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February-04-2010,
Single Game Sports Betting in Canada May be on the Docket in the Near Future...By HARTLEY HENDERSON

The idea of offering single game sports betting in Canada has been tossed around for about a year and half but is gaining more steam as of late.

Last month Windsor-Tecumseh MP Joe Comartin asked the feds to consider the possibility of changing the Canadian criminal code which bans single game sports betting (section 2.07.1(4)(b)) and there seems to be a groundswell from both gambling and non-gambling factions supporting the notion. In fact the support is non-partisan as politicians from all parties are showing interest.

Comartin wasn't the first politician to approach the Conservative government asking for a change to the criminal code but he is the first Federal Member of Parliament. In 2008, Ontario MPP David Caplan sent a letter to the Justice Minister asking for the code to be amended in an effort to help the struggling Ontario casinos. Shortly after that, Conservative MPP Tim Hudak joined the notion.

Their hope was that single-game sports betting would entice more Ontarians to go to the casinos in Windsor, Niagara Falls and Rama. More importantly, it would also persuade Americans to come north to wager on games since that option is only available to U.S. citizens in Nevada.

Ontario casinos were doing well when they first opened but the sagging economy combined with the new border crossing rules seemed to have convinced U.S. citizens to stay in the U.S. to gamble. However, while cities like Detroit and Niagara Falls, NY have set up casinos to compete with their Canadian counterparts, they have no way of offering sports betting. If Canada does change its law this will be a niche no American casino will be able to match.

If there is a sticking point to changing the law right now it appears to be that at present only Ontario politicians have lobbied for the change and the Federal government would likely want to see more support across the country. Paul Burns, the Vice President of the Canadian Gaming Association acknowledged that fact but stated that other provincial support is happening.

Nova Scotia expressed interest in sports betting a year ago and New Brunswick has interest since Moncton is the gateway from the Atlantic to the West. Burns also stated that the Canadian Gaming Association is traveling across the country trying to drum up support for the change.

Burns noted that the Federal government handed decisions regarding gambling to the Provinces years ago and they really don't want to address that area unless asked. Prior to 1999, there was a law in the Canadian criminal code that prohibited dice games. The Windsor casino lobbied to have the law changed so it could compete with nearby U.S. casinos and after examining the reasoning behind the original statute it was determined that the law was brought forward from old English law and was quite antiquated. Most provinces agreed to change the law and that country-wide support combined with the reasoning behind the original law made the decision easy for the Federal Liberal government in power at that time. Changing the sports betting law would certainly have more opposition, but the process is similar.

According to Michael D. Lipton, a Canadian Attorney specializing in gambling law, the process to changing any Canadian law is fairly simple. A motion to change a law is almost always introduced in the lower House of the Canadian Parliament and if it passes there it is sent to the Canadian Senate for debate and a vote. Once the bill passes the Senate it becomes law. Even though the Canadian Senate is the upper House of Parliament, it is very rare for them to override the will of the lower House and generally approves of any changes. In any case the Justice Minister usually approves the original motion since he is responsible for enforcement of the new law.

Almost every province in Canada currently offers sports lotteries, which require people to wager on a minimum of 3 games. And while the lotteries are popular with smaller bettors they naturally never gained any headway with larger or more sophisticated bettors. Aside from the requirement to wager on a 3 game parlay, the odds are also obscene. A pick 'em line on baseball in the lottery offers a dividend of 1.7 on either side, or in better words an 84 cent line. Multiply that by 3 and it's easy to see why the government loves it. Even a point spread parlay only pays 5/1 for picking 3 games correctly.

Nevertheless, in spite of the ridiculous lines the lotteries certainly aren't generating the type of revenue they should be because it is likely that most real sports bettors are playing offshore or wagering with illegal bookies. That is another reason why Paul Burns believes single game sports betting should be welcomed by the Federal government and all provinces should join in.

"The current laws for illegal bookmaking in Canada are very weak to say the least," Burns stated. "In fact, bookies rarely even go to jail on a first offense." However, Burns acknowledged that illegal bookmaking is the biggest source of money laundering in Canada and is tied to other illicit activities. Burns believes if the sports betting industry was legalized and regulated like it is in the UK that it would be easier to identify illegal bookmakers and consequently arrest them and shut them down. "The Conservative government claims to be tough on crime so give the police some tools to go after the illegal bookmakers who are the real concern." Burns suggested that offshore sports books are growing in popularity and there is really no way of stopping them. Not to mention Canadians enjoy betting with them and likely wouldn't give up the accounts but he also said that there are many Canadians that will not bet online.

Regardless, Burns would like to see a system that regulates the reputable offshore sports books as well as the legal casino or racetrack based sports books so that Canadian citizens and the police know who is operating legally and who isn't. "It's a way to eliminate inconsistencies and get rid of the grey area" Burns said. "There are always mechanisms the Provincial governments can employ that will allow both casino sports books and offshore sports books to co-exist." Furthermore, if Canadians are given more choices of where to play and by extension, more payment options, then there is really no reason to continue wagering with illegal bookies that will extend credit and also charge 100% daily interest on unpaid wins.

Unlike in the United States, there is no tax on windfalls in Canada so there is no reason for bettors to try and hide winnings from the government. The UK system has been very successful in effectively killing the underground sports betting industry there.

When asked whether they would like to see the governments run the sports betting or hire an established company to run it, Paul Burns stated that the decision would rest with the Provincial government but Michael Lipton suggested that under the criminal code they may not have a choice. "The Canadian criminal code requires all betting schemes to be operated and managed by the government or an agency of the government."

The one exception is horse racing although they were given a special exemption ages ago under the Pari-mutuel Horse Racing Act. In fact, the industry also included a caveat that allowed them to offer their product by any means of communication. Hence horse race betting is available to Canadians by telephone or the Internet. However, there is no question that casinos would bring on those with experience to manage the bookmaking operations if allowed. Caesar's owns and operates Windsor Casino now so there is no reason to suspect they wouldn't transfer Caesar's employees from Nevada to oversee the operation there.

The last question I asked to Mr. Burns was whether he believed there would be opposition to single game sports betting from the various leagues. Burns was surprisingly unconcerned. Burns noted that the NHL has been on the sports lottery for years and has supported it, plus they signed a memorandum of understanding with Betfair. The CFL has welcomed betting on the games and many teams have sponsorships with Bet365. Major League baseball has been in Toronto since 1977 but the MLB expressed no concern when baseball was offered on the sports lottery years after. And even the NFL agreed to allow games to be played in Toronto knowing about the sports lottery in Ontario. Furthermore, the NFL allows betting on NFL Europe and supported scratch tickets bearing team logos along with rotisserie leagues. "The NFL isn't opposed to gambling," Burns stated, "they just want to benefit from the gambling."

The one league that did have concerns with gambling in Canada was the NBA. In fact, the NBA threatened to pull the Toronto Raptors bid in 1994 unless the Ontario government agreed to take NBA games off the sports lottery. The Raptors and NBA worked out a deal with the government whereby NBA games were not listed on the sports lottery tickets in exchange for compensation to the government. Other provinces continue to offer NBA games. However, even in the NBA there seems to be a change brewing. Recently, Commissioner David Stern told Sports Illustrated that it may be time for the NBA to reconsider its stance on sports betting. It seems in times of declining attendance and diminishing sponsorships all areas are now open to discussion.

"The moral objections of the leagues no longer hold water," Burns commented.

It seems inevitable that single game sports betting will be coming to Canada in the near future.

The Canadian Gaming Association is traveling around the country trying to elicit support for single game sports betting. To generate interest in the Prairies, Quebec and BC, the Association will likely need to demonstrate how single game sports betting will help casinos and/or race tracks in those provinces and to also prove that the initiative won't eat into the revenues generated by the sports lotteries too much. That shouldn't be too difficult and it seems only a matter of time before other provinces agree to the law change.

02-04-2010
Hartley Henderson
MajorWager.com
henderson@majorwager.com

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