Save Canadian Poker

In March, Peterborough MPP Jeff Leal introduced a private member’s bill in the Ontario Legislature to ban advertising for online gaming. “I’d read reports about college students in the United States racking up tremendous amounts of debt through online gaming,” Leal says. “And here in Ontario we have bona fide gaming, whether it’s horse-racing or slot machines, operated by the Ontario Lottery and Gaming Corporation, and a number of people in that sector have seen dollars siphoned away to online gaming.”

Despite the strict prohibition on unlicensed betting operations, there’s no law against Canadians placing bets or playing games on offshore websites. But advertising to attract these customers faces several prohibitions under the Criminal Code of Canada: it is explicitly forbidden to advertise for games of chance and sports betting. Games of mixed skill and chance, on the other hand, are not addressed, says Lipton — which is why ads for online poker sites are common.

So which is it? Is the government cracking down to protect consumers, or to protect its own revenue stream? Leal has watched the U.S. clampdown and followed the debate in Britain, where regulation of online gaming is seen as way of protecting consumers — and bringing in tax dollars that would otherwise go offshore. He understands both approaches, but the key is consumer protection, he says. “If people are involved in gaming activities, they have to have some reassurance that it’s legal and that they’re going to get a fair return with set rules.”

In Lipton’s view, the benefits of regulation far outweigh the risks. “There are about 80 countries worldwide that tolerate online gaming, and I don’t see any of them going down the crapper,” he says. Even higher taxes and a strict regulatory burden wouldn’t deter companies, he says. “The industry cries out for regulation. They would embrace it.”

The payoff is trust. “If someone is putting money into a computer, they have to know they’re being treated fairly,” he says. That extends to having rigorous customer identification, so that underage gamblers are unable to register, and software that can recognize patterns of play characteristic of a problem gambler and cut the account off.

For now, the dream of a stable, regulated market remains elusive. Instead, the new U.S. legislation will usher in a period of great uncertainty. Some analysts predict the exodus of large, publicly-traded, mostly British-based gaming companies will leave the field open for less reputable private companies based in the Caribbean.

Since the new legislation is only targeted at payment mechanisms, Lipton predicts that plenty of sites will continue to serve the ravenous U.S. online gaming market. Stopping payment of credit and debit cards, which are coded 7995 for gambling payments, is relatively straightforward. Preventing payment by cheque is a much tougher challenge, he says, and other payment routes will no doubt be developed.

In the long term, we hope that more countries follow Britain’s lead towards regulation — and if Canada goes first, it could attract significant business. “Canada originally started out, from a technology point of view, as one of the original countries where the whole concept of online gaming started. (Now) nobody in online gaming has much of a presence in Canada because of the regulatory environment.”

“The genie has been out of the bottle for a number of years now. Trying to go the route of prohibition is very difficult to enforce, and we just believe that regulation is the right way to go.”

Courtesy of Ottawa Citizen