A sports betting bill that seeks to change a section of the Criminal Code in Canada is up for review in the Justice Committee at the end of the month. We checked in with Canadian gaming legal expert Chantal Cipriano to talk about Bill C-218 and the future of Canadian sports betting.
Chantal Cipriano is the Senior Director of Legal & Compliance with Mazooma, a fintech company that provides bank-verified payment processing to gaming operators in regulated U.S. markets. Previously, Chantal worked as a lawyer in the Toronto office of Dickinson Wright, where she provided legal advice to clients involved in the land based and online gambling industry. Chantal can be found on LinkedIn.
What are the biggest similarities and differences that you see between the repeal of the
Professional and Amateur Sports Protection Act (PASPA) and the amendment to, or repeal
of Section 207(4)(b) of the Criminal Code of Canada?
Cipriano. The repeal of PASPA was arguably the biggest gaming industry story in 2018. It allowed the respective states to open their doors to the proliferation of sports betting and sportsbooks looking to enter their states. While there are still states that have no intention of regulating single-event sports betting today, it cannot be refuted that PASPA reformed the American sports betting landscape, giving it the ability to level the playing field with jurisdictions around the globe that legalized single-event sports betting many years ago.
Aside from the competitive, private operator model for iGaming that is set to roll out in Ontario which is also a major initiative, similarly, the potential legalization of single-event sports betting in Canada is the largest gaming development to hit the newsstands. It will revolutionize countless facets of the gaming industry in Canada – in person sporting events, online gaming, mobile gaming, tv, and so much more.
In this regard, a key difference between the U.S. and Canada is that many states allow a private operator model wherein sportsbooks are able to obtain a license from the respective gaming commission in the state and offer their sports betting product to consumers. The government monopoly over gaming is not as prominent in the U.S.
In Canada, gaming and betting is conducted and managed by the provinces. Accordingly, even if the Criminal Code of Canada is amended to contemplate single-event sports betting, the provinces are within their right to offer such products by way of a government only platform. Ontario has made the move to offer a competitive and open private operator model, whereby if legalized, consumers will be able to place bets on sporting events with their favorite licensed sportsbooks.
The issue that remains: even if Canada legalizes single-event sports betting at the federal level, certain provinces that solely offer a government run platform may struggle in competing with bookmakers that have brand loyalty and offer a superior customer experience.
Is Bill C-13 primed to pass this year? Why haven’t efforts in the past been fruitful?
Cipriano. As part of the potential legalization of single-event sports betting in Canada, two bills were on the table: a private members’ bill known as Bill C-218, which received government support and resulted in an additional government bill known as Bill C-13.
The two tandem bills that attempted to move this initiative forward posed a procedural hurdle. As such, Bill C-13 is now obsolete, while Bill C-218 received a rare display of approval and has moved forward to the Justice Committee. Hearing dates related to the matter were held at the end of February 2021, early March 2021 and will be held again at the end of March 2021.
The Justice Committee intends to begin a clause-by-clause review by the end of March 2021. As private members’ bills generally take longer than governments bills to move through the Senate, the timing may be not as expeditious as many would have hoped.
Past efforts relating to the previous two private members bills, Bill C-290 in 2012, and Bill C-221 in 2016, were not supported by the government, politicians, and sports leagues. For example, during the time of Bill C-290, the then President of the Toronto Blue Jays delivered a detrimental report to the Senate against a regulated sports betting market. This seriously hindered the ability of Members of Parliament to move the dial forward.
To exacerbate the matter, gambling has simply never been a priority in Canada, resulting in the bills receiving little attention, even though from a financial standpoint, legalization could have prompted an incredible source of revenue for the provinces, and an opportunity for the country to be viewed as a leader in the gaming space and the booming industries related to it, such as fintech.
Which sportsbooks are Canadian sports bettors expected to see?
Cipriano. I cannot comment on which sportsbooks may enter the market if legislation is passed. This will not only be based on desire to enter the market, but also on operators overcoming regulatory hurdles. However, I am confident that consumers will have access to the well-known industry players, as well as start-ups that have created innovative sports wagering related offerings.
Which sports are Canadians expected to bet on?
Cipriano. In June 2020, the commissioners of the five professional sports’ leagues operating in Canada being the National Basketball Association, the National Hockey League, Major League Baseball, Major League Soccer, and the Canadian Football League, sent a statement to Prime Minister Justin Trudeau, former Finance Minister Bill Morneau and Attorney General of Canada and Justice Minister David Lametti. The statement indicated support and urged prompt action of an amendment to the Criminal Code of Canada that would authorize provinces to offer betting on single sporting events.
Based on this statement by the leagues, we can expect Canadian sports fans to be able to engage in basketball, hockey, baseball, soccer and football, in a new and exciting way through single-event sports betting.
How profitable can the single-event sports betting market be for Canada? Will it match the
Cipriano. A recent study by Deloitte suggests that within five years of legalization, sports betting in Canada could grow from CAD$500 million to nearly CAD$28 billion in legal market wagering. According to Deloitte, at that rate, “the sector would grow to be nearly seven times the size of the country’s existing spectator sports market in just five years.”
VIXIO Gambling Compliance suggests that the U.S. market will be worth USD$3.2 billion in 2021 and between USD$6.3 billion and USD$8.4 billion by 2024, “considering market confidence coming from major U.S. sports and a projection of 45 states having legalized sports betting by 2024.” In addition, a recent report by JP Morgan suggests that the U.S. sports betting market could hit USD$9.2 billion by 2025.
Only time will tell whether Canada will surpass the U.S. in revenue, but one step at a time –first, Canada has to make this minor in form, yet major in substance, change to its Criminal Code.
This is provided for informational purposes only and is not legal advice. Please consult with a lawyer/attorney if you need legal advice related to sports wagering.
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