Provincial lottery corporations have been lamenting the presence of iGaming operators in their provinces since the early days of iGaming. However, despite a significant amount of grumbling, the provincial lottery corporations haven’t taken sufficient action to stop these sites.
In their defence, stopping these operators does appear to be a daunting task. Typically, they are located overseas and have no connection to Canada other than making their services available to Canadian players.
British Columbia & Quebec
There have been a few attempts to address non-provincial iGaming operators over the years. The two most notable are the cease and desist letters sent to 19 iGaming operators by British Columbia’s Gaming Policy and Enforcement Branch (GPEB) in 2016, and the Quebec legislature passing Bill 74, also in 2016, which would require internet service providers (ISPs) to block iGaming sites not approved by Loto-Quebec or risk being fined.
GPEB’s letter threatened penalties under BC’s Gaming Control Act and indicated that GPEB would address the iGaming operators’ activities with their regulators if they didn’t stop offering services in BC. This letter was ignored by the operators and to date, there haven’t been any consequences.
Bill 74 was heavily criticized by numerous stakeholders, including net neutrality proponents, Canada’s telecommunications regulator, ISPs, and legal experts. The Quebec Superior Court found that this bill was unconstitutional and that finding was upheld by the Quebec Court of Appeal. The Quebec government’s appeal to the Supreme Court was dismissed.
Ontario’s Approach
Ontario took a different approach towards non-provincial iGaming operators. It established a quasi-licensing regime with channelization as one of its primary goals. One way that Ontario was able to achieve high channelization was to “forgive” the activities of operators in its jurisdiction prior to market liberalization. Ontario’s position was that as long as an operator applied for registration before market launch, not only would that operator’s activity in the jurisdiction be ignored, but that operator could continue its unregistered activities in Ontario up to whenever it received registration and signed an operating agreement with the Ontario government, or to October 31, 2022.
Another way that Ontario was able to achieve high channelization was to “ignore” the activities of registrants and applicants in other provinces. Operators’ activities in other Canadian jurisdictions would not, and have not, had an impact on eligibility for Ontario registration.
This approach makes strategic sense for Ontario. As the first province in Canada to regulate iGaming, its priority should be channelization. The unfortunate effect of Ontario’s channelization journey is that lottery corporations in other provinces still have to deal with operators active in their provinces without provincial authorization and these operators are now advertising their real-money gaming sites in national advertising campaigns (with a disclaimer the site is only available in Ontario).
Back to Ontario – as impressive as its channelization campaign has been, there are still several operators who are active in Ontario without registration. Other than statements suggesting that Ontario will be dedicating an increased police presence to combat unauthorized gaming and that it will be difficult for unregistered operators offering services to Ontario players to obtain a registration, no actions have been taken (publicly, at least) to address unregistered iGaming in Ontario.
The Canadian Lottery Corporation
Against this background, in August 2022 the Canadian Lottery Corporation (the CLC) was established. The purpose of the CLC was to establish a mechanism for inter-jurisdictional cooperation to address non-provincial iGaming operators active in Canadian provinces. The CLC is targeting these operators and any free-to-play or informational sites these operators provide. The current members of the CLC are the Atlantic Lottery Corporation, British Columbia Lottery Corporation, Manitoba Liquor and Lotteries, and Loto-Quebec.
In 2023, the CLC sent cease and desist letters to various operators in Ontario as well as at least one non-Ontario registered operator, Il Nido Limited (operator of Bodog.eu).
It doesn’t appear these cease-and-desist letters had the CLC’s desired effect of removing these operators from non-Ontario jurisdictions. Interestingly, Bodog.eu and US-facing Bovada have pulled out of certain states and provinces after receiving cease and desist letters. However, in those situations, the letters were written by regulators, not operators (Loto-Quebec is both a regulator and operator, and Bodog.eu does not accept players from Quebec).
In 2025, the CLC is attempting a new strategy – seeking to halt the activities of Il Nido Limited and Sanctum IP Holdings Limited (claimed by the CLC to be operating bodog.eu along with Il Nido Limited) in Manitoba through the court system. If successful, this judgment will be leveraged against operators in all Canadian jurisdictions (save for Ontario registered operators in Ontario, and possibly Alberta, which is working towards a regulated market). The iGaming world is watching closely to see whether Il Nido Limited and Sanctum IP Holdings Ltd. will defend themselves.
Next week, we will be releasing an overview of the Notice of Application, a brief explainer of the “Civil Uncontested List,” a description of the remedies requested by MBLL, the grounds for the application, and a summary of the evidence provided. Keep an eye out for it here on our blog and on the GME Law LinkedIn page!
