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Canadian Senate Undemocratically about to Kill Single Game Sports Betting Bill




A bill on sports betting (C-290) that unanimously passed in the Canadian House of Commons seems on the verge of dying a procedural death.

A private member's bill on sports betting (C-290) that unanimously passed in the Canadian House of Commons seems on the verge of dying a procedural death thanks to Senators who have chosen to use this bill as a means of showing their relevance and also to appease their major league sports friends.

For those unfamiliar with the Canada's laws related to gambling a history is in order. Until 1968 all forms of gambling except horse racing and small scale gambling at fairs (i.e. money wheels) were illegal. In 1968, however, an omnibus bill was passed by then Minister of Justice Pierre Trudeau (who later became Canada's Prime Minister), and the bill addressed many social issues which the government believed needed to be amended. The bill permitted abortions if 3 doctors agreed that the abortion was necessary for the mental or physical health of the woman; it decriminalized homosexual acts between consenting adults over 21; it made it illegal for anyone to provide firearms to people of unsound mind; it made it an offense to drive with an alcohol level over 80mg/100 ml of blood; and it changed the laws related to gambling by allowing charitable gambling. The definition of a charity was not clearly defined so the federal government used that portion of the law to create a lottery to fund the 1976 Olympics in Montreal. Soon after provinces started introducing lotteries with funds geared to improving health (since in Canada health care is free to all citizens), education (since public education is free and graduate studies are subsidized by governments) and amateur sports. Not surprisingly the federal and provincial governments started arguing over who should be allowed to offer lotteries but in 1985 the federal government agreed to turn over the right to manage and regulate all forms of lotteries or games of chance to the provinces in exchange for a $100 million one-time payment which would be used for the 1988 winter Olympics in Calgary. Pretty much all forms of gambling became legal for provinces under the lottery scheme with a few exceptions, the most notable being dice games and sports betting. The latter exception is listed in Canadian Criminal Code section 207 4(b) stating that illegal gambling included:

"Bookmaking, pool selling or the making or recording of bets, including bets made through the agency of a pool or pari-mutuel system, on any race or fight, or on a single sport event or athletic contest."

The criminal code did not concern itself with the method of delivery so as of 1985 the provinces have the right to offer gambling online or at land based operations as long as it's managed and regulated by the provinces. Not surprisingly the provinces took advantage of their new powers and casinos began to pop up in Canada almost everywhere. The first casino was opened in Winnipeg, Manitoba with other provinces following suit not long after. Ontario saw the new law as a way to take advantage of the lack of gambling at U.S. border cities so in 1996 they opened Casino Windsor with the hope of attracting money from Detroit and other large cities in the Midwest and northern part of the United States, since casino gambling in the U.S. was more or less restricted to Nevada, Atlantic City and some Indian reserves. Ontario wasn't interested in building or operating the casino so they agreed to let Caesars build the casino and operate the gambling although the ownership and regulation remained with the province as is required by the criminal code. Caesars takes a percentage of revenues and most of the risk. The Ontario government also opened casinos in Niagara Falls, Sault Ste. Marie and Gananoque and the government entered into a partnership with the Chippewa Indians which saw a casino go up in the native lands of Rama (just outside of Orillia) with operations being handled by Penn National.

The inability to offer dice games became a concern for the casinos since they realized craps was one of the most popular games for Americans so the Ontario and Quebec government petitioned the federal government to amend the law to allow for dice games. The request passed with little to no opposition and in fact the Senate at the time championed the amendment so in 1998 the law prohibiting dice games was lifted. The provinces still couldn't offer sports betting but lawyers noted that the criminal code stated "single sport event or athletic contest" was prohibited so the governments decided to get around the law by offering multiple games as part of a lottery scheme. They introduced several options including moneyline parlays, parlays on totals, parlays on point spreads, betting pools and parlays on propositions. The hold of 35% is almost identical to the takeout on any lottery game so naturally while it appeals to novices or small time bettors it was never really bought into by real Canadian gamblers. Serious sports bettors either continued to bet with illegal bookmakers or at offshore sportsbooks including European based sportsbooks, which were only off limits to Americans. While Canada is seen as a grey market, offshore sportsbooks realize there is nothing in the law that targets them nor is there any appetite by the government to charge offshore operators the way the U.S. government has. Bet365 (who actually sponsored the Canadian Football League with its .net site) likely has the largest contingent of Canadian bettors.

In the interim the ban against casinos stateside was lifted in most border cities and large casinos have popped up in Detroit, Niagara Falls, New York, Northern Washington State (just outside of Vancouver) etc. and the attraction to Canadian casinos has waned. Most Americans have chosen to keep their money in the U.S. rather than venturing across the border. Of course sports betting is still illegal stateside, except in Nevada and Delaware so Joe Comartin (an MP from Windsor) as well as Rob Nicholson, an MP from Niagara Falls asked the federal government to take out the line that prevents single game sports betting, believing that if Americans could bet on sports legally in Canada on single events and with competitive odds they would flock back to the casinos to wager on football and on special events like the World Series and Olympics. The motion was also backed by the Horse Racing industry which believed offering sports betting at racetracks would help their revenues and increase interest in horse racing. The bill was introduced to the House of Commons and was passed by all parties, which is very unusual. The next step was to send the bill to the Senate to rubber stamp it and the law would be changed, as was the case with dice games in 1999. However, the Senate has dragged their feet and seems unwilling to pass the bill. It should be noted that unlike in the U.S., the Senate is not elected but is rather lifetime patronage appointments and as such the Senate has never blocked a bill that passed with all party support in the House. Liberal Senator Peter Baker argued that while a Canadian Supreme Court decision stated that the Senate should "never set itself in opposition to the deliberate and understood wishes of the people," he wondered whether the all-party support in the House was really representative of the people's wishes, because it was never really debated and it passed with a virtually empty House voting on it. Of course the truth is that most of the smaller bills are passed that way and the dice amendment which the Senate championed had even few members in the House voting on it.

Baker and other Senators have said they preferred "the status quo," but Bill Rutsey, the President of the Canadian Gaming Association wrote an article in the Windsor Star indicating that the request to keep going as is would only channel money offshore and to illegal bookmakers.

"What is the status quo? It is reliably estimated that Canadians are spending over $4 billion annually through illegal offshore online sports books that are easily available to anyone with Internet access, but it doesn't stop there. Canadians are betting up to a further $10 billion through illegal bookmaking operated by organized crime, such as the Hells Angels," Rumsey wrote in The Windsor Star earlier this year.

So the question has to be asked why the Senate has chosen this bill as the one they are going to draw a line in the sand on. Speaking to several people in government it seems that it has to do with Senate scandals of late.

"The only entities who will benefit from the law not being amended are illegal bookmakers and offshore sportsbooks ... "

The Canadian senate has been plagued by spending scandals since 2012 and accusations of corruption and incompetence and as a result there has been a wide call to either abolish it or reform the Senate by having the public elect it. Several people close to the Senate indicated to me that many Senators have been reeling and looking for a bill to strike down in an effort to prove they are still relevant and also as a way of punishing the elected officials for not backing them in the wake of the spending scandal. One politician said to me "the bill they want to strike down would have to be one that most Canadians wouldn't have an issue with them opposing but would hopefully be high profile." And the single game sports betting bill fits that profile.

In the fall of 2012, the bill encountered its first real opposition from Major League Baseball and the NFL, which said the legalization of single sports betting would increase the chances of game fixing and they asked the Senate to kill it. So many Senators believe that this is an easy bill to vote against. Most Canadians don't bet on sports so by supporting the leagues rather than the hated gamblers how can the Senate lose? Not all Senators feel the same way. Bob Runciman lambasted the sports leagues for their hypocrisy and effectively said that Canadians are betting on sports anyway and if the leagues can't trust their own players not to throw games because it's now legal to wager on single games that it's not the government's concern. And he vowed to reintroduce the bill in the Senate if it's defeated. In the meantime Baker wants the bill to be stalled and looked at again in 5 years.

Of course what these Senators fail to realize is that the defeat of this bill will not win them any brownie points with the public since studies have indicated that the majority of Canadians would like to see single game sports betting and in fact the Senators will just encounter the anger of sports bettors who want the ability to wager, as well as the provinces and casino owners and operators who will be furious that an unelected body has single handedly and undemocratically killed the wishes of the elected House for selfish motives. And in the process they also will have pushed back the ability for the casinos and racetracks to possibly become profitable thanks to new sports betting tourism. And really the only entities who will benefit from the law not being amended are illegal bookmakers and offshore sportsbooks like Bet365 and Bodog who would have faced some serious competition. In fact several people have told me that the reason so many offshore sportsbooks have withdrawn from Canada of late isn't fear of a new Canadian law but rather that they were sure single game sports betting would proceed and they doubted any sportsbooks except the elite could compete with the provincial governments once it was legalized.

So it appears that the single sports betting bill will be shot down in the Canadian Senate because they feel dissed and also because the Senators are reaching for any straw that will help them keep their cinchy jobs. In the meantime, the provinces, the casinos, the bettors and democracy all lose.

Read insights from Hartley Henderson every week here at OSGA and check out Hartley's RUMOR MILL!