THE STANDING SENATE COMMITTEE ON INDIGENOUS PEOPLES
EVIDENCE
OTTAWA, Tuesday, December 3, 2024
The Standing Senate Committee on Indigenous Peoples met with videoconference this day at 9:03 a.m. [ET] for the consideration of the subject matter of Bill S-268, An Act to amend the Criminal Code and the Indian Act.
Senator Brian Francis (Chair) in the chair.
[English]
The Chair: Before we begin, I would like to ask all senators and other in-person participants to consult the cards on the table for guidelines to prevent audio feedback incidents. Please make sure to keep your earpiece away from all microphones at all times. When you are not using your earpiece, place it face down on the sticker on the table for this purpose. Thank you all for your cooperation.
I would like to begin by acknowledging that the land on which we gather is on the traditional, ancestral and unceded territory of the Anishinaabe Algonquin Nation and is now home to many other First Nations, Métis, and Inuit Peoples from across Turtle Island.
I am Mi’kmaw Senator Brian Francis from Epekwitk, also known as Prince Edward Island, and I am the chair of the Standing Senate Committee on Indigenous Peoples.
I will now ask committee members in attendance to introduce themselves by stating their names and province or territory, and we will start on my left.
Senator Arnot: I’m David Arnot from Saskatchewan. I live in Treaty 6 territory.
Senator McNair: I’m John McNair from New Brunswick. I’m part of the unceded lands of the Mi’kmaq people.
Senator Tannas: Scott Tannas from Alberta.
Senator M. Deacon: Welcome. Marty Deacon, Ontario.
Senator White: Kwe. Judy White, Ktaqmkuk, better known as Newfoundland and Labrador.
Senator Boniface: Gwen Boniface from Ontario.
Senator Coyle: Mary Coyle, Antigonish, Nova Scotia, Mi’gma’gi.
The Chair: Thank you, everyone.
Today we’ll continue our study of the subject matter of Bill S-268, An Act to amend the Criminal Code and the Indian Act to authorize First Nations’ governing bodies and those designated by them to conduct, manage and regulate lottery schemes on reserve.
I’d now like to introduce the first witness from today. Please welcome from Mi’gmawe’l Tplu’taqnn Inc., or MTI, in New Brunswick, Dean Vicaire, Executive Director, and Chief Terry Richardson, Pabineau First Nation, Board Member.
Also, please welcome online, Chief Darcy Bear from the Whitecap Dakota First Nation and Chief Evan Taypotat from the Kahkewistahaw First Nation.
Thank you all for joining us today. Our witnesses will provide opening remarks of approximately five minutes, which will be followed by a question-and-answer session with the senators.
Before we start, I want to remind everyone that we have three witnesses today and a fairly good complement of senators here, so please keep questions and answers as succinct as possible. I’ll hold this up when we’re down to one minute to keep everything on track.
I will now invite Mr. Vicaire and Chief Richardson to give their shared opening remarks.
Mr. Vicaire, welcome, and it is nice to see you again.
Terry Richardson, Chief, Pabineau First Nation, Board Member, Mi’gmawe’l Tplu’taqnn Inc.: Dear members of the Senate committee, I wish to thank you for the opportunity to address the Senate committee on gaming. My name is Terry Richardson. I am Chief of Pabineau First Nation, a Mi’kmaq community in northeastern New Brunswick.
The Mi’kmaq name for our territory is Mi’gma’gi, which includes the Maritime provinces, parts of Eastern Quebec, Newfoundland and the Northeastern United States.
Our oral history tells us that we have been in our territory since time immemorial. The traditional name for my community is Oinpegitjoig, meaning “rough waters” in Mi’kmaq. My communities’ territory includes the eastern portion of Chaleur Bay, the Nepisiguit River watershed and branches of several neighbouring watersheds.
It is no secret that First Nations have a very long history of gaming and the regulation of gaming. As a matter of fact, in many of our nations, gaming was a practice that resulted in exchanging anything from material objects to livestock. The favourite gambling game of the Mi’gmaq is called “Waltes.” Historical records indicate Waltes was being played in Mi’gmaq communities throughout Eastern Canada, including in my community, long before European contact, and Waltes continues to be practised in many of our communities today.
Senate Bill S-268 is very important to the Mi’gmaq in that it is an affirmation by the Government of Canada of our Aboriginal and treaty rights to govern gaming in our territory. This critical step moves us one step closer to reconciliation.
Bill S-268 will allow us to move forward with gaming in our respective territories without the unnecessary risks of litigation. It will also create a source of wealth for our communities and help address the ongoing core program funding shortfalls in health, housing and employment.
Furthermore, we know that wealth generated by First Nations stays local, because it is primarily spent in all surrounding businesses. In the case of my community, that translates into millions of dollars being pumped back into the regional economy.
Many First Nations in Canada are already involved in gaming, and the revenues they generate are helping their communities thrive financially as well as socially and culturally through economic development, housing, health, education and environmental initiatives as well.
The generation of wealth through gaming raises concerns when considering the potential for infiltration by criminal elements. To that end, gaming laws and gaming commissions need to be established in order to ensure that all dimensions of gaming in First Nations stay above board. In my community, we are currently in the process of developing both a gaming law and a gaming commission to govern gaming. These key regulatory documents are being developed with expert legal advice to ensure everything is in place for when we commence gaming in our territory.
In conclusion, I would like to again emphasize that your support of Senate Bill S-268 is a critical step on the road to true reconciliation with First Nations. In our country, an unrestricted landscape for First Nation gaming in Canada will enable our nations to enter a new economic development realm. Moreover, revenues generated through gaming will help address the funding shortfalls our communities continue to face on a daily basis.
I thank you for the opportunity to speak to you today. I will hand my next few minutes over to Mr. Vicaire.
Dean Vicaire, Executive Director, Mi’gmawe’l Tplu’taqnn Inc.: Wela’lin. [Indigenous language spoken]
It is a pleasure to see you again, Senator Francis; thank you for chairing this meeting. We would also like to thank Senator Tannas for introducing this legislation and recognizing the importance and impact this can have, as Chief Terry alluded to, on our communities.
In New Brunswick, not all Mi’kmaq communities are currently involved in gaming, but every community would like to be involved and have those opportunities expanded. We have tried numerous times to have discussions with previous governments to create new gaming opportunities. This has not been successful, and there has been no movement on the file.
One thing to note is that the New Brunswick Lotteries and Gaming Corporation and the Atlantic Lottery Corporation do not share any profits with First Nations in New Brunswick, despite the fact this is our land. There is a current agreement between the government of New Brunswick and Casino New Brunswick which states that, legally, a casino cannot be established within 150 kilometres of Casino New Brunswick in Moncton. As you can imagine, this regulation makes it difficult to have provincially authorized gaming in Mi’kmaq communities. Previous governments have tried to deny First Nation casinos like Madawaska’s Grey Rock Casino. They had to take the provincial government to court, and ultimately they won that case.
We have a meeting with the new finance minister in a couple of weeks, and this topic will also be part of the discussion. However, knowing this legislation is a possibility and will help in those discussions, this legislation is important because it would increase economic and social opportunities — as Chief Terry alluded to — recognize our right to self-determination and provide a mechanism for communities to develop a regulatory framework.
I believe if the federal government had taken this approach for cannabis, it would have been allowed communities to better develop rules and regulations around the selling of cannabis in communities. If enacted, this would correct an oversight in the original changes to the Criminal Code, which failed to address Indigenous rights or deal with First Nations on a nation-to-nation basis. We understand there may be an amendment that includes the ability for communities to get involved in online gaming, and we would certainly welcome that amendment.
We look forward to your questions. There are some points that I skipped, as you will receive the written document on this. Certainly, the senators around the table are more than welcome to review that document and pose any questions. I purposely left some of these out so we can entertain questions. I thank you so much, wela’lin.
The Chair: Thank you. Wela’lin, Mr. Vicaire.
Darcy Bear, Chief, Whitecap Dakota First Nation: Good morning, Senator Francis, and thank you and the Senate for chairing the meeting this morning. I’m from the Whitecap Dakota First Nation, located south of Saskatoon, 20 minutes from downtown. Our nation had territories both in the United States and in Canada, and they have been affirmed through a map that was commissioned by the Hudson’s Bay Company and the British Crown, the Arrowsmith map, which clearly shows the Dakota territories in both Canada and the U.S.
Chief White Cap was at the signing of both Treaty 4 and Treaty 6, and was not allowed to sign the treaties on the false pretense that he was an American Indian, which has since been rectified through our self-government treaty, Bill C-51, which recognizes us as Aboriginal people of Canada with section 35 rights and, most recently, an apology from the federal government and the treatment and discrimination of the Dakota.
We have a casino operating on our lands here in Saskatchewan. A bit of history on this. In our province, back in 1993, the White Bear First Nation opened a casino on their lands, were raided and the casino had to shut down its operations. From there, of course, negotiations began between the provincial government and the Federation of Sovereign Indigenous Nations to look at how we move forward with First Nations asserting jurisdictions, provinces saying they have jurisdiction because of the Criminal Code that gave them that jurisdiction to electronic gaming, and therefore, through this gaming framework agreement, agreeing to disagree and moving forward with gaming operations. The province opened two casinos in Saskatchewan, one in Regina and one in Moose Jaw. Initially, in Saskatchewan we opened the White Bear, North Battleford, Yorkton and Prince Albert. Of course, we’ve added some other casinos since then, and of them one was Whitecap in 2007.
The province has electronic gaming jurisdiction, so they also license and regulate all of the gaming activity on our lands here in Saskatchewan. They also have to own all the slot machines, which they currently do in our province, and they will also dictate how many machines each site will receive. On a positive note, when it comes to market stability, there is a process inside the Gaming Framework Agreement, or GFA, that looks at each market and looks at what kind of penetration there is and the appropriate number of casinos in that area.
We have nine casinos operating in Saskatchewan, and seven of them are operated by the Saskatchewan Indian Gaming Authority, which was founded in our province by our 74 First Nations. It operates all of the casinos in our province and does an excellent job. In Dakota we currently have a little over 300 employees in our casino. Through our ancillary investments, such as the Dakota Dunes Golf Links — the hotel, the convention centre and other operations — we have created an additional 300 jobs. Plus our governance operations created another 125 jobs.
That is who we are as far as Whitecap Dakota First Nation just outside the city. We just signed — sorry, I should say it is a self‑government treaty with Canada, but it was a bill, Bill C-51, which Senator Tannas would be familiar with, as well as Senator Arnot and the rest of you. It was passed with unanimous consent from both the Senate and the House of Commons. Inside that self-government treaty, there is a section, chapter 18, that talks about gaming jurisdiction. Once again, the biggest challenge to implement anything is actually amending the Criminal Code. That’s one of the things that we’re seeking here and we’re supporting.
There are not only host nations, but other nations looking at gaming, and those interested in gaming and those that already host casinos, are looking at addressing all of the concerns that have been raised in our discussions with other senators in our area, such as anti-money laundering and FINTRAC — we’re absolutely on board with that — responsible gaming and addictions. In Saskatchewan we have the First Nations Addictions Rehabilitation Foundation to support those with addictions. Market sustainability is also in place here. For example, for the Dakota Dunes Casino to be operational on Whitecap Dakota lands, we, along with the FSIN, the SIGA and the Saskatoon Tribal Council had to get support from the major market, which was the City of Saskatoon. The City of Saskatoon had to pass a council of support. It was voted on and they gave us that support. One of your next speakers is Edmund Bellegarde, and he is the former CEO of SIGA. We also needed to seek and get the support of the surrounding municipalities. We did all of this to get the needed support.
We were what was once listed as plan B. Plan A was building a casino in downtown Saskatoon, but Saskatoon had a plebiscite, and we became plan A. We have been operational since 2007. We were netting about $30 million a year, and most recently, since our strategic investments in a hotel and stay and play, we are now netting over $40 million a year. Last year I believe it was $43 million, and this year it will be about $46 million.
The jobs stay here in Saskatchewan. In our gaming framework agreement, we have section 2.1, which talks about gaming jurisdiction. It hasn’t been moved at all since the gaming agreement has been signed in our province.
We’re very supportive. I know that the Federation of Sovereign Indigenous Nations has also sent in a supporting resolution in support of Bill S-268. As I’ve said, as those less interested in gaming across the country, we want to make sure there is a national regulating body and there are models out there, such as in the United States with the tribes and how their relationships work within each state. We do know there will be regional politics to be addressed as well.
Certainly, we’re prepared to go down that pathway. We have a good working relationship with the Province of Saskatchewan. All of our nations benefit from the existing agreement we have here in our province.
Those are my comments. Thank you, and I look forward to your questions.
The Chair: Thank you, Chief Bear. I’ll invite Chief Taypotat to give his opening remarks.
Evan Taypotat, Chief, Kahkewistahaw First Nation: [Indigenous language spoken] On behalf of the 2,374 Kahkewistahaw First Nation members, I send greetings and bring greetings from Treaty 4 territory. Good morning to you, senators and my fellow panellists. I am here today to support Bill S-268 and share the benefits it can bring, if passed.
When First Nations people in Canada, including my own, sign treaties, we hope to maintain our sovereignty. Unfortunately, this has not been the case. In the early 1990s, the Saskatchewan Indian Gaming Authority was created under a new gaming framework agreement. At that time, no one could predict the significant economic benefits of settlements between the Canadian government and First Nations.
Today, First Nations communities have the financial resources and expertise to take the next steps forward. This bill could accelerate discussions and actions around sovereignty.
Health is directly related to wealth. Unfortunately, my people are the poorest in Canada, making us the unhealthiest in Canada. This bill can help address those issues through the economic benefits it would generate. Instead of the province taking 25% of the profits, these funds can be directed to my people. These resources could be used to fill gaps in areas where treaty funding falls short.
We also have much to learn from our relatives in the United States of America. American Indian communities have successfully taken this gaming leap, and once this bill passes, we can adapt their model to Canada.
Thank you for the opportunity to speak to the Senate and to contribute to shaping this country. Ekosani, thank you.
The Chair: Thank you, Chief Taypotat. We’ll now move on to questions from senators.
Senator Arnot: Thank you to all the witnesses here today. I have one question for Chief Bear and one for Chief Taypotat, because I know time is of the essence.
With respect to Chief Bear, the Whitecap Dakota First Nation is widely recognized for its casino operations. What elements of your model could inform other First Nations in their approach to gaming? And this might be the most important element: This bill will recognize the sovereignty of the First Nations to control gaming. How do you think that will benefit the First Nations in Canada when they’re not under the yoke of provincial jurisdiction?
Mr. Bear: Thank you, Senator Arnot. I also want to say good morning to Chief Taypotat and Chief Richardson.
Senator Arnot, this is something that you’re very familiar with in Saskatchewan and the landscape we have here as a former treaty commissioner. Certainly, an inherent right to gaming, as Chief Richardson spoke of earlier, is something we’ve been pursuing for years. The Gaming Framework Agreement, or GFA, is, I believe, almost 30 years old. Section 2.1 of the GFA talks about gaming jurisdiction. It hasn’t moved at all; it’s sat there. We have not had any progress.
The GFA talks about how the province and the FSIN would move forward to look at amending the Criminal Code, but, again, we need the federal government on board. So this is a very important bill that we want to move forward with. We will continue to have a relationship, of course; we know we have to have a relationship with the province. You look at the tribes in the U.S., and they do have relationships with the states that they’re in. As Chief Taypotat said, we would certainly look at that model.
The MOU is just what we had put together from across the country. It is to make sure we address all of the concerns that are out there from the Senate and from others. We will certainly address those concerns.
Again, it gives the jurisdiction to the nations. We can then own the slot machines ourselves, as nations, and look at the revenue streams, as Chief Taypotat talked about, and how we bring those revenue streams back to the host nations. We make a lot of strategic investments, but, sadly, through the existing agreement, there are no resources allowed for the Saskatchewan Indian Gaming Authority to have any capital for any of the ancillary services, reinvestment and partnership.
It would address those situations, because those ancillary services also generate more jobs. It’s not just about the gaming opportunity jobs. A good example would be our hotel, the Dakota Dunes Hotel. It created another 135 jobs, and the golf course another 65. In 2026, we’re going to be opening the first Indigenous-themed thermal spa in Canada, and that will create 165 jobs.
So it’s not just all about gaming. Gaming is the driver, but there are other economic activities that drive further employment that are beneficial to all of our First Nations in the local area. We’re 20 minutes from Saskatoon, and we draw upon that labour force. We have First Nations from across Western Canada working here at the Dakota Dunes Hotel.
I hope I addressed your question, senator.
Senator Arnot: You did. Thank you very much.
To Chief Taypotat, the Kahkewistahaw First Nation has always been entrepreneurial. You made a number of developments, for instance in alternative energy. How do you see gaming lotteries fitting into your broader economic strategy? I know you have significant real estate investments in the City of Saskatoon.
Can you comment on that, and any challenges you face as a leader in a rural or a smaller First Nation that involves anything we should know about?
Mr. Taypotat: Thank you, senator.
This bill will certainly help. I was thinking about this on the walk here this morning. Our ancestors dreamed of moments like this. They knew they would happen. Moments like this — when this bill passes — just open up the possibilities of addressing all these things in Canada that sometimes First Nations people are pegged with. Like I said earlier, we’re the poorest people in Canada. We’re the original people of this land, yet we’re the poorest. Bills like this help us realize our ancestors’ dreams of what we can do.
Money is not everything, but, at the same time, as I said, the treaty has a lot of shortfalls. Right now on our First Nation, we can address those because of our economic development ventures. This bill helps us address those even more. We talk about the residential school effect and reconciliation. This brings those to action.
On my First Nation, Chief Kahkewistahaw Community School is the hub of our nation. Today, we are thriving. When I was a principal there 10 years ago, we weren’t thriving. We couldn’t afford to hire language teachers. Money helps fill those gaps. Today, our school — we’re known as the Hurricanes; we’re the only Hurricanes in Saskatchewan. Why we picked that name, I’m not sure; I’m sure it was a vote. The young Hurricanes at the school right now love this culture. We have two Cree teachers today in our school whom we can afford only because we have economic ventures.
I know there are negative spinoffs to the gaming and the casinos. We will and want to address those.
To answer your question, senator, as to what this does for our community, it gives those little kids hope of being culturally strong First Nations people of Canada and breaking that residential school effect. That’s what language and culture does for us. Gaming profits and the money we see going elsewhere would directly benefit my 2,374 First Nation members.
Senator Coyle: Thank you to all of our witnesses for being here.
Chief Taypotat, you’ve underscored that important link between health and wealth, and health in its broadest sense and wealth in its broadest sense. This has been extremely helpful.
Several among you have mentioned the U.S. model, et cetera, both in terms of how people have benefited and how things are set up. It would be interesting for us to hear from you — perhaps starting with you, Chief Taypotat — as to what you think we can take from the U.S. example that would be helpful to us here in Canada as, hopefully, this bill passes and we move to a whole other level of sovereignty over this sector of our economy for your communities.
Mr. Taypotat: Thank you, senator.
When we started kicking tires about this a few years back, myself, Chief Bear from Whitecap Dakota First Nation and other chiefs I know, started making those relationships south of the border. Realistically, they are 30 years ahead of us on gaming right now. Recently, I visited the Coushatta tribe in Louisiana, which is the richest Indian tribe in Louisiana. The tribal chairwoman, Crystal Williams, personally accepted us and asked what we wanted to learn. We said, teach us everything. What’s the structure? What’s the governing body? What are the economic spinoffs? What are the negative and positive spinoffs? The job is in the creation.
The biggest thing we will learn from relatives south of the border is how they govern this. We can’t just shoot from the hip and hope things will go well. If a casino or online gaming pops up in every First Nation community in Canada — there’s 674 First Nations. That’s a lot of casinos and gaming websites. We want to make sure that doesn’t happen. There has to be a method to the madness. When we start thinking about what we could learn from them, it is essentially how to regulate ourselves and ensure a fair and equitable process. How does the money get spread around? I was chatting with Chief Bear last night. We want to make sure that other First Nations don’t get left behind. If we are the only two to make a profit off of this, then we are not doing it right. When I talk about health related to wealth, then I’m being greedy.
Chairwoman Crystal Williams sent me a package yesterday on how the local community, Indigenous and non-Indigenous, benefit from this. For us, getting this passed doesn’t mean just a healthy First Nation community, it means a healthy Canada because the jobs that come with this are for everybody and the spinoffs are for the local communities as well. We want to learn from those, but the most important thing is how to govern it properly.
Senator Coyle: Thank you for that. I was hoping that was where you were going. It has to be done really well. Hopefully, we can also learn from some of the mistakes that have been made there and we won’t have to repeat any of them.
In terms of responsible gaming and actions against criminality, money laundering and others, are there also lessons in those areas that we could be learning from south of the border?
Mr. Taypotat: One hundred per cent. Yesterday, when Chief Bear and I had our phone call, that was one thing that we talked about. We need to ensure that the senators understand the negative spinoffs and money laundering. Those have to be addressed as well. We can’t just shoot from the hip and hope it works out. We have to forecast that and get ahead of that.
Senator Tannas has been on a few phone calls with us, and that’s one of the things that he addressed as well. We need to address how we ensure that the senators are okay with that and then, in turn, it goes to the government. How do we ensure we get ahead of that? Last night, as I was having supper at JOEY Rideau, Chief Bear and I were talking about that. I was literally standing in the bathroom saying, yes, we have to make sure that this plan — in all the Zoom calls we’ve had with the other chiefs, that has been at the forefront. We have to make sure this is done legally, professionally, properly and with the proper structure to ensure that none of the negative stuff comes to the forefront.
Senator Boniface: Thank you very much for being here. To give you some context, I live in the snowy city of Orillia with borders Rama First Nation, and Chief Ted Williams was here last week.
In terms of economic benefit, I’m particularly interested in the rural impacts. What do you see as the benefits for your neighbours in terms of a regional impact? What type of conversations are going on with them? What level of support are you getting?
Mr. Richardson: I’m glad you brought that up, senator, because we are not myopic in my community. We look at the region and the municipality as part of growing. We are a small community. If all of those other people can benefit, we all benefit and we can all grow together.
Everything we do in our region is based on that regional approach. We look at everything from our municipalities — we have a great relationship with our French community, our Acadian brothers and sisters, as we call them in our territory. We work together on a lot of energy files; we are working together on this gaming file. The benefits would be the spinoffs. Obviously, for a small community, we are not going to get — everybody working within our community is probably already working. It will create great spinoffs, great economic development and growth in our region. You can’t put a number on that. It is just so great.
One of the things with the provincial government in New Brunswick that we had a concern about was looking at what happened with cannabis. We had suggested an approach. I remember talking with the premier and saying that a good approach would be looking at becoming the distributor and not getting involved in the control aspect. What happened is that we now have cannabis shops all over the place. Is that going to happen with gaming? I think we can get ahead of that. Mr. Vicaire has already mentioned that we are in talks with the premier of New Brunswick to get ahead of the game here. Let’s start talking about gaming so that we don’t have — as my fellow chief said — a casino in every community. That’s just not going to go.
How do we develop it? How do we make sure there is a process in place where all First Nations benefit? That’s what we are looking for. I liked the comment — it is a small world — the chief was telling me that he served in the military and I did as well, and we continue to serve. It is great to see our communities continue to thrive. That’s what we’re looking for. It is important for us that this will bring people in. It will bring people to the regions. It will become the place to be, and that’s what we are looking for.
Senator Boniface: Thank you, because in our region, that’s how it works, in fact. Casino Rama is the second-biggest employer in our region.
One of the things that I think Chief Williams alluded to last week was the province moving ahead with opening a number of casinos in proximity to the GTA, which was the draw for Rama First Nation, had created a competition that had significantly impacted. For you and Chief Bear, I wonder whether the province is coming on side in a way that will make sure that doesn’t happen? Perhaps you can enlighten me.
Mr. Bear: Thank you for the question. To date, in Saskatchewan, through the Gaming Framework Agreement, we have only one casino per market. There is one in Regina, one in Moose Jaw, and we have seven First Nations casinos operating in each different marketplace.
You will hear from Rob Scarpelli from HLT Advisory Inc., or HLT, in the next panel. He does all the market analysis for every area, looking at the size and scale of each casino in each marketplace. That has worked very well. We also have language in the existing GFA about when there is another casino entering into a market area, they have to keep the existing casino whole. That’s in the language right now. That’s important as well, because you don’t want to see market saturation. Chief Taypotat and I were talking about that. We have to make sure that as we go forward, we are not putting three or four casinos all in one area, cannibalizing another casino. That impacts the sustainability of that casino and all the employment it created. We are very mindful of that.
I wanted to mention one other thing. You were talking about U.S. casinos. We visited the Choctaws in Mississippi, and they currently have over 10,000 employees in the state. They are one of the largest employers. They have casino operations, but they take their profits and reinvest them in further economic development activities for their tribe. They reinvest a lot of the profits back into the community as well. They have their own hospital, tribal court, tribal police and fire department. Any of their people who want to go beyond Grade 12 — it doesn’t matter what post-secondary institution they want to go to in the world — they will send them. They reinvest a lot of their money back into their number-one resource, which is their people. That’s very important. They don’t look at per capita distribution, but they reinvest in their people and, of course, the state benefits as well.
In Whitecap alone, from all of the operations we have besides the casino, we had Fiscal Realities do an analysis, and we generate about $60 million to Canada’s GDP annually right now. With future developments, we will be hitting about $100 million in GDP. We all benefit — Saskatchewan, the federal government, First Nations, municipal governments — because a lot of our employees own homes in Saskatoon and they pay taxes back to the City of Saskatoon.
There are a lot of benefits to everyone. When First Nations are successful, and we are allowed to take our rightful place and be part of the economy, everyone benefits. This is something we are doing, taking back what was taken away from us, which is a right to an economy and economic reconciliation and also the inherent right to gaming jurisdiction.
We are hopeful the Senate will support this bill and move it forward.
I hope I answered your question.
Senator Boniface: You did. Thank you.
The Chair: I want to go back to Chief Richardson’s comments and ask Mr. Vicaire, in terms of New Brunswick, do you have anything you would like to add?
Mr. Vicaire: Yes, if I may. The chief mentioned that they are roughly 30 years behind some of the tribes in America. We are probably double that, due to the fact that we had a previous provincial government who flat out refused to deal with us. Now, with the change of government, we are very hopeful that we can make progress there.
The one thing about being last is that we have the benefit of hindsight. All the chiefs mentioned that in order to commission gaming in a responsible way, there were a lot of mistakes and shortcomings that won’t happen in our situation, because we have the benefit of hindsight, and we are able to learn about what it is, exactly, not to do and what it is to repeat and the successes that come along with that.
Speaking about the Atlantic region, as you know, senator, being from the region, it is a little bit behind. I am being diplomatic and polite here in saying that it is high time for every and all governments — whether it be local, municipal, provincial and certainly federal — to support what it is that we’re trying to do here. Because in the end, as Chief Terry noted, if it is a win for First Nations, it is a win for the region. If it is a win for the region, then it’s a win for all Canadians.
We are the fastest and most educated population that is growing in this country, and that is a fact. I just wanted to state that, and I will turn it over to Chief Terry, if he has more comments.
Thank you for that, senator.
The Chair: Thank you, Mr. Vicaire.
Senator M. Deacon: Thank you all for being here in person and virtually today. I really appreciate it.
I think I heard some parts of my questions asked through my colleagues. I want to understand better if any of you wish to comment on those early conversations at the front end. You talked about governance and the importance of good governance and what you are learning. What conversations are happening at the front end? What is your approach to project impact assessment, and how do these principles get applied to gambling operations?
If I could hear from Mr. Richardson first, and then I will ask Chief Bear.
Mr. Richardson: Sure, senator. Obviously, we want to have regulations in place, because they have to be there. Our approach was that we are not even in gaming yet, but we are getting our ducks in a row.
What we have done is we have gone out, and we are developing a gaming commission. We are putting a governance policy in place, and we are learning from everybody who is already there.
As Mr. Vicaire mentioned, being last is not always a bad thing; you get to learn. We’ve gone and learned from what has happened out West, and we are taking that approach of moving forward, and as we move forward, making sure that we are able to get to the point where we want to be.
We are not always going to be able to financially do it. One of the problems some communities have is how to raise that capital. You have to be careful, because there are a lot of people out there willing to throw money at you to bring you into agreements that are not always that great for First Nations. You have to make sure that you take your time at the front and look at what type of agreement you are going to get yourself into, and then, of course, who your partners are is very important, as well.
I think that is some of the stuff we are doing from the beginning.
I don’t know if you want to weigh in, Mr. Vicaire?
Mr. Vicaire: Yes, thank you for that, Chief Terry.
Really quick, being a former chief in my own community of Listuguj, with cannabis, it is kind of like the wild west, where you have stores opening up all over the place. We are very mindful of the fact that we don’t want that to be repeated in gaming, because, quite frankly, it will happen. If we don’t do this in a responsible manner — to your question and your inquiry, senator — and if we work with — which we are more than willing to do — the provincial and federal governments to really get ahead of this, it would be responsible for us to do it. It would be responsible government and good governance, and more importantly, it is responsible for all Canadians so that we can all benefit and leave out that grey area of fraud and corruption and that sort of thing.
That applies to our own people. As I said, if we don’t get ahead of it and control it, it is going to happen, and nobody wants to be in that situation. I can say that with all due respect and wholeheartedly in support of our local chiefs, our chiefs in the communities. They don’t want to be faced with that.
I just wanted to share that. Thank you.
Senator M. Deacon: The same hour that Senator Tannas introduced this bill, Bill S-268, I introduced a bill right behind him, Bill S-269. It was not meant to impede or interfere with this work; it was tied to trying to fix something that we did in another bill related to single sports betting and advertising. I bring it up today, because, ultimately, my question is about health and well‑being.
We talk about mitigating, and we know there are people that are — I think the language was used — in trouble and that we need to assist. I would like to know more and dig deeper into the social impacts of gambling. Of course, we have great concerns, particularly in certain populations, and what has your community’s experiences been? Can you share any best practices for mitigating these negative social impacts? They are critical, because the balance is really great, governing your economy but also needing to deal with one of these issues.
Chief Bear, can I start with you first; is that okay?
Mr. Bear: Sure.
In Saskatchewan here, we have a — I would say — mature marketplace. You will hear more from Rob Scarpelli in the next panel, and he will talk about gaming across the country and where we are with brick-and-mortar casinos.
It very definitely is a concern for all of us, as far as addictions and responsible gaming. Even the provincial government has their program, and for the 74 First Nations in Saskatchewan, we have our own program, the First Nations Addictions Rehabilitation Foundation. If problem gamers are identified — and you have to remember that casinos are different than video lottery terminals, or VLTs. VLTs are everywhere. We have about 4,000 in Saskatchewan, but the VLT operators do not monitor the gaming activity. There are no cameras inside monitoring the gaming or anything like that. People just come in.
If anybody does have a gaming problem, they don’t want to go into a casino, because in a casino, we have the eye in the sky. There are cameras everywhere, so it deters problem gamers from coming into casinos. They would sooner go to a video lottery terminal or a lounge site and do their gaming there.
In our casinos, though, our staff do monitor, and if there is someone who looks as if they are having a gaming issue or something there are supports there for them. Some people even go as far as signing themselves out of the casino, saying, “I want to ban myself,” and it has happened where people have made that choice.
There are supports there, and, certainly, we do take it seriously as far as addictions and making sure there is responsible gaming and giving people choice, because people are going to game, regardless. Even when there were no casinos here in Saskatchewan, people were going to other jurisdictions to gamble. We do know that there is gambling going on. You see lotteries. Everybody has their own choice of gaming, whether it be bingos, break open tickets, online, brick-and-mortar casinos or going to VLTs in lounges in our province.
I hope that answers your question.
Senator McNair: Thank you to the witnesses for being here today.
Chief Richardson, you touched on this, and you talked about the fact that you are developing gaming laws and a gaming commission and the fact that you are not doing this in isolation.
Could you expand on that? You are looking to the expertise of Indigenous communities who have been in gambling for 30‑plus years?
Mr. Richardson: Yes, senator. That’s exactly what we have done. We have gone and talked to our fellow communities out West that have been doing this in Saskatchewan for many years now. We have gone down to the United States as well to get their input. In Quebec itself, gaming is there as well, so we are trying to gather all that before bringing our regulations in place, so we have a solid foundation. We have sought legal advice. It is an expense for a First Nation, but it is important to be ready.
That’s what we wanted to do beforehand, so we are ready to go, and we have everything in place. Now the question is: How deep do we want to go into gaming? Do we want to go into a casino style, or do we just want to go into the VLT market where we are actually gaming at that level? That can still be regulated and monitored.
That’s what we’re looking at. We want to make sure we do what’s best for our community and what’s going to be best for our region.
It’s about creating that wealth. I always wonder why First Nations can’t be giving back to the province. We’d be willing to do that. The province gets their revenues that they don’t really share with First Nations. Sometimes, they do if you have a gaming agreement signed with the First Nation, but a lot of provinces don’t. It’s at a 75-25 clip. Why can’t it be the reverse, with 75% going to the First Nation and then 25% going back to the province? I am using those as high numbers; they could be even less, maybe, depending upon how much revenue you’re sharing. Regardless, there are ways of doing that.
You’ve got prepare yourself. That’s what we’re doing: Getting everything in place, so we’re ready to go when the time comes, whether Bill S-268 goes through, or we decide to say that we will go into the court system to do another section 35 and UNDRIP, and we will use that as our defence.
The history of gaming is there for First Nations. It’s not a secret. That’s why this bill excites me. Bill S-268 is here. It’s giving First Nations the opportunity to control our own destiny and do it the right way. That’s what is exciting.
Senator McNair: Thank you.
Chief Richardson, I had not realized that Casino New Brunswick, essentially, has a 150-kilometre non-compete clause, which is interesting. You also mentioned the upcoming meeting with the new Minister of Finance in New Brunswick. I assume the expectation and hope is that there will be a more collaborative approach to all of these things with the new government.
Mr. Richardson: Of course, senator. That’s our hope.
If you’re not at the table talking, you’re not negotiating. There are two ways to go, negotiation and litigation. Negotiation is a lot less expensive than litigation. If we can get at the table to negotiate and actually come up to an agreement — at the end of the day, we might disagree, but if we can get on that range of negotiation and start to move, we will come up with something that’s palatable for both sides, I am sure.
That’s what is exciting about this new government presently in place: They are ready to do that. They have made some huge steps already. I am sure people have heard about the tax agreement we have in New Brunswick. We are looking at it and renegotiating it. It won’t be the same tax agreement but something that’s more palatable, allowing First Nations to grow their economy. We all know we’re challenged. Every First Nation is not located in the most ideal area, unless you are, maybe, 2 of the 15 First Nations in New Brunswick that are. The rest of us are located in pretty remote areas. Through the Additions to Land, or ATR process, we have been able to get lands that give us the ability to create economic growth in our communities. That’s why gaming is something we would like to get involved in.
Again, I go back to the model. We are willing to approach it with the new premier and try to get at the table and talk. Maybe there is a way of doing this without getting into, as Mr. Vicaire stated, the cannabis debacle that we had. We don’t want that again. I go into some communities, and there are 50 pot shops. It is difficult to control; it wasn’t controlled.
With gaming, we have a chance, with this bill, to get ahead of it, and that’s exciting for us.
Senator McNair: Mr. Vicaire, you described it well when you said it was the “wild West” in New Brunswick, at least, in some of the communities.
We look forward to hearing positive comments of your first meeting with the Minister of Finance.
Mr. Vicaire: Absolutely. Thank you very much.
Senator Boniface: I wanted to pursue the issue of money laundering. We don’t have to look to the U.S.; we merely have to look to British Columbia and the report from them about using casinos for money laundering.
In terms of those issues, have you been able to speak with people in British Columbia? I’m not certain what they’ve put into place, but I would be interested in how you see that, because it raises huge concerns.
Mr. Richardson: Of course, senator. There’s an example: Kahnawake went through the system and screened it out. If you have the proper system, regulations and gaming authority in place and everything is sound, you will catch that stuff.
I think there are ways of learning from that. I have not talked to B.C., but now that you mentioned it, I will. It is getting all of that in place and ensuring you are ready to go.
Senator Boniface: A final point on that is that, in British Columbia, the impact hit the real estate market because of the money laundering.
As you grow your community wealth — and health is connected — I worry that if this is not in place, it could be problematic.
The Chair: The time for this panel is complete. I thank the witnesses again for joining us today. If you wish to make any subsequent submissions, please submit them by email to our clerk within seven days.
I would now like to introduce our next panel of witnesses. From FHQ eCommerce Ltd and Kihew Consulting & Research Inc., we welcome Edmund Bellegarde, President and Chief Executive Officer; and from HLT Advisory Inc., we have Rob Scarpelli, Managing Director. Thank you both for joining us today.
Our witnesses will provide opening remarks of five minutes each, which will be followed by a question-and-answer session with senators. I’ll invite Mr. Bellegarde to give his remarks.
Edmund Bellegarde, President and Chief Executive Officer of FHQ eCommerce Ltd, and Chief Executive Officer of Kihew Consulting & Research Inc.: Good morning, senators. I want to acknowledge the chair, Senator Brian Francis, and the deputy chair, our former Treaty Commissioner in Saskatchewan, Senator David Arnot. I also want to thank Senator Scott Tannas for bringing this bill forward.
I’ve been involved in the gaming industry since 1995, working for the Saskatchewan Gaming Corporation in advance of Casino Regina first opening its doors. I was the Director of Slot Operations and Banking Operations for the Crown casino operation. In March 1997, I moved on to the Painted Hand Casino, a casino operated by the Saskatchewan Indian Gaming Authority. It’s located in Yorkton, and it is on Kahkewistahaw First Nation’s urban reserve lands there. I was the General Manager there until June 2000.
In Saskatchewan’s history, SIGA went through a bit of a corporate crisis, which was a governance and relationship crisis with the provincial government. I was appointed as the CEO in June 2000.
Some of the very important work that we’re talking about is the conduct and management, and the effective operation of casino gaming in Canada. I’m proud to say that, in 2008, as a result of the corporate crisis and the corporate governance work that we did at SIGA, the Conference Board of Canada recognized SIGA as the best-governed non-profit corporation in the country. That capacity is there.
I was the CEO until 2006. I went on to First Nations leadership as the tribal chief of the File Hills Qu’Appelle Tribal Council, which has 11-member First Nation in Treaty 4 territory in Saskatchewan. I held that position for more than 15 years. I was also the Treaty 4 spokesperson for the 36 First Nations that are party to or reside within the boundaries of Treaty 4 in Saskatchewan, Manitoba and Alberta.
My role is researching and looking at the aspects of a gaming regulatory structure and the historical contexts that Bill S-268 will bring into play, as well as to design some options based upon experiences, best practices, and global and industry standards for the gaming industry, and bring those forward.
In the previous panel, Chief Bear and Chief Taypotat mentioned the Gaming Framework Agreement. It’s going to be 30 years in February since the GFA in Saskatchewan between the Province of Saskatchewan and the Federation of Sovereign Indigenous Nations was entered into.
That 1995 GFA created SIGA, it created Indigenous Gaming Regulators Inc., an important function. It created the First Nations Addictions Rehabilitation Foundation and the First Nations trust that distributes the arm’s-length benefits from the gaming activity. It also created the community development corporations that do a lot of work on the ground at the community level in the markets where the SIGA casinos operate.
We’ve got proven capacity; we’ve got nearly 30 years of gaming.
I would be remiss, though, if I didn’t talk about White Bear First Nation. In the fall of 1992, they enacted the White Bear First Nation Gaming Act. They set up their gaming commission and issued their first licence to the original Bear Claw Casino that opened its doors in White Bear First Nation in January 1993. It was March 22 in the early morning hours of 1993 that the provincial government and the RCMP raided the casino and shut it down in quite a violent fashion. So I have to recognize White Bear First Nation’s assertion of their inherent and treaty rights for economic development for their livelihood and gaming on their lands.
Chief Bernie Shepherd and Chief Brian Standingready played instrumental roles. Edward Littlechief was on council and played a critical role in the early days of the operation of the casino. I recognize those people.
I think the industry has matured in Saskatchewan in those 30 years, and First Nations have demonstrated that we have the capacity to not only conduct and manage but also to regulate and license all gaming activity. We’ve got that experience.
Our way forward is to look at the regulatory models and industry standards. We have our own examples here, like Indigenous Gaming Regulators Inc. in Saskatchewan and the Kahnawake Gaming Commission. We’re looking at the 1988 U.S. Indian Gaming Regulatory Act and the National Indian Gaming Commission that came to be as a result. We’re studying the state-by-state compact agreements that exist in the U.S.
We’re capturing all the best practices in anti-money laundering and countering the financing of terrorism — all the FINTRAC obligations. We’re also looking at the integrity of the operations and the industry as a whole, making sure that all of the payments and financial transactions are monitored and knowing your customers through identity verification measures. We’re looking at a registration system and auditing gaming suppliers, the employees and the supply of gaming equipment for the industry. We are leaving no stone unturned. We’re looking to develop options for consideration for Indigenous nations throughout Canada to have an independent, arm’s length First Nations gaming accreditation authority.
In the last minute of my presentation, I would like to introduce and speak to one of the host gaming nations’ proposed amendments to Bill S-268. Everywhere that it referenced “on First Nations reserve” or “on First Nations reserve land,” we would like to replace the word “on” with three words, “from or within.” That brings clarity to the issues of gambling activity that happens on the lands, but it also clarifies the iGaming or internet gaming from the reserve.
Section 207 of the Criminal Code has not been modernized to really dig into modern technology and the fast-changing iGaming technology.
With that, I leave my comments there, and I am open for questions. Thank you.
The Chair: Thank you, Mr. Bellegarde.
I will now ask Mr. Scarpelli to give his opening remarks.
Rob Scarpelli, Managing Director, HLT Advisory Inc.: Thank you for inviting me to speak on this important bill.
I have been providing gaming industry advisory services to the Canadian gaming industry for over 31 years. During my career, I have conducted over 300 gaming-related projects in every province and in two territories. I hope to be afforded the opportunity to undertake an assignment in Nunavut before I retire.
Within this body of work, I have been fortunate to have completed over 80 projects for First Nation governments or controlled entities in eight provinces and two territories. In fact, the very first gaming project that started my career was with the Rama First Nation which resulted in the implementation of Casino Rama.
I am currently assisting a First Nation in Western Canada in acquiring an existing gaming facility asset. As well, I am currently in discussions with a First Nation in Eastern Canada and the Government of Canada on how my company HLT Advisory Inc., or HLT, can assist both parties with respect to a land claims settlement that involves a gaming component.
This First Nation experience base has afforded me the privilege to discuss the gaming industry with numerous provincial First Nation assemblies, tribal councils, individual First Nations’ political representatives and individual First Nation community members. Some of the most meaningful discussions I have had were with community members.
Today, I would like to focus on two basic, simple but fundamental questions that have arisen in virtually all of these community meetings. Mainly, what is the gaming industry, and what are the real opportunities for my community?
To help guide my comments, I have prepared a short presentation guide that has been provided to senators. It contains a number of charts and tables that I will be referencing.
The Canadian gaming industry is large and mature. HLT estimates that it currently generates over $21 billion in gaming win or gaming revenue. Further, we estimate that over $15 billion in invested capital has been spent to support this revenue volume. This investment has been spent by both private sector operators and provincial governments and First Nation governments.
The industry growth trend has been shaped by the introduction of individual gaming activities and supply changes. Most of the supply increases and/or changes that have occurred, occurred before 2010. The revenue increase experienced post-pandemic has largely been due to delivery channel changes.
For reference, I’ll tell you the page number if you’re following along in the little deck I gave.
On page 3, when people refer to the gaming industry, more often than not they equate gaming to land-based casinos. The industry is much more than land-based casinos. There are video lottery terminal, or VLT, networks, commercial lotteries, charity lotteries, bingo, parimutuel and betting in terms of sports activity. All of these activities are delivered to customers via land-based and electronic gaming delivery channels.
While land-based casinos have historically been the backbone of the industry, its share of the total industry is decreasing — 44% in 2024. The electronic gaming or internet gaming delivery channel currently accounts for 20% of industry win. You cannot have any discussion of the future of the industry without talking about the electronic gaming delivery channel and its potential impact on traditional land-based activities. For instance, electronic gaming accounted for virtually all of the industry growth while land-based gaming accounted for virtually all of the industry investment since 2019. On page 4, we give you the same win numbers and trend lines but by activities.
You can also not discuss the future gaming industry opportunities without taking into account existing grey market activity. This is especially the case with regard to First Nation gaming opportunities as the largest concentration of grey electronic gaming activity is thought to be through servers located in a Canadian First Nation community. If First Nations want to invest in land-based facilities, they must factor in the presence and future growth prospects of the electronic gaming delivery channel in their investment decision. Operating and investment partners, especially banks, will surely consider this factor when they determine whether or not to participate.
Inside the deck, I also provided a map and table which attempt to summarize First Nation involvement in the gaming industry in Canada.
First Nation participation in the gaming industry, while uneven across provinces, is extensive, well entrenched and constantly evolving. For instance, two provinces have gaming agreements that cover a wide range of gaming activity. Those agreements are based on either a share of revenue or a share of profit.
HLT is aware of First Nation participation in charity gaming activity in seven provinces. Three provinces have VLT gaming agreements, four provinces have casino gaming agreements. In two additional provinces, First Nations also participate in casino gaming by virtue of being an owner and/or operator or hosting a casino. Currently, 19 casinos are owned and operated by First Nations, and that is increasing.
You will notice on the chart a “4” next to British Columbia. HLT is aware of four potential First Nation acquisitions of casinos in British Columbia at the current time.
There are 23 casinos in Canada located on First Nation lands. These existing agreements should be considered in the deliberations on Bill S-268. They were negotiated in good faith, and hundreds of millions of dollars have been invested to support First Nation gaming participation by both provincial and First Nation governments.
Now is an appropriate time to note that, from a market perspective, all gaming activities and delivery channels overlap in varying degrees. For example, a portion of VLT customers are also land-based casino customers. A portion of electronic casino customers are also land-based casino customers. This overlap in customer segments is important as there are only so many gaming entertainment dollars available in Canada to be captured by all forms of gaming.
I would also like to mention this. HLT estimates that sports betting activity in Canada generated about $875 million in Canada in 2024. Charity lotteries and bingo generated about $807 million. If you factor in that not all charity gaming revenue is reported on a consistent basis across all provinces and from communities or whatever, we believe that the actual number for charity gaming in Canada probably exceeds $1 billion.
Why is sports betting talked about much more than charity gaming when the numbers don’t support this discrepancy in air time? I find it odd that charity gaming is rarely brought up in discussions about First Nation involvement in gaming when the majority of First Nations have been involved in charity gaming activities for a long time. Charity gaming generates meaningful profit that is reinvested back in communities.
I’ll leave it at that, chair, and allow senators who have questions to get into some other elements of the topic. I will note this, though. For a $24-billion industry, currently First Nations in Canada probably receive north of $500 million. It’s a large topic that is worthy of further study.
The Chair: Thank you, Mr. Scarpelli. We’ll ensure that the senators get a copy of your full speech. We’ll now open the floor to questions.
Senator Arnot: Thank you to the two witnesses here today. This question is mainly for Mr. Bellegarde.
Mr. Bellegarde, you have extensive experience in the gaming industry. You’ve studied the models in other places and in the United States. I have a couple of questions. Do you see that national gaming commission idea that the United States has as being incorporated in Canada? Is that a model you would support?
This is the real question I want to get at: How can First Nations ensure that gaming revenues are equitably distributed among member communities? In Saskatchewan, you have 74 First Nations that receive money from gaming, even though some of them are very small and couldn’t undertake that type of entrepreneurial investment. Do you see that kind of model as being something that would benefit the 634 First Nations in Canada, in other words, sharing the profits? Because I think that would be directly linked to economic reconciliation.
That’s the model in Saskatchewan, but it isn’t the model in other places. To me, it seems that would be a very important way to share so that all First Nations in Canada would have an opportunity to benefit through economic reconciliation in that model. I know that these decisions haven’t been made. I wanted to hear your comment on that.
My last question would be what measures First Nations should use to measure the success of gaming operations beyond mere revenue generation. I’m thinking about community development, employment rates and all the benefits that the wealth created and generated by the gaming industry would flow to the First Nations.
Those are the questions I have. Thank you for coming and helping us understand this. I’m making an assumption, which is that Bill S-268 is really saying that First Nations have sovereignty on gaming in this country.
Mr. Bellegarde: Thank you for the question, senator. In regard to the first question regarding the National Indian Gaming Commission in the U.S., we are currently studying the model. I am the CEO of Kihew Consulting and Research, and we have been contracted by a handful of the host gaming First Nations here in Canada to do the research, do the study and come up with some options for consideration.
From Mr. Scarpelli’s reports and some of the market aspects, there is significant variation if you go province by province and territory by territory across Canada. With respect to First Nations gaming, there is casino gaming, and I’m glad that he highlighted charitable gaming and all the other forms of gambling activity that does happen throughout Canada. It’s a big industry with some big numbers, but the markets and the saturation points and how underserved or saturated a market is, that’s some of the market penetration data that Mr. Scarpelli’s company, HLT Advisory Inc., are experts in. They are the experts in Canada, and their reputation is certainly growing.
I would look to some of those market differences and review the mature markets. I also recognize that there are markets in Canada that First Nations have not been allowed to participate in because of a lack of provincial government agreements. We have to look at options that take all of that into consideration. We have to take into consideration the markets that do have provincial gaming agreements that have different revenue-share agreements. The Saskatchewan agreement that I’m most familiar with, the First Nations Trust, was set up in 1995 to distribute the profits from gaming to all 74 First Nations on a base community level and then a per capita basis. That’s the fairest and most equitable distribution of gaming proceeds.
The revenues generated could look at the Saskatchewan model, but I would argue that natural resource development and revenues derived from that natural resource activity that Canada’s economy is founded on needs to be part of that factor in terms of revenue sharing with First Nations and Indigenous peoples across the country, because that is a much more significant piece of wealth. If we’re going to look at revenue-sharing structures, I think it needs to apply across all different sectors and industries and not just gaming.
In terms of the socio-economic impacts that gaming has, I’ve worked in gaming on the ground level and within the start-up of commercial gaming activity almost 30 years ago in Saskatchewan. We’ve seen the capacity built, confidence strengthened and livelihoods grow through the training and professional developments of many Indigenous people. That is something —
The Chair: Mr. Bellegarde, I’m sorry to interrupt, but we’ll have to get you to finish your answer there. We have a long list of senators waiting to ask questions as well.
Senator White: Thank you both for your presentations. As a First Nations senator, I am quite happy that Bill S-268 will authorize First Nations governments to be able to be like provincial governments and manage and conduct online gaming. My concern, though, is that in many First Nations, particularly rural and remote communities, we have unreliable internet access to access health care services let alone gaming. Can you speak to how we can address some of those challenges and, obviously, how this might impact First Nation communities in rural areas who really want to participate in the management of online gaming, but because of the internet they will be facing a challenge?
Mr. Bellegarde: Yes, communication, technology and infrastructure is a key issue, and it affects the livelihoods and the well-being of many Indigenous communities and peoples across the country. Those in more remote territories and regions are certainly more impacted. There are more impacts because of that remote factor.
In terms of participation in internet gaming endeavoured, I think that infrastructure and internet gaming is a really huge industry. We’re studying it right now through the FHQ eCommerce partnership that I lead. The infrastructure that the cybersecurity — it’s a huge undertaking to be successful in the internet gaming space as an internet gaming website operator. There are some incredible expenses, especially in terms of player acquisition, getting traffic to your website. Having that cybersecurity, the payments processing, the systems, the regulated aspects of it are very technical. A First Nation in a remote territory may not have access on its own. They would certainly need to partner with capacity partners.
Senator White: Do you have any advice for remote and First Nations, as opposed to saying, “find a partner?” Is there any experience you may have in your current regime in terms of how to address some of these challenges?
Mr. Bellegarde: To operate internet gaming, it does take a lot of traffic to your site. It is an ultra-competitive business world, because now you’re looking at global activity because the internet is global. I would say it would take a significant amount of working capital, literally millions and millions of dollars, just for your marketing efforts alone to reach a player demographic and player base that would come to your website, and then the competitive aspect of developing the product and the infrastructure is a huge undertaking. Many First Nations will need to take on capacity partners, whether it’s financial, resources or technology.
Senator White: Thank you.
Senator M. Deacon: Thank you all for being here. As with my colleague, I think about if there are any technological workarounds to access markets with connectivity issues. I do wonder about that, as you say, with all sectors. I wonder if you have learned about any of those workarounds in your work.
I also have a question for Mr. Bellegarde. Could you, if you are able, tell us any of your insights related to cybersecurity for online gambling and any learning or precautions there?
Mr. Bellegarde: I do know that cybersecurity is one of the paramount risks of iGaming regulations, along with threats of fraud, fraudulent activity, anti-money laundering and threats of terrorism financing and countering those threats. Those are probably the biggest technical risks associated with iGaming, but the other risks are marketing and player acquisition. We need to make sure that the integrity is there and that the players have confidence that if they deposit resources with your website to play games of chance, and if they win, that they have guarantees or high likelihood that they will receive their winnings or be able to withdraw their money from the website. Technology is probably paramount for successful.
I don’t think there are any workarounds. You have to have the highest cyber security technology and software platform and security providers that the global industry can provide. It’s much like the banking and financial services and payment processing industries. That’s where we see a lot of the space really developing in terms of fintechs or financial technology. Payment rails and cross-border payments in the iGaming industry are huge, and that’s what we’re researching through FHQ eCommerce Ltd.
Senator M. Deacon: Thank you. As we listen today, Mr. Scarpelli, I think we are all well aware that the tourism industry in Canada has certainly faced a lot of challenges, including labour shortages, infrastructure issues, hotel capacity and access to capital for infrastructure needs. I’m trying to think about it from the perspective of First Nations and First Nations casinos, how these challenges have impacted them. Perhaps you could tell us your wish for what the federal government could do to address these issues and, frankly, help First Nations take advantage of these economic opportunities.
Mr. Scarpelli: Thank you for the question. Twenty to thirty years ago, gaming was thought to be a generator of out-of-province tourism or a visitor segment. If you think of it from this perspective, gaming is widely available in all regions. Why would someone travel for a gaming experience when you can get it in your backyard? That’s the first thing I would say. That opportunity for certain developments has come and gone.
In those markets, as you look around the world, you might say, okay, they seemed to do something well with tourism. I would say it’s because they have limited the supply in other places.
We have to realize in Canada that we can’t go back 20 or 30 years to what could have been. We are in a situation now where it’s $21 billion. It’s widely available in all places. We are at the point of looking to the future, as opposed to looking at the past. Unfortunately, those elements of tourism opportunity with regard to gaming have gone by. I can look at player card data in Canada, and I can’t pick out one casino that generates more than 10% of its revenue from visitors from outside its defined market area.
Senator M. Deacon: Thank you.
Senator Tannas: Thanks to our witnesses, both of whom collectively would represent a huge amount of the back office expertise that exists in the country. So thank you for spending time with us here.
Mr. Scarpelli, you mentioned something that caught my attention when you said that the bill needs to provide some protection or recognition of existing agreements that were negotiated in good faith, et cetera. I want to ask a couple of questions and then hear from you about what you meant.
It caught my attention for two reasons. Number one is that a lot of what I’ve heard from gaming nations is that agreements were made with the provinces, but it wasn’t exactly a level playing field in those negotiations. One had the authority and the other didn’t. You kind of start out behind the eight ball if you want to get certified by the province with the fact that they can say no. That’s number one.
Number two is that we spent time thinking about this. One segment in the bill is really there to deal with this issue, and that is opting in. In order for a community to take up their rights, they need to signify that they want to take up their rights.
Once they have taken up their rights, then provincial agreements on those territories are nullified, and it becomes illegal for anyone other than the gaming authority that exists when the community takes up its rights. That’s where an agreement could get cancelled.
The wording provided four alternatives for communities. One is to do nothing and not be in gaming or to do nothing and continue with their existing agreement. The other one would be to see the agreement cancelled and renegotiated with the province on even terms. Both could go their own way, but it would be a fairer negotiation. Or they could do something on their own or in concert with other nations, as we’re hearing about this national gaming authority, about which there are live discussions.
Can you confirm your concern? Does this piece of the bill address what you were talking about?
Mr. Scarpelli: Thank you, senator, for the question. First of all, please understand, I look at things from a market penetration and activity perspective. I don’t look at things from what I will call a legal agreement perspective. I do have to deal with agreements to understand market penetration. Let me throw out a few comments there.
Number one, you are talking about $21 billion in industry revenue that, fundamentally, from a measurement perspective really has not changed in the past decade. We are a mature market.
On top of that, in order to generate the $21 billion, you have $50 billion in investment capital. So you are talking about unravelling all of that and hoping that the pieces come back together.
The next thing is — and these are all related back — the fundamental characteristic of the Canadian gaming industry that separates us from any other jurisdiction in the world. That is the amount of profit that currently drops to the bottom line. That profit is shared between what we call governments and government stakeholders, which includes charities and First Nations.
I get the notion of asking if that sharing is equitable right now. That has nothing to do with the market. Market is about customers from that perspective.
What concerns me about the bill is this. When the bill was announced, I got a call from a province asking, “What does this mean to us?” My response to them was, well, how many First Nation parcels of land do you have in your province? Let’s call it over 100. That’s like having 100 bordering jurisdictions doing things over which you have no control and no say.
As I view the term “conduct and manage,” it really means managing a market on behalf of shareholders. If that’s the case, you have 100 different jurisdictions making their own decisions. I don’t know how many of the jurisdictions, whether they be First Nation or province, are able to manage the market efficiently. You will have no profit to distribute on the bottom line but a lot of activity. That part worries me because gaming has been accepted in Canada on the basis that you have to be able to do public good with gaming.
Recently, the Senate dealt with this issue indirectly with the sports advertising thing. There is this notion in Canada about conducting gaming in a socially responsible manner. It’s much more than responsible gaming. How much do we want to tolerate advertising? How much do we want to tolerate practices of encouraging people to game and what the impacts are?
Your question was: Do these components of the bill help manage that? I would say, this theory, it does. In practice, it doesn’t.
Senator Tannas: Thank you.
Senator Coyle: Thank you to both of our witnesses. Several of my questions have been asked already, but I want to probe more with Mr. Scarpelli.
We have this bill. There’s a lot of excitement about this bill, naturally, in First Nations communities, both those that already have gaming operations and those who might want to get into the business. You’ve talked about market penetration.
I want to better understand what the actual opportunity is here. I understand the opportunity for those who are currently in business, and you’ve described the trends in the industry toward — not that the land base is going to end, but I believe you are saying that the market is fairly saturated. Is there any more room for land-based at all? Is the growth entirely in the internet or electronic gaming world? What does that mean for future opportunities? Because we are all interested in economic opportunities for First Nations communities. That’s why we are here at this table. What good will this bill do for those who already have something going, and is there potential for those who don’t? Straight up.
Mr. Scarpelli: I can’t do straight up on this one. It will take too much time, and I will be told to stop.
Let me put it this way: In any mature market, there is always growth available. The issue you have is that in order to get at that incremental growth, you have to be able to live with a certain amount of redistribution of existing activity. In other words, I could pop a casino down in Vancouver tomorrow. It will make money, but what is the impact on the other casinos in and around Vancouver? I could pop a casino down in Saskatoon, and Chief Bear would be concerned because that cuts them out there. More importantly, governments — whether provincial or First Nation governments — the more activity you have, the less profit you have. If that leads to no more profit to distribute, what do we get from this? That’s number one. Number two, there is a notion that not all places can have a casino. I brought up on purpose the notion of charity gaming. It is based on the market; you need population.
You raised an interesting point with internet gaming and electronic gaming. Take a look at the chart I gave you. On that page, a typical casino in 2017 was dropping about 50% of the revenue as profit. Fast forward to 2024, you can add up all the electronic gaming in Canada — albeit it is influenced by the open market model in Ontario, which has an 80% commission rate — the profit to the government from electronic gaming is less than 15% in all of Canada, whereas profit from a land-based casino is at 50%. Let me ask this question: As a society or as a First Nation, do I want more electronic gaming, which generates 14% profit, or do I want a casino that generates 50% profit and adds jobs locally?
There is a notion that we are in a free market in gaming. We are not in a free market. Gaming is a managed market. I will add that there are a lot of examples in the U.S., especially with regard to tribal gaming or electronic gaming in the states, but a lot of people don’t realize that those markets are managed. They have agreements with revenue sharing with the states. There are restrictions on how to build facilities and how to finance them. There are all of these restrictions, so they are all managed markets. When we come to look at Canada, we don’t recognize it as a managed market.
The other thing is that the issue with most provinces is that most First Nations want access to gaming, and that requires a relationship with the provincial government. I would say there are a lot of examples of good relationships that benefit all parties. There are other jurisdictions where there are not good relationships. When you are dealing with a mature market, do you wipe it all away and start fresh, or do you work with what you have? That becomes a practical assessment of what you are dealing with right now.
Senator Coyle: Thank you.
Senator Boniface: Thank you very much to both witnesses for being here. I would like to pick up on Senator Coyle’s question. If you were looking forward 10 years, what would the gaming industry in Canada look like? What could it look like from First Nations or Indigenous perspectives if this bill moved forward and opened opportunities? What would be the risk involved in that? I direct that to both witnesses, please.
Mr. Scarpelli: I will give my two cents’ worth first. It is a difficult question when you ask what it will it look like in 10 years. What gaming looks like right now is because of government policy. The government creates policy and they have objectives whether it be profit, jobs or a bunch of things. When you ask what it will look like, I would say talk to the politicians who will be in power in 10 years. That’s really what it will look like. They influence that, from that perspective.
We’re not in a free market. This is a market that is managed, and it really depends on governments. Unfortunately, with politicians, they usually have a four-year window to make decisions, and some of those decisions can screw up future generations.
Mr. Bellegarde: Thank you for the question, senator. I think the markets in 10 years, should this bill proceed and become law in Canada — I think it’s important and it’s critical, from that inherent right, from the treaty rights, from the inherent right to self-government, from the recognition and the status, not only the status of Indigenous peoples in this country about Canada’s responsibility to implement the United Nations Declaration on the Rights of Indigenous Peoples, to make headway on the recommendations from the Royal Commission on Aboriginal Peoples report from 1996. I think the capacity, the health, the well-being, the education levels and the community infrastructure will all depend on the recognition of Indigenous peoples’ inherent right to self-government. Building that capacity, having that recognition to effect and govern the impacts on the lives of the people you are serving — I think that’s the most important aspect of this.
It puts us on a level playing field with provincial governments. In Saskatchewan, we have invested hundreds of millions of dollars in capital projects. We have invested in training and development opportunities for our employees and our people. We have invested in that side of institution building. We have invested in community infrastructure. We have significant investments. The provincial government has invested zero in our gaming operations enterprise, but they take a significant amount of the profits. This would put us on an equal playing field. Province by province, First Nations gaming is different, so the provincial governments — and to Mr. Scarpelli’s comments, the managed markets — it is similar to the United States, but they have different legal parameters and foundations.
Senator Boniface: It seems to me that you are both saying that the provinces — and this is the joy of a federation because you have to deal with a large number of them — need to think about getting out of the way and letting the processes take place. Would I be correct in that?
Mr. Bellegarde: From a rights perspective and self-government aspect, I would say that a lot of laws and policies in this country need to be rewritten as a result of the 94 Calls to Action in the Truth and Reconciliation Commission and the National Inquiry into Missing and Murdered Indigenous Women and Girls. Those requirements need to change. This is one sector and one industry that is important because it does have social and economic impacts, and it does level that playing field.
The Chair: We have exhausted our list, if there are no other questions, the time for this panel is complete. If you wish to make any subsequent submissions, witnesses, please do so within seven days by email to our clerk. That brings us to the end of our meeting today.
(The committee adjourned.)