Contributed By Dickinson Wright LLP
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.
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