The past few years have seen the proliferation of internet gaming websites. Along with the rise in the popularity of poker and similar card games, gamblers have had more options than ever to place wagers on games of chance from the comfort of their homes.
Different jurisdictions have reacted in various ways to address internet gaming websites. Some jurisdictions see internet gambling as taking profits away from state-sanctioned gaming monopolies. Other countries pass legislation to protect their residents from unscrupulous gaming websites. In some countries, no legislation exists to ensure that there are reasonable odds of winning.
In the United States, state governments have moved to prosecute any U.S. based or foreign based internet gaming website, which illegally offered its residents the opportunity to gamble; in certain cases, executives of such gaming websites have even been arrested. In the United Kingdom, conversely, the government has taken the position of cultivating the U.K. internet gambling business into a worldwide leader; internet gaming website stocks are freely listed and traded on the London stock exchange.
In Canada, the government has responded to the internet gaming phenomenon by reinforcing the existing laws prohibiting gambling in general. The Criminal Code (Canada) prohibits the advertising of illegal gambling businesses. In Ontario, legislation recently came into force which can be used to prosecute those individuals advertising or facilitating the advertising of illegal gambling businesses. The federal Criminal Code (Canada) provisions prohibit the illegal advertising of internet gaming websites, while it is the goal of the Ontario legislation to protect consumers from the illegal advertising of such internet gaming websites.
Canadian Criminal Law
In Canada, gambling is prohibited under the Criminal Code (Canada), subject to certain exemptions; for example, exempted activities include private wagers between people not engaged in the business of gambling or lotteries managed by provincial governments.
The Ontario Response
Ontario passed Bill 152 in 2006. Bill 152 contains amendments to certain provisions of the Consumer Protection Act (the “Act”) concerning internet gaming sites. The amendments came into force on January 1, 2008. The amendments are dealt with separately below based on their purpose.
No Advertising contrary to the Criminal Code
The overall intent of the amendments is found in section 13.1(1) of the Act which states that no person shall advertise an internet gaming site which is operated contrary to the Criminal Code (Canada).
Prohibition on advertising of Gaming Websites from Ontario or directed at Ontario residents
“Advertising” under section 13.1(1) of the Act means, where a person advertises an internet gaming website, which originates in Ontario or which is primarily intended for Ontario residents.
No Facilitation of Advertising contrary to the Criminal Code
No person, except for an internet service provider, shall arrange for or otherwise facilitate any advertising that is prohibited under section 13.1(1) of the Act on behalf of another person. It appears that internet service providers were provided with an exemption in this provision, so that the mere intermediary service provided by internet service providers would not constitute an infringement of the Act. This must simply acknowledge the fact that while an internet service provider is integral to permitting most users to connect to the internet, it cannot be held accountable for what websites individual users access or the content of such websites, including, what advertising may appear on such websites.
The new section applies despite subsection 2(1) of the Act
Section 2(1) of the Act states that the Act applies, if the consumer or the person engaging in the transaction with the consumer is located in Ontario when the transaction took place. In relation to internet transactions, it is quite common that an internet gaming website would involve transactions between consumers and businesses who are not located in Ontario. The legislature has attempted to address this issue with section 13.1(5), which states that section 13.1 expressly applies despite section 2(1) (in other words, despite the fact that both the consumer and the person engaging in the transaction with the consumer may not have been in Ontario when the transaction took place).
Advertising is broadly defined
Advertising under section 13.1(1) is broadly defined and does not only mean advertising over the internet; under the subsection, advertising includes:
- providing, by print, publication, broadcast, telecommunication or distribution by any means, information for the purpose of promoting the use of an internet gaming site;
- providing a link in a website for the purpose of promoting the use of an internet gaming site, but does not include a link generated as the result of a search carried out by means of an internet search engine; and
- entering into a sponsorship relationship for the purpose of promoting the use of an internet gaming site.
Definition of Internet Gaming Website
The Act has been amended to include a definition for “internet gaming website”, which the Act states is an internet site that accepts or offers to accept wagers or bets over the internet:
- as part of the playing of or participation in any game of chance or mixed chance and skill that is to take place inside or outside of Canada, or
- on any contingency or on any event that may or is to take place inside or outside of Canada,
including, without restricting the generality of the foregoing, a casino game, card game, horse race, fight, match, sporting event or contest.
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Ryan K. Smith is a lawyer and trade-mark agent at Feltmate Delibato Heagle LLP. He specializes in corporate and commercial law with expertise in intellectual property matters including trade-marks, copyrights, privacy, information technology, and confidential information. You can reach Ryan at email@example.com and (905) 287-2215.
 2002, S.O. 2002, c.30, Schedule A