Proceedings of the Standing Senate Committee on
Legal and Constitutional Affairs
Issue 23 - Evidence for October 17, 2012
OTTAWA, Wednesday, October 17, 2012
The Standing Senate Committee on Legal and Constitutional affairs met
this day at 4:15 p.m. to study Bill C-290, an Act to amend the Criminal Code
Senator Joan Fraser (Deputy Chair) in the chair.
The Deputy Chair: I call today's session to order. We are
continuing our study of Bill C-290, an Act to amend the Criminal Code
For our first panel of witnesses we are pleased to have with us, from the
Canadian Gaming Association, Mr. Bill Rutsey, President and Chief Executive
Officer; and Mr. Paul Burns, Vice-President.
Welcome, gentlemen. Thank you for joining us. I think you are going to
open with some remarks.
Mr. Rutsey, the floor is yours.
Bill Rutsey, President and Chief Executive Officer, Canadian Gaming
Association: Good afternoon honourable senators. I am Bill Rutsey, CEO
of the Canadian Gaming Association and with me is Paul Burns, Vice President
of Public Affairs.
Our association represents the major participants in Canadian gaming —
facility operators, equipment manufacturers and service providers. We
sponsor research and speak out on important national and regional issues,
which is why we are here today.
Personally, I have participated in gaming from both the public and
private sector perspectives for more than 20 years, including assisting in
the creation of gaming policy and casino development in Ontario, Nova Scotia
and New Brunswick. As Practice Leader of the Coopers & Lybrand Gaming
Consulting Practice, which is now PricewaterhouseCoopers, I advised numerous
public and private clients, including the Government of Ontario, and
authored the Ontario Casino Market and Economic Impact Study, the blueprint
for Ontario gaming development.
As CEO of private sector companies, I developed and managed gaming
businesses in Ontario, Las Vegas and internationally and have been licensed
by gaming regulators in Nevada and Ontario. I regularly comment on gaming
issues in media and before government.
We are here today to speak in support of Bill C-290, an Act to amend the
Criminal Code, that will allow wagering on the outcome of a single sporting
event and answer any questions you may have.
Canadians have enjoyed legalized parlay-style sports wagering for many
decades, but the current restriction, which prohibits wagering on a single
sporting event, does not reflect the modern reality for sports bettors. As
Mr. Masse has told you, Bill C-290 is simple in that it is a deletion of a
section of the Criminal Code that will allow the provinces to decide if and
how they want to go about offering single event sports betting. As he said,
there is currently no legal gambling on single event sports in Canada.
With the passage of Bill C-290, Canadians will have a legal and regulated
product for wagering on the individual sporting events of their choice.
The Canadian Gaming Association has supported this initiative since it
was raised by the Government of Ontario nearly three years ago, and
supported on the record by other provinces, including British Columbia,
Alberta, Manitoba and Saskatchewan.
Since then, in addition to communications with provincial governments,
their Crown agencies and representatives of law enforcement, we have met
with numerous members of Parliament from all parties, as well as many
senators, to discuss its merits, have appeared before the House of Commons
Standing Committee on Justice, and are here before you today.
The issue is seen by most as a tool of law enforcement and economic
development, as well as simply catching up with what Canadians are already
doing. As Senator Runciman has rightly said, and as you have been told by
many others appearing before you, the reality is that Canadians are wagering
on sports predominantly through illegal means, either with bookies or
This bill will enable sports wagering to occur in safe, regulated
environments in either physical facilities or online. Right now, the only
beneficiaries of the existing situation are offshore operators, bookies and
A review of the annual reports of Criminal Intelligence Services Canada
indicates that illegal bookmaking exists in all regions of Canada, with
organized crime ultimately profiting from the revenue. While the size of the
Canadian market is unknown, estimates suggest it is in excess of $10 billion
annually and could be as much as $40 billion.
The growth in wagering on sports through the Internet has significantly
increased over the past decade, with estimates showing that Canadians wager
about $4 billion annually through offshore sports books.
Passage of this bill will allow for a legal and safe alternative for
Canadians to do what they are already doing through illegal channels,
provincial agencies to compete online on a level playing field, a product of
competitive differentiation for gaming properties located at or near the
U.S. border, and the diversion of monies from the underground economy.
With respect to the operation of sports betting, this is best left to
provincial governments through their crown agencies, as are all other forms
of lottery and gaming. You may know that betting on horse racing —
incorrectly described to you by a previous witness as single event wagering
— is entirely different. Horse race betting is done through parimutuel
pools; a completely risk-free undertaking for the racetracks. Single event
betting, on the other hand, is a very specialized subset of gaming that
requires real expertise and must be carefully managed to be profitable.
Racetracks in Canada have no such experience or competence.
Companies with such expertise are not racetracks. They are major
companies, like Caesars, which operates the casino in Windsor, and large,
well-capitalized companies specializing in sports betting such as Cantor
Gaming, William Hill and Tabcorp, as described by previous witness Peter
Further, the customer profiles for single event sports customers and
racing are completely different and seldom cross over. Betting on horse
racing is a declining activity undertaken by a relatively small number of
people which requires arcane knowledge of racing and handicapping and how to
understand a racing form. In comparison, sports betting is an activity with
broad popular appeal across a wide demographic customer base.
For provinces that operate online, it could complete their offerings and
eliminate the competitively disadvantageous environment in which they
currently operate. Sports betting comprises approximately 40 per cent of
online gaming activity, so right now Canadian provinces operating online do
not have a product for 40 per cent of their potential clients.
It will be a potentially significant competitive factor for border and
near-border properties. When people come to bet on sports, they often stay
to watch the game. If so, they consume food and beverage, may play some
blackjack or slots and stay overnight. If they bring their spouse, even more
ancillary revenues are generated. A recent report we commissioned on the
impact of sports wagering on Ontario border casinos highlights the benefit
of offering a legally regulated sports wagering product in the Ontario
border casinos of Windsor and Niagara Falls.
The potential benefits created by additional visits from U.S. patrons
include up to 250 new jobs directly in the new casinos, as well as
generating economic benefits in the broader community.
We think it makes eminent sense to turn off the tap to such a source of
funds for the bad guys and to make it available to provincial governments to
help fund programs and services for the general good. From a tourist and
economic development perspective, it is a no-brainer. With more than 100
million Americans within a six-hour drive of a Canadian casino, and existing
U.S. federal law explicitly prohibiting sports betting where it does not
already legally exist — which is essentially in Nevada — single event sports
betting could be a significant attractor, especially during times and events
like March Madness, the NFL and NBA playoffs, and the Super Bowl. Remember,
these revenues from single event sports betting already exist and continue
The interest to bet on sports is significant and pervasive. Ordinary
people, our neighbours and our friends, bet on sports every day. Under the
existing law, this makes them complicit in illegal activities. These people
are not criminals and what they are doing is legal in many other countries
around the world. It is just good public policy to have the law catch up
with what so many Canadians are doing, and not simply treat them as
miscreants. It is time to catch up with what Canadians are doing, and more
importantly take that money away from the bad guys and make it available for
the public good. Not only does it make sense, it is just the right thing to
Thank you. We will be happy to answer any questions that you might have.
The Deputy Chair: Thank you very much, Mr. Rutsey, and of course
we will have questions.
Senator Runciman: Mr. Rutsey, I wonder about the gaming model.
Perhaps you cannot speak to this Canada-wide and we have only had a couple
of jurisdictions indicate an interest, including Ontario and British
Columbia, I think. We have seen letters from a couple of other jurisdictions
who support the legislation, but no indication in terms of what kind of
gaming model will be utilized. The study you undertook seemed to focus
solely on the commercial casinos in Ontario.
How do you envisage this rolling out and how it will have an impact on
the revenues flowing to organized crime?
Mr. Rutsey: I will let Mr. Burns answer that.
Paul Burns, Vice President, Canadian Gaming Association: The
provinces have not articulated clearly their preferred distribution model
for this product. Ontario had indicated and the study was done before the
modernization plan was released by OLG. At that point, they were looking at
strictly a casino product as a way of regaining a competitive advantage for
the border casinos.
British Columbia Lottery Corporation, for example, has been online with a
fairly robust platform for several years. Atlantic Lottery has been online
for a number of years with limited product offering. Loto-Québec has had
about a two-year experience. They are all looking at where the customers
are. We have seen the resurgence in sports betting come because of the
Internet and technology. Game wagering, or proposition wagers as they are
often referred to, has seen a resurgence in interest, and technology is
driving a lot of that. A lot of it is from Internet sites. Advertising of
fantasy sites in Canada has been proliferated. Some of those sites have had
agreements with the CFL, rink boards and the NHL, and mainstream TV
The lotteries have not been clear, but it is clear that BCLC is looking
for this as a product in that way. Ontario with its online strategy has
listed it as a phase three — a way down the road for them because they have
not been in that space at all. You will see a mix of offerings. Some
provinces have made no decisions at all in this case.
Senator Runciman: The CFL does advertising for offshore sites.
Those are legal sites, are they not?
Mr. Burns: To play for free they are legal. However, if you find
your way into betting for money, for Canadians it is not under the current
Senator Runciman: Yes, as a resident of Canada.
Mr. Burns: As well as the "conduct and manage" provisions of the
Code. They are advertising a dot-net or a fantasy site, but often they lead
people to create accounts and bet for money. That is why we have seen as
part of this the reported earnings from Canada from the online space and
offshore operators are significant. It is about $1 billion per year in
earnings from these companies.
Senator Runciman: You talked about the commissioned study —
Michigan and New York specifically — and that U.S. federal legislation
restricts single event betting to four or five jurisdictions. It is unlikely
from the perspective of the folks who carried out the study that we will see
that be created as an opportunity presented in Windsor, Detroit and Niagara
I give Senator White credit for discovering the NFL perspective on this.
We know what is happening in New Jersey where all of the major pro sports
organizations are fighting New Jersey's efforts. This will obviously go to
court, and now they are suing Delaware as well. There is always the
possibility of them winning those cases. They are going into them on the
assumption that they will win and we could see a proliferation. There is a
real possibility that this could be a short-term panacea for some of the
border casinos, but it could be short lived.
Mr. Burns: It could be. It depends on the Supreme Court striking
down the federal ban on sports wagering in the United States. The law stated
that the states that had currently offered sports wagering in any form could
continue if they reaffirmed their state's support for that in a period of
time once the bill was passed. New Jersey had a sports wagering product but
did not reaffirm in the timeline they had. It put them at a greater
Delaware and most others offered parlay betting except for Nevada at that
time. Delaware tried to expand their sports book offering, but the law
contended that they could only do what they did before. When they tried to
expand, the NFL took them to court and won.
Senator Runciman: One of the arguments for this legislation is
that it will have an impact on illegal gaming. How do you balance that with
the position taken by all of the major sports leagues and the NCAA? I do not
know their rationale, but I assume they are concerned about the impact of
fixed games and those kinds of things and that this might encourage that.
Mr. Burns: We ask them what they do now. People are betting on the
games today. In terms of preserving integrity in sport, they have to be
diligent today. They should welcome a legalized regulated sports betting
environment because it brings oversight. In an environment where there is no
regulation, who watches and who knows what is going on? When there is a
popular form of betting line, there have been many successful demonstrations
of untoward things that have been going have been found out by sports books.
The margins on the odds on a sports book are between 5 per cent and 7 per
cent. That means between 93 per cent and 95 per cent of the money is
returned to bettor. If you make a mistake, you lose money. They keenly watch
and there is predictability to the odds. Professional bookmakers should see
a betting pattern. When it gets out of a normal pattern, they become keenly
aware and look for what is going on. There have been many examples of this.
Many of the professional sports leagues in North America actually have
data sharing agreements with a lot of the European sports books because they
recognize it as something they have to be aware of. I find the position of
the leagues somewhat difficult at times because the NFL takes their games to
Europe and they are bet on when they are there. The NFL brings their games
to Toronto every year — a legal sports betting environment today — and they
are bet on where their games occur. I kind of question what their motives
are in their opposition.
The Commissioner of the NBA was on the record a couple of years ago
saying that they thought it was time to look again at the issue of sports
wagering and professional sports leagues. A maturity is coming with the
technology awareness and with more eyes watching, and it is all good.
Senator Baker: This information was just given to us by Senator
Runciman saying that Senator White informed him of a matter that he just
addressed a moment ago, which I had not heard before. Senator White has
displayed his excellence in investigating in previous committee reports; and
he has held witnesses to account for what they are saying. I am looking
forward to hearing from Senator White on this issue.
For people watching at home, we are dealing with a bill that, it has been
suggested and referenced by the witnesses, will facilitate the betting on
games when the people conducting the games do not agree with it.
Madam Chair, I noticed you were taken aback as well.
The Deputy Chair: Perhaps not quite as much because I had had
about 24 hours' notice of this wrinkle.
Senator Baker: We will call it a wrinkle; but it is a pretty big
wrinkle when talking about court cases and litigation. I look forward to the
questions of Senator White.
I believe he is next on the list. I simply yield to him.
The Deputy Chair: Are you passing over?
Senator Baker: I absolutely give my time to Senator White, plus
whatever time he wishes on his own.
The Deputy Chair: That is very generous of you, Senator Baker.
Senator White: I listen with interest when people sit here before
us and tell us that the NHL, the NBA, the NCAA and Major League Baseball are
wrong and suggest that they have concerns, as you have, around sports bet
fixing. To suggest that the NFL's Buffalo Bills, which I am very happy to
see play in Toronto and wish it was permanent — I would say that twice if
thought I could make it happen. The reality is there is no single sport
betting. That is why they are not concerned about playing in Toronto, I
People cannot bet in Toronto, and you suggest they could bet on them.
They cannot bet on them as one game in Toronto, legally.
Mr. Burns: The NFL and the sports leagues took an equally
aggressive tone against the State of Delaware that offered parlay wagering.
Senator White: I understand that, but you suggested they could
place a bet on that game in Toronto and that is not correct, is it? They
could not place a bet on one game in Toronto when the Bills play.
Mr. Burns: They can today because they can go on line.
Senator White: Not on one game, no.
Mr. Burns: Yes, they can. They can go to bet365 and open an
account and make a bet.
Senator White: Illegally, you suggest.
Mr. Burns: That is what is occurring to the tune of about $4
billion a year.
Senator White: You did not say illegally. You say they play in
Toronto and they can bet on them now, even though —
Mr. Burns: You can. That is a parlay bet.
Senator White: A parlay bet, which is three games, so you would
have to convince one player on each team on three different games to
actually fix the game to be successful in winning the bet.
Mr. Rutsey: If I could speak to that, I am not suggesting you are
naive, but I think it is naive to think that people are not betting on
sports anyway. It is a huge business in North America and around the world.
Unfortunately, most of the business in North America is currently
conducted underground. That is not to say that the betting does not occur.
I think that what is important, and I think Mr. Burns touched on it very
well, is that when legitimate companies are taking these bets and watching
the betting patterns, it is easier for them to determine whether or not
something needs to be looked into.
As Mr. Burns pointed out, all of these companies have arrangements with
professional sports leagues to share that kind of information. A really good
example of that took place a couple of years ago in professional tennis. It
was 2008-09 when Nikolay Davydenko was playing against some player who was
ranked a couple of hundred points below him and he actually won the first
set and then he lost the second set. All kinds of money started pouring in
on this underdog for no apparent reason. The companies discovered that,
identified it immediately, took the match off the book so that no one could
win or lose, and turned all of the information over to the ATP, which
conducted a two-year investigation into it. They determined that there was
no cheating going on and turned the files over to law enforcement to see
whether or not there was anything else they needed to do. They then
determined there were some people in Russia who believed they had some
inside information and were using that to bet.
None of that would have occurred had all of this activity been taking
place underground. It makes a tremendous amount of sense for this kind of
information to be above ground where it can be looked at, evaluated, studied
and, if something untoward is going on, gone after and prosecuted. That does
not happen when all of this economic activity takes place underground.
Senator White: Explain to me why the NFL, NBA, the NCAA and Major
League Baseball do not see that makes sense for them? In reality we know the
NFL today is arguing with New Jersey, and New Jersey is supposed to hold the
2013 Super Bowl. I would argue that I am sure the NFL is concerned about
that if they are successful in having single sport betting in 2013.
Mr. Rutsey: You are asking me to take the position, and it is
unfair for me to try to speak on behalf of the NFL.
Senator White: You are speaking on their behalf now by stating
they should see the common sense of this. I suggest you are doing that.
Mr. Rutsey: As Mr. Burns said, at least the NBA, at the highest
levels, has said this is something we should look at again.
Senator White: In 2007 the NBA signed the same letter to the U.S.
Congress disagreeing with any changes in sports betting.
Mr. Burns: It has more to do with money than anything else,
senator. The fact is that the biggest provider of fantasy sports betting in
the United States is the NFL. They went so far as to take other fantasy
sports operators to court to say they owned the names of their players and
all the statistics and no one could have them. The Supreme Court firmly
rejected it because the players' names are public information, as are the
statistics. That is the extent the NFL went to in order to ensure they could
make a dollar off of all their products.
I have seen the NHL agreement with Betfair in terms of a data-sharing
agreement to say that they recognize it is going on and they are hopefully
taking the steps necessary. We have seen the numbers in Canada, and they are
huge. To say it is not going on is for a league to have a position.
The NHL's comment on this bill was that they would prefer things to stay
the same, but that was a quote by Mr. Daley in one paper. They have quite
happily existed in a sports betting environment for decades.
Senator White: This is a couple of times now that we have heard
the comment that it is happening anyway, organized crime is engaging in
this. Because organized crime is engaged in something is not a reason, for
me, to suggest that we ought to engage in it in Canada.
Mr. Rutsey: There are also many public companies engaged in this
business, just not in North America.
Senator White: It does not necessarily mean it is something
Canadians should be engaging in Canada. That is the suggestion, that
organized crime is doing it and we ought to be making that money, but there
is a whole bunch of things organized crime is involved in, including drug
trafficking. I could go on and on. It does not mean we should change our
laws so we can make money off of it.
We are the number four gambling country in the world today behind
Australia, Ireland and Singapore. I do not think that is a number one we
ought to obtain.
Mr. Rutsey: I was watching that debate last night and the way they
were going at each other. I probably could not help myself in interrupting
you there. I apologize for that.
Senator White: It was a good debate.
Mr. Rutsey: Having said that, we do not expect the amount of
wagering on sports in this country to increase in any material way by
legalizing it. All we expect to see happen is that a great majority or some
large amount of what is currently occurring will now occur above ground and
not through the underground economy.
We think that this will make what is going on more transparent. We see
this as something that a tremendous number of Canadians engage in on a
weekly and monthly basis in a casual way. You just watch television, the
newspapers, they publish the odds. When you watch the sports shows on
television they talk about the games from the perspective of odds and
betting lines and things like that. It is pervasive in the culture of
sports. It is really kind of hypocritical to pretend it does not already
exist or to say that if we maintain the status quo that somehow or other it
will go away or it is not occurring. It is occurring.
I think it is probably not a good thing to criminalize what our
neighbours are doing. I think that information is a good thing. I think that
driving the revenue above ground and putting that revenue towards the
products and services that we all cherish, like education and health care
and things like that, is a good thing. I think, on balance, it makes a lot
of sense from a bunch of different perspectives.
The Deputy Chair: You said you did not expect much in the way of
increase in the volume of single sport betting, but I wonder if you could
explain why not. I do not know how to go on the Internet and find illegal
gaming sites. I expect I could find out if I cared enough. It seems to me
logical that there would be a certain fraction of the population that will
not do it while it is illegal but will do it once it becomes legal, with the
imprimatur of, in my case, Loto-Québec. I am from Quebec. Why not?
Mr. Rutsey: I think that it is an argument that is hard for either
of us to win. We are saying what we are because it is so pervasive now and
so many people are doing it in a casual way.
Many of my long-time friends that have nothing to do with the gaming
industry casually bet online or they have someone they can call to place a
bet. That is just what has evolved over the last 15 or 20 years in the
culture of enjoying watching sports.
We did a poll, and the majority of Canadians already think it is legal.
They think that it is already regulated. When we have spoken to members of
Parliament and senators and talked to them to about this, they have said
"That is not legal?" There are lawmakers in Canada who thought it was
I do not think there is a feeling among the people who bet on sports that
they are doing anything nefarious. I think they are doing something they
enjoy doing, and so I do not think that you are really going to create much
more of a market for it. It is big; it is pervasive; it is the biggest
single element of what goes on in gaming in Canada and the United States
Senator Boisvenu: Thank you very much; your brief is very
interesting. I have a few quick questions. The first thing I am curious
about is basically how checks and balances are put in place to keep the
sport pure. You tell us that you are going to legalize something illegal,
something where there was very little control. By legalizing sports betting,
how will the checks and balances that you are going to put in place assure
us that the purity that the professional leagues hold so dear will be
preserved? What is the control process that will stop the players or anyone
else from fixing games?
Mr. Rutsey: We have spoken to that. Betting on sports already
occurs. Legalizing it will not change that basic fact. When you change it
from illegal to legal, what does change is the activity then can be
monitored. As we said, once it is monitored, then unusual betting patterns
emerge. If they are there, they emerge; they can be seen and then
If it is all underground, then no one knows what is going on except the
people placing the bets. If a game has been fixed, there is a much lesser
likelihood of that being determined.
Senator Boisvenu: Technically, how are those controls done? Do
officers, officials, do it? Is any checking done with the professional clubs
to see if players are getting any winnings from a third party, as is often
the case? The players do not win directly. There is an intermediary. How are
the investigations done?
Mr. Burns: Right now in Europe the system, which is quite
extensive and proving effective, especially in FIFA, is a sports-monitoring
system for players, officials, coaches, trainers, anyone involved. These
individuals submit to monitoring. There is a company that has provided this
technology, and it is something that we have talked to them about.
Sportradar is the company, and they have used this technology. It monitors
players and their activities, and players submit to it as a condition. It is
an effective tool for the leagues to ensure their integrity.
The European sports betting environment is hypercompetitive compared to
anything we will see in Canada because it is virtually a wide-open market.
There are thousands and thousands of books and there is competition for
product and customers. We will not see it here because of the control that
falls under the lottery corporation. I think in any one given province there
would be one sports book.
The technology has been written into regulation in numerous European
jurisdictions and is something we have met with gaming regulators in Ontario
specifically about. Adopting the technology, this monitoring system, becomes
part of the regulatory scheme. The Italian government is using it, and it is
proving effective. It is incumbent upon the leagues to ensure their
integrity; it is incumbent upon book operators to share data, and there is
lots of data available.
I think all of those things are important, working with regulators, with
oversight, and this is why it is not a particular product that anyone can
offer because it is highly technical and highly specialized. Frankly, if you
do not operate a good book, you lose money. Even the books in Las Vegas lose
money on Super Bowls and other things like that. It does happen.
However, there is technology available, and in combination with operators
and regulators working together, the ability for oversight is there and the
technology exists to do it. It is being done effectively by FIFA.
Senator Boisvenu: I feel that one of the objectives of the bill is
to replenish the flow of revenue to the public purse. Revenue seems to have
fallen in Ontario, if I look at this graph. Also from the graph, I see that
Windsor has a lot more customers compared to Niagara.
The diagram also shows the American dollar against the Canadian dollar.
The falling American dollar and falling profits and activity kind of go hand
in hand. Is wagering activity linked to tourism to any considerable extent?
Some casinos run at a loss, even in Quebec. Does the drop in casino revenue,
or in sports betting, not go hand in hand with the drop in the American
dollar, meaning that fewer people come to the country to go to casinos, as
professionals or tourists? Is the drop in revenue linked to the lower
Mr. Burns: Specifically in Ontario in the past decade we have seen
a series of factors that have impacted the market in both Niagara and
Windsor. First off, there was no competition on the other side of the
border. The State of New York, through the compacts with the First Nations,
saw Seneca Nation build casinos directly across the border in Niagara Falls,
New York. Michigan, which only had First Nations gaming in the peninsula
region, had the City of Detroit opt for three casinos, so the market is
shared. Now you have seen Pennsylvania — and both casinos in Niagara and
Windsor share part of that market — grow with the expansion of casino
gaming. Then you add in the parity in the dollar and a tightening at the
border mainly from Americans not wanting to leave their country for daytrips
and things like that, and you have seen the decrease. The combination of
these factors have affected the market, and that is one of the reasons why
Mr. Comartin and the Mayors of Windsor and Niagara Falls have seen this as a
tool to regain the competitive advantage to bring tourists and visitors back
across the border.
In terms of revenue numbers around sports betting, it is not a very big
profit margin business. It is about 5 per cent. The economic benefits of
someone visiting and staying overnight and buying food and beverage, maybe
they will gamble in the casino when they are there, is the real benefit of
bringing people back over the border. It is a product they not do not have
right now and may not have in the foreseeable future. Those communities have
seen it as a way to draw gaming tourists back in to their communities. They
have seen a drop-off, and gaining that competitive advantage is important to
those communities. That is why we focused on that in this report. It is
partly that Ontario, which was the first province to write, had wanted to do
this as a casino product. They still do. They saw it as a great benefit for
these two communities.
Senator Frum: I am having difficulty understanding. In his letter,
Mr. Masse, who is now the sponsor of the bill, talks about 100 million
gaming patrons that live within a six-hour drive of the Canadian border. I
do not understand why those people would get into their car and drive for
six hours to place a single sports bet when they can already do it, albeit
Mr. Burns: They cannot do it in the United States.
Senator Frum: They cannot bet illegally online in the United
Mr. Burns: It is very difficult because of the Unlawful Internet
Gambling Enforcement Act that was brought in by the government. The fervour
with which the Justice Department of the United States has been pursuing and
basically trying to incarcerate and arrest online operators has not occurred
in this country. It is the same people operating. Our biggest concern is the
rise of the offshore Internet operators has driven the increase in sports
When you look at $4 billion being wagered through these companies who are
licensed and regulated in their own jurisdictions but not in Canada and
accessing our market, that has been the one piece. There has been no
enforcement, no deterrent in any form or fashion in Canada from people
accessing the Internet where there has been in the United States.
Senator Frum: You are saying that an American consumer cannot
access those offshore gambling sites that are in the Isle of Man or
Mr. Burns: If they do —
Mr. Rutsey: It is very difficult.
Senator Frum: The argument that we have to legalize it because we
cannot stop it is not actually true?
Mr. Burns: Well, no one has chosen in this country to determine
how to stop it.
Senator Frum: The Americans have?
Mr. Burns: Somewhat effectively. They have not sent a whole lot of
people to jail. They have taken a lot of executives off airplanes and
extracted significant fines from companies without ever going to court. I do
not think that would work in our system. They have a tool with which to —
whether you want to use the term bully or provide some heavy suasion —
encourage them not to take bets from Americans. They have done that, and it
has not occurred here. That has been one of our biggest concerns.
Canada is a very wired nation. In a decade, our rise in gambling on the
Internet has gone from about 1 per cent or less to almost 10 per cent of the
population. It is significant, and people are doing it. They are using it.
That is why the lottery corporations have now decided they should get into
this space. The governments in those provinces have allowed them to do that,
probably by understanding this is where their customers are going and have
gone. They want to meet the desire of their customer and protect their
business, which is only prudent.
The deterrent has not been here, so we have seen bet365 and Bodog logos
plastered across CFL fields. Those companies do not take bets from
Americans. They take bets from Canadians. They advertise because in the
province of Ontario, for example, if you do not advertise the dot-com but
dot-net and take someone to a fantasy site, it is legal to advertise that.
Mr. Rutsey: It deflects away from . . .
Mr. Burns: Look at those sites and you may find a dot-net in the
corner of the ad maybe that big, but you will find the brand name. Wherever
people choose to take themselves on the Internet is their business. The CRTC
is not regulating the Internet. There is a whole host of issues that have
gone on that have allowed this to proliferate unchecked.
Mr. Rutsey: To specifically answer your question about people
hopping in their cars and driving, if you look at the experience in Nevada
when major sporting events take place — like the Super Bowl or towards the
end of the NFL playoffs, NBA playoffs and during March Madness — there is a
huge increase in the amount of visitation to Nevada. There is a huge
increase in the amount of betting that is taking place in the legal sports
books there, and it is an approximate dollar for dollar equation.
For every dollar that is bet on the sports book there is another dollar
of ancillary economic activity taking place within the economic community
there. It is a big, major driver. If something is closer to them than
hopping on a plane and spending several hundred dollars to fly to Nevada and
the alternative is there, then yes they will do that.
Senator Dagenais: You mention that this type of betting already
exists, but that it is illegal. Am I to understand that, if this kind of
betting were legalized, it would be better for the players?
Mr. Rutsey: The short answer is yes. The bets would be taking
place in safe and secure environments. They would be dealing with legitimate
organizations. All of the issues you hear about or can imagine with respect
to dealing with criminal elements simply go away. You are providing a safer
and more secure environment for the players to play the games, yes.
Senator McIntyre: Mr. Rutsey, I understand you are CEO of the
Canadian Gaming Association and Mr. Burns you are the Vice President of
Public Affairs. Gentlemen, thank you for your presentation.
Senator Baker: Hear, hear.
Senator McIntyre: Most people seem to be approaching this with
regard to the economics. I am approaching it with a different viewpoint. I
am not a gambler; never was, never will be. I am a long distance runner and
I am more interested in sports than gambling. I enjoyed your presentation,
but found there was nothing in your presentation, either oral or
documentary, regarding the impact that the legalization of single sports
betting will have on Canadian society. Granted, gambling will increase the
coffers of government, whether federal or provincial, and render organized
crime very uncomfortable. However, on the other hand, have you taken into
consideration the impact that this will have on our society?
Mr. Rutsey: First of all, congratulations. I was also a long
distance runner for many years until my knees gave out on me. Good for you.
I enjoyed that more than just about anything else I have ever done.
To answer your question, I do not think it is going to have any impact at
all. It is already happening. You are simply giving the people that are
already doing it a safer alternative. We are bringing an activity that is
occurring underground to above ground where it can be monitored and
measured. To the extent that there are attempts to fix games, you are
certainly giving yourself a better opportunity to see that it is occurring.
I see no or very little negative impact on society. I see good things
happening with respect to this.
The Deputy Chair: Colleagues, we have six or seven minutes for a
second round, but I am going to ask both the questioners and the respondents
to be as concise as possible to get in as many people as we can.
Senator Runciman: I could make a comment. I am sponsoring the bill
and I think the proponents are perhaps a little overly optimistic with
respect to its impact on the U.S. However, I understand when you reference
Las Vegas and the major events, like the Super Bowl, which attract a lot of
folks to visit and spend money in other areas as well. Hopefully that will
be the impact it has in Ontario if the legislation passes.
There are other elements, and I think Mr. Burns mentioned some of them.
When you look at the smoking prohibition in the Ontario casinos, my wife
likes the slots. I have no use for gaming at all. I try to keep her away
from them, so I would like to see smoking brought back.
The passport requirement is quite different from Las Vegas as well. There
are the entertainment opportunities available in Las Vegas. I understand
that you have to be optimistic about these things and hopefully have an
impact, but casinos around North America are suffering. Part of that has to
do with the state of the economy.
I am just curious about where the sense of optimism comes from.
Mr. Rutsey: I think we are being more realistic than optimistic.
In terms of the study that we did with respect to Niagara Falls and Windsor,
we are not suggesting that it was going to create thousands of jobs. We are
talking about it creating an additional 250 permanent positions.
It is important for those communities because it is a point of
differentiation, and people will come across. It is becoming marginally
easier to get across the border now with these new secure ID driver's
licences, for example. Everyone does not need a passport now if they have
one of those. What is really important — and equally important from our
perspective — is the fact that we have been criminalizing an activity that
millions and millions of Canadians are doing on an ongoing basis, and it
does not really make a lot of sense. When I was a little kid, my parents
would buy the odd Irish Sweepstakes ticket, and my mother was concerned that
we would have to leave the country if they won because they would be
arrested. We have moved beyond that. The law really needs to reflect what
Canadians are doing.
Senator Boisvenu: You say that one of the objectives is to
eliminate illegal activity as much as possible. You will gather from our
questions that we are confused by the idea of legalizing something illegal.
Earlier, I believe you were talking about billions in illegal betting. What
percentage of that betting is exported because people do their betting
outside the country? Do you have an idea? Will legalizing sports betting in
Canada have the effect of keeping the money here and stopping it from
leaving the country?
Mr. Rutsey: The short answer is yes. In our testimony, we said
that right now the best estimate is that about $4 billion is being bet
online illegally, and all of that would be going out of the country to
companies that are outside of Canada.
Senator White: As you probably know, when Oregon had sports
betting, the NBA had an agreement that their games could not be bet on in
Oregon. Have you had any discussions with any of the major sports providers
about what they would do if Canada and in particular Ontario were to do the
same thing and legalize it? Do you know whether the NBA would request or
maybe demand such a legislative change or whether Major League Baseball or
the NHL had concerns? What about the NCAA in the case of British Columbia?
They now have a team in British Columbia.
Mr. Burns: They do, and the NBA currently has an agreement with
the Ontario government that NBA games do not appear on PRO-LINE Sport
Select. That was a condition of the franchise when the Toronto Raptors were
granted. B.C. agreed to the same thing.
The Ontario Lottery and Gaming Corporation maintains that relationship
and those discussions. The provinces have discussions with those leagues to
talk about this. There is provincial lottery support for some — not all — of
the CFL teams in the country, and they have those agreements because of
PRO-LINE Sport Select. They have created marketing partnerships in some
provinces. In others, there are none. The best way for those decisions to be
made is with the provinces looking at any negotiation that would occur if
The NHL and the provincial lottery corporations have had a happy
coexistence for decades now. I think that it is up to the individual leagues
to determine that. As we mentioned, the NFL has an agreement with every
state lottery to provide a scratch ticket with the state team's logo on it.
Senator White: That is not betting on the game.
Mr. Burns: It is still gambling. As for betting on games, some
have taken different positions than others over the years, and some have
taken different positions in the United States than they have in Canada. The
NFL never asked for the Bills games to be removed from PRO-LINE Sport Select
as a condition of bringing those games to Toronto.
Senator White: Again, that is not single sport betting.
Mr. Burns: It is still wagering. The NFL and some of the other
leagues do not distinguish. Some do. In short, the provinces have had those
relationships and have made those decisions based on agreements and on the
needs of their various provinces because not every league operates in every
The Deputy Chair: Gentlemen, thank you very much for your very
interesting testimony. The more we look at this bill, as with so many other
things, the more complicated it gets. However, we are very grateful to you
for being with us today.
Our next witnesses are Ms. Lynda Hessey, Chair of the Board of Directors
of the Ontario Problem Gambling Research Centre; Mr. Gary O'Connor, Chief
Executive Officer of the Ontario Problem Gambling Research Centre; and Mr.
Jon Kelly, Chief Executive Officer of the Responsible Gambling Council.
Mr. Kelly, please proceed.
Jon Kelly, Chief Executive Officer, Responsible Gambling Council:
On behalf of the Responsible Gambling Council, I want to express my
appreciation for this opportunity to speak to your consideration of Bill
C-290. It is quite imaginable that some people are not quite familiar with
the Responsible Gambling Council. This organization was established 30 years
ago by people who had first-hand experience with gambling problems. They
felt that there should be supports in place, like research, treatment and
prevention programs, for problem gambling similar to those in place for
alcohol and drug problems. Today, the Responsible Gambling Council is
focused exclusively on problem gambling prevention. We do not have a
treatment program, but we are heavily into a variety of prevention programs.
The council positions itself attempting to bring together the
perspectives of people who have had gambling problems — researchers, people
who are in the gaming industry, and anyone with a stake in reducing the risk
of gambling problems. On our board, the chair is someone who has had a
gambling problem. We have four people who have had gambling problems and two
members of the gaming industry, including Ms. Jane Holmes, whom I believe
you have met.
In order to be effective, problem gambling prevention has to be
double-sided. If you are going to reduce gambling problems, you need to
address the demand side and provide information to people who choose to
gamble about the risks of gambling, the ways to avoid those risks, realistic
expectations and signs of a problem — these types of things. However, no
matter how good you are at problem gambling prevention addressing the demand
side, you also need to address the supply side and the way the games are
structured and the gaming products are supplied. We invest a lot of time
looking for best practices in the design and delivery of gambling products
in addition to a range of programs addressing the gamblers themselves.
When we are talking about the legalization of single event sports
betting, it is important to consider the context. Right now across the world
there is a large scale transformation of gambling — what we used to
understand to be gambling. I have been in this job for 15 years. When I
started, people who talked about gambling talked about casinos, tracks,
bingo and the lottery. That was where I started with the Responsible
Gambling Council. That has changed considerably. While the venue-based
gambling is here to stay, there is no doubt that technological changes are
having a pervasive influence on the way that both land-based gambling and
online gambling are provided. We can see an explosion of gambling products
and formats. Companies like Facebook and Zynga Poker are in the gambling
business because they are introducing betting into their social games. The
line between social games, video gaming and gambling is being erased. This
is happening worldwide and is not specific to any country.
The possibilities offered by new technologies are constrained only by the
imagination and legislators. This will be the reality of the world of sports
betting as well as most forms of gambling as we go forward. These
developments modify the gambling landscape in several ways. They provide
instant and unlimited access to gambling no matter where you are, really.
They represent a shift from older players to younger players, and they are
more engaged in the local market versus a tourist market. In Ontario, for
example, we have seen the significant drop in tourism gambling as gambling
becomes much more localized.
As a result, there will be an increased risk of gambling problems,
especially if new people are brought in to the gambling activity. It is
essential that risk reduction and risk mitigation programs be strengthened
and modernized to address the new challenges and increased risks we see with
new forms of gambling. We are in an era of diversification and integration
in which conversations about gambling management are displacing the
conversations about gambling prohibition. Bill C-290 is an example of this.
Canada, by and large, has set in place a very good gambling safety net
through community programs with programs in schools, colleges and
universities, and social marketing campaigns, which we are involved in. In
Canada, about $82 million a year is invested in problem gambling prevention,
treatment and research. That is the community side, usually through health
ministries. On the gaming side, about $35 million is invested in problem
gambling prevention programs, usually called "responsible gambling
programs," in addition to the $82 million.
When you look at the new types of gambling and the impact of gambling,
you see that these programs need to be modernized in order to keep up. They
are designed largely around venue-based gambling and slot machine gambling
with controlled access, which are rapidly disappearing. On the game delivery
side, it is essential that the public sector corporations and regulators
play an even stronger role in defining the rules of the game and setting
clear limits for what is acceptable. There will be an increasing array of
gambling options in the future. This array is somewhat unpredictable because
technology allows the imagination to drive what new games will be created.
It is very important, then, to address the demand side with gambling
literacy programs to help people clearly understand what gambling is about,
where to get help if they need it, and what risks are involved to approach
gambling from an informed consumer point of view.
As gambling grows, it is also very important to address the awareness
prevention side of the equation. The Senate of Canada can play a very
important role in making clear that single event sports betting needs
careful and scrupulous management, including the careful planning and
incorporation of player safeguards and strengthening the problem gambling
safety net that is in place to match the different types of gambling that we
are entering into. Thank you.
Lynda Hessey, Chair, Board of Directors, Ontario Problem Gambling
Research Centre: First, on behalf of the Ontario Problem Gambling
Research Centre, I would like to express to the Senate committee our
appreciation for the opportunity to speak to you today as you consider Bill
C-290 regarding the single event sports betting.
The Ontario Problem Gambling Research Centre is an independent,
not-for-profit organization formed by the Ontario government approximately
12 years ago. The intent was to put distance between the government and
problem gambling research and to reduce the perception of government bias.
The purpose of the centre is to fund research to develop knowledge in
problem gambling, to build research capacity for problem gambling research
in Ontario and to disseminate the research results through knowledge
transfer to treatment and prevention providers and policy-makers.
The centre has a rigorous, objective and independent research review
process. That process has been reviewed and validated externally by the
Canadian Institutes of Health Research. We have been recognized as a leader
in problem gambling research in Ontario, in Canada and internationally.
I will turn it over to Mr. O'Connor.
Gary O'Connor, Chief Executive Officer, Ontario Problem Gambling
Research Centre: First of all, as a research centre, we try as much as
we can to confine comments and statements to something that is fact based,
from research. Our brief we gave you has a lot of reference to Internet
gambling because it is something that has been far better researched than
single event sports betting, but there is a lot of comparable evidence that
we can bring into play, plus it is our understanding that in some locations,
in some provinces, there are plans that single event sports betting would be
Over the past two decades there has been widespread expansion of
legalized gambling in Canada and in Ontario. Over that time, there has been
quite remarkably a stabilization of what you call the problem gambler.
Just-published estimates of problem gambling in Ontario show that 1.2 per
cent of the Ontario population would be called a problem gambler, and of
course depending on severity. Highest prevalence areas, the areas of highest
concern, are electronic betting and in the community combined with permanent
A systematic review of our research has confirmed that accessibility and
proximity to gambling, particularly land- based opportunities, have a
significant influence on the rate of problem gambling. Therefore, the easier
it is for you to access, the more people will gamble and the more you will
have a problem gambler. It supports the predictions that, as we expand, new
forms of legalized gambling will lead to an increase in gamblers and an
increase in people experiencing problems with gambling, and there will be
considerable public health costs.
The Ontario Problem Gambling Research Centre has worked with leading
researchers and practitioners in the field to contribute to the development
of a range of responsible gambling initiatives intended to reduce potential
harm caused by legalized gambling. I will not go into a lot of detail, but
the examples are online learning tools, pop-up messaging on video screens,
restrictions or guidelines in casinos about where ATMs are placed so you
have to think more to go get more money, looking at the addictive properties
inherent in electronic game design, examining how social media campaigns
influence attitudes towards gambling, and looking at venue design in
In general in Ontario, with the decision of the provincial government to
expand gambling, we are facing new challenges. With single event sports
betting we will be facing challenges as well.
With regard to Internet gambling and sports betting, there will be an
increase — you could say it could be a perfect storm — of gambling
addiction. Currently Ontarians wager an estimated $400 million on gambling
websites that are not authorized in Ontario. The most recent Canada-wide
study indicates that prevalence of Internet gambling was 2.1 per cent, and
it is also estimated that the rate of problem gambling among Internet
gamblers is 17.1 per cent compared to 7.1 per cent in non-Internet gamblers.
People that gamble more intensively tend to also use the Internet and favour
There are a number of research activities we have funded that identify
aspects of Internet gambling, and likely sports gambling, that may increase
risks of gambling: availability of it 24 hours a day, convenience and
comfort of playing at home or on mobile devices, greater anonymity and
possibly looser age restrictions, better playing experience and the solitary
nature of the play, monetary transactions are electronic and sometimes using
points or tokens rather than money, and online gamblers can play under the
influence of drugs or alcohol.
We have been working with the regulators and the Ontario Lottery and
Gaming Corporation, the major gaming provider in Ontario, to suggest policy
recommendations that leading experts in the field recommend. These
recommendations are: restricting use for those under 18 years of age by
implementing verification techniques; implementing pre-set limits on
deposits and losses and session time while discouraging re-gaming;
prominently placing responsible gaming information and how to access help;
implementing controls on advertising; providing transparent information
about the odds of winning the game; and offering self-exclusion programs.
The Ontario Problem Gambling Research Centre encourages the Senate —
while examining this bill and making recommendations for regulation to
accompany it — to recommend, where appropriate, that federal and definitely
provincial governments look to the above recommendations that I just read
out in our brief about enhancing resources to problem gambling research,
prevention, awareness and treatment. Research shows that all forms of
gambling lead to problem gambling. As revenue to governments is increased,
support for the broader social and economic issues that expanded gambling
will bring must be increased.
The Deputy Chair: Thank you all very much. Of course, we have
Senator Runciman: I appreciate your comment with respect to
proximity and the increase in access to gambling venues. I think that is
probably driving the Ontario government's initiatives with respect to new
casinos in larger urban centres. That is their answer to solving their
deficit problems, I guess.
I am curious about the issue of monies flowing offshore. You heard the
previous witnesses suggesting that in a regulated and transparent
environment this will be advantageous. Another comment that was made was
with respect to the fact that individuals are already gambling and going
offshore to do so. In their view this legislation will not, if passed, have
an impact on increasing the number of problem gamblers. Do any of you have a
view on that?
Mr. O'Connor: We do not have any research to point to that, but a
lot of commentators and researchers have concluded that the legalization of
gambling will have little net effect of the total gambling dollars spent. It
is correct that there could possibly be little net effect.
However, whenever you make any form of gambling accessible, especially
with a new game, you increase the number of people gambling. Any time you
increase gambling, you increase the number of people and the end result is
they experience problems with gambling.
Senator Runciman: I guess the point is they are gambling now and
it is going from an offshore venue to a regulated and transparent process.
Mr. O'Connor: The advantage is that it would be regulated and
easier to build in responsible gambling controls.
Senator Runciman: On that note, we had a letter from the Alcohol
and Gaming Commission of Ontario assuring us that if this legislation passes
that they are quite confident with respect to being able to regulate. I
wonder if you have any view with respect to the job they are doing now with
regulation of the gaming sector in Ontario. Do you have any concerns from
Mr. O'Connor: We work closely with Jean Major and his staff at the
commission. They are working very hard, bringing in a new standards-based
regulation that will be more proactive.
Senator Runciman: We had Professor Derevensky testify last week.
He said that if one looks at pathological gambling rates internationally
with the vast expansion of legalized gambling, Internet gambling, land-based
casinos, lotteries and horse racing, we have not seen significant changes in
the prevalence of pathological gambling. Do you share that view?
Mr. O'Connor: The research that we have, and just recently
published, shows that the overall number of people who statistically are
problem gamblers has reduced in Canada and Ontario over the last decade. The
research also says that the growing number of gamblers means in total you
have more people who need support for problem gambling.
Senator Frum: Did I understand that you say Internet gambling is a
more addictive form of gambling?
Mr. O'Connor: We do not know for sure if there are more people who
participate in Internet gambling who would be diagnosed as having problem
gambling. It is more likely that if you are going to gamble, you are going
to gamble on a number of sites. More people who are problem gamblers are
gambling on the Internet.
Ms. Hessey: Since some of that gambling is done either in the home
or with mobile devices, there is no observation of people sitting at a slot
machine for many hours and someone observing that. In that more isolated
environment, there is a higher probability that the problem gambling will
Senator Runciman: Mr. Derevensky also said that if the bill goes
through, this will be a somewhat safer product. Would you share that view?
Mr. O'Connor: Being that it is regulated, yes.
Mr. Kelly: One aspect that I have not seen commented on is the
issue of betting with a bookie. I was not here for the earlier
presentations, but with the support of the Ontario Problem Gambling Research
Centre, we did two studies of prevalence of problem gambling in 2001 and
2005. In both those cases we found that betting with a bookie was much more
predictive of problem gambling than most other forms of gambling. Again,
from my perspective, if it were possible to move people from betting with a
bookie — which can be single game betting and also has credit — to more
legitimate betting on single games, that would be a benefit to those people
betting with a bookie, at least from a problem gambling point of view.
Senator Baker: I want to congratulate each one of you for your
On the point of bookmaking, the bill that we have before us will remove a
section from the Criminal Code that includes bookmaking as not being illegal
anymore. It says bookmaking, pool selling or the making or recording of
bets, including bets made through an agency of a pool or parimutuel system
or any race or fight or on a single sport event or athletic contest.
All of the evidence we have heard so far has only pertained to the single
betting portion of that section which is being removed from the Criminal
Code. The wording of this bill says simply that:
1. Paragraph 207(4)(b) of the Criminal Code is
That is it. All of what I just read out, including bookmaking, is
repealed. Were you thinking about that when you were making your point about
bookmaking or was this on a different —
Mr. Kelly: I did not know that, senator. I was assuming that the
bill would not make individual bookmaking legal and that the products had to
be delivered by the organizations that conduct and manage gambling, i.e.
provinces and non-profits.
Senator Baker: I am not giving an opinion on what eradication of
this section will do pertaining to these other matters other than the single
sporting event. I am not suggesting anything beyond that because I have not
really examined it. We have had no evidence whatsoever before the committee
to tell us what the rest of this means in this particular section that is
being taken out of the Criminal Code. Hopefully there will be some evidence
before the committee as to what it actually means when you remove that
Senator Runciman was going to say something that would be of benefit to
the committee if we hear him now on the intervention.
Senator Runciman: I was advised that the bill does not deal with
the issue that Senator Baker mentioned. It deals with a lottery scheme and
not with bookmaking. I would just advise that that is the case.
Senator Baker: I completely understand that, but the way the code
reads, a lottery scheme means this, this, this and this and not that. Then
we get to bookmaking, single-sporting event betting and so on. All of that
section is being removed. We have to keep in mind here that it will still be
illegal to have three-card monte, a punchboard or coin table. Just imagine.
Anyway, my point is this: You have not really examined what is being
removed here; you do not have a legal opinion as to total effect of that.
Here is my question to you. I have listened to you very carefully. It was
very interesting, and your points are very well made. What you are
suggesting to this committee, the sober second thought on this bill, is that
we include something in the passage of this bill that will address some of
the problems that have been raised here today. That is what you are asking
the Senate committee to do.
There is a problem because everything that you have asked the Senate
committee to do involves an expenditure of money. We cannot, as a committee,
make an amendment that involves an expenditure of money on a bill such as
Some of us have been wracking our brains trying to figure out how we can
amend this bill to address the very problems that you bring up. I would
leave you with that, as to the wording of an amendment that a member could
propose that would address your concerns. It is a very difficult question
simply because the bill just removes exceptions to the lottery scheme. Could
you turn your minds to that when you leave the committee room? If there is
anything that you want to say now, fine. If you want to forward to the
committee a suggested amendment that would not involve an expenditure of
money, then I could try to figure out — former law clerk that I was 40 years
ago — how to add a new section 4(1) that may address what you say. It cannot
involve an expenditure of public funds.
The Deputy Chair: I think that was a request rather than a
question. We will turn to Senator Runciman for a quick supplementary.
Senator Runciman: I will just make the witnesses aware of the fact
that if they are unable to achieve that goal, with respect to a proposed
amendment, the committee has an ability to attach observations. That could
encourage some action on the part of provincial jurisdictions with respect
to how they go forward.
Mr. O'Connor: I was assuming that my comments were for inclusion
in observations, but I think we could make an honest attempt at suggesting
Mr. Kelly: My assumption as well was that it would be outside of
the legislative mandate specifically.
When you look at Canada, I cannot think of another example where the
allocations for problem gambling or responsible gambling are actually
legislated. I am sure that they are all policy and driven by decisions of
cabinets as opposed to legislated. Even the formula in Ontario, where two
per cent of the gross revenue from specific venues is allocated to problem
gambling, is a policy of the Ontario government; that is not anywhere in
Senator Baker: You are not suggesting that a member of the
committee should not consider putting it into law. You are not considering
Mr. Kelly: It is hard to sit on the non-profit side of this and
suggest that that would not be a good idea.
Senator Boisvenu: First of all, thank you for your testimony; and
congratulations, because I know that you are working with clients who are
not always easy and that prevention is not always straightforward. I want to
go back to the main argument: legalizing an illegal activity. We are
confronted by two problems: keeping gambling legal with all its
consequences. You were talking about it earlier in terms of the development
of the pathology. It is more pronounced when the activity is illegal because
it is harder to look for people with problems because they are doing it
under the table. But you say that the pathology has been decreasing in
Canada for about 10 years. So that makes me more optimistic. We have to find
the least undesirable solutions. We are stuck either way.
Once more, suppose you are legislators; let me give you a legislator's
hat. You have an illegal activity, one that involves a lot of money,
billions of dollars, leaving the country. You have people you do not know
because they are betting anonymously. You can stay with the status quo or
you can legalize it and find out who is doing the betting, who may develop
the pathology, and whom you have to go after with your prevention programs.
Given that we are generous as a government, we are probably going to be
putting out millions of dollars to support your efforts. What do you decide?
The Deputy Chair: Who wants to tackle that?
Mr. O'Connor: Of course, in the way the question is framed, the
answer is that you must find ways to bring the gambling out in the open and
regulate it, control it and provide for those who need more support. That
was the spirit of our presentation. I wholly support your comments.
Senator Boisvenu: You have a lot of credibility because you are
working with those clients. I find your position almost as credible as ours.
Have you anything to add?
Ms. Hessey: I would like to add one thing. In a previous Senate
committee report by Senator Kirby on mental health and addictions, it was
identified that problem gambling was seen to be the storm on the horizon.
Many people who have problem gambling may have a mental health issue or
another addiction issue. Sometimes, the identification of the issue is not
I believe that, through the work of Senator Kirby, that issue has at
least been raised. I would not say that it has been particularly taken up by
the provinces or in other mental health reports. It has to do, perhaps, with
how it gets identified and reported.
Mr. Kelly: The Responsible Gambling Council was set up by
pathological gamblers, people who had totally lost everything to gambling,
and the organization still reflects a great influence from people who have
significant gambling problems. I have not heard, for the most part, in my 15
years of talking to people who have had significant gambling problems, a
great appetite for prohibition. My predecessor, the day I started in this
job, said, "Remember, focus on the problem not the gambling." By that he
meant that it is not about the availability of gambling, which is becoming
more and more available; it is about getting at the problem, which is the
In answer to your broader question, a better way to deal with it is to
get it out in the open and provide support, treatment, prevention and
research rather than to leave it hidden in the back room somewhere. It is
even worse, to enforce it, which becomes a kind of circular problem.
I will go back to your comment about the reduction of problem gambling.
Being in the prevention business, I would like to think that we have reduced
problem gambling over the years. It may well be that our instruments to
pinpoint it are better. I suspect that my colleagues from the Ontario
Problem Gambling Research Centre would agree with that. We understand more
about problem gambling and pathological gambling. We understand so much more
about gambling because this whole area has had a lot of attention because we
have had the resources to investigate it more and understand it better than
we did 15 years ago. The resources provided have enabled us to understand it
My suspicion is that we have a much better fix on it. We have not been
enormously successful in reducing it, but we have been enormously successful
in gaining a much better understanding. This is a very good thing, but it is
not necessarily a large scale drop in the numbers. The numbers that Mr.
O'Connor mentioned in his presentation are exactly half the numbers that we
found a decade ago. I do not think that problem gambling has gone down by
half, but I think we have a better understanding.
Mr. O'Connor: We know that upwards of 60 per cent of people who
are experiencing an episode of problem gambling self-correct within a year.
The issue is that two years down the road they might be back to problem
gambling. It is a constant churn.
Senator Dagenais: At the moment, we know that those who bet on
sport do so illegally. The profits go to organized crime and that will
continue to be the case if this bill is not passed. How can we bring this
all together? People are pocketing money. We have to protect problem
gamblers. We know that it is all going on undercover, so to speak.
Mr. O'Connor: The spirit of the comments from the Ontario Problem
Gambling Research Centre was part of your recommendations for the people who
ultimately will operate the single event sports betting — the provinces and
their provincial lottery corporations or gaming corporations: responsible
gambling principles that they must ensure adherence to. In Ontario, like it
is probably in all provincial jurisdictions, the legislation that created
the Ontario Lottery and Gaming Corporation sates that one of the four
pillars of the corporation is that it pays attention to responsible gambling
and promotes responsible gambling. You can easily say that the work done
needs to be extended as gambling options grow.
Senator McIntyre: I am probably hitting the nail on the head a
second time and, in doing so, echoing Senator Baker's remarks.
I am interested in the comment that you have made both orally and in
writing regarding the important role of the Senate in the management of
single sports betting and any form of gambling product, including player
safeguards. You also made recommendations, which I will not go over, and
Senator Baker made a request for specifics. In answering the request for
specifics, could you send us as much information as possible? For example,
could the specifics relate to the provinces, the territories and First
Nations reserves? It will be important for the Senate committee to look at
Mr. O'Connor: On single event sports betting we will not be able
to give you specifics, but we can give you comparables.
Senator McIntyre: Yes. I am driving at the management. For
example, you are inviting the Senate to play a role in the management of
single sports betting and any form of gambling product, including player
safeguards. Tell us exactly what you want. That is what I am interested in
knowing. Get to the bottom of things and tell us exactly what you want, and
we will look at it.
Mr. Kelly: Yes. I am sure we can provide a number of specifics.
Senator McIntyre: We would like as many specifics as possible.
Mr. Kelly: For example, one specific is: Do not provide credit.
Senator McIntyre: Not an expenditure of public money.
Mr. Kelly: Others include the way that a product is advertised and
banning live odds during games. You are asking about what kind of things you
could build in as safeguards.
Senator McIntyre: Yes.
The Deputy Chair: Of course, this being politics, we truly need
this material as soon as possible. I hate to put pressure on you, but
Senator McIntyre is right because it would be very useful for us, and it is
no good if it comes after we have already finished our deliberations on this
Senator McIntyre: Thank you for your fine presentation.
The Deputy Chair: Before we go to a second round, I have a point
You have been clear that you do not have much in the way of data on
single sports event betting. You said that the incidence of problem gambling
tends to be higher among Internet gamblers, but no one knows whether that is
cause or effect. It is interesting that you said it tends to be higher among
people who use bookies. Given Senator Baker's question about bookmaking,
that might be worth looking into.
In terms of the single event sports betting, which is what most of our
work so far has focused on, do you have any indication whether single event
sports betting would tend to attract or encourage problem gambling more than
other kinds of betting? I am not a gambler, so I do not know. It seems that
you might get more zing or more buzz out of betting. I take your point about
not during the actual game but right up to close so that you know as soon as
the game is over you will get your fix. Is that a factor?
Mr. Kelly: Single event sports betting and sports betting
generally appeals to younger people who are more likely to have a problem.
Like in everything else, younger people aged 18 to 24 years will go off on a
tangent in a number of ways; and gambling is one of them. Sports betting
appeals to that age group. It is a zing. We have an NFL pool at the
Responsible Gambling Council. Maybe there are some enforcement people here
who could tell me whether that is acceptable. There is no question that it
adds a bit more to the game, the banter around the game and the abuse you
can take if you lose. It adds that dynamic, which appeals to a great number
of young people.
The difficulty is trying to identify single event sports betting as a
cause of problem gambling because most people who have a gambling problem,
gamble on many things.
When we did our study, the person with the problem is likely to bet on
six different types of gambling — sports betting, casino, lottery for sure.
When you start trying to distinguish which one is the problem, it is very
difficult to do, partly because you get a small number of people and you
start getting down too far to be specific.
These things are difficult to tease out. Who really has a specific
problem related to single event sports betting is such a tiny little
question. To unravel that, it is unlikely that a lot more research can
unravel that particular question.
Mr. O'Connor: Research has said quite clearly exactly what Mr.
Kelly was saying: It is not the game.
The Deputy Chair: It is the problem.
Mr. O'Connor: It is the problem, yes, and there are people that
experience problem gambling with bingos.
Senator Chaput: When you say it appeals more so to young people,
could you say if it is more so to young men?
Mr. Kelly: Yes.
Senator Chaput: Is it a higher percentage? Is there quite a
Mr. Kelly: As I recall, it is a fairly significant difference. It
is much more young men than young women.
Senator Chaput: What age are we talking about here, approximately?
Mr. Kelly: In the research that we have done, the prevalence
studies, we have taken age groupings, 18 to 24, 24 to 35, and you see the 18
to 24 is the highest participation. Toward 35 goes down, and then it sort of
levels off. Definitely the 18-to-24-year-old grouping is the one most into
Senator Baker: I have one main question. In this section of the
Criminal Code, it will still be legal for a lottery scheme to conduct
three-card monte or punchboard. Do any of you know whether that is a problem
in Canada today, either punchboard or three-card monte?
A punchboard is a board sometimes found in a confectionery store, and
three-card monte is your shell game. You try to guess where the marble is or
where the ace is with three cards. It is the speed of the eye versus the
hand. Do you think those are problems, because why on earth would we leave
these things in the law if we are taking out single sport betting?
Perhaps you can answer that in answering this question: The authority —
the law regarding what we are talking about — is really enforced and enabled
through the provinces, and we have seen over the years a difference in the
laws of certain provinces in that some of them outlawed the advertising of
booze, of alcohol, for example, and the actual drinking of alcohol.
I think somehow that legislation has gone by the wayside. From looking at
recent television, I see people drinking. I do not know if those laws have
changed, but would you suggest that perhaps a similar encouragement should
be made to the provinces to outlaw the advertising of gambling? It is very
attractive when you see some poor person on television on an ad run by some
lotto corporation that somebody all of a sudden became a millionaire, a
truck driver, a cook becomes a millionaire. It is terribly effective in
convincing people to do this sort of thing. Would you advocate the
encouragement of the provinces to look at outlawing advertising of gambling?
Mr. Kelly: Senator, we have addressed this question. A few years
ago Loto-Québec introduced what were called Ludoplexes in Quebec. They asked
us at that time, "Do you think that advertising of these venues should be
banned?" They ended up banning advertising in the beginning.
Our organization has never had a difficulty with the advertisement of a
gambling product as long as it is within certain guidelines, for example,
not appealing to children, not promising that you can do this and your
problems will all be solved, not showing someone who looks like they are out
of control. There are a number of restrictions on gaming advertising that
are in place around casino advertising and lottery as well. From my
perspective, it is not about banning advertising; it is about banning
certain practices within the advertising.
Senator Baker: What about three-card monte? You would not object
if we amend the bill to include three-card monte?
Mr. Kelly: I would not object if I knew what it was, senator.
Senator Baker: Okay.
The Deputy Chair: Thank you all very much. This has been very
helpful. We will look forward to receiving your suggestions about what we
might attach to our report on this bill.
Colleagues, we shall meet again tomorrow morning at 10:30 in this room.
Thank you very much.