Online Gambling in Canada: A House Divided

As Canadian provinces look to regulate online gambling and fortify their land-based gambling regulations the Mohawk Council of Kahnawake has been seen to throw a spanner in the works by taking iGaming Ontario to court.

Join us as we learn more about the suit that was filed, why the Ontario Superior Court ruling was made, and what this could mean for the future of games of chance and other gambling games in Canada.

A Wholly Self-Serving Suit

Despite offering land-based casino entertainment since 1994, it was not until 4 April 2022 that Ontario began to license online gambling. This move from brick-and-mortar casinos to online gambling triggered a response from the Kahnawake Gaming Commission, which promptly took Ontario, the Alcohol and Gaming Commission of Ontario (AGCO), and iGaming Ontario (iGO) to court.

The lawsuit claims the province’s Gambling Act and licensing framework were illegal, stating:

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“The Council takes the position that the igaming scheme is, in effect, a disguised licensing scheme that impermissibly outsources the conduct and management of internet gaming to private sector enterprises.”

For context, the Mohawk Council of Kahnawake (MCK) oversees the online gambling regulatory authority, the Kahnawake Gaming Commission. Leveraging their first-nation status and the autonomy this provides, they have licensed online casinos, sports books, and poker rooms since 1996.

Make no mistake, this is all about the money, not the legality of the scheme, as the then Council Chief, Mike Delisle Jr, and present MCK member, noted:

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“Until these actions were taken, we were operating legally, safely, and successfully across Canada. To be shut out of Ontario – by far the largest province in Canada – will have devastating effects on a source of income…”

Regardless of the legal status of online gambling in any other Canadian province, the Quebec-based Commission had been free to operate its licensing scheme with impunity, making them the only game in town and funnelling untold fortunes their way.

Supreme Court Back Ontario’s Play

While the MCK’s constitutional challenge of the Ontario gambling charter tried to paint it as “illegal and unconstitutional”, as well as being financially harmful to the well-being of the Kahnawake people the Superior Court found their claim to be baseless.

According to a press release by iGO, the court ruling found that:

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“iGaming Ontario’s model is consistent with the Criminal Code and that iGaming Ontario is conducting and managing igaming in the province.”

In its filing, the Super Court lists the following proof that iGO, not the online casino operators, is the “operating mind” behind Ontario’s legal online gambling market:

The iGO controls the casino games through an approved "Games Catalogue and Games Conditions Policy".
Operators accept bets on behalf of iGO, acting solely as their agents.
The iGO pays operators a share of the collected revenues equal to 80% of gross gaming.
Operators retain player data but use it under the iGO’s “exclusive and unfettered” control rights.
The iGO has prohibited all subcontracting by licensees, including collecting bets.
The iGO is the sole determinant of which entities may accept bets and demand that winnings be paid only to persons physically present in Ontario.
The iGO controls all advertising, including when it may be aired, its format, content, and more.
The iGO decides what monitoring levels are allowed and can suspend or cancel licenses at will.
The iGO has oversight of customer care and dispute resolution.

Martha Otton, Executive Director of iGaming Ontario, responded to the ruling by saying:

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“We have always been confident in our model and are pleased that the court has ruled in our favour and that Ontarians can continue to play with confidence in our regulated igaming market,”

Adding:

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“Ontario’s model meets the requirements and contributes to the public good by protecting players, their data and their funds while helping to fund priority public services in Ontario and bringing well-paid, high-tech jobs and economic development to Ontario.”

The dismissal of the case allows for the continuation of Ontario's iGaming licensing program. It ensures that iGaming Ontario continues to manage the regulated market under the supervision of the AGCO.