Contributed By Dickinson Wright LLP
The following types of gaming are permitted:
Certain gambling products are entirely prohibited, and may not be provided by anyone, even the provincial governments. These include:
The Code regulates gaming and betting by stating which activities are prohibited by criminal law and which are permissible.
Lottery schemes that may be conducted and managed by a provincial government and/or a charitable/religious organisation under licence from that provincial government are regulated by each such province’s gaming statute, regulations and policy statements. Each province empowers an agency to act as the gaming regulator, and a separate provincial government-controlled corporation to conduct and manage gaming on the government’s behalf. The sole exception is the province of Alberta which merges those functions into a single government agency.
Pari-mutuel horse race betting is regulated by the federal Pari-Mutuel Betting Supervision Regulations enacted under the Code and enforced by the Canadian Pari-Mutuel Agency.
Sections 201, 202, 206 and 207 of the Code contain provisions that prohibit all forms of gaming and betting, save for the exceptions noted 1.1 Types of Permitted Gaming.
The federal prohibitions on gaming and betting are enforced by provincial law enforcement authorities.
In addition to the Code, the provincial gaming regulatory statutes of Manitoba, British Columbia and Alberta contain provisions which could conceivably be applied to prohibit gaming activities which are not regulated by the provincial governments: see S. 80(1) and 101 of the Liquor and Gaming Control Act (Manitoba), S. 88 of the Gaming Control Act (British Columbia)and S. 36 of the Gaming and Liquor Act (Alberta). However, we are not aware of any reported cases in which prosecutions have been brought under these provisions.
The application of the gaming prohibitions in the Code is also subject to the interpretive authority of the courts. For example, while “gambling” is not defined in the Code, it is clear from many reported cases that the terms gambling and gaming are synonymous (R. v Gardiner,  2 W.W.R. 728, 2 C.C.C. (2d) 463, paragraph 9).
"Game" is defined in the Code as a "game of chance or mixed chance and skill." The Supreme Court of Canada has read in additional elements of what is considered a game for the purpose of the gaming and betting provisions of the Code.
With respect to whether a game has taken place, according to the common law: "it is not sufficient for the prosecution to prove only the elements required by the plain and literal meaning…[of ‘game’]…the prosecution must also prove that the participants in the game or operators of the game have a chance of both (i) winning and (ii) losing money or money’s worth by (iii) participating in a game of chance or mixed chance and skill." (R. v. Irwin, (1982), 1 C.C.C. (3d) 212 (Ont. C.A.), p. 225, cited with approval in Di Pietro et al. v. The Queen,  1 S.C.R. 250, paragraph 8).
In other words, for a game to be a game for the purposes of the Code, it must contain the following three elements:
Only when all three of the above elements are present and satisfied will a game fall within the provisions of the Code and be classified as gaming.
As noted in 1.1 Types of Permitted Gaming, a game of skill is not prohibited by the gaming and betting provisions of the Code. At the same time, one particular prohibition in the Code that was initially enacted to combat pyramid schemes (subsection 206(1)(e)) has been interpreted by the Supreme Court of Canada to be applicable to any "scheme, contrivance or operation," even where winners are determined by the application of skill (Roe v. The King and R. v. Dream Home Contests (Edmonton) Ltd). However, to interpret subsection 206(1)(e) of the Code so broadly as to cover games of skill alone would introduce an internal inconsistency into Part VII of the Code as between the common gaming house provisions of the Code and subsection 206(1)(e). The rules of statutory construction require that a line be drawn between the skill-based "schemes, contrivances or operations" prohibited by subsection 206(1)(e) and the games of skill explicitly permitted by other provisions of the Code.
Roe v. The King and R. v. Dream Home Contests (Edmonton) Ltd dealt with situations involving betting, not gaming (see the definition of betting from the decision in R. v. Lebansky, below). Participants in those schemes were not paying money "for the right or privilege of participating in any event, in the hope of winning a prize." In both schemes, participants were paying money to back their forecasts of an event of a doubtful issue; in the first case, of the amount of time it would take a barrel to travel a distance down a river, in the second, of the value of a house and its contents. This is the usual form of betting: stakes put forward on the outcome of an event between non-participants in that event.
From this we conclude that subsection 206(1)(e) of the Code can apply to "schemes, contrivances or operations" that are akin to betting. However, subsection 206(1)(e) cannot be interpreted so as to render unlawful activities that relate to the playing of games of skill alone.
In Ontario, the Alcohol and Gaming Commission of Ontario (the AGCO) has implemented Gaming Related Supplier Standards (the Standards). Under the Gaming Control Act, (the Act) and Regulation 78/12, the Registrar is authorised to establish risk-based standards to regulate the gaming sector in Ontario. The objective of the standards based model is to shift the focus from prescriptive rules and processes, towards broader regulatory outcomes or objectives expected to be achieved. In most cases, the Standards are general, with the aim being to offer great flexibility for regulated entities to determine the most efficient way of meeting the outcomes required, which in turn helps reduce the regulatory burden while supporting market innovation. The risk-based standard allows the AGCO to focus its resources on high-risk companies or individuals seeking registration.
The Ontario government, through the Ontario Lottery and Gaming Corporation (the OLG), conducts and manages all commercial casino gambling in Ontario. The OLG does not require a licence to conduct and manage a lottery scheme in Ontario. Private sector entities and individuals require licensing or registration in order to do business with the OLG.
A charitable or religious organisation may obtain a licence to conduct and manage a lottery scheme in Ontario, provided that the proceeds from the lottery scheme are used for a charitable or religious object or purpose. The recognised common law categories of charitable purpose are:
Accordingly, there is a clear distinction between how the OLG may use the proceeds of gaming and how a charitable organisation may use such proceeds. The provincial government may treat the OLG’s proceeds of gaming as general government revenue that may be applied to whatever ends the government sees fit. Proceeds from licensed charitable gaming must be used for a charitable or religious object or purpose, and charitable organisations are subject to audit by the AGCO to ensure that such proceeds are put to their lawful use.
In order to supply goods and services to the OLG or to a charitable or religious organisation licensed by the Ontario government to conduct gaming, a supplier registration must first be obtained from the AGCO. The five broad categories of suppliers that are required to be registered in accordance with the Gaming Control Act, 1992 (the Act) are:
The first step in applying for a gaming licence is to complete an application for registration in the form required by the AGCO. Operators, gaming related suppliers and non-gaming related suppliers complete the Registration as an Operator or Supplier, Enterprise Disclosure Form and Personal Disclosure Form. The applicant corporation, its parent company, and corporate shareholders holding 5% or more of the shares must all complete the Enterprise Disclosure Form. Partners, officers, directors and principal employees of the applicant and parent company, along with shareholders holding 5% or more of the shares must complete the Personal Disclosure Form.
The Registration as a Trade Union Form must be completed by trade unions to represent individual gaming assistants registered by the AGCO. Various individuals who perform certain functions as part of a trade union must also complete a Personal Disclosure Form and Trade Union Addendum to the Personal Disclosure Form.
All applicants are required to sign a waiver consenting to the collection of personal information, in order to verify the veracity and accuracy of information provided. Application forms must also include the applicable registration fee. Registration fees are paid annually and are non-refundable. They cover the AGCO’s costs in processing applications and conducting background checks. In circumstances where the activities, business structure or broad geographic location of the applicant will result in costs exceeding that of the application fee, the Registrar will add another levy to cover the costs.
A risk-based approach to reviewing applications for registration has been implemented with the AGCO. The purpose of the approach is to allow the AGCO to process lower risk applications much faster, which ultimately streamlines the application and investigation process. Investigative resources will be allocated to applications that present a higher level of risk of the integrity of the gaming industry.
The AGCO undertakes a two-step process for evaluating applications. The first step involves a risk assessment intended to establish eligibility for registration and whether a more thorough investigation is required to be carried out. Applicants that are lower risk will normally not require an interview with an investigator and will be approved for registration. An individual may be considered lower risk depending on their job function, such as a maintenance employee. Higher risk applicants may require an interview. A business may be considered high risk if it has a track record of non-compliance with legislation or has regulatory sanctions. Gaming site operators and gaming related suppliers are considered higher risk than non-gaming related suppliers, by virtue of their role in the gaming industry.
Applications for the registration of gaming assistants are evaluated on the following five criteria:
Applications for the registration of suppliers are evaluated on the following five criteria:
See 3.2 Applying for a Gaming Licence.
There are no limits set in law on the number of registrations that are available to suppliers, nor to the licences to conduct gaming that may be granted to charitable or religious organisations. A registration as an operator is granted to those seeking to operate a casino or slot machine facility in Ontario on behalf of the OLG or a charitable or religious organisation, and while there is no limit to the number of such registrations that may be granted by the AGCO, there are a limited number of casinos or slot machine facilities in Ontario. The number of casinos and slot machine facilities that exist in Ontario will only be increased in association with a formal request for a pre-qualification process initiated by the Government of Ontario.
Under S. 3.8(1) of the Act, the AGCO concerns itself with, amongst other things, the integrity of a lottery scheme, the prevention of unlawful activities, the prohibiting and restricting of certain persons from entering gaming sites or playing lottery schemes, and the protection of players and responsible gaming. Applicants are required to comply with the Standards set by the Registrar of the AGCO concerning such activities.
The Standards provide as follows:
"2.3 Information about the risks of gambling and where to obtain additional information or assistance shall be made readily available to all patrons.
Requirements – At a minimum:
1. Responsible gambling materials and information about obtaining help, including Ontario’s Problem Gambling Help Line, shall be available, visible and accessible to all patrons.
2. Information about setting betting limits, if applicable, shall be made available to all patrons.
3. Information about self-exclusion programs shall be available, visible and accessible to all patrons.
4. Advertising and marketing materials shall, where effective, contain a responsible gambling message.
5. All information related to responsible gambling shall be regularly and periodically reviewed and updated to ensure that it is accurate, up to date and in line with industry good practice.
2.4 Patrons shall be provided with meaningful and accurate information to enable them to make informed choices.
Requirements – At a minimum:
1. Meaningful and accurate information on the rules of play shall be clearly stated and made available to patrons.
2. Meaningful and accurate information on the odds of winning, payout odds or returns to patrons shall be clearly stated and made available to patrons.
3. For games that include progressive awards, Operators shall provide notice to patrons of the disposition of accumulated progressive prizes prior to a progressive game being converted or removed.
2.5 Support shall be provided to persons showing signs of potentially problematic gambling behavior.
Requirements – At a minimum:
1. All employees who interact with players shall receive training in a Registrar-approved program designed to identify and respond appropriately to players who may be showing signs of problem gambling.
2. Players shall be provided with easily accessible contact information of at least one organization dedicated to treating and assisting problem gamblers.
3. OLG shall develop and enforce responsible gambling policies, procedures and training, ensure they are available, kept up to date and relevant, and that the Operator complies with them.
4. Responsible gambling policies shall be reviewed periodically for effectiveness.
2.6 OLG shall provide a common voluntary self-exclusion program.
Requirements – At a minimum:
1. At the time of signing up for self-exclusion, individuals shall have the option to be excluded from any or all gaming sectors (e.g. Casino, cGaming).
2. Despite requirement 1, if a player self-excludes from a Casino, the player is not eligible to gamble on OLG’s iGaming site for the duration of the self-exclusion period.
3. Individuals shall have the option to sign up for the self-exclusion program at gaming sites or at an off-site location.
4. Self-exclusions shall have a term of at least six months.
5. Operators shall take active steps to identify, and if required, remove self-excluded persons when they are found to be in breach of their self-exclusion agreement.
Guidance: OLG’s self-exclusion program may be executed in each of the gaming sectors using different processes and technologies to reflect the distinct operational circumstances of that sector, however, the long term expectation is that OLG will be able to identify, track and prohibit access to self-excluded persons in and between the various gaming sectors.
2.7 Individuals who have decided to voluntarily self-exclude shall be removed from mailing lists and shall not receive incentives or promotions for any products and services during the period of self-exclusion.
2.8 Game designs and features shall be clear and shall not mislead the player.
Requirements – At a minimum:
1. Where a game simulates a physical device, the theoretical probabilities and visual representation of the game shall correspond to the features and actions of the physical device, unless otherwise disclosed to the player.
2. Game design shall not give the player the perception that speed of play or skill affects the outcome of the game when it does not.
3. After the selection of game outcome, the game shall not make a variable secondary decision which affects the result shown to the player. If the outcome is chosen that the game will lose then the game shall not substitute a particular type of loss to show to the player (i.e. near miss).
4. Where the game requires a pre-determined pattern (for example, hidden prizes on a map), the locations of the winning spots shall not change during play, except as provided for in the rules of play.
5. Games shall not display amounts or symbols that are unachievable.
6. Games shall not contain intentionally programmed subliminal messaging.
7. Where games involve reels:
a. For single line games, jackpot symbols shall not appear in their entirety more than 12 times on average, adjacent to the pay-line, for every time they appear on the pay-line;
b. For multi-line games, jackpot symbols shall not appear in their entirety more than 12 times, on average, not on any pay-line, for every time they appear on any pay-line.
8. Free-to-play games shall not misrepresent or mislead players as to the likelihood of winning or prize distribution of similar games played for money.
9. The denomination of each credit shall be clearly displayed on game screens.
2.9 Free-to-play games shall provide the same responsible gambling and player protection information as games played for money.
2.10 Only eligible individuals are permitted to play free-to-play games.
2.11 Games shall not encourage players to chase their losses, or increase the amount they have decided to gamble, or continue to gamble after they have indicated that they want to stop.
2.12 Players shall have the means to track the passage of time.
2.13 Games that are located in gaming sites that are not age-restricted shall not appeal primarily to, nor be associated with, underage individuals."
There are two categories of registration for employees of commercial casinos, OLG casinos and slot machine facilities, namely:
In Ontario, a category 1 gaming assistant is defined under Regulation O. Reg. 78/12, Section 1 as: “an individual who is employed in the conduct, management, or operation of a lottery scheme or in the operation of a gaming site and who, in the opinion of the Registrar, exercises a significant level of decision-making authority or has significant supervisory or training responsibilities with respect to the lottery scheme or site.”
A category 2 gaming assistant is defined by the same regulation as: “an individual who is employed in the conduct, management or operation of a lottery scheme or in the operation of a gaming site and who, in the opinion of the Registrar, does not exercise a significant level of decision making authority or have significant supervisory or training responsibilities with respect to the lottery scheme or site.”
The first step in applying for registration is the completion of an application form. To qualify for registration, the applicant must be over 18 years of age and must hold a conditional offer of employment from the OLG, a registered supplier or a supplier that has applied for registration. The application form includes questions relating to past conduct, criminal record, employment history for the preceding ten years, unsuitable associations, financial responsibility, civil litigation history, gaming licence history and regulatory infractions.
Various restrictions may be placed upon each type of licensee, depending on the terms and conditions set out by the Regulator when granting a licence. Each licence and company will be subject to different restrictions, depending on the requests of the Regulator.
Common terms and conditions include the type of business a registrant may carry on, ongoing fees associated with the registrant, notice of change in address of the registrant, changes in officers and directors, continuous disclosure obligations, etc.
The applicable provincial regulator will determine the appropriate term for each type of gaming licence. In Ontario, a gaming-related supplier registration or a non-gaming related supplier registration is valid for a period of four years.
In addition to the term, the regulator will determine whether the registration is approved without terms and conditions or whether registration is approved with terms and conditions.
Effective 1 July 2011 the License Appeal Tribunal, established under the License Appeal Tribunal Act, hears appeals of proposed orders of the Registrar of the AGCO refusing, suspending or revoking registration under the Act.
See 1.1 Types of Permitted Gaming.
Rules of games played in gaming venues in Ontario must be approved by the AGCO. “Rules of play, including any subsequent modifications, shall be submitted to the Registrar [of the AGCO] for approval.”
Hours of operation of an OLG casino or slot facility are established by the OLG and the registered operator of the casino, subject to the approval of the AGCO. Hours of operation of a gaming venue conducted and managed by a charitable organisation are established by that organisation and its registered operator, also subject to the approval of the AGCO. In practice, most casinos are open 24 hours a day, seven days a week.
The Standards set out the following concerning the physical requirements of land-based gaming in Ontario:
"5.1 Operators shall have available for review by the AGCO floor plans and documentation showing that the premises complies with all applicable laws including:
a. Zoning by-laws respecting the use of the premises
b. Building Code Act
c. Fire Protection and Prevention Act(including emergency evacuation plans)
d. Health Protection and Promotion Act
e. Liquor License Act
Requirements – At a minimum:
1. Floor plans shall identify the sensitivity level of each area of the premises including:
a. Areas within the premises at which lottery schemes are offered, showing the current inventory and location of games;
b. Financial control areas;
c. Areas containing sensitive inventories.
2. Floor plans or other documentation shall identify areas where a dual authorization access system or two factor access system is appropriate, given the sensitivity level of the area.
3. Floor plans or other documentation shall include the maximum capacity approved for the gaming site.
5.2 Only authorized individuals shall be permitted access to sensitive areas.
Requirements – At a minimum, Operators shall:
1. Adopt a dual authorization or two factor access system for those sensitive areas of the premises or sensitive parts of gaming supplies identified by the Operator.
Guidance: There may be various levels of sensitivity in a gaming site. Dual authorization access will be appropriate for the highest risk areas, such as playing card vaults and cash count rooms, where strict controls are necessary to secure the gaming site and/or safeguard gaming integrity or assets. Two factor access, on the other hand, may be appropriate for other types of sensitive areas or equipment. Each gaming site is unique and should define its sensitive areas as it deems appropriate. The Registrar, however, retains the authority to direct an Operator to adopt a certain form of access authorization for a certain area or equipment, as deemed necessary.
5.3 Individuals suspected of, or engaged in, creating a disturbance that could be harmful to the individual, to the public or to gaming-related assets shall be removed from the premises, and the occurrence shall be reported in accordance with the established notification matrix.
5.4 A policy and process shall be in place to provide individuals with security escorts to and from vehicles, where it is requested.
5.5 Areas under the control of the Operator shall be monitored for the presence of unattended children. All occurrences of unattended children shall be addressed and reported in accordance with the established notification matrix.
5.6 There shall be site emergency procedures to protect the public from personal harm and limit the damage to or loss of gaming-related assets
Requirements – At a minimum:
1. Employees or persons retained by the Operator shall be competent in implementing site emergency procedures.
5.7 Security and surveillance shall be in place to protect the public and gaming-related assets and to record transactions.
Requirements – At a minimum:
1. Floor plans must show surveillance equipment positioning for each area including:
a. location(s) of the lottery schemes (including the camera coverage for each);
b. areas containing cash or cash equivalents such as cages, count rooms, armoured car pickups and deliveries;
c. areas containing sensitive inventories;
d. all entrances and exits (points of egress).
Guidance: The intent of Requirement 1(d) is to ensure that all points of access, which directly or indirectly lead to the gaming floor or sensitive areas at a minimum have camera coverage or an alarm, which is actively monitored for unauthorized access.
2. Surveillance plans must include activities that address the following:
a. camera coverage and control systems for all lottery schemes;
b. secure movement of cash, cash equivalents and sensitive inventories within the gaming site;
c. interventions related to persons suspected of conducting illegal activities at the gaming site.
3. Any interruption of monitoring activities shall be immediately reported in accordance with the established notification matrix.
4. Continuous independent monitoring must be provided even if the premises is closed to the public.
5. Video/digital recordings shall be made and retained for a minimum period as specified by the Registrar.
6. Destruction of sensitive inventories, whether performed on the premises or at another site, shall be conducted under the supervision of security personnel and verified independently by staff from another department.
5.8 There shall be timely and accurate maintenance of gaming-related financial transactions, accounting information and data.
5.9 Lottery schemes shall be played only within designated areas of the premises."
Federal Restrictions: Advertising & Marketing under the Criminal Code
The only provision of the Code that refers to advertising of games of chance as determined by the case law is ss. 206(1)(a). If a game contains any element of skill, it is not subject to this provision. This provision would accordingly apply to casino games that contain no element of skill, such as roulette or slots, but not to games that involve skill as well as chance, such as poker, blackjack or sports betting. The advertisement of foreign lotteries is specifically included in this prohibition by virtue of ss. 206(7) of the Code.
With regard to games of mixed chance and skill such as poker, there is in our view no provision of the Code which criminalises the marketing and advertising of such games. This may well be an unintended loophole in Part VII, but it cannot be cured short of Parliament amending the Code.
Some have argued that ss. 202(1)(f), (g) and (i) of the Code can be interpreted so as to apply to advertising, but we do not agree. A penal statute must be strictly interpreted by the court, with any uncertainty being decided in favour of the accused, and the court cannot supply words by implication. Parliament has never seen fit to amend ss. 206(1)(a) of the Code to prohibit the advertising of games of mixed chance and skill, despite the passage of over 60 years since the Supreme Court of Canada in its decision in R. v. Roeheld that this provision applied only to games of pure chance. Viewed in the context of the strict interpretation of penal statutes, the canons of interpretation would not appear to allow the courts to perform the task abdicated by Parliament by way of a liberal interpretation of S. 202(1)(f), (g) and (i) of the Code.
Subsections 202(1)(f) and (i) of the Code lack any explicit reference to either advertising or to the outlawing of information used to promote betting and/or gaming. A court should be compelled to assign some meaning to the absence of language forbidding advertising or promotional activities in ss. 202(1)(f), and (i) of the Code. Subsection 202(1)(g) does use the word promote; however, it is restricted to situations where information or writing that promotes or is of use in sports betting is imported or brought into Canada. The act of exporting that same material is not criminalised; as well, advertising and marketing material that originates in Canada does not offend against this provision.
The activities of an offshore remote gambling advertiser would likely be held to be subject to Canadian criminal jurisdiction where it knowingly acts within the Canadian market in advertising games of chance. This is the case regardless of whether the marketing, advertising and active selling communications are by way of:
In practice, almost all radio and television broadcast advertising of online gaming in Canada, including for games of mixed skill and chance such as poker, is restricted to ‘freeroll’ websites. Such advertising is accepted as lawful by the ThinkTV, the body responsible for pre-approving the content of nearly all television advertisements in Canada. ThinkTV does not allow advertisements for real money games of chance or mixed chance and skill.
The only provision of the Code that refers explicitly to advertising of sports betting is s. 202(1)(h). This provision prohibits advertising, printing, publishing, exhibiting or otherwise giving notice of any offer, invitation or inducement to bet on, guess or foretell the result of a contest or the result of a contingency relating to any contest.
Provincial Restrictions: Advertising and Marketing of Licensed Gaming
Provided that a gaming operation is authorised by a provincial government (eg conducted and managed by a provincial government [eg the OLG] or by a charitable or religious organisation licensed by a provincial government), there are no limitations in the Code with respect to how it may be advertised. However, advertising and marketing materials of authorised gambling providers in Ontario must comply with the AGCO’s Registrar’s Standards for Gaming.
Specifically, advertising and marketing materials and communications shall not target underage or self-excluded persons to participate in lottery schemes and shall not include underage individuals. At a minimum, materials and communications shall not:
Further, according to the Standards, advertising and marketing materials and communications shall not be misleading. At a minimum, materials and communications shall not:
Advertising and Marketing and the Consumer Protection Act
The Province of Ontario has enacted a consumer protection law specifically directed at advertising for online gambling that is not authorised by the provincial government. Section 13.1 of the Consumer Protection Act (Ontario) (the CPA) purports to ban the advertisement of internet gaming sites. Section 13.1 of the CPA applies to advertisements that either originate in Ontario or are primarily targeted at residents of Ontario.
The offence created by s. 13.1 of the CPA states that “no person shall advertise an internet gaming site that is operated contrary” to the Code. If the site is operating contrary to the Code, and any advertisements for the site offering the games either originate in Ontario or are primarily targeted at residents of Ontario, such activity will be subject to prosecution under s. 13.1 of the CPA. A site that is operated by the OLG is not operating contrary to the Code, and any such site may accordingly be advertised in Ontario without contravening this provision.
Canada’s Anti-Spam Legislation – Marketing of Gaming through Electronic Means
In order to comply with Canada’s Anti-Spam Legislation (CASL) you need consent to send any electronic messages that encourages participation in a commercial activity, which is defined widely enough to encompass social gaming. With some noteworthy exceptions, CASL prohibits sending commercial electronic messages (CEMs) such as email, text, instant messages, SMS and messages sent to similar accounts (such as social media platforms) to parties in Canada without consent. It doesn’t matter, if the message is sent from outside of Canada; CASL will apply to any electronic message that is sent to any recipient who resides in Canada, or uses a Canadian internet service provider ("ISP") or uses a computer system located in Canada to access their electronic messages. CASL’s provisions also place restrictions and requirements on altering transmission data in electronic messages and the installation of computer programs.
Under CASL, consent can either be “express” or “implied.” Express consent is preferable as it remains valid until it is revoked by the individual who initially provided the consent. Anyone seeking express consent must clearly state: 1) the purpose or purposes for which the consent is being sought; 2) include the prescribed information identifying the sender and, if applicable, the person sending the request on behalf of the sender; and 3) indicate that the party may unsubscribe at any time. There are specific requirements related to how an individual must indicate their express consent (for example, if a box is to be checked by the individual the box cannot be pre-checked).
Implied consent pertains to the relationship between the sender and the recipient and is only valid for a specific period of time, the length of which is dependent upon the relationship between the sender and the recipient and relative to a specific date. For example, implied consent may exist if there is an existing business relationship between the sender and the recipient, arising from the purchase (or bartering) of a product, good or service between the parties within the past two-year period immediately before the date the CEM was sent; or an inquiry or application between the parties within the past six-month period immediately before the date the CEM was sent.
CASL applies to social media messaging as well. Any marketing endeavour, even on social media, may be considered a CEM if the message encourages participation in a commercial activity and is sent to an electronic address. According to the frequently asked questions (FAQs) provided by the Canadian Radio-Television and Telecommunications Commission (CRTC), a social network account may fall within the category of an electronic address (eg a similar account to email accounts, phone accounts and instant messaging accounts). According to the CRTC, the definition of “electronic address” must be determined on a case-by-case basis, depending upon, for example, how the specific social media platform in question functions and is used. For example, a Facebook wall post would not be captured. However, messages sent to other users using a social media messaging system (eg, Facebook messaging and LinkedIn messaging), would qualify as sending messages to “electronic addresses.”
Practically speaking, CASL has largely put an end to cold emailing to Canadians. If you don’t have consent or fall within one of the exceptions to consent requirements, you may want to consider resorting to snail mail to communicate with your Canadian contacts.
CASL provides for either actual damages or statutory damages of CAD200 per each violation, up to a maximum of CAD1 million per day for individuals and CAD10 million per day for corporate entities. In determining the final amount of statutory damages to award, courts analyse the personal/corporate history of the violator(s), the financial benefit obtained and the nature and scope of the violation(s). Under CASL, any officer, director, agent or mandatary of a corporation who "directed, authorised, assented to, acquiesced in or participated in the commission of" a violation can be personally liable for that violation. This liability can arise regardless of whether the corporation itself is the subject of any CASL proceedings. A person can seek to avoid liability for a violation by showing that it/he/she exercised due diligence to prevent the commission of the violation, among other common law principles. CASL also allows individuals to file private and class action lawsuits to collect CASL related damages.
The issuing of credit must be done in a manner that is consistent with S. 3.8(1) of the Act which aims to, amongst other things, protect players and endorse responsible gaming.
Where casino credit is offered in Ontario, it is done by way of an authorisation to draw a countercheque. A countercheque, which is commonly referred to as a “marker,” is a preprinted instrument signed by the customer and endorsed for deposit only to the casino operator’s bank account. They are typically drawn at gaming tables as well as the casino cage for slot play. Casino credit is interest free and used as a tool for facilitating gaming as players like the option of not having to carry large sums of cash on them.
In Ontario, only the operators of commercial casinos are permitted to issue credit to players, subject to certain regulatory requirements. Section 2.15 of the Standards requires that the operators of commercial casinos “shall ensure that credit services provided to patrons are carried out in a responsible manner.” At a minimum, this means that that “operators shall not extend credit to individuals who display problem gambling behaviour” and “if a player requests a credit limit increase, the operator shall not increase the player’s credit limit until at least 24 hours have passed since the request.”
Procedures must be put in place by licensees to prevent the following individuals from playing at a site, in accordance with S. 3.1(2) of the Standards:
• Employees of registered suppliers who maintain or repair gaming equipment at the site;
• Members or employees of AGCO; and
• Officers, members of the board of directors, or employees of the OLG, unless they are registered as category 2 gaming assistants or otherwise not required to be registered by the AGCO..
Gaming venues in Ontario are regulated by two levels of government: the federal government under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the provincial government under the Act.
Licensees are required to record and report requirements for large and suspicious cash transactions for the purpose of deterring and detecting money laundering and terrorist activity financing, and to facilitate the investigation and prosecution of any related offences.
In addition, effective compliance procedures must be implemented to ensure compliance with all regulatory requirements. Licensees must have their own procedures for complying with such requirements. It is not enough to communicate regulatory requirements – compliance policies must be in writing and clearly identify the applicable procedures and personnel responsible for implementing those procedures. A checks and balance system is necessary. This will ensure that more than one individual or department is responsible for enforcing key regulatory requirements, so there is a reduced risk of regulatory breaches caused from oversight or ineffective monitoring. Details on compliance controls and documentation will be further discussed under 5.3 Internal Controls and Procedures.
Gaming licensees are required to report changes to information provided to the AGCO at the time of licensure-/registration. Each province has different requirements regarding various types of reporting under the applicable gaming legislation, such as reporting corporate changes.
Prior to the opening of a facility, operators are required to submit to the Registrar, internal control procedures governing the handling and movement of money and money equivalents within the facility and the maintenance of timely and accurate accounting information.
Standards re: Land Based Gaming
An operator’s control environment and operating principles form an integral part of the Registrar standards. Operators are required to have appropriate and effective control activities in place. Control activities must be developed based on the regulatory risks identified by the AGCO, taking into account how risks could manifest at their particular gaming site.
While there is no one specific control environment that must be implemented for each company, gaming sites should be cognizant of their specific risk profile and implement policies and procedures to mitigate risk. Control activities must be audited or reviewed for compliance with the Standards.
An operator’s plan must cover, at a minimum, the following: process for developing control activities, including industry standards or good practices; a corporate governance framework; the role of auditors; and the timing for each phase of implementation and final implementation date. Approval from at least two senior level managers is required to override control activities. Any overrides shall be reported to the Board, documented and communicated to the Registrar. Substantial changes to a control environment must be communicated to the Registrar. Information, including logs related to compliance with the law and Standards, and adherence with control activities, must be kept for a minimum of three years. Operators are required to maintain an independent oversight function for compliance with the Standards. Independent oversight may vary depending on factors such as the size of a company, structure and complexity of an organisation. An independent whistle-blower policy must be put in place to allow employees to anonymously report a deficient control environment along with instances of failing to comply with controls, Standards or law.
Operators and gaming related suppliers must exhibit a commitment to character, integrity and high ethical values. To demonstrate such a commitment, operators and gaming related suppliers shall create and abide by a code of conduct which addresses at a minimum, conflicts of interest and transparency in dealings with the Registrar. The code of conduct must be regularly reviewed by an organisation’s senior management, including those with the day to day responsibility of managing the business.
Security management must be put in place including access privileges being granted, modified and revoked based on employment status. Access privileges must be independently reviewed and confirmed on a periodic basis. Data governance must also be put in place to address data processing integrity and the protection of sensitive data. Sensitive data, including player information and data relevant to determining game outcomes shall be secured from authorised access at all times.
All gaming activities and financial transactions must be conducted fairly and honestly, and must be independently verifiable.
Standards re: iGaming
Player information must be collected and saved upon registration, including name, date of birth, address, method of identification, player contact information, and information required by the Proceeds of Crime (Money Laundering) and Terrorist Financing Act which must be filed with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).
All gaming systems must demonstrate security in depth. Any software developments for gaming systems must be developed using industry good practices including software development methodologies being documented, appropriate systems in place to manage software development, and an established audit trail for the review of software coding. Reasonable efforts shall be made to inform players of player funds remaining in dormant or deactivated accounts.
The Standards also consider change of management, display and game information, speed and interruption, peer to peer games, determination of game outcomes, randomness of game outcomes, automated functionality, game management, funds management, security, system account management, software, change management, downloadable game content, collusion and cheating, and responsible gaming.
In 2012, the amendments to the Actintroduced a standards based approach. Under S.3.8(1), the Registrar is authorised to implement a risk based standards to address significant areas of regulatory concern, including surveillance, security, access to gaming sites, protection of players and responsible gaming.
Under the Standards, the operator’s board of directors has the primary responsibility for ensuring compliance with the Standards. A compliance oversight function must be established by the operator and this role must be independent of the carrying out of the activities supervised by the compliance body.
There must also be an internal audit function to independently review any aspect of the business which shall report any compliance issues to the board. Regulators have the authority to conduct term audits upon registrants, particularly to ensure compliance with the terms of registration granted upon licensure.
The Audit and Compliance Branch of the AGCO conducts compliance inspections and audits of registrants to ensure compliance with various affairs, including the Act, approved policies, terms and conditions of registrations, and anti-money laundering and terrorist financing measures. As well, the Audit and Compliance Branch approves and monitors applicable internal control measures, and surveillance and security policies and procedures, to help protect honesty, integrity and the public confidence in the operations of lotteries and casinos. If areas of risk or non-compliance are identified, the Audit and Compliance Branch works with gaming registrants to address those concerns and, when necessary, initiates administrative action. The Audit and Compliance Branch also inspects and responds to complaints regarding regulatory issues at individual gaming sites.
The Registrar has the authority to approve, refuse, suspend or revoke registration. A registration certification or badge is issued once registration is approved. In the circumstances where the Registrar believes that the applicant’s registration should be refused, suspended or revoked, the applicant will be given notice, specifying the reasons why registration is being refused, suspended or revoked along with being advised of the right to have a hearing before a panel.
The Registrar may also, by order, suspend registration without service notice where the Registrar considers it necessary to do so in the public interest and/or where an employee has committed or been charged with a serious crime (including allegations of the same). An order of this nature would be necessary in the public interest where a registrant poses a threat to public safety or where employee charges would risk the perception that the integrity of gaming operations is compromised. Immediate suspensions should only be used in circumstances where serious charges or allegations have been made, as this order deprives the registrant of his or her livelihood.
Registrants have a statutory duty to comply with the Standards and requirements under S. 3.8(1) of the Act. Non-compliance is an offence under the Act. An offence committed by a corporation is punishable on conviction with a fine of up to CAD500,000. Any director or officer of a casino who causes, authorises, permits, participates or acquiesces in the commission of an offence by a corporation is also guilty of an offence. Officers and directors convicted of an offence as individuals are liable to a fine of CAD50,000 and/or imprisonment for one year.
The Board of the AGCO has also created a schedule of monetary penalties that may be imposed for contravention of legislation. An example of a monetary penalty in the schedule under S. 2(1) of the Act highlights that a person authorised to sell lottery tickets who sells to an individual under 18 years is liable for a fine of up to CAD100,000 if they are a gaming operator; up to CAD15,000 if they are a seller; and up to CAD15,000 if they are a category 1 gaming assistant. However, ss. 46(5.1) of the Act allows for a penalty of up to USD50,000 in the case of an individual and USD250,000 in the case of a person who is not an individual.
In deciding to impose a monetary penalty, the Registrar must consider the guidelines of the Board which determine whether a monetary penalty or another form of discipline is most appropriate. The Registrar must consider factors such as the usefulness of the monetary penalty in deterring future instances of non-compliance; disciplinary history; the way in which the violation was revealed; whether there was any loss or injury associated with the violation; mitigating events; the need for general and specific deterrence; and if applicable, considerations such as the location or size of the registrant. The money collected from monetary penalties must be used for public education and awareness of alcohol and gaming or for education and training for licence holders and other persons governed by AGCO legislation.
There is no tax regime applicable to the proceeds of commercial gaming operations in Canada because those proceeds flow to either the provincial governments or charitable organisations. Revenue from government-operated commercial gaming operations is spent on government services. Revenue from charitable gaming operations is spent by the charity earning the revenue, and the revenues of a charitable organisation are not subject to income tax. The revenues of gaming and non-gaming suppliers registered by the AGCO are generally subject to federal and provincial income tax.
As a general rule, a player’s gambling winnings is treated as a windfall under the Income Tax Act. In circumstances where a taxpayer is found to pursue gaming as a professional or business activity, the winnings from such gambling will be considered income from a business and will thus be taxable.
Fees and investigation expenses must be paid to the AGCO by new applicants for registration, and fees are thereafter payable to the AGCO for subsequent applications to renew registrations granted. The fees are set by regulation, but the costs of investigation are at the discretion of the AGCO. Where the AGCO deems it necessary to engage in particularly complex investigations, the costs may run into six figures.
A gaming-related supplier is prohibited from providing, installing, maintaining or repairing gaming equipment or management systems unless the equipment is approved by the Registrar. In order to determine equipment approval, the Registrar will consider technical integrity, safety, security and accounting capability. Monitoring and testing is performed throughout the life of the equipment or system to certify that it is operated in accordance with the Standards.
Gaming equipment must comply with the Electronic Gaming Equipment Minimum Technical Standards and with the Electronic Gaming Equipment and Server-assisted Technical standards, which are standards and requirements established pursuant to S. 3.8(1) of the Act.
The type of equipment that requires approval includes:
Gaming equipment and gaming management systems must be submitted to the Registrar for an assessment and approval, at the supplier’s expenses. This must be completed prior to the gaming equipment or gaming management systems being made available for patron play. The Registrar may also require that the equipment or system be tested before approval. The Registrar usually requires that electronic gaming equipment, the management system for monitoring slot machines and software for Caribbean Stud Poker and automatic shufflers be tested. Gaming equipment, such as dice, playing cards, wheels for Roulette and Big Six, are seldom tested.
The supplier requires the consent of the Director, Electronic Gaming Branch of the AGCO (the Director) to approve testing the equipment. To obtain the approval, the supplier must show that one or more gaming sites in Ontario have an interest in purchasing the equipment. The AGCO will not normally test equipment without indication that there are gaming sites wishing to use it. If the Director has agreed to move forward with the testing, the supplier must submit an application with the applicable fee to the Director using AGCO’s forms. The equipment may be approved, conditionally approved or refused. The equipment must be monitored by the operator as well as by the AGCO’s Electronic Gaming Enforcement Officers, if an approval or conditional approval has been granted.
Where slots of slot monitoring systems have been approved by New Jersey or Nevada, the supplier must submit a request for the review of equipment to the Director. Depending on the interest received from gaming sites in Ontario, the Director will determine whether or not to review the equipment. If the Director has agreed to review the equipment, the supplier must make a formal submission using AGCO’s equipment forms. The supplier may be required to provide training on how the equipment operates without charging the AGCO. The equipment may be approved, conditionally approved or refused. If the equipment is granted approval or conditional approval, it must be monitored by the operator for any issues arising during testing.
No changes or modifications may be made to gaming equipment or gaming management systems (including AGCO approved and installed gaming equipment and systems at a gaming site) unless modifications have been disclosed to or approved by the Registrar prior to changes being made. The AGCO will decide whether to approve changes by considering technical integrity, safety, security, and accounting functions of the equipment or gaming management system.
An entity licensed by the AGCO to provide gaming services in Ontario is not required to obtain approval of the AGCO in order for it to apply and ultimately obtain licensure in a foreign jurisdiction. However, the licensed entity in Ontario should notify the AGCO of any foreign licences obtained, as well as provide the AGCO with prompt notice of any regulatory sanctions imposed against it.
Under S. 207(1)(h) of the Code, it is lawful for any person to make or print in Canada anything relating to gaming and betting if it is to be used in a place where it would meet certain conditions provided by law and where it would be lawful to use such a thing, including sending such a thing where the destination thereof is such a place. For example, if a Canadian lottery ticket manufacturer desires to print lottery tickets for use in a foreign jurisdiction, the use of such lottery tickets in the foreign jurisdiction must not only be lawful, but the user of such tickets must comply with all conditions provided by law to use such tickets.
Under s. 16 of the Election Finances Act,at the Ontario provincial level and the federal level, only individuals may make contributions to political parties, constituency associations, nomination contestants, candidates and leadership contestants. Corporations and trade unions are prohibited from making such contributions. Some of the other provinces of Canada allow corporate and union contributions in provincial political matters. These are restrictions of general application; there are no restrictions on political activity or political contributions specifically applicable to persons licensed or registered in Ontario under the Act.
Provincial lobbyist registration legislation exists which requires that persons be registered if they communicate with a public office holder, for payment, in respect of:
As well, communications about financial benefits, such as the awarding of a gaming licence or registration, are considered to be lobbying.
Accordingly, if an external lobbying firm or an in-house individual employed by a registrant or licensee makes representations to public office holders concerning a gaming licence or registration, or concerning gaming legislation, regulation or policy generally, they may be required to register as a lobbyist.
There are two bills proposing amendments to Canadian laws on gambling.
The first is a private member’s bill (Bill C-290) to amend the Code to allow for authorised groups (eg provincial governments) to provide betting offers on single sporting events, which was passed unanimously by the House of Commons in 2012. In order to become law, it needed to be passed by the Canadian Senate. The bill, however, remained before the Senate from 2012 to 2015 without being brought forward for a vote. Bill C-290 was criticised by certain Senators as promoting gambling and match-fixing. Media outlets reported that Bill C-290 was stalled in the Senate because it did not have enough support to survive a vote. In the end, Bill C-290 failed to become law prior to the dissolution of Parliament for a federal election in late 2015, and the bill accordingly died on the Order Paper. It was reintroduced as a new private member’s bill entitled (Bill C-221). On 21 September 2016, a motion to have Bill C-221 referred to a committee for further examination was defeated in the House of Commons.
The second is Bill 74 in Québec. On 17 May 2016, the Province of Québec enacted omnibus budget legislation (Bill 74) which included provisions that modified the QuébecConsumer Protection Act to require ISPs to block persons in Québec from accessing unauthorised online gambling websites. Under this law, the body authorised to conduct and manage gaming in Québec (the Société des loteries du Québec, commonly known as “Loto- Québec”) is authorised to “draw up a list of unauthorised online gambling sites and provide the list to the Régie des alcools, des courses et des jeux (the provincial gaming regulator). The Régie is then to send that list to ISPs operating in Québec, whereupon those ISPs have 30 days to block access to those websites. These provisions of Bill 74 are not yet in force.
It is important to note that nothing in Bill 74 imposes any sanctions or risks of enforcement upon offshore online gaming operators. All of its sanctions and enforcement risks are directed at ISPs based in Canada.
In July 2016, a consortium of the largest ISPs in Canada filed legal proceedings seeking a declaration from the Superior Court of Quebec to the effect that the amendments to the Consumer Protection Act relating to ISPs that would be effected by Bill 74 are unconstitutional and therefore of no force and effect. Also in July 2016, a public interest advocacy group (the Public Interest Advocacy Centre, or PIAC) filed an application with the CRTC objecting to the law on similar grounds.
On 1 September 2016, the CRTC indicated that it was of the preliminary view that consideration of PIAC’s application should be suspended while the constitutional issues are before the courts, while seeking comment from interested persons on this preliminary view. Also on 1 September 2016, the CRTC expressed its preliminary view that the federal Telecommunications Act prohibits the blocking by Canadian ISPs of access by end-users to specific websites on the internet without prior approval of such blocking by the CRTC, which approval would only be given where it would further telecommunications policy objectives. Accordingly, in that preliminary view compliance with the provisions of Bill 74 would not justify the blocking of specific websites by Canadian ISPs, in the absence of CRTC approval of such blocking. The CRTC has again sought comment from interested persons on this preliminary view.