Northern Exposure: Québec Government Not Interested In A Regulated Igaming Market

Greg Warren
Written by: Greg Warren

Each week, Canada Sports Betting recaps all the top sports betting and iGaming news in Canada and highlights upcoming events.

Our top stories this week

Event of the week

UFC 298 – Feb. 17

UFC 298 is the next big event in the MMA world and all the action goes down on Saturday night at Honda Center in Anaheim at 10:00 p.m. ET.

Alexander Volkanovski (-125 at Bet99) will put his featherweight title on the line in the main event against Ilia Topuria (+105). This will be the only title fight of the night.

No Canadians will be featured on the main card or in the preliminary fights.

Check back with Canada Sports Betting on Friday for a full betting preview of the event!

https://twitter.com/Bet99ON/status/1758167540587512221

Québec government squashes talk of regulated market

On Wednesday, the Québec Online Gaming Coalition released a document it has submitted to the Ministry of Finance for the 2024-25 pre-budget consultations.

The document outlines all of the advantages of adopting a regulated igaming market like Ontario has done, and the coalition is estimating that a similar model in Québec could generate a minimum of $230 million in annual revenue for the provincial government. The coalition told Canada Sports Betting that an English version of the document will also be available shortly.

So far, the coalition, which consists of Betway, Bet99, DraftKings, Entain (BetMGM), Flutter (FanDuel and PokerStars), Rush Street Interactive (BetRivers), Apricot Investments, and Games Global, has been unsuccessful in its attempts at advocating for an open online gambling market since banding together last May. The group recently released a survey that found two-thirds of Quebecers are actually in favour of a regulated model, but the provincial government appears to be unswayed by the presentation of the data and the public demand for such a market.

Earlier this week, a spokesperson for Québec Finance Minister Eric Girard’s office told local media outlet laTribune that the government is standing behind its Loto-Québec monopoly on online gambling.

“What we observe in other jurisdictions is that the changes made have led to overexposure to online gambling advertisements and a trivialization of gambling,” said the spokesperson, when translated to English. “This is not what we want in Québec. Furthermore, several experts believe that with the massive arrival of cell phones, deregulation is not desirable. This has an effect on the rise in pathological gambling, particularly among young people.

“Loto-Québec’s mission is to regulate games of chance and money and protect them from the control of illegal operators, including organized crime. Loto-Québec’s revenues are entirely returned to Quebecers, which is not the case for illegal operators.”

Loto-Québec’s online gaming site generated $403.9 million in revenue according to its 2022-2023 fiscal year report, but those figures also include online lottery sales. All of Loto-Québec’s proceeds are reinvested in the province.

While momentum towards a regulated market in Québec has appeared to hit a snag, we mentioned in last week’s industry news column that the Minister of Service Alberta and Red Tape Reduction, Dale Nally, attended a major industry conference across the pond in England last week and he “engaged in insightful discussions” with Ontario Attorney General Doug Downey regarding Ontario’s igaming expansion.

Alberta had previously expressed interest in allowing private operators into its igaming jurisdiction, and the government is now revisiting the possibilities of expanding its online gambling offerings outside of its provincial lottery and igaming scheme.

OLG launching SST pilot project

Earlier this week, the Ontario Lottery and Gaming Corporation announced it has begun piloting self-serve lottery terminals in select retail locations across the province.

OLG says the new terminals will offer customers a new safe, secure, and convenient way to purchase its lottery products, including INSTANT tickets, using a debit or credit card.

Roughly 140 SSTs will be deployed, mostly in the Greater Toronto Area and Sault Ste. Marie region.

“OLG continues to look for new ways to deliver engaging gaming experiences that create value for our retail partners and for the Province of Ontario,” said Nancy Kennedy, OLG’s chief lottery and customer officer, in a release. “Self-serve terminals will help us meet evolving consumer and retailer preferences while maintaining a strong commitment to responsible play.”

The initial pilot is expected to run until May 2024 and then more SSTs could be launched more broadly throughout the province later in the year.

According to OLG’s 2022-23 annual report, lottery retail proceeds were $4.4 billion in the province for the fiscal year.

MCK v iGO court hearing

It’s been well over a year since the Mohawk Council of Kahnawà:ke (MCK) filed a lawsuit with the Ontario Superior Court of Justice that aims to end Ontario‘s new regulated igaming market, but the hearing date is finally on the horizon.

The hearing was initially scheduled for late next week, but CSB hasn’t yet confirmed a concrete date for the hearing with the parties involved. It’s presumed the hearing will commence next week, as scheduled.

At the hearing of the application, a presiding judge can grant the relief sought, or dismiss/adjourn the application in whole or in part (Rule 38.10(1)(a); or (b) order the application to proceed to trial (Rule 38.10(1)(b)).

MCK, which is challenging the legality and structure of the new regulated online gambling market in the province that launched in April 2022, is being represented by Olthuis Kleer Townshend LLP and the law firm filed a Notice of Application on behalf of its client on Nov. 28, 2022, to kickstart the legal process.

The definition of “conduct and manage” as described in section 207(1)(a) of the Criminal Code of Canada is being called into question by MCK, and the court’s interpretation of “conduct and manage” will ultimately decide the fate of the case. MCK claims that iGaming Ontario, which was formed in July 2021 as a subsidiary of the Alcohol and Gaming Commission of Ontario (AGCO), is not “conducting or managing” the online gambling sites of private operators, and allowing operators to “conduct and manage themselves,” subject to the payment of a portion of their revenues (roughly 20%) to the Ontario government.

The Council says it has “facilitated, conducted, and safely regulated gaming activities on behalf of the Mohawks of Kahnawà:ke for decades, and this new regime ignores their expertise in the gaming sector, and will result in the loss of significant revenue to the community of Kahnawà:ke.”

In 2023, Ontario’s regulated igaming market produced $59.3 billion in total wagers and $2.26 billion in total gaming revenue.