Day One Recap
If you missed our first entry in this live series covering Ontario’s reference to the Court of Appeal for Ontario (“CAO”) you can catch up here. In a nutshell, Ontario is proposing an international pooled liquidity model where Ontario-based players can compete with international players in peer-to-peer gaming. Yesterday, the Ontario government and the Canadian Gaming Association (“CGA”) presented their position supporting international pooled liquidity. The core of the debate focuses on Section 207(1)(a) of the Canadian Criminal Code (the “Code”) and whether “in that province” should be interpreted strictly as within Ontario’s physical boundaries or more flexibly under a modern reading of the law.
Yesterday marked the second session, with Flutter Entertainment PLC (“Flutter”) and the Lottery Corporations1 (the “Lotteries”) presenting their cases. Flutter went first.
Flutter’s Dynamic Interpretation of the Code
Flutter focused on the definition of a “lottery scheme” under the Code. Just like the CGA, Flutter asked the court to consider the “what” and the “where” of the Model. According to Flutter, the Model is lawful because both elements are satisfied. Ontario will conduct and manage the scheme entirely within the province. Furthermore, under the Model, Ontario would retain full control, enforcing its own rules and regulations, while international regulators would oversee their jurisdictions.
Further, Ontario acting as part of the Executive, would enter into agreements with international operators to safeguard Ontario-based players. In that context, the Court should trust that Ontario will enter valid and prudent agreements, just as they do with other daily executive decisions taken by the government.
At this point, the Court raised a concern: if two schemes are involved, wouldn’t this suggest that Ontario would also be conducting and managing a foreign scheme?
Flutter clarified that Ontario simply cannot conduct and manage any scheme outside the province. However, since the Code does not explicitly preclude provinces from international schemes, the Model should be deemed lawful.
The Court pressed further: if the rules that govern the game are not necessarily set by Ontario, then whose rules govern the game? Flutter responded that the rules would be jointly established by Ontario and the foreign operator. This collaboration is not conducting and managing, however. Instead, conducting and managing should be read as defined in Mohawk Council of Kahnawà:ke v. iGaming Ontario.
Flutter concluded its presentation by requesting that the Court adopt a dynamic interpretation of Section 207(1)(a) and the expressions “in that province”. Laws evolve and Courts are obliged to interpret them in the current context, not that of decades or even centuries ago. Today, the Internet has transformed the concepts of “what” and “where” and has changed the way people interact with each other. Therefore, “in the province” should be dynamically interpreted under a modern lens for the Model to be consistent with the Code. Failing to do so, would provide a restrictive and literal interpretation that ignores present-day realities.
The Lotteries’ Opposition to the Model
The Lotteries took a firm stance against Ontario’s proposed Model, arguing that section 207(1)(a) of the Code is inherently restrictive/prohibitive. They contended that Ontario’s broader interpretation stretches the provision beyond its intended scope and should be rejected. Section 207(1)(a) was narrowly crafted to carve out limited exceptions to the Code’s offences. As such, an interpretation of the plain meaning of the provision’s restriction to conduct and manage a scheme only within the province’s physical borders is clear and there is no reason to depart from it.
The respondents also challenged Ontario’s theory of two interacting schemes. According to the Lotteries, there is only one scheme governing a single game where players from Ontario and other jurisdictions compete (i.e. an online poker table). Since that single scheme is an international framework, Ontario cannot legally conduct and manage it under the Code. The Lotteries argued that even if the Court were to accept the two-scheme theory, the Court should see that Ontario would necessarily participate in both, which is also unlawful. Whether viewed as one scheme or two, Ontario’s involvement would imply conducting and managing an international scheme, contrary to the Code.
As to Flutter’s request for the Court to “trust” Ontario to enter into prudent and valid
agreements, the Lotteries were nothing short of skeptical. They pointed out that Ontario’s current regulated operators have already crossed legal boundaries by actively advertising outside the province. Sometimes even targeting players in other provinces exclusively. Therefore, there is no evidence that Ontario’s future agreements or enforcements will fully comply with the Code.
Ultimately the Lotteries argued that conducting and managing a scheme in the province is not the same as doing so from the province, like Ontario plans to do. If the Model is properly construed as one (or multiple) lottery scheme with international components, the Court should answer the reference question2 negatively. The Model, being international by nature, cannot be interpreted as lawful under the Code.
Today marks the third and final session of the hearing. Stay tuned for updates and our final entry on this series of live reporting!
1 Atlantic Lottery Corporation, British Columbia Lottery Corporation, Lotteries and Gaming Saskatchewan and Manitoba Liquor & Lotteries Corporation,
2 Would legal online gaming and sports betting remain lawful under the Criminal Code if its users were permitted to participate in games and betting involving individuals outside of Canada as described in the attached Schedule? If not, to what extent?
