Canada needs to legalize single game sports betting now

Now that the United States has licensed and regulated sports betting nationwide, it is time for Canada to allow single game sports betting as well.

Until 1985 the only legal forms of gambling in Canada were horse racing, bingo and some charitable gambling. In 1969 the criminal code was amended to allow for lotteries as well, spurred on by a desire by the federal government to raise money for the 1976 Montreal Olympics. And in 1985, the law was amended once more allowing provinces as well as religious and charitable organizations to raise money by way of a "lottery scheme." The term lottery scheme is defined in section 207.1 of the criminal code as follows:

Definition of lottery scheme

(4) In this section, lottery scheme means a game or any proposal, scheme, plan, means, device, contrivance or operation described in any of paragraphs 206(1)(a) to (g), whether or not it involves betting, pool selling or a pool system of betting other than

(a) three-card monte, punch board or coin table;
(b) bookmaking, pool selling or the making or recording of bets, including bets made through the agency of a pool or pari-mutuel system, on any race or fight, or on a single sport event or athletic contest; or
(c) for the purposes of paragraphs (1)(b) to (f), a game or proposal, scheme, plan, means, device, contrivance or operation described in any of paragraphs 206(1)(a) to (g) that is operated on or through a computer, video device or slot machine, within the meaning of subsection 198(3), or a dice game.

That amendment led to the creation of land-based casinos in Canada for the first time, video lottery terminals in some provinces and a plethora of new lottery games, including instant win tickets, inter-provincial lotteries, such as Lotto 6/49 and Lotto Max, and a new sports lottery called Sport Select in English Canada or Pari sportif in Quebec. The earliest Sport Select lottery was called Pro-Line in most of Canada and Sports Action in British Columbia. Pro-Line requires bettors to wager on a minimum of three games indicated by a single game sports betting  Canadahome team win, away team win or tie as defined by the game (e.g. a win of 3 points or less in football is deemed a tie as is a win of 5 points or less in basketball). A tie in hockey requires a game to go to a shootout and there are no ties in baseball.  The lines for the games are quite poor and a toss up game in baseball has a line of 1.70 or -140 for each team. Using a 3-team parlay, the hold is almost 40%, similar to a standard lottery and the odds decrease with every additional team added to the parlay. The requirement of 3 teams or more stems from the Criminal Code law listed above which states that a single game sport event or athletic contest is illegal. In later years parlays on over/under and point spreads along with a betting pool on the days games were added to Sport Select.

Sport Select has had some success although it never met the revenue expectations that governments thought it would, mostly due to the poor odds, the ban on single game betting and most importantly, the opening of offshore sportsbooks who are willing to take Canadian action and offer Las Vegas style odds, high limits the ability to bet on single game and events such as heavyweight boxing matches. London England based Bowman’s International (eventually sold to Bet365 for Canadian customers) was arguably the first company to take offshore Canadian action although several sportsbooks including World Wide Telesports (whose Canadian action was also later sold to Bet365), SDB Global and Intertops followed suit. And when the Internet became viable the number of options for Canadians grew exponentially.

It thus made little sense for serious sports bettors to wager on Sport Select for profit and that lottery has become an outlet for casual gamblers almost exclusively. It is estimated that provinces only garner about $500 million in revenue from the sports lottery products (a figure that has been fairly consistent over the years) and the profits have been less than $100 million after salaries, advertising and overhead have been taken out. On the other hand, the amount bet offshore and with illegal bookmakers in Canada has been estimated at about $14 billion.

Failed attempt to change the sports betting law

For this reason, Joe Comartin, a Member of Parliament for the New Democrat Party in Windsor-Tecumseh, put forth a private members bill in 2011 to amend the criminal code by removing 207.1 (4) (b) which would allow for single game sports betting. Along with Comartin's personal convictions on the issue, Casino Windsor as well as the Canadian Gaming Association believed that the enactment of single game sports betting would convince Canadians not to bet offshore or with illegal bookmakers and also to entice Americans to come north to wager on their favorite sporting events. They knew that Americans from places like Detroit, Buffalo and Seattle would happily drive the short distance to wager on sporting events at casinos in Windsor, Niagara Falls, Ontario or Vancouver rather than having to fly to Las Vegas to bet on sports provided Americans could bet on a single game at fair odds. They also estimated that on weekends and for major sporting events, Americans in the northern states would flock to Canada to wager on games like the Super Bowl or New Year’s Day bowl games.

Although Comartin was hopeful, the general expectation was that the bill would likely never get much notice, since private members bills are generally ignored, but to the shock of many, Comartin’s bill was not only heard but passed in the House with all party support. It thus only had to be rubber stamped by the unelected Canadian Senate to become law and up to that point the Senate never vetoed a bill that was passed unanimously in the House. But in this case, the Senate refused to sign it and stalled the bill. There were several reasons the bill did not pass.

First, the Senate argued that the bill only passed in the House on a voice call rather than actually being discussed and voted on formally, which the majority of the Senate said they were uncomfortable with. Second, the NHL, led by many alumni, asked the Senate not to pass it as they were worried single game betting would affect the integrity of the game. Third, Quebec City was looking to get a new hockey team and those that were bidding for that team were concerned that a positive vote for single game sports betting would hurt their chances. (While that seems far-fetched it is notable that when the Toronto Raptors and Vancouver Grizzlies were bidding for an NBA team, the league only agreed to allow the teams if NBA games were removed from the Sport Select tickets. That dilemma was solved when the teams agreed to pay the provincial governments what was deemed the likely revenue that would have been generated from NBA wagering on Pro-Line).  And lastly the Senate was going through a credibility crisis after several incidents plagued with corruption and incompetence were brought to light and there were calls by some political parties and many in the media to have the Senate elected or abolished. Consequently, some in the Senate believed by stalling this bill they would gain some political clout by appearing to be relevant and winning over those in the public who dislike gambling. It worked and the bill was never brought to the House before the next election when the Liberal government took power from the Conservatives. The bill was brought back for a vote after Brian Masse, an M.P. in Windsor West asked the bill to be heard again, but the House officially killed the bill.

"We are about to be left behind . . ."

Things changed dramatically in 2018 when the U.S. Supreme Court repealed PASPA (the law that prohibited wagering on sports in the United States). That decision has led to New Jersey, Delaware, Rhode Island, Mississippi, West Virginia, Pennsylvania, Iowa, Indiana and Arkansas to pass bills allowing for legal sports betting. New York also had passed a sports betting bill previously when it approved fantasy sports, but until recently they never indicated how or where it would be offered. That question was partially answered when the state agreed to allow the Seneca Indians to offer sports betting at the casinos in Western New York as a pilot. And it is pretty much accepted that other states, including Michigan, will offer sports betting soon. As a result, the provinces and casinos are no longer asking for the ability to offer single game sports betting to get a big draw from U.S. states, but rather to keep Canadian money home.

"We are about to be left behind," Paul Burns, President and CEO, Canadian Gaming Association told me. "Border states in the U.S. will soon begin to take business away and threatening jobs in Canadian communities, and we continue to sit on the sidelines. We know that Canadians enjoy single-event sports betting because they are wagering approximately $14 billion annually through illegal channels. We are asking the government to bring about the changes required to realize the full economic potential of single-event sports wagering in Canada. The Canadian gaming industry has world-renowned programs for responsible gaming and some of the best regulatory oversight in existence, and we can’t afford to ignore the issue and continue with laws that are outdated, non-competitive and afford no consumer protection. Now is the time for change."

Brian Masse has been adamant that the law must be passed now, and he blamed Justin Trudeau for the fact it had not become a law earlier. He said that Trudeau's Sunny Ways that he promoted in the 2015 election never occurred in Windsor that thousands of jobs were left on the table. He claims that the competitive advantage which would have occurred if the Liberal government simply passed the bill when it was brought up for vote in 2016, before the U.S. government repealed PASPA, is gone. Now the bill must be passed to convince Ontarians to stay at home to gamble rather than crossing the border and betting on sports in Detroit or Buffalo once New York expands their offerings and Michigan starts offering sports betting.

Barriers to change the gambling laws are gone

Canadian sports betting lawsFortunately for Masse and Canadians there are a few reasons to be optimistic that the bill will pass. First and foremost, the U.S. decision to repeal PASPA makes it much easier for the government to justify amending the law, since Canada will not be trying to outdo the U.S. but rather just keep up with them. Second, the leagues have all come on board with sports betting (save for the NCAA), so it would be hard for the NHL to protest single game sports betting in Canada when they have condoned it and are profiting off it stateside. Third, the NHL allowed a team to operate in Las Vegas, so a sports betting law would not affect the chance of another team in Quebec or other parts of Canada. Fourth, the Liberals only have a minority government and must work with the Conservatives and NDP to pass legislation and both those parties were supportive of single game sports betting in the past. Consequently, it could be political suicide to take a stand on this issue and be the outlier. And lastly the Senate has a new look and the scandals are history. Consequently, the majority of Senators will almost certainly just rubber stamp a decision in the House if they agree to amend the criminal code. In fact, it may be prudent and get public support for them if the Senate were to take the initiative to amend the criminal code and strike out 207.1 (4) (b) just as they did the words "dice games" from 207 (4) (c) to allow Casino Windsor to offer craps.

 In 1999 the Senate took out ads in the newspapers and radio stations to tell the public that the reasoning for disallowing dice games under the criminal code stemmed back to the pre-confederation days when the British Army was concerned that soldiers were spending too much time rolling dice than fighting wars and thus passed a law banning it. That law was brought forth into Canadian law after confederation. The Senate argued the law was antiquated and meaningless in this day and age and hence it only made logical sense to strike it to help Canadian casinos compete with their American counterparts. It seems logical that they can use the exact same argument now to justify striking out the clause which prohibits single game sports betting.

So, Canada is now at a crossroads. They likely never expected the U.S. Supreme Court to repeal PASPA and they likely never envisioned a day when sports leagues would welcome betting on their sports. But indeed, those things have happened, and Canada must move forward with single game sports betting now, not just to get people to stop gambling offshore, but also to stop Canadians from crossing the border to wager on sports. It's no longer a wish but rather a must. The future of Canadian casinos may rely on it.

Read insights from Hartley Henderson every week here at OSGA and check out Hartley's RUMOR MILL!

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