Quebec Seeking to Ban All Non-Governmental Gambling Sites

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Friday, April 8th, 2016 | Written by Stephen Smith

Much like in the United States, Canada allows provinces to establish their own laws regarding gambling regulation, and throughout the country offshore online gambling sites which for the most part are unregulated are readily accessible. However, the government of Quebec is now trying to change that, citing an argument that many people believe is disingenuous.

About the Proposed Law

Premier Phillippe Couillard and the Liberal party of Quebec have introduced a piece of legislation, Bill 74, that would require Internet service providers to block access to all online gambling sites in the province. If the bill passes, it would make it so that the only website available for those people who want to gamble online would be Espacejeux, a website operated by Loto Quebec, the official provincial lottery of Quebec. As an summary of Bill 74 states:

“To monitor online gambling, the Consumer Protection Act is amended to require Internet service providers to block access to illegal gambling sites entered on a list drawn up by the Société des loteries du Québec, which must report to the Régie des alcools, des courses et des jeux if service providers fail to comply with the Act. The Régie will be responsible for informing service providers of their non-compliance, and the president and chief executive officer of the Société or a person the latter designates is granted investigation powers to ensure compliance.”

What’s Really Behind the Law

Most industry experts believe that Quebec’s sudden push to ban access to free market online gambling sites is due to the underwhelming performance of Loto Quebec’s site. Espacejeux has failed to bring in the projected revenues that it was anticipated to generate for Loto Quebec. By making it impossible for people located in Quebec to play on other sites, the government seems to be hoping to increase traffic to the province’s own site, whilst creating an online gaming monopoly for itself.

Quebec’s Position

In public statements, the Quebec provincial government has stated that the move to restrict access has nothing to do with eliminating competition for the lottery’s online gaming site. Officials are saying that the ban is necessary in order to reduce gambling addiction and to protect Quebec residents from predatory offshore sites that entice them to spend their hard earned money.

The province’s claims do not seem to have a basis in reality, though. The Quebec Working Group on Online Gambling issued a report stating that gambling addiction is only a problem for about 0.4 percent of the population of Quebec, and that when province residents do play online, it’s typically not for large sums of money. Based on their findings, the group recommended that the government does not ban other online gambling sites, but instead, regulate and license them in order to protect consumers. Nevertheless, the government of Quebec has ignored those suggestions and continues to push for a ban.

Opposition on Different Fronts

The provincial government of Quebec is coming under a lot of fire from voices outside of the Quebec Working Group on Online Gambling. Small Internet service providers are stating that they won’t be able to afford the changes that the government is making and may be forced to close as a result, while large providers are cautioning that they may suspend services in Quebec all together in order to avoid the costly process of blocking sites.

There is also a legal argument being made against the move, as the country’s Telecommunications Act says that Internet service providers are not legally allowed to interfere with the content of the Internet service that they give to consumers and businesses. There are fears that if Quebec succeeds in blocking the sites, they might next try to limit access to other types of information, and as Dr. Michael Geist, law professor at the University of Ottawa, explains:

“We’re a free and democratic society and and I think we don’t believe in Chinese-style approaches where the government shapes what kind of information, or what sort of sites people are entitled to access. To see the Quebec government do so here really runs counter, I think, to some of the fundamental values we have in this society.”

Implications for PokerStars

PokerStars is owned by Amaya, a Canadian firm with its headquarters in Montreal. As the world’s largest poker website is not operated by the government, Bill 74 would undoubtedly apply to the company, although whether it would subsequently be required to move its base of operations from Canada remains to be seen. Progress of the bill couldn’t have come at a much more troubling time for Amaya, either, as last month its CEO David Baazov was charged with alleged insider trading activities by Canada’s securities regulator, known by the acronym AMF. Since then, Baazov has taken indefinite leave from his position at the head of the company, with Rafi Ashkenazi having now been appointed Amaya’s interim CEO. As Baazov commented in March:

“I believe that stepping down in the short term will help to avoid distraction for the company and its management while I vigorously contest all allegations made against me and pursue my bid to acquire the company.”