Last month, the Government of Québec released its long-awaited report on online gaming (“iGaming”). The Working Group on Online Gambling was struck in February 2010 to analyze the social impact of iGaming in Québec, and measures that might be used to block “allegedly illegal” iGaming. The particular focus of the Working Group was the lawful iGaming carried out in Québec through Espacejeux.com (“Espacejeux”), whose operations are conducted and managed by the Government of Québec through its wholly owned Crown corporation, Loto-Québec.

The report of the Working Group criticized the ability of Loto-Québec to provide measurably effective measures to ensure Espacejeux is operated consistent with social responsibility, security, and integrity. The conflict or appearance of a conflict between its two mandates, profitability on the one hand and social responsibility on the other, was cited. The final recommendations of the report accordingly focused upon the creation of an independent authority to oversee the activities of Loto-Québec, rather than allowing Loto-Québec to self-regulate on these matters.

The report of the Working Group goes on to note that the availability of Espacejeux has not curtailed Québecers’ use of “allegedly illegal” iGaming websites. The Working Group was not critical of the lack of concrete measures implemented by the Government of Québec to crack down on such websites. Rather, it noted the obstacles to such a crackdown, citing (i) police action, (ii) the ambiguity of legislation governing gaming, (iii) the fact that many “allegedly illegal” websites hosted outside Canada are legal in their home jurisdictions, and (iv) the presence of private iGaming operators offering their iGaming services to the world from Québec territory, specifically from the Territory of Kahnawà:ke near Montreal.

The federal Criminal Code (the “Code”) prohibits any entity other than the provincial government from acting as the “operating mind” of iGaming made available to Québecers. Without explicitly saying so, the Working Group concluded that enforcement of the Code in this respect is practically impossible. Accordingly, it recommends a solution best described using the old maxim: “if you can’t beat ‘em, join ‘em”: petitioning the federal government to amend the Code to allow the provincial governments to license private sector iGaming operators to legally offer their services within Canada.

We will continue to monitor developments, most importantly whether the Government of Québec will explicitly adopt and endorse in part or all of the report and recommendations of the Working Group.