The dark days for Ontario-based players of paid daily fantasy contests and online poker could be coming to an end — but only if the top judges in Canada’s most populous province say so.
Ontario’s government announced Monday that it filed a reference with the province’s Court of Appeal in February asking whether allowing residents to play online games and to bet with people outside of Canada is legal.
Specifically, the question put to the court is: “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?”
The court set out a timetable for the matter on March 1, giving interested parties until April 8 to file their paperwork. The reference will be heard by the Court of Appeal, the highest court in Ontario, from Nov. 26 to 28 in Toronto.
Potentially big news for Ontario-based daily fantasy and poker fans: the provincial government is asking the Court of Appeal whether allowing residents to participate in online games and betting involving people outside of Canada is legal. https://t.co/sv2ouYlVQY pic.twitter.com/Eanx9zgAS0
— Geoff Zochodne (@GeoffZochodne) March 12, 2024
Ontario is asking the question because it launched a regulated and competitive market for online gambling in April 2022 that requires all players to be in the province. That allowed numerous private-sector operators of online sports betting and casino sites to legally offer their products in Ontario — a first for Canada — but it also limited the player pools for poker and paid daily fantasy contests, which are considered gambling by the province.
The restrictions meant DraftKings and FanDuel launched internet-based Ontario sports betting and casino gaming yet shut down their daily fantasy businesses in the province because the contests were no longer economical. The regulations have also kept other companies, such as Underdog Fantasy, from offering contests in Ontario.
However, the provincial government says some Ontarians are still accessing online gambling sites that are not regulated by local authorities and involve players located outside of Ontario. The government wants to allow Ontario-based players to play games against people outside of the country because, among other things, it could let the province channel that activity back to its regulated sites, which was part of the rationale for the regulated market in the first place. But first, Ontario needs to be certain it is standing on firm legal ground.
“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,” the provincial government’s Feb. 2 order in council said. “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.”
A little late night poker
This is why the provincial government is now asking the Court of Appeal to rule on its question. The legal opinion could bolster daily fantasy and poker player pools in the province and perhaps even lead to the likes of DraftKings and FanDuel reopening their paid DFS businesses in Ontario.
“Here, it is proposed that Ontario and its agents allow players located in Ontario to access online gaming platforms conducted and managed by Ontario and, through electronic means, to participate in peer to peer games and betting involving persons located outside Canada participating in foreign lottery schemes,” a statement of particulars to the Court of Appeal says. “For example, an Ontario player could play a late-night poker game with players in Asia who are just getting home from work or place a bet on the outcome of the Stanley Cup final as part of a betting pool that also includes hockey fans in the United States.”
Ontario is asking for clarity from the court as its competitive iGaming market continues to hum, with around 50 operators and 70 websites taking action from approximately 1.2 million active player accounts. More than $17 billion was wagered on sports, casino games, and poker from Oct. 1 to Dec. 31 in the Ontario iGaming market, and more than $650 million in total gaming revenue was generated, around 20% of which is kept by the province.
The iGaming system is the only one of its kind in Canada, where most other provinces permit government-owned lottery and gaming corporations a legal monopoly on online gambling.
It is, however, not a perfect system, as the recent advertising tweaks imposed by the Alcohol and Gaming Commission of Ontario (AGCO), an ongoing legal battle with an Indigenous government group, and now the court reference suggest. Complaints about the loss of daily fantasy options and a smaller poker player population have been ongoing and Ontario Attorney General Doug Downey said last June that the province's "liquidity challenges" were on his mind.
"We understand that operators are not currently offering pay-to-play fantasy sports primarily because of their inability to allow individuals not located in Ontario to access the regulated Ontario offering (i.e. pooled liquidity)," the AGCO says on its website. "Questions about this issue should be directed to the Ministry of the Attorney General at MAG-Media@ontario.ca."
A new model
Ontario is now envisioning a way to allow residents to log onto their provincially regulated sites but play against people living outside the country. They could also play against people from other provinces on those sites if a deal can be struck between governments.
“Under this model, players in Ontario will be able to participate in peer-to-peer games, including games of chance and mixed chance and skill played for money, and sports betting, involving players outside of Canada,” a schedule attached to the order in council says. “Players located outside of Ontario but within Canada would not be permitted to participate in games or betting in the absence of an agreement between Ontario and the province or territory in which those players are located.”
A statement of particulars filed by the Attorney General of Ontario shows the provincial government believes it has the legal right to permit crossplay between provincial bettors and those located abroad. Now what the province needs is confirmation from the appeals court.
“Permitting players participating in Ontario’s electronic gaming scheme to bet against or participate in the same betting pool as players located outside Canada participating in foreign gaming schemes would not change the fact that Ontario’s electronic gaming scheme has a real and substantial connection with Ontario and that the players in Ontario are participating in a lottery scheme located ‘in that province,’” the Feb. 29 statement says, citing part of the federal Criminal Code.
