Loto-Quebec Pushing for Online Gambling Crackdown

Canadians have enjoyed a rather relaxed online gambling landscape over the past few years, and in 2017 the industry was worth around CAD$17.3 billion (US13.11bn), much of which ended up in the pockets of unlicensed foreign internet gambling companies. That may soon be about to change, though, as Loto-Quebec is pushing hard for a resolution on Bill 74, an IP blocking piece of legislation that has been awaiting a provincial court ruling since being challenged for being in direct violation of the Telecommunications Act.

Current Situation

Thus far, Canadians have been permitted to bet online providing that the gambling sites that they choose do not have a physical presence (servers, offices, etc) in the country. This has not sat well with Quebec’s provincial casinos, such as PlayNow.com, Espacejeux, and PlayOLG, who are currently the only operators holding valid licenses to offer online gambling in their respective jurisdictions. Legislators have also expressed their concern that Canadian players are continuing to gamble on foreign websites, in the process eating into the revenues of the province-run Loto-Quebec corporation, and representing a major missed tax opportunity for the province.

Quebec’s Bill 74

In 2016, the Quebec Assembly subsequently passed Bill 74 which aims to prevent gaming revenue from leaving the country. One of its proposals is that local Internet Service Providers (ISPs) should block all foreign online casino sites from accessing Canada, thus following in the path of a similar crackdown that blocked access to illegal poker websites in 2015.

Two years later, however, and Bill 74 has still yet to go into effect, with freedom of internet activists claiming that the legislation represents a violation of the Telecommunications Act, as well as the Constitution in general. After successfully having their voices heard, the Canadian Radio-Television and Telecommunications Commission (CRTC) then filed an injunction halting Quebec from enforcing the internet gambling IP blockade until a provincial court ruling could determine its legitimacy.

A ruling was expected to have been made by March 2018, but that date has since come and passed without any resolution on the issue. Furthermore, Bill 74, according to industry experts, is likely to ultimately end up being decided in the Supreme Court, as the Telecommunications Act grants only the federal government the power of censorship. One of the organizations currently challenging Bill 74 is the Canadian Wireless Telecommunications Association (CWTA), and as stated on the Canadian Broadcasting Corporation news website (CBC.ca):

“It (CWTA) argues the country’s telecom industry falls under federal jurisdiction, and the Quebec law violates the Telecommunications Act by forcing Internet companies to control or influence content.”

Loto-Quebec Leading Charge

Bill 74 may not have garnered much momentum over the past couple of years, but Loto-Quebec has recently been doing its utmost to bring the piece of legislation back to the fore once more. As the operator points out, the organization’s profits have steadily been dropping in recent times, while those of foreign operators continues to increase. According to Loto-Quebec, it therefore makes sense to only allow licensed foreign operators to offer their services in Quebec, therefore enabling the province to receive its fair share of all their profits.

In the meantime, the body has already compiled a list of 2,000 gambling websites that it wants Internet service providers to block. Loto-Quebec is encouraging these sites to submit a tender to form partnerships with EspaceJeux, instead, which will then redirect their players to these casinos, whilst holding on to all customer information, and taking a percentage of revenues.

Leading candidates to receive Quebec licenses are operators such as PokerStars, Casino.com and LeoVegas, which already enjoy popularity in Quebec, while many of the other online casinos are likely to find themselves blocked in the province by ISPs. If successful, many of Canada’s other provinces are likely to subsequently follow down the same path.