On May 13, 2024, the Ontario Superior Court of Justice (ONSC) released its decision in Mohawk Council of Kahnawà:ke v. iGaming Ontario, ruling in favour of the province of Ontario and iGaming Ontario. The Court found that iGaming Ontario is appropriately “conducting and managing” Ontario’s iGaming market in accordance with the requirements of the Criminal Code (the Code).
The Court’s decision examines the degree of operational oversight and control that provincial governments must have over online gaming and gambling operations in order for such operations to be compliant with the requirements of the Code, while setting an important precedent for provincially conducted and managed online gaming frameworks in Canada. The decision validates Ontario’s iGaming model and provides useful guidance for other provinces considering similar legal frameworks for online gaming.
Background
Canadian gaming law has two sources: federal statute (the Criminal Code) and provincial statute (provincial gaming control legislation). The dual nature of Canadian gaming law results from the fact that the Code generally prohibits most forms of gaming and gambling. The Code, however, contains an exemption from these general prohibitions for gaming and gambling offerings that are “conducted and managed” by provincial governments. The operative provision of the Code, Section 207(1)(a), provides that notwithstanding the general prohibitions on gaming and gambling, it is lawful:
(a) for the government of a province, either alone or in conjunction with the government of another province, to conduct and manage a lottery scheme in that province, or in that and the other province, in accordance with any law enacted by the legislature of that province.
The main legal issue before the Court (at least concerning gaming law) was the proper interpretation of the phrase “conduct and manage” under s. 207(1)(a) of the Code. The applicant Mohawk Council of Kahnawà:ke (the Council) sought a declaration that two legislative provisions in the provincial statute that enable Ontario’s iGaming framework are inoperative, arguing that the impugned provisions required private operators, and not the provincial government, to conduct and manage gaming and gambling offerings in Ontario’s iGaming market. The respondents, the Attorney General of Ontario and iGaming Ontario, argued that the province, through iGaming Ontario, is properly conducting and managing the Ontario iGaming market in accordance with its statutory authority.
The ONSC Decision
In arriving at the conclusion that the province of Ontario, through iGaming Ontario, is properly conducting and managing Ontario’s internet gaming framework, the Court first found that legislative history pointed to Parliament’s intention to exclude from criminalization gaming and gambling that has a sufficient level of provincial control. This allows for provincial governments to tailor local legislation to local issues and sentiment and ensure that public harms are minimized while gaming is conducted responsibly and in the public interest.
The Court reaffirmed the long-standing interpretation that in implementing gaming and gambling frameworks under s. 207(1)(a), the province can engage private entities in an operational capacity, but that the province must exert a sufficient level of control to maintain its position as the “operating mind.” In the Court’s examination of Ontario’s iGaming framework, Justice Brownstone noted several factors as evidencing the fact that iGaming Ontario is the “operating mind” of gaming and gambling in Ontario’s iGaming market. In particular, iGaming Ontario: (i) has control over which games may be offered; (ii) has control rights over the use of gaming data; (iii) maintains ultimate authority over advertising methods and content; (iv) imposes prohibitions on an operator’s ability to subcontract elements of operations; (v) maintains control over requirements with respect to responsible gambling, good governance, game integrity and player awareness; and (vi) oversees customer care and dispute resolution.
Ultimately, the Court found that iGaming Ontario is the operating mind of Ontario’s regulated iGaming market as iGaming Ontario retains ultimate decision-making power on central issues to the scheme and maintains a high level of control over the operators in many aspects. The Court dismissed the application concluding that the province of Ontario, through iGaming Ontario, was conducting and managing the iGaming scheme in accordance with the provisions in the Code.
The authors would like to acknowledge the contributions of Alice Xie (summer student) in preparing this bulletin.
