Canadian Provinces Eager to Cash-in on Online Gambling

April 5, 2015 •

If you find yourself in a Canadian convenience store anywhere across the country you’ll definitely see a sign for the provincial lottery, and hear the pings of the lottery terminal punhcing out tickets and recognizing winners. This wasn’t always the case though. lotteries were actually illegal in Canada before Parliament made ammendments to the Criminal Code in 1969. Soon after that, Quebec put the new law into affect and the other provinces soon followed suit. Decriminalize=ing lotteries came with little public discussion or political debate, as the change happened gradually and not all at once. Canadian gradually warmed up to the benefits of gambling.

The same can be said of the new debate on whether to fully legalize online gambling in Canada. The provinces seem hungry for the legislation to go through. If you look at Ontario, it only allowed four months to pass between the provincial gambling regulator issuing a request for proposals to gaming companies interested in running the province’s online operations and the site going live this past January. Alberta did the same as the province’s gaming commission just only asked vendors for proposals this past February in hopes of making a recommendation to the finance department this very month. There is a possibility that it will be rejected, but that seems more and more unlikely when looking at the experience of other provinces. Take also into consideration Alberta’s recent financial woes.

Online gambling is being touted as a way out of that mini-crisis for Alberta. It’s expected to line government coffers with up to $50 to $75 million CAD annually. When he energy sector was booming, billions in royalty revenues allowed Alberta the luxury to put the lure of online gaming dollars on the back burner, but not anymore. When you look at falling oil prices you can make a direct corelation between the timing of Alberta’s decision to get into online gaming and the price of oil. Despite those statistics, the head of Alberta’s Gaming and Liquor Commission, Bill Robinson, claims that the move to go ahead with online gaming at this particular time is unrelated to recent falling oil prices. “It has nothing to do with [oil] actually,” he says.

Robert Williams, a Gambling researcher and professor at the University of Lethbridge, wrote a report from the Alberta Gambling Research Institute to the Alberta Gaming and Liquor Commission (AGLC) in 2011 that recommending that the province stay away from internet gaming, isn’t so sure that the connection is coincidence. In an interview with local media on the subject he says, “The large majority of Canadians will indicate that the harms far outweigh the benefits and they’re not in favour of further expansion. This goes against economic sense, it goes against social harm considerations, it goes against the desire of Alberta citizens, so the only rationale is increasing AGLC revenues because of the price of oil.”

Some critics of he province are saying that sanctioning online gaming could lead to different types of financial woes later one or in the long run, but the immediate intake of another $50 to $75 million in annual revenues seems to be more appealing at a time when the province expects its budget deficit to shoot north of $5 billion in 2015. So critics are worrried about who, exactly will be responsible for looking out for the province’s best interests beyond the bottom line.

The AGLC’s six-point mandate, as an example includes a directive to “Generate revenue for the government of Alberta.” But in these instructions it does’t include any strategy on how to deal with the potential economic and social costs that may come with that revenue. Alberta’s Treasury Board and Finance Department, is also tasked with managing the province’s fiscal health. So an influx of around $75 million a year would surely improve the province’s situation.

So, with Alberta opting in for the extra cash it won’t be the only province to do so. Ontario, B.C., Manitoba, and Quebec already offer a full slate of online casino-style gambling. The Atlantic Lottery Corp., meanwhile, which oversees gaming for New Brunswick, Newfoundland and Labrador, Prince Edward Island, and Nova Scotia had made lottery tickets and sports betting available online, but does not offer casino type games. These casino games such as online slots, roulette, blackjack and poker are more lucrative, but they’re also troublesome for addictive and problem gamblers, as they tend become highly addictive for them.

When you look at Alberta who’s now on track towards online gaming, Saskatchewan it’s conservatibe neighbour is now the only province still choosing to stay away from all sorts of online gambling. According to a spokesperson for the province’s gambling regulator, no discussions are underway that would change Saskatchewan’s position that the risks of online gaming outweigh the benefits. Kent Hehr, the opposition finance critic for the Alberta Liberals, thinks that ‘Saskatchewan currently has the right policy by not going down this path at all.’ He says his province would do well to follow Saskatchewan’s lead. “To be honest, I think Saskatchewan currently has the right policy by not going down this path at all,” says Hehr, adding the extra revenue promised by online gambling will trump the considerations that caused the government to hold off in the past. Research shows that fewer than five per cent of gamblers account for more than 30 per cent of gambling revenues. But the government is saying they’re the best body to keep an eye on the industry and regulate it safely for consumption.

Statistics show that governments will spend less money treating problem gambling creates rather than what they take in overall. The worrying trend in the media has been that research on provincially sanctioned online gaming has shown to increases the size of the market and therefore the number of problem gamblers. Many politicians think that it deserves some discussion before going ahead, as once you start it’s almost impossible to go back.

Canadian law so far, has left online gambling issues to the wayside, as the business of gambling can fall between the political, legal, and regulatory cracks, which means many relevant questions often go unasked. Legally, gambling is governed by a batch of old laws, and it’s under provincial jurisdiction, which further complicates things federally. Online gambling also maintains a low profile, combined with political and financial lobbying and favour, probably means Alberta’s will soon enter into the online gaming business. Sometime this year, Albertans, like fellow Ontarians, will quickly find out that they can play a few hands of blackjack or an online slot machine with their morning coffee. All thanks to their province, led by Premier Jim Prentice, who will make his decision shortly. It’s a change, that shall come to pass slowly, but it will seem all quite sudden if the right preparations are not made ahead of time.