Quebec Superior Court Rules Blocking of iGambling Sites UnconstitutionalJuly 26, 2018 11:53 am
The Quebec Superior Court has dealt a major blow to the province’s state-operated lottery after ruling that any attempts by ISPs (Internet Service Providers) to block access to international internet gambling websites would be deemed unconstitutional. The Canadian province and Loto-Quebec had hoped to create a virtual monopoly governing all types of online gambling in the province, but their efforts were subsequently put on hold after the Canadian Wireless Telecommunications Association filed a motion against them at the Quebec Superior Court.
Their efforts have now ultimately failed following the ruling handed down last week by the court, and commenting upon its decision, Professor Michael Geist from the University of Ottawa’s Internet and E-commerce Law Department, stated:
“(The ruling) sends a strong message to the Quebec government and to any provincial government that might think regulating the internet through mandating blocking schemes is the way to go.”
In 2010, Loto-Quebec attempted to shore up its declining revenues by launching an online gambling site called Espacejeux. Despite offering its customers the full range of casino, slots and poker games, however, the site attracted little interest as its rake was set too high, with Quebec residents preferring, instead, to frequent gambling site belonging to unlicensed international operators.
After seeing no improvement in its revenues, Loto-Quebec then sought to divert traffic away from these international websites by arguing that they posed a public-health concern that could only be averted if players were made to gamble on Espacejeux’s official platform. Groundwork was subsequently laid for the blocking of “illegal” sites by ISPs, who were provided with a Loto-Quebec created blacklist, periodically updated by the organization.
In 2016, the Quebec Assembly green-lighted Bill 74, but for the past couple of years the piece of legislation was unable to be put into effect after internet activists filed a motion arguing that such a move was in opposition to the country’s Telecommunications Act. This was followed up by an injunction taken out by the Canadian Radio-Television and Telecommunications Commission (CRTC) preventing Quebec from implementing its online gambling IP blockade pending a court ruling.
Superior Court Ruling
The situation came to a head on July 18 after Loto-Quebec’s arguments were shot down in flames by the Superior Court. One of Loto-Quebec’s major claims was that it had better protection systems in place than unlicensed operators in order to help prevent problem gambling. Nevertheless, the court dismissed the notion that Quebec was actually suffering from a “pathological gambling problem” in the first place.
Its arguments were further undermined after the court pointed out that Loto-Quebec had failed to maintain the responsible gambling measures that it had put in place following the launch of Espacejeux, stating that they had “crumbled over time”. This includes reducing the scope of expenditure and personal time limits initially introduced, ultimately making Quebec’s site no safer for vulnerable players than other international site.
The Superior Court also dismissed Loto-Quebec’s claim of serving the public interest, basically calling it a money grab all along. Furthermore, the power of censorship, including the blocking of websites, is a federal issue governed by the country’s Telecommunications Act, placing Loto-Quebec’s move on even shakier ground. Dismissing its argument, the court subsequently explained:
“The Tribunal, after analyzing the pith and substance of the Provincial Provision, concludes that the association of this provision with consumer protection is only superficial. The essence of the impugned provisions is to enforce the exclusive right of the province to exploit online gambling by imposing an obligation on ISPs to block signals or data from content providers that the province considers illegal. These powers fall under federal jurisdiction.”
Canada’s online gambling market presents a lucrative draw for international operators, and in 2017 generated CAD$17.3 billion (US13.11bn) in revenue, with unlicensed online gambling firms taking a huge slice of the pie. This includes sites such as PokerStars, 888 Poker and PartyPoker who all decided to stay on in the market despite the pressure being placed on them by Quebec’s local regulator.
The ruling would seem to indicate that they now have little to be concerned about regarding any potential risk of prosecution, whilst other companies who had previously pulled out over the uncertain online gambling landscape, such as Ladbrokes, should be free to safely return. Moreover, the precedent naturally has important implications for all of Canada’s ten provinces.