Canada May be One Step Closer to Single Game Sports Betting

  • In Hartley Henderson
  • Fri, Oct 7th, 2011 11:02:00 am
  • By Hartley Henderson - Exclusive to OSGA

In recent years there has been some interest in changing the federal law in Canada regarding single game sports betting, but to date no motions have been successful.

In recent years there has been some interest in changing the federal law in Canada regarding single game sports betting, but to date no motions have been successful. Betting on single games is banned under the Canadian criminal code (section 2.07.1(4) (b)) but the federal government has set a precedent indicating that they are willing to change the law if there is enough provincial support. Up until 1999 dice games were illegal in Canada. But that law, which was carried forward for centuries from the British common law, was in place because the British government in the 1600s was worried that soldiers were preoccupied with dice games instead of fighting wars. Casino Windsor lobbied to have the law changed and when no other provinces objected, the dice law was struck down by the Senate since the concern was no longer legitimate.

The process of striking down the law is fairly simple. A motion to change a law is usually introduced in the lower House of the Canadian Parliament, often through a private members bill and if it passes the lower house it is sent to the Canadian Senate (the upper house) for debate and a vote. Once the bill passes the Senate it becomes law. Americans need to note that unlike in the U.S., the Canadian Senate is not elected but consists of patronage appointments by the Prime Minister at the time. Senators are generally there for as long as they like and will only be ousted if they rock the boat, such as voting down a law passed in the lower house. Consequently almost every bill ever handed to the Senate is rubber stamped. The dice law mentioned earlier was a prime example.

To date, numerous provinces have indicated an interest in changing the single game sports betting law. Ontario submitted requests on numerous occasions, B.C. and Nova Scotia also submitted requests and Quebec has indicated they have no objections. I asked Paul Burns, Vice President of the Canadian Gaming Association (CGA), a national industry association that was created to generate a better understanding of the gaming industry in Canada by presenting facts to the general public, elected officials, key decision makers and the media, if the provinces had to be unanimous on their consent for the bill to be considered, but he didn't think that was the case:

As long as there are no objections by the provinces that should be enough Burns stated.

But he also believes any provinces that are unsure just need to be reminded of the benefits:

"It all revolves around revenue and money. Would you not welcome a regulated environment where you could make more money and you control the way sports betting is offered?"

A private members bill was indeed introduced on September 28th by Joe Comartin, an NDP MP for Windsor-Tecumseh. The bill, C-290, was introduced by the member with some short but effective comments:

"This is a very simple bill, matching the personality and character of the person moving it. It is simply a repeal of one very small section of the Criminal Code. The effect it will have is to allow for sports betting on single sporting events in this country.
This is a very important bill from this perspective. That industry is very big, entirely controlled by organized crime at the present time both here and in the United States because it is generally illegal in the United States to bet on one sporting event.

The estimate in the United States is that there is $30 billion a year that is bet on that, all going into the pockets of organized crime and some of it offshore. It is estimated that as much as $2 billion is spent in Canada, annually, all of that money going out of the country to organized crime syndicates in the U.S. and in the Caribbean.

It is quite important that we move on this. The other thing is there is a national gaming association in Canada. It just completed a study that shows the type of employment that will be created by creating this into a legal business. For instance, in the casino in Windsor there will be another 150 jobs either saved or added to the current employment in that particular casino.

In the riding of the Minister of Justice (Niagara Falls) there is a casino and a similar number of jobs will either be saved or added. So it is job creation."

If there is going to be any objections raised by the provinces it will likely be as a result of sports betting that is already being offered. Almost every province currently offers a sports lottery but the figures are miniscule when compared to the real amount being bet on sports in Canada. The CGA has issued a report where they indicated that approximately $450 million a year is wagered by Canadians on the sports lottery but that only represents about 5% of what is actually being wagered in total. By extrapolation that means almost $10 billion is wagered on sports betting by Canadians of which $2 billion is wagered offshore and the bulk is wagered with illegal bookmakers. Note this figure is higher than the amount suggested by Comartin but is probably closer to the true figure.  The sports lottery definitely has a following but the majority of real bettors won't play the lottery because gamblers are forced to wager on at least 3 games (2 games for point spread) and the payback is very poor. When the lottery was first introduced, the governments decided to treat it like any other lottery, so the payback is only 60% - comparable to Lotto 649. As a comparison, a 3 play parlay on the sports select lottery pays back 4/1 odds while offshore, in Vegas or with illegal bookmakers the payout is 6/1. The 50% different is quite a disincentive. In fact, the payback of the sports lottery is worse than games like keno or bingo.  Not surprisingly, therefore, many analysts have determined that the government is losing out on a lot of potential revenue that could be achieved by offering single game sports betting.

I was curious if the Burns was worried that the sports leagues would raise objections if the motion ever got more traction, but he was confident it wouldn't be an issue.

"This issue came up before and no one from the leagues said a peep. As well, the NFL, (who have been the biggest objectors in the U.S.), allowed Buffalo Bills games to be played in Toronto even though Ontario is a sports betting environment. And with NFL Europe, all sportsbooks in England offered betting on the games and there was no objections raised by the league." It's also notable that the CFL has expressed no concerns to date regarding betting on its sport and the NHL has a memorandum of understanding with Betfair to identify any suspect betting behavior on its sport.

As for other forms of betting in Canada, single game sports betting would be a boon to their business. No doubt if casinos are allowed to offer the product then horse tracks and other gaming venues will be given the opportunity as well and that one extra reason to visit a race track or one of its facilities will only help boost its ancillary revenues. When the tracks were allowed to offer slot machines, their revenues increased substantially and it all filtered down to higher purses for horse races, greater betting on the product and consequently more jobs as well. And in Delaware, the parlay betting on NFL football at racetracks has proven to be quite successful.

It's uncertain how the single game sports betting would be offered but federal law says it must be regulated by the provinces. Consequently, the lottery corporations would still almost surely be in charge of overseeing the betting although the management of the bets could be done by outside companies. Caesars, for example, owns Casino Windsor and Penn National manages the gaming at Casino Rama. The Ontario government is still ultimately responsible for regulating it but the sports offers, odds and payouts will almost certainly be set by Caesars, Penn National etc. which can only benefit the bettors.

According to Burns the next step with Comartin’s motion will be a 2nd reading on October 31st. If it carries there, it will then be sent to committees in November to be analyzed more closely.

The motion for single game sports betting also couldn't come at a better time to gain approval. The Full Tilt Poker scandal (of which Canadians were swindled out of millions of dollars) can be illustrated to show what happens when gambling is offered in an unregulated way. But despite the scandal at Full Tilt, Canadians are still betting poker online in increasing numbers and the same holds true with sports betting. There is no law on the books that prohibits Canadians from wagering online or offshore and even if there was, it likely wouldn't make a difference. So no doubt Comartin, the Ontario government and other proponents will simply identify how this motion is a win-win for all. The governments make more revenue, the bettors are better protected and the federal government gets one more soft law it doesn't need to enforce anymore. 

Contact Hartley via email at Hartley[at]osga[dot]com.

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