Thank you, commissioner.
Senator Klyne: Welcome to our two guests on this panel. First, I have two quick questions for Paul Burns, and if time permits, I will move on to the CFL or go to the second round.
Thank you for sharing with this committee some of the positive social and economic benefits that the regulated gaming industry has had on Canada. Beyond the potential tax revenue and giving Canadian sports fans another reason to closely follow their favourite professional sporting events, including the Saskatchewan Roughriders who define the CFL, should this bill pass, Mr. Burns, how might Canada benefit from a form of legal wagering that doesn’t exist now?
Mr. Burns: The benefits go from tax revenue for provincial governments to creating jobs and economic opportunity. There is a lot of leakage in the sports-betting world that leaves the country and where there is no tax benefit to this country. In fact, there are estimates that the potential job expectations could be in excess of at least a thousand out of the gate and an increase in the GDP, through direct, indirect and induced effects, of close to $400 million.
We’ve seen there is lots of potential from this because Canada has a great technology sector that participates. There are companies like theScore, which is a Canadian, Toronto-based company participating in the regulated sports-betting market in the United States and five licensed markets. They’re hiring people in the technology sector. They’re hiring at very high-paying and high-skilled jobs. These are the opportunities for these companies to continue to grow and prosper inside Canada.
Senator Klyne: A portion of gaming revenue from the regulated gaming industry in Canada typically goes toward responsible gaming education and supports for problem gaming and gambling addictions. Gambling addictions going without notice or intervention, and without the corresponding supports, has serious negative consequences on the individual and their loved ones. These negative outcomes can include erosion to the household business’s financial position and even lead to insolvency, fraud, theft, domestic abuse, depression, family breakup, homelessness and suicide.
Can you provide the committee with additional details about the programs supported through the current gaming revenue carved out for problem gaming and gambling addiction? How would revenues from regulated single-event sports betting contribute to responsible gaming and supports for those who suffer from problem gaming?
Mr. Burns: Thank you, senator. Canada’s gaming industry has become a world leader in the responsible gambling programs. Because of the provincial government partnerships and involvement in gaming across the country, what we have seen is a development of world-class player education tools, education programs for people and treatment as well as a lot of good researchers in this country doing work. We have some great programs that, in fact, are exported to other parts of the world. British Columbia Lottery Corporation, for example, has been able to develop a great player education program, giving people informed choices and tools to manage their play and educate them on the pitfalls of gambling to excess. That program is being used by MGM throughout all of their properties in the United States. It’s being used by the states of Oregon and Massachusetts and many other provinces in Canada.
We have had this investment. It’s part of the DNA of the industry, from how products are rolled out to how gaming facilities are created. All of that is done through a responsible-gambling lens. We have some of the best programs and the ability to continue to deliver on excellent programs to make sure our customers are healthy, play safe and have the information they need to make those informed choices.
Senator Wells: Thank you, Mr. Burns and Mr. Ambrosie, for appearing and providing information that the committee needs for its study. My first question is for Mr. Burns. You mentioned the spending in Canada last year was $14 billion. Are there estimates or projections on what it might be, should this bill be legalized?
Mr. Burns: There have been. PwC has done a report that’s been widely circulated, and there have been lots of independent reports. I’ll use that one for tonight. The expectation is that we will probably see a very significant growth and a decrease in the illegal market. Is it going to go away? No, not right away. What we will see is Canadians being given a legal, regulated option.
In terms of gross gaming revenue, which is actual revenue — the numbers I quoted earlier are actually total wagers — when you’re looking at wagers in this we expect that number will probably go from, today, over $1 billion in revenue that can flow back into $1.1 or $1.2 billion in the first year. Lottery corporations are earning a lot less than that today. I think we’ll see a significant growth. I think we’ll see the capture from the illegal marketplace, and the regulated market [Technical difficulties] will be able to grow and prosper. Part of this is education — Canadians understanding that legal, regulated sites are now available. Our office gets calls quite regularly from people who are having tough times getting their money out of offshore sites. Many Canadians don’t realize these aren’t regulated and aren’t legal in the country. The unfortunate part is that sometimes they learn the hard way, and they can’t get their money out of the sites.
Senator Wells: I understand that, but is there a projection on how much would be spent on legal sports betting? I want to compare the $14 billion that you referenced to what happens next year, should this bill goes through.
Mr. Burns: Deloitte has used numbers of over $7 billion that would flow into the legal market right away. In the next five years, that would go to about $28 billion. That is an estimation they have made. We would see that growth, which is not insubstantial, beyond the current wagering, and, hopefully, a lot of the illegal marketplace shifting to the legal, regulated market. When Canadians know they have that choice and understand where their betting dollars are going — and the benefits — we will see that shift. It will take time. One estimate for growth is as high as $28 billion in the next five years.
Senator Wells: Thank you for that.
Mr. Ambrosie, tell me how this works. An individual bets on a CFL game. Let’s say it’s a $20 bet. The bet is not successful for the person betting, so they lose the bet. Where does that $20 go? Does it go to the lottery corporation and is distributed to the league? Does it go to the league? Tell me how the process of the lost bet goes and how it works?
Mr. Ambrosie: Well, Senator Wells, I would confess that I’m not an expert in the area of gambling. What I see as the benefits to the CFL will be relationships with the providers — the operators — who would obviously be interested in encouraging people to consider putting a wager on a Canadian Football League game. The mechanics of the gambling industry are really the purview of Mr. Burns, and it would be ill-advised for me to try to pretend to be an expert in that particular area.
Senator Wells: Could I kick that over to Mr. Burns? What happens when someone bets $20 and they lose it? Where does that money go?
Mr. Burns: I will be short. Professional sports leagues won’t participate in the bet. What they do is done through relationships in selling data and their information and marketing partnerships and other partnerships like that. That’s where the revenue returns to the organizations, teams, stadiums and things like that.
Senator Wells: Thank you.
Senator Loffreda: Thank you to our witnesses for being here. I have a question for CFL Commissioner Mr. Randy Ambrosie, but also for Mr. Burns from the Canadian Gaming Association. Mr. Burns, you did mention $4 billion in offshore betting, currently, and $10 billion in organized crime betting. We have Deloitte projections that we will recuperate, with this bill, from $7 billion to $28 billion over the next five years. With the $14 billion that is currently illegal, we will recuperate $28 billion. My concern is that, because of this bill, we are growing this market. Are we leading many Canadians to a gambling addiction?
Here is a quick question for Mr. Ambrosie: What is the economic impact of Bill C-218 on the CFL? Will we see more partnering with sports books, like I believe some CFL teams are currently considering? Would there be elite sports tourism with more U.S. citizens coming? Will it grow the CFL?
Mr. Burns: What we’ve seen is, yes, there will be a growth in the market. There’s been a slight growth in the gaming market over time, and it will continue to grow over time. These are estimates by independent groups. Are these exactly what will come true? What we’ve seen is that Canadians do like to bet on sports, but we have also seen that we have some of the best world-class responsible gaming programs. A recent piece of research published through the Alberta Gaming Research Institute also shows that problem gambling rates in this country over the period of time between 2002 and 2018 decreased by 45%. Our education programs are working, and Canadians are becoming more accustomed to understanding what gaming is and what it isn’t. What we’ve seen is a stabilization of problem gambling over the last decade or more and lots of decreases happening more recently — and gaming has expanded in this country in that time.
The reality is that just because there’s a new product doesn’t mean there are new problem gamblers. There are lots of people gambling today illegally in illegal markets. Those programs are available to people today if they reach out, but the problem is things like credit. The Hells Angels is happy to extend you credit all day long. There are less than a handful of casinos in this country that will actually extend you credit, and it’s like applying for a mortgage. We don’t extend credit very widely. It won’t happen online. There are lots of differences that will come with a regulated, controlled marketplace.
Mr. Ambrosie: I’ll pick up on that point, and then I’ll answer Senator Loffreda’s more direct question. One of the concerns we have today with so much of this business being done offshore is we have no line of sight or access to surveillance. We can’t tell if something is happening behind the scenes that might lead us to a deeper, more thorough investigation.
One of the things we’re excited about by bringing it onshore is the opportunity to work with the gaming operators, the provincial regulators and law enforcement to make sure that we have a line of sight to see if something is happening that doesn’t make sense. We understand from Mr. Burns that all of those tools can be available to us to actually make gambling safer and raise the level of integrity in our game.
To Senator Loffreda’s more direct question, we think this is a tremendous revenue opportunity. Exactly how much, we don’t know. We do think it will impact our ability to create engagement with fans and create an opportunity to attract new fans within all four corners of our great country and from other parts of the world, who will be more attracted to watching a game because they have a $5 bet or a $10 bet. They might stay longer. We know in conversations with our broadcast partner, for example, that improvements in ratings are not just how many people watch a game but how long they watch it for. If somebody stays for that last three minutes of the game because they have a $5 bet, it’s actually going to help us improve our ratings.
There are benefits all over the ecosystem for us. As Mr. Burns said, there are going to be avenues relating to data and other such things. Suffice it to say, we are very excited. We don’t think we’ve seen an opportunity for revenue enhancement to any degree like we have seen and see in Bill C-218.
Senator Moncion: Could you discuss measures the industry is taking in excluding pathological players? That’s the first question. Do you have data on the efficiency of your responsible gambling programs?
Mr. Burns: Thank you, senator. Self-exclusion tools are available for patrons. One of the things we’ve learned and that experts will talk about is that as much as controlling the environment and providing highly trained staff is possible, every staff member in a front-line casino is trained on responsible gaming and how to identify people in distress and with problems and helping them find pathways to help. They do have to want to help themselves at the same time. There are self-exclusion tools for that.
In the online space, there are player controls so they can set budgets and time on devices. They can control and give them the tools to ensure they are able to control their spend and give them the information they need to make those informed choices.
With respect to effectiveness, obviously the rates of problem gambling have been stable in this country and declining, and our education programs and initiatives continue unabated and we continue to develop new and innovative programs and ways to reach and educate players. There are lots of professionals you will hear from in the responsible gaming space that I know are coming as witnesses who can attest in a very detailed way on how they work to build those programs within our gaming environments and within the provinces.
Senator Marshall: Thank you for being here this evening. I have a simple question.
In order for this to go into effect, if we pass this bill by the end of the month, how long will it take for all the partners to be ready so we can start making our bets? Are we talking about months or years? The reason I’m asking the question is because we study a lot of government legislation, and quite often the time frames are far out into the future — five years, seven years — and in some cases, the deadlines or the target dates aren’t even mentioned, it’s that far out.
I support the bill and it’s long overdue, but realistically speaking, how long do you think it will take for all the players to be ready?
Mr. Burns: Thank you, senator. I believe that the provincial governments are currently in the process of having provincial gaming regulators look at developing provincial regulations. As you know, they’ve had a long, robust history regulating the gaming industry. Being able to be prepared, there are other jurisdictions we’re learning from.
It would be a matter of months. By the fall, you will see jurisdictions start having very robust offerings. With provincial lottery corporations, through their own sites and working with the provincial regulators, it could be weeks because the sports product is there. It’s being offered today. There are new rules that need to be put in place, and I can tell you that gaming regulators from coast to coast are working on those right now to be ready for the opportunity when it comes.
Senator Marshall: Are your organizations ready? You sound like we could go in a year and are right ready to launch.
Mr. Burns: We’re right ready. The B.C. Lottery Corporation has a very robust sports offering on their online platform today. The Gaming Policy and Enforcement Branch in British Columbia, the regulator from that province, is writing regulations today. The Alcohol and Gaming Commission of Ontario is doing the same. They are prepared to be ready soon.
Senator Marshall: Give me a time frame.
Mr. Burns: By Labour Day.
Senator Marshall: By Labour Day of this year?
Mr. Burns: Yes.
Senator Marshall: I’ll wait until you come back to testify next time. Thank you.
The Chair: I think what Senator Marshall is getting at is it’s better to under-promise and over-perform. Nevertheless, I’m sure you’ll do the best you can.
[Translation]
Senator Bellemare: My question is for both participants, whom I thank for being with us.
I’m having some difficulty with this, as it’s a little concerning when you get into voting on individual sports bets. I wonder what effect it has on professional teams compared to semi-professional teams.
I was wondering: Isn’t there a greater risk of cheating in sports betting that involves semi-professional teams? Perhaps the amounts are smaller, so it could go unnoticed.
Would it be better to include a specific provision in the Criminal Code for betting on semi-professional teams, or do you feel there’s no particular problem between the two sports categories?
[English]
Mr. Burns: It’s very particular which sports are actually bet on. Just because there is a sporting event happening, it doesn’t mean people are going to place bets on it, or more importantly, sports books are going to take bets on that product. In fact, there will be a very clear line. This is where the provincial governments and the regulators come in.
For the last three decades, the provinces have been able to take the Criminal Code and apply their own provincial regulations, laws and oversight to be able to enforce those mechanisms. This is one of the areas where they will step in and say, “We will prohibit sports betting on these sports. We will permit betting on these sports.”
There is a series of criteria and best practices around the world. Regarding minors, that would probably be no. Is there secure data available to understand how the bet is satisfied? Because if it’s a group of people playing in a field, there is nobody watching, there is no data, so they won’t take bets on that. They will take bets predominantly on professional sporting events because they can ensure the integrity of the data to settle the bets. The operators don’t want to be cheated and don’t want to take bets in areas where they’re not certain of what can happen.
The Chair: Mr. Ambrosie, do you have any comments on that?
Mr. Ambrosie: Unfortunately, I did not get the translation for the question, and I apologize that I’m not in a position to respond.
The Chair: I don’t like to save time that way, but I’m sorry you don’t have that information.
Senator Bellemare, are you satisfied with the response by Mr. Burns?
Senator Bellemare: Yes. It would have been interesting to have your opinion. Briefly, I was wondering if there was a risk that the semi-professional groups will trick the game more easily than for professional games. Mr. Burns told me they will probably not be allowed because the data would not be so strong in the semi-professional leagues or any other kinds of games in the park — with kids, for instance.
The Chair: Mr. Ambrosie, could we have a quick view on that matter?
Mr. Ambrosie: Again, Senator Bellemare, I apologize that I didn’t get your question the first time, but I understand it now. I’m not an expert in this area, but my understanding is that there will be significant restrictions on what kinds of sports and activities can be gambled on. There will have to be a certain level of sophistication and control in place in order to qualify. I think some of those perhaps semi-pro or more informal sports will simply be excluded from this ecosystem. I also think it will put a positive responsibility on us — for the training, education and ongoing learning — to make sure we are a competent and professional partner in this endeavour.
[Translation]
Senator Dagenais: I have a question for Mr. Burns and Mr. Ambrosie. I will start with Mr. Burns.
Currently, Canadians are placing bets over the internet, even in U.S. casinos. There’s no denying that they are also betting with illicit organizations. What benefits will you offer to bettors for spending their money in Canada, and will it pay off better with you than with other organizations?
[English]
Mr. Burns: There are a couple of things that are also happening around this time. Canada has had this grey market for online gaming because the law has been unclear in terms of where the bet occurs. We can’t enforce our laws extraterritorially. When you go online and the server is sitting in Malta or the United Kingdom, the bet is really occurring in that server and not in your living room where you’re sitting in Canada. That has been part of what has been evaded in the law.
The Ontario government is in the process of trying to change that and bring in a regulated system for all online gaming. This is important because it will create a black market and a white market with the Province of Ontario. Other jurisdictions in the country are watching to see what Ontario’s choices are to try to curb some of that offshore online spending, to try to create a marketplace and promote those licences.
Within the Canadian jurisdiction, we need to make sure that people know the sites are fair and regulated and that they are top-tier companies that are meeting the highest standards of control. We live in a highly regulated industry and we pride ourselves on being able to provide safe and secure environments.
The key is to bring that back in. That’s the work of promoting the fact that these Canadian sites are licensed, and telling and educating people continually that some of the sites they chose are not legal and that you run the risk of not getting paid in some cases, depending on where they are.
There are sites that are regulated in the U.K. that Canadians are betting on. They’re not betting on the United States, though, because those sites don’t offer. The United States’ laws are very clear, and they’re black and white, so most of these are offshore European sites or in other countries in South and Central America.
[Translation]
Senator Dagenais: Mr. Ambrosie, we know that professional sports organizations have a history of putting an expensive price tag on their trademark. Will you get your fair share of the winnings?
[English]
Mr. Ambrosie: Mr. Chair, I apologize. I’ve been working with your staff to see if I can get translation, but I cannot respond to the question because I’m not getting translation.
Senator Dagenais: How much do you receive for your trademark, Mr. Ambrosie?
Mr. Ambrosie: As it relates to this particular opportunity?
Senator Dagenais: Yes.
Mr. Ambrosie: The answer is that today we don’t know exactly. There are lots of elements of this initiative that are yet to be defined. We do believe that the opportunity is significant. Of course, getting those answers will come as we go into the next steps, once the legislation is passed. Hopefully it passes the Senate, and we believe at that point a lot of those answers will become much clearer. We do think it is significant and, as I said earlier, perhaps a once-in-a-generation opportunity for revenue enhancement at a time when we desperately need it.
Senator Ringuette: My question is for both gentlemen. My concern is with regard to enforcement. You will say that, well, no one is enforcing the offshore betting that is happening right now. For certain items the provinces do make regulations, but the enforcement is not as one would expect.
To give me an idea of the provincial enforcement mechanism, in the last five years, Mr. Burns, with regard to the members within your association, how many contraventions did the province put forward to your membership?
Mr. Burns: Our members, obviously, hold licences in the jurisdictions in which they operate, and they value those licences. Clearly, those things do happen at times when things may not go as planned. However, there have been very few instances — that I’m aware of at this point, and I can’t speak to a specific number — where there have been questions within the current licence-regulated marketplace. Most of the operators have highly sophisticated compliance and screening programs for employees and suppliers. There are multiple procedures in terms of how gaming floors and online sites operate within the country, as they are regulated.
The enforcement of keeping out those offshore online sites is where the Canadian law is not clear. Where does the bet occur? That has been a point where the Crown and law enforcement have not been interested in trying to pursue this because the outcome is uncertain. Is what they’re doing illegal? Does the bet occur in Canada?
There was a case in British Columbia, called Starnet. The servers existed on Canadian soil and they were shut down. The operators were fined and operations stopped.
However, when the servers are not in Canada and the activities are taking place offshore, the law has been unclear. That’s why the Province of Ontario has chosen to create a legal licence framework for online gaming at any level. People who want to offer their services in the Province of Ontario need to be licensed. They will need a security and integrity test to get those licences. This will ensure that there is a black market and a white market. There will be legal and illegal markets clearly defined in Ontario by the end of this year. That’s a very productive move by the province. As an industry association, we have been asking for internet gaming to be entirely regulated in this country since our inception in 2006.
Mr. Ambrosie: I would add that we would be massively motivated to have robust surveillance. We would be very motivated to have strict enforcement because the fundamental integrity of our game would be at stake. On behalf of our nine member clubs and all of my colleagues from around the league, we would want to make sure this next step into legalized sports betting would be taken in partnership with the authorities, with the provincial regulators, because the fundamental integrity of our game would be put at risk if we weren’t. All I can tell you is that I think we will be a very good partner in this process because our level of motivation is exceptionally high.
The Chair: Thank you very much. As you can see from some of my comments, we are somewhat pressed for time. We have another panel. I want to thank you both very much for your evidence this evening. As you can imagine, we will be going through a number of meetings going forward and hearing from other witnesses as we develop a complete and thorough understanding of the issues. I can say for myself and for the committee we’re very thankful for your attendance this evening. It’s much appreciated.
Thank you, Mr. Ambrosie, and thank you, Mr. Burns.
For our second panel, Ms. Deer and Mr. Hansen, we want to welcome you both and thank you very much for attending. I apologize for the short notice given to you to join us this evening, but it’s much appreciated. If you could introduce yourselves and what your roles are, then we will start opening comments with Chief Deer.
Gina Deer, Chief, Mohawk Council of Kahnawà:ke Good evening, I am Chief Gina Deer, I am with the Mohawk Council of Kahnawà:ke and head up the external government relations.
Zane Hansen, President and CEO, Saskatchewan Indian Gaming Authority: Good evening to the Senate committee members. My name is Zane Hansen. I’m the President and CEO of the Saskatchewan Indian Gaming Authority. We operate a number of casinos in Saskatchewan owned by the First Nations of our province.
The Chair: Thank you so much. I wonder if you would permit me, if I might, to express the committee’s deep regret and dismay with respect to the tragedy which occurred at the Kamloops Indian Residential School in British Columbia. I hope you permit me to mention that to you. We appreciate you coming this evening.
Ms. Deer: Wat’kwanonweraton.
I would like to acknowledge that today’s proceedings are taking place on unceded Anishinaabe Aki Algonquin territory.
I also want to acknowledge the heavy hearts we have today due to the discovery of the remains of 215 Indigenous children at a former residential school in Kamloops. We stand with the Secwépemc Nation. We are united in grief.
Dear members of the committee, on behalf of the Mohawk Council of Kahnawà:ke, I am pleased to be here today to relay much-needed discussion points around Bill C-218. We hope that our testimony shines light on the dangers of the federal government crafting legislation while choosing to stay blind to the substantive rights and interests of Indigenous communities, including ours.
Let me be clear: Our community endorses the essence of Bill C-218. Indeed, Canadians should have the right to bet on single sports or athletic events.
Our issue with Bill C-218, as crafted, is it fails to properly regard the rights and interests of Indigenous peoples, especially in a case like that of Kahnawà:ke, where we have been and are actively operating in the sector.
For context, the Mohawks of Kahnawà:ke and Mohawk people generally have engaged in gaming and sports betting since time immemorial. Games of chance and wagering on sporting events such as lacrosse are an integral part of Mohawk culture.
In its most recent iteration, the Mohawk Council of Kahnawà:ke has been exercising this right by regulating, facilitating and conducting both land-based and online gaming. Our community has done so through an assertion of our inherent right to self-determination, enacting the Kahnawà:ke Gaming Law, an assertion that is clearly reconcilable with section 35(1) of Canada’s Constitution Act, 1982.
Over the last 25 years we have utilized our own ingenuity and resources to build a successful, sound and reputable gaming industry in both the online and land-based sectors. The industry has provided us opportunity to secure resources to support socio-economic needs in our community, basic needs that would otherwise be under-resourced and unmet.
This industry generates much-needed funds to address those and other socio-economic initiatives for the benefit of the Mohawks of Kahnawà:ke. We did this on our own.
This track record highlights Canada’s worst-kept secret: Indigenous-led initiatives rolled out by and for Indigenous peoples can be powerful and vibrant successes. We have always known best how to take care of our own. Away from the one-size-fits-all paternalistic framework, we create, nurture and thrive.
Again, I will reiterate the obvious: Kahnawà:ke does not take issue with the intent of the Criminal Code being amended to permit provinces to facilitate sports betting. We recognize Bill C-218 as a positive move for Canada’s gaming industry. However, we do take issue with the bill’s failure to appropriately consider, accommodate and reconcile the interests of Indigenous peoples.
To add insult to injury, at no point in the review and progression of this legislation through the House were the concerns and proposed solutions meaningfully accommodated. We don’t know which interests drove the House of Commons to pass this legislation without any real regard for our perspectives and proposed solutions. And we are seeking clarity from Minister Lametti on this front.
However, we know that it has been left to the Senate, whose role is to provide sober second thought to legislation, to right a definite wrong. Without amendments, Bill C-218 perpetuates the ongoing misappropriation of Indigenous rights and interests by failing to provide a process for Indigenous nations to negotiate agreements directly with the federal government.
We urge you to work with us in the true spirit of reconciliation to find a path forward that satisfies all sides, and one that provides Canadians with new rights without coming at the expense of ours.
With an eye to moving forward, we are providing specific recommendations on how to precisely achieve this. We are proposing specific and tangible wording amendments that accommodate Indigenous interests by simply establishing a means for Indigenous governments to negotiate specific agreements directly with the federal government.
Senators, there is no shortcut to reconciliation. Canada has to trust the expertise and listen to the lived experience of Indigenous communities. We are here; it starts now.
We thank you for your time and look forward to your questions. I am joined by Chief Ross Montour, who is also on the call.
The Chair: Welcome, Chief Montour.
Thank you very much, Chief Deer.
Mr. Hansen: Good evening, members of the Senate committee. I am Zane Hansen from the Saskatchewan Indian Gaming Authority. It is a pleasure to be talking to you this evening on the topic of single-event sports betting.
As I mentioned, we are a casino operator that has been operating in the province of Saskatchewan for about 25 years now. We are collectively owned by the 74 First Nations of our province. We operate under a master gaming agreement that our central legislative body here in the province negotiated with government. That’s enabled us to develop seven casinos. We recently agreed on terms to add online gaming as the provider for a province-wide application. So we are very engaged in the gaming industry and it has driven many benefits to us.
Our purpose for getting into this industry is not unlike how other governments view gaming. It is to create employment, support economic development and raise revenues for our communities. The industry since the early 1990s has been resilient and we have delivered well on our mandate in expected benefits.
From our seven casinos, we have had employment created for up to 1,800 individuals, of which two thirds are of First Nations descent. We support on-reserve economic development and we have helped build local infrastructure and tax bases.
From our earnings and proceeds, we commit over $2 million annually to responsible gaming programming through addictions foundations. Beyond that, we are a non-profit, so we return millions of dollars of profits back annually to our First Nations communities, to the government and to regional charity foundations.
In the context of First Nations economic development and what we have been able to achieve with the gaming industry, these benefits are of critical importance. As we all know, we’re not in normal times. COVID-19 has devastated the casino sector over the past 15 months. At this point, we face mounting losses, and a large percentage of our employees remain out of work.
It’s good to hear about and see now the vaccine efforts, and we look forward to restarting our casinos on a limited basis. We will begin that road to recovery.
One tool that will help us recover going forward is the approval of single-event wagering. This is an important piece of legislation that will assist us and other gaming operators across the country.
The gaming industry is no different than other sectors of the economy where advances in technology and evolving customer preferences do drive continuous change. What you see with single-event sports wagering is a key example whereby industry estimates show it’s the preferred form of sports wagering, yet it remains unregulated and primarily takes place through online and mobile channels, a newer technological form of delivering gaming.
From our perspective as an operator, Bill C-218 enables us to do a number of things.
First, it gives us the opportunity to compete and offer a product demanded by our customers. We currently see grey-market operators operating in our province with no benefit back to our stakeholders. Bill C-218 will also enable our company to bring an enhanced experience to our customers based on sports. We will have the ability to integrate online sports wagering while watching sports in our casino food and beverage formats and that will bring a great experience to our customers. This multi-channel approach not only diversifies our revenue base, but it will drive reinvestment and more jobs back to our casinos.
The other thing legislating single-event wagering does is it helps protect the interests of our customers. We always make sure that our customers are well informed on the games we offer, and the integrity of our games are held to a high standard. As operators, we are held to high standards of accountability, as I mentioned, in industry regulation, responsible gaming and the processing of financial transactions. Those are just a number of the benefits we see moving forward with Bill C-218.
I thank you for the invitation to speak this evening.
The Chair: Thank you to you both.
Senator Wallin: Thank you for being here. Mr. Hansen, are you happy with the bill as it now stands?
Mr. Hansen: We would be on the narrow application of the bill. This opens up the ability for the industry which we participate in to offer single-event wagering. We have not been able to participate in that in the past. I understand the interests and the importance of recognition of First Nations jurisdiction in the Criminal Code, but that is a much bigger issue than what Bill C-218 is really looking at doing.
Senator Wallin: Thank you. That was my comment to Chief Deer. My sense is you don’t believe that you should be subject to the regulation at all, and that seems to be separate from whether or not you have any interest in Bill C-218 or amending Bill C-218. Can you clarify that? Do you think this shouldn’t apply in your case?
Ms. Deer: No. As I stated in the submission, the agreement needs to be with the federal government. Unlike other provinces, they have agreements with Indigenous communities. There is no such agreement here in Quebec.
Senator Wallin: Do you or do you not support Bill C-218?
Ms. Deer: We would like to see an accommodation for Indigenous people within Bill C-218. The way it is written, it does not address it. We did give specific wording to Bill C-218 that we would like to see for Indigenous communities.
Senator Wallin: You gave wording to whom, to this committee or you dealt with the government?
Ms. Deer: To the House when we made the original position for Kahnawà:ke.
Senator Wallin: You want it amended, but as it stands now, you wouldn’t support it?
Ms. Deer: In its current form, no. We have the wording. We could provide it to you if you would like. Chief Montour can read it for you.
Senator Wallin: That’s fine. I just wanted to clarify that. Thank you.
Senator Smith: Mr. Hansen, you’ve noted that your organization has created over 1,800 jobs, with the majority being First Nations people. Like many sectors of the economy, yours has not been immune to the impacts of the COVID-19 pandemic, with many of your properties closed and staff on leave. Many stakeholders, including yourself, have come out in favour of the legislation, citing how important it could be for the recovery of your industry.
What type of analysis have you done on the legislation, and what could it mean for your members in terms of recouping revenues lost during this pandemic?
Second, how quickly will you be able to generate or integrate single-game betting into your casinos?
Mr. Hansen: Essentially, it’s one of those forms of gaming that we’re not legally permitted to participate in. It gives us one more offering to our customer base, to serve the customers and generate revenue.
Those aren’t new types of gaming being created. It’s happening now, but it’s happening by operators who aren’t licensed to regulate it in our province. Moving this into a regulated atmosphere, we can deliver it well, safely and with a high level of integrity.
If you looked at single-event betting in the broader context of all gaming in the country, it’s probably, revenue-wise, going to be a 5% to 6% increase in that overall pie. It’s not overly huge in the context of all gaming, but everything helps when you’re rebuilding from the impacts of COVID-19. It’s a great event-based activity and will help drive visitation to our properties as well.
Senator Smith: Chief Deer, I understand what you have explained to us in terms of your frustration. Could you, in simple terms, develop exactly what you are looking for in this bill to be able to assist you in moving forward as an energetic partner in the process?
Ms. Deer: We look to have the amendment, and we had provided some wording. That was from section 207(1) of the Criminal Code, and we had a clause:
(a) for an Indigenous governing body to conduct and manage gaming and betting pursuant to the terms of an agreement with the government of Canada;
Further down, there is a definition for “Indigenous governing body,” which means:
. . . a council, government or other entity that is authorized to act on behalf of an Indigenous group, community or people that holds rights recognized and affirmed by section 35 of the Constitution Act, 1982;
Senator Smith: Presently, in terms of ability to move and do what you do with the casinos, that relationship is with Quebec, is it not?
Ms. Deer: We do not have a relationship with Quebec. We have asserted our jurisdiction. We have been doing this for over 25 years, since our law has been enacted in Kahnawà:ke, and we have been in the online sector for over 20 years.
Senator Smith: Those of us who are Quebecers recognize the success you have had and are probably envious of what you have been able to accomplish. Thank you very much.
Ross Montour, Chief, Mohawk Council of Kahnawà:ke It is very important to point out that one of the reasons we did set out 25 years ago to determine a jurisdiction for ourselves to enter into this as an avenue to raise revenues for our community is because Quebec would not talk to us. There was no interest on the part of Quebec to have any discussions with the Mohawks of Kahnawà:ke in terms of any kind of agreements.
Twenty-five years have come and gone, and we have proceeded and developed a gaming framework in this community, which even Justice Minister David Lametti described as being a gaming jurisdiction that was worthy of recognition. This came after we had reached out to the Prime Minister of Canada, explaining what our concerns were about the bill when we first learned of it, that Minister Lametti set out. We were supposed to meet with him; we did meet him in good faith to try to find a workable solution. That’s what we were told. And thus far, we have not been able to reach that.
I want to point out that the gaming industry, particularly our online product, has generated just in the last year close to $10 million that went to cover our own costs for the pandemic, to offset people’s incomes and so on. We didn’t rely on the Canadian programs. We provided for that.
That’s the goal of our gaming industry, to provide for our people, for our community. This is not a profit-making venture. This is a venture which solely has the interests of the Mohawk people of Kahnawà:ke at stake and at heart. We have never been a people who want to put our hands out. We’ve always wanted to stand on our feet, and we have done that throughout time.
This test of not having a carve-out is one that threatens our ability to continue to provide for our community, for our people. That’s a major shortcoming for us in terms of the proposed legislation without the amendments that we have suggested.
The Chair: Thank you, Chief Montour.
Senator Ringuette: I do understand that. In my own community of Edmundston, we have our own native communities operating a casino and they are very successful at it.
My question is to Chief Deer. If you have been operating for 25 years without the agreement of Quebec, and it is Quebec that has the betting authority in their province, how does this bill interfere with your current activities or any additional activities that you want to entertain? My understanding is that this is not removing any of your current ability or future ability. You’re acting on your own. Quebec seems to agree with that, indirectly.
Ms. Deer: Thank you for that question. The way things happened in 1985, there was no consultation when the provinces took over the rights to gaming. Those rights were sold without any consultation with Indigenous people. Now that there is an amendment before us and Canada has been talking about the nation-to-nation relationship, that’s what we are looking for here — the nation-to-nation relationship between the federal government and Indigenous communities.
It’s very difficult for us when laws are created to shut us out of industries, and that’s what happens. We’ve been shut out of industries throughout time, including tobacco, which originally was our product. So here I am before you today, wearing a red dress that represents the murdered and missing Indigenous women and talking about the 215 children who were found. As a parent who lost a child, it’s been very difficult for me to know that those parents never knew the fate of their children. They never got to spend their last moments with their children.
Now I’m here before the Senate, after going to the House, asking for consideration so we can have true economic development and be in charge of our own affairs, rather than relying on the government which has not been able to live up to the responsibilities and commitments that it has made over time.
We’re a people who have supported ourselves, as Chief Ross Montour has said, but laws are constantly created to shut us out of industries that are very lucrative. The rich get richer, and we go on struggling and asking to be considered for an accommodation. It makes it very difficult to believe in true reconciliation and righting the wrongs of the past.
I shouldn’t even have to appear here today. I should be given that consideration long before we get to this point in this bill or other bills, as we have talked about in the past.
The Chair: Thank you, Chief Deer.
Senator Klyne: Welcome to our panel of guests here.
The first question is for Mr. Zane Hansen. Many good things have come out of the Gaming Framework Agreement that you referenced. The province’s treasuries have benefited. First Nations and Métis economic development has been buoyed. Saskatchewanians have entertainment options in their own province, instead of having to drive to other provinces or the northern United States or flying to Vegas.
I want to thank you for sharing some examples of how gaming has improved the social and economic agendas for First Nations in Saskatchewan and the direct and indirect positive economic impacts where the Saskatchewan Indian Gaming Authority’s, or SIGA’s, casinos are located.
We note that 66% of the employees at SIGA’s casinos identify as Indigenous, which means that your gaming sites are also having a positive impact on non-Indigenous employment. Your casinos directly offer quality work and career opportunities, but their activities also support local contractors, skilled labourers, food services and entertainers, just to name a few.
From a First Nations perspective and given the valued contributions Saskatchewan’s First Nations casinos are already making, what new incremental impact could come from the introduction of single-event sports betting through online gaming platforms?
Mr. Hansen: Thank you, Senator Klyne. First, I just want to say, we definitely are aware and sympathize with the different ways gaming policy has rolled out across Canada. We have been fortunate that our leadership positioned us to get a foothold in this industry. Government came across and developed policy and worked with them to enable us to have the footprint, the impacts and benefits that you mentioned.
Simply, Bill C-218, in the context of what it does now, enables us to compete in that space. We can get a competitive offering for single-event sports and provide that to the marketplace. Right now, we can’t. That’s what it enables us to do.
In the broader and very important piece around recognition for First Nations or jurisdiction in the Canadian Criminal Code context, Bill C-218 does not do that. That is a very important issue, but it is a very large and complex issue as well. We’re very sensitive to that.
Senator Klyne: Hopefully, through the Gaming Framework Agreement, you guys can find your way through that, as it relates to the online gaming platforms.
Chief Ross, we understand that the Province of Quebec has been somewhat on the sidelines of this gaming industry which you’ve created and flourished with and developed for the benefit of your communities. Since the announcement of Bill C-218, has the Province of Quebec approached your council to discuss any agreements or regulations? Is it necessary to carve something out, or could you just carry on with business as you have been?
Mr. Montour: At this point, the Province of Quebec has not extensively reached out to us. They have a concern about land-based gaming facilities. Essentially, our concern here has to do with the opportunity for single-sport betting, which is an online venue and product. They have not spoken to us about that.
I just find it curious that, after so many years, decades really, of having no interest whatsoever, now there is a concern because it’s something that concerns them. It doesn’t concern us. But in the meantime, since 1985, when gaming was turned over to the provinces as jurisdictions by the federal government — for whatever reasons it had at that time — there was never any attempt to address First Nations, Indigenous nations, as jurisdictions.
There’s a lot of talk in the Canadian Constitution, there is a lot of talk in the political discourse today when we talk about reconciliation, when we talk about Bill C-15, and all of these things. It all falls short of being able to recognize us as a legitimate jurisdiction. Did you know we have one of the best-managed and best-policed systems anywhere? We recently were up for an award. We made the short list of five different online gaming operations to receive an award for new business start-ups in online gaming. We have a well-governed and well-policed system for a gaming jurisdiction, and we hold it up to any other in the world. Kahnawà:ke has been recognized.
A major concern for us is, number one, for the Government of Canada to honestly engage with Indigenous people. It’s not just Kahnawà:ke. Our hope would be that by putting in these amendments, this would apply and offer opportunities for other Indigenous nations across the country as nations and jurisdictions. The government has used that language over decades of my life talking about nation-to-nation as well; you know, recognition. This is the way to recognize that.
I don’t believe we’re asking for anything more than any other jurisdiction in this country. It’s not more than the Province of Ontario does. That’s a real concern to us. We have been singled out and labelled as being offshore when we’re not offshore, as being an elephant in the room when we’re not an elephant in the room. We are simply a nation of people who are attempting to provide for our people. If there is really going to be recognition of reconciliation and a new relationship in this country, then let’s get the first one back in line and recognize us as being quite capable and able to provide for ourselves a means and a mechanism where we can have responsible gaming, and actually be able to do that ourselves and be recognized as a jurisdiction.
The Chair: Mr. Montour, I’m sorry, I have to stop you there. I don’t mean to sound rude.
Mr. Montour: It’s fine.
Senator Loffreda: Thank you to Chief Deer, Chief Ross and Mr. Hansen for being here this evening. It is much appreciated. We currently have $4 billion in offshore betting and $10 billion in organized crime betting — both illegal — for a total of $14 billion. You do invest your revenues in your communities and for the well-being of your communities, so thank you for doing that. That’s a fine job. Keep doing it, and congratulations for that.
Do you see any potential in recuperating a portion of those revenues? If so, have you put together some projections of what percentage or amount of those revenues you can recuperate or grow across Canada and continue investing in your communities’ well-being? That is for any or all of our panellists.
Mr. Hansen: I can give one example of what the potential represents for us. On the immediate surface of the business line potential, you often look at sports wagering revenue capacity in the context of your adult population in your region or province and apply a dollar spent per annum against that. There are different estimates out there. I think the potential would, for a province-wide application, be in the neighbourhood of $25 per adult. It would take you three or four years to get there. In a Saskatchewan context of 900,000 people — we’re a smaller province — you’re seeing yourself get north of $20 million in topline activity.
The important thing to remember, when you hear terms such as $14 billion in sports wagering, is that is the amount wagered. The actual amount of what we call “house advantage” or what you hold as revenue in a single event is 5% to 7% of that. That’s where you have to start drilling down to the true potential that way. We would offer that in a high standard and deliver those benefits as a non-profit back to our communities.
Mr. Montour: The projections that we’ve had, for us to have the ability to continue and to have a carve-out in the legislation — as I said, just in the last year alone we’ve generated $10 million in own-source revenue to our community. The projections for that with a carve-out continue to grow. Unfortunately, without that carve-out, we’re looking at — you know, Ontario is the major market for online gaming. With the approach they’re taking to conduct and manage, this is going to have a prohibitive effect on our ability to even function.
If this bill passes without our suggested amendments — we think they are necessary — the future does not look good for our ability to continue to provide those revenues to our community. That’s what we’re looking for: self-sufficiency and the ability to give back to our community and take care of the needs of our people.
The Chair: Thank you, Chief Montour.
[Translation]
Senator Dagenais: According to recent news stories, sports betting organizations like BET99 have carried out operations during National Hockey League games. Apparently, these betting companies have chosen to set up shop in your territory, in Kahnawà:ke, to bypass Quebec’s laws. Can you explain the steps you took to circumvent the law?
[English]
Ms. Deer: We do not have anyone who has settled in Kahnawà:ke other than our own brand. If you are not licensed by the Kahnawà:ke Gaming Commission, you are not permitted to be here. The only one we do have here is Sports Interaction, which is owned by Mohawk Online and the Mohawk Council. I think you might have some error in your information. We have a very strict rule.
[Translation]
Senator Dagenais: Can you tell us why, according to news reports we’ve seen just recently, Indigenous communities are partnering with individuals identified with organized crime to launch new casinos, particularly in Bécancour and Oka?
[English]
Ms. Deer: I cannot speak for Oka. As far as I know, they do not have a gaming commission. That is not part of our community. Kahnawà:ke is a very separate community from Oka. As a matter of fact, when I spoke with Minister Lafrenière here in Quebec, I had informed him that when it comes to gaming and things that they are seeking to learn, we can help educate them. We’ve been involved in this industry for a very long time, and we have the highest standards of player protection than anyone else in the world. Not even Canada’s Loto-Québec or any other place has self-exclusion to the degree that we do to ensure player protection. We are recognized throughout the world. We have agreements with different jurisdictions in the world and we worked with the Division of Gaming Enforcement in New Jersey.
So you have these different recognitions, but when it comes to Canada, we have not been able to come to any sort of accommodation or agreements around what we do. We were, I guess, looked at as the elephant in the room, as Chief Montour said before, and that came from someone at the Canadian Gaming Association at one of the meetings. People do know what we’re doing here is legitimate and we’re hoping Canada will realize that.
The Chair: Chief Montour, I will come back to you. I have two senators that have questions. I won’t get into the details, but I’ll come back to your response, if I may.
Senator Marshall: My first question is for Chief Deer.
Chief Deer, regarding the amendment that you spoke about and put forward, is there another vehicle you would be happy with? I get the impression from your response to Senator Ringuette that it’s this amendment that you want, nation-to-nation. Can you confirm that?
Ms. Deer: Yes, that’s correct.
Senator Marshall: You’re not looking for an agreement, but the amendment.
If the bill gets passed as it is without your proposed amendment, are you able to share with us what you would do then? Do you just take the bill and integrate it into your gaming industry or you look for the bill to be amended? Where do you go if the amendment doesn’t get included in the legislation?
Ms. Deer: Well, that’s the issue we have. If it doesn’t get included, you’re going to have people who will be told they can no longer work with us, which has been our experience over time. There are different things that have happened within the industry and we need some of the payment processors and different platforms that we have tried to use for marketing and people were told they can’t do business with Kahnawà:ke, otherwise they can’t do business with other provinces. This is one of the ways they tried to squeeze us out of the industry.
We’re competing for dollars and that’s what it comes down to. Provinces would really like to push us out of the way. We really do have a good platform and a good product. Being recognized by the industry for an award, as Chief Montour indicated, people realize what we do. We do it professionally and we are getting those dollars and we are competition, so it feels like we’re being squeezed out.
Senator Marshall: Mr. Hansen, you indicated you have a master gaming agreement. Who is the agreement with?
Mr. Hansen: Yes, that agreement is held between the province and our central legislative body, the Federation of Sovereign Indigenous Nations. They would act on behalf of all the First Nations in our province and hold that master agreement with Saskatchewan.
Senator Marshall: If this bill is passed, does it fall under the existing master agreement or is a new master agreement required?
Mr. Hansen: We would be able to amend the existing agreement and fold single-event sports betting into that and figure out the best way to go to the marketplace and deliver.
Senator Marshall: Thank you.
Senator Wells: Thank you very much. Senator Marshall had a great question, because I was going to ask [Technical difficulties] — I will turn to Chief Deer and Chief Montour and I and others met by Zoom —
The Chair: Senator Wells, you’re a bit quiet on your mic.
Senator Wells: I just wanted to recognize that I had a couple of calls with Chief Deer and a Zoom call with their group and I found it very helpful.
Chief Deer, should this go through unamended, will the activities of the gaming commission that is under the Mohawks, how will that change other than some [Technical difficulties] funds because others may be involved?
Ms. Deer: I’m not sure I heard your entire question. Your mic is going in and out.
Senator Wells: I’m sorry about that and I don’t know what to do it other than hold it in front of my mouth.
If this bill goes through without amendment, how will the operations — not the income, but the operations — of the Mohawk First Nation change?
Ms. Deer: Again, it makes it difficult for us to operate within the industry, and the hosting and licensing will be affected that we do here. People are going to look to move toward Ontario because they’re looking at their new “conduct and manage” model. That’s also going to be problematic. What they’re waiting for is the passing of this bill. So I guess we’re going to be attacked on several fronts from the passing of this bill without the amendments.
Mr. Montour: I can only echo what Chief Deer pointed out. It will create a situation where we are at a distinct disadvantage in terms of being able to extend our ability to reach out to the player market across the country, particularly in Canada. It is Ontario that is a concern. The way Ontario is looking at “conduct and manage” has, in our view, been particularly injurious to our ability to conduct in the future our efforts in the gaming industry to provide for our people.
I wonder at this time, would I have the opportunity to address some of the other remarks that were made by a previous senator?
The Chair: I’m going to give you exactly three minutes, but I’m going to mention one other thing. If you have any further information you want to provide to the committee, you may provide it, but do so through the clerk. Please go ahead, Mr. Montour.
Mr. Montour: We will do so.
The previous senator to Senator Wells raised some questions, number one, to talk about, say, Bet99 as a licensed operator to the Kahnawà:ke Gaming Commission. Our jurisdiction follows all of our rules. It’s important to point out that most online operators taking bets in Canada are currently unregulated. Bet99 is regulated and licensed by the KGC. That is an important point to make.
I also want to draw attention to the fact that, for the past 25 years, we have operated on the strength of our section 35 inherent right. We have an inherent right to an economy, not to one specific activity, but to an economy. This is the way we have proceeded. We have asserted that right. It’s never been challenged. It has not been recognized by Canada or the provinces. By having a carve-out, we have the opportunity for us to continue.
On the comment with regard to Kanesatake, it does not have a thing to do with Kahnawà:ke. Whatever is going on there and whatever partners they are looking into, they do not have a regulated environment over there. We do. We do not welcome. We will remove anybody who has a hint of improper associations from our jurisdiction. It matters that much to us. We take it very seriously. So to bring us and to create some sort of equivalence to Kanesatake to my mind is unfair and disrespectful to what we have in Kahnawà:ke.
The Chair: Thank you very much, Chief Montour. I don’t think anybody is drawing those conclusions. We’re just trying to get information. As you can imagine, it’s important for the committee to have that.
Mr. Montour: I’m afraid it was raised, with due respect.
The Chair: Of course. Let me say we’re at the end of our proceedings this evening. I want to thank all the witnesses. Mr. Hansen, Chief Deer and Chief Montour, it is most appreciated. We appreciate all of your comments. It’s important for the committee to hear your views on these matters, and your collective experiences are important for the committee. Thank you once again.
Thank you, honourable senators, for your participation this evening with respect to this bill.
(The committee adjourned.)