Ontario residents may soon get to play online poker and daily fantasy sports (DFS) against global competition if the government gets its way. First, though, the province must determine whether that sort of international traffic-sharing is legal under Canadian federal law.
The top international poker sites, like PokerStars and GGPoker, have thousands of concurrent users around the clock. By contrast, regionally segregated sites operated by those same brands often have only a few hundred users at peak hours and drop off sharply at other times.
Traffic matters a lot to the user experience for poker and DFS. It can affect how quickly players can find a game. On smaller sites, they may not find one at all if they want to play a niche format or at unusual hours. More importantly, it affects the size of prize pools for big multiplayer contests. For instance, international poker sites frequently organize tournaments with thousands of entries and six- or seven-figure prize pools, which is difficult or impossible in a “ring-fenced” market with a limited population.
Premier Doug Ford’s government is eager to fix this problem to bolster revenue and reduce the appeal of illegal offshore gambling. However, it’s not yet clear whether it can.
In February, the province’s Lieutenant Governor sent an Order-in-Council to the Court of Appeals for Ontario to clarify the issue. The order states, in part:
While Ontario would like to permit players participating in legal online gaming and sports betting to participate in games and betting involving players outside of Canada, there is uncertainty about whether doing so would be consistent with the requirements of the Criminal Code as they have been interpreted to date.
It is in the public interest that the issue of whether an online lottery scheme conducted and managed by a province which permits its users to participate in games and sports betting involving players outside of Canada is lawful under the Criminal Code be settled authoritatively as soon as possible.
Per the CBC, the court is scheduled to hear this case this fall.
Canadian Federal Laws Unclear on Online Gambling
In Canada, gambling is a matter of federal law. Its laws stipulate the forms of gambling that are legal and delegate responsibility for “conducting and managing” the games to provincial lottery corporations.
However, the laws predate the concept of online gambling. As such, they contain several blind spots around issues that arise only when gambling ceases to be tethered to a retail location.
Ford’s government has already tangled with one such issue in creating its private market.
“Conducting and managing” retail gambling means that the province owns the casinos, even if it hires a private company like Caesars to provide staff and run the games. When it came to online gambling, there were differing points of view on whether iGaming Ontario was sufficiently involved in the operators’ day-to-day activities to be considered to be “conducting and managing” them.
However, that model has now survived a legal challenge, and at least one other province intends to follow suit.
International traffic-sharing is another issue that didn’t exist at all when Canadian legislators drafted the gambling laws. This time, the province is seeking clarity upfront rather than diving in and hoping to defend itself successfully in court later.
A favorable ruling would be a massive win for all poker and DFS operators with an international presence, especially GGPoker. It operates Ontario’s version of WSOP, and its parent company, NSUS, recently bought the World Series of Poker brand from Caesars.
Could US Poker Sites Join International Player Pools?
US online poker operators have found a partial solution in the Multi-State Internet Gaming Agreement (MSIGA). That agreement allows players in different states to play in the same games.
If enough states were to legalize online poker and join MSIGA, the US player pool could rival the international one. However, as it stands, only five states are party to MSIGA, and only three of those have active sites. The largest network, WSOP (still operated by Caesars, not GGPoker), spans Nevada, New Jersey, and Michigan. However, these states still only have a combined population of 22 million, and the resulting network isn’t much bigger than GGPoker’s standalone site in Ontario.
American poker players will undoubtedly be jealous if their Ontario peers regain access to the international pool. Ontarians lost their “gray market” status when the privatized market launched, while Americans have been cut off since “Black Friday” in 2011.
Unfortunately, there’s not much hope that Ontario’s move could spark a similar one in the US.
Unlike Canada, the US has clear federal laws about international online gambling. It’s illegal under the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006. State laws and compacts like MSIGA can’t overrule that. Even MSIGA’s legality was in question for a while due to the Wire Act until federal courts ruled that the prohibition on interstate wagering applied only to sports betting.
In other words, for US sites to legally join international player pools, lawmakers would have to repeal UIGEA, or the courts would need to strike it down in a legal challenge.
About the Author
