Canadian Lottery Executives Critical Of Grey Market Operators

June 25, 2024
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Top executives from three provincial lottery corporations in Canada have maintained a strong stance against grey-market operators who continue to operate in their jurisdictions and argue that advertising of unregulated products has confused Canadian consumers.
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Top executives from three provincial lottery corporations in Canada have maintained a strong stance against grey-market operators who continue to operate in their jurisdictions and argue that advertising of unregulated products has confused Canadian consumers.

CEOs from Loto-Quebec, the British Columbia Lottery Corporation (BCLC) and the Atlantic Lottery Corporation, which services four Atlantic Canadian provinces, spoke out at the Canadian Gaming Summit last week against “illegal” operators that effectively serve as competitors for the crown lottery corporations.

“I want to be honest, competition is good, actually it’s really good, they force us to be better, and they are often a great source of inspiration,” said Jean-Francois Bergeron, president and CEO of Loto-Quebec.

Still, he said, the federal Criminal Code of Canada is clear that it is up to provincial governments to conduct and manage gaming within their own jurisdictions.

“To me, there is no grey zone in Quebec; if it’s not Loto-Quebec, it’s not legal,” Bergeron said, also pointing out that some of the offshore operators providing sports betting and online gaming to Quebecers are now participating in Ontario’s regulated market.

“Now that Ontario decided to entrust that responsibility to private operators, that’s fine, that is their right and their own choice, and we respect that, but it doesn’t give the rights to these operators to operate elsewhere in Canada with legality,” he said.

Bergeron said that although he respected those who are lobbying for a similarly open market to be established in Quebec, as a coalition of private operators has been doing since forming in May 2023, he expected those operators to comply with Canadian federal law in the meantime.

Patrick Daigle, CEO of the Atlantic Lottery Corporation, said research has found that two-thirds of Atlantic Canadians “aren’t aware this activity [by unregulated operators] is illegal, because of all the ads that are out there”.

“Look, a lot of these ads are spilling over from Ontario, but we also know that advertising is being purchased directly in Atlantic Canada and in other regions in Canada, and so it’s confusing out there,” Daigle told Canadian Gaming Summit delegates.

Daigle also argued that unregulated operators do not have similar responsibilities when it comes to areas such as responsible gaming, financial controls, or returning money back to the province for other causes.

“What’s obvious is there’s no silver bullet here, there’s no easy answer,” said Pat Davis, president and CEO of the BCLC. “However, what I will say is anyone who’s operating across the country here, it is a shared challenge.”

“Illegal operators, in terms of competing in an unlevel playing field, is a challenge that we all share, whether it’s myself in British Columbia, or whether it’s a private operator, licensed and registered in Ontario.”

Davis highlighted that multiple Canadian lottery corporations, including BCLC, Loto Quebec and Atlantic Lottery, had now formed the Canadian Lottery Coalition to advocate for federal fixes surrounding areas such as advertising standards, anti-money laundering controls and responsible gaming issues.

One coalition-backed measure is a bill currently in the Canadian Senate, S-269, that would require the federal government to create a national advertising framework that could restrict sports-betting advertising by limiting the number, scope or location of ads.

Will Hill, executive director of the coalition, testified at a hearing on the bill earlier this month that the Canadian federal government should look to restrict advertising of unlicensed operators.

“Our suggestion ... is that any regulatory framework that results from this bill going forward should carefully consider and delineate between what is legal and what’s not,” Hill told senators. “After all, if a particular operator is not legally enabled to take wagers in a certain province, why should they be allowed to advertise there?”

Hill was also critical of companies regulated in Ontario running ads throughout the country, even when the ads specify that the product is only available in Ontario.

“Their advertising that is going beyond Ontario is contributing to one of the greatest problems as it relates to illegal online gambling in Canada, and that’s player confusion,” Hill said. “There’s a sheen of legality and authenticity implied by advertising that goes beyond Ontario.”

“When a player in a different province than Ontario sees one of these ads on Hockey Night in Canada during one of the intermissions and then goes to log on their computer, and on their sports news website of choice there’s a digital banner with an operator, they actually develop the perception that it must be legal.”

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