Analysis: Can foreign operators advertise legally in Canada?
Off-shore operators are advertising around Canadian sporting events despite being unregulated in the country, but are they actually breaking the law?
This article first appeared on eGR North America
Last month the boss of the Atlantic Lottery Corporation hit out at offshore gambling sites for advertising at a recent Canadian Football League game.
Brent Scrimshaw singled-out non-Canadian egaming operators advertising their online gambling platforms in the state, describing them as “brazen, unregulated and unlawful”.
The lotto boss claimed the sites, which are regulated overseas in the UK, Gibraltar and other jurisdictions but not Canada, had taken more than CA$64m away from the Atlantic Lottery last year alone.
“Offshore, unregulated operators from all over the globe are selling online gambling products to our neighbors. While it is completely unlawful in Canada, they are brazen about it,” Scrimshaw told eGaming Review.
But while Scrimshaw is clear in his belief that offshore gambling sites are advertising illegally in his state, Canadian law is far from black and white on the matter.
The Canadian Criminal Code states it is illegal for anyone other than a provincial government monopoly, such as the Atlantic Lottery, to take bets online from Canadians or advertise gambling websites.
However, the law has been rarely tested and even those who sell advertising space seem confused as to what is legal and what is not.
So what does the law actually stipulate when it comes to who can and can’t advertise online gambling sites in Canada?
“It is a criminal offence to advertise a proposal or plan to dispose of property by a game of pure chance, or to advertise an offer to guess at or foretell the results of any contest, including any sporting contest,” says Stuart Hoegner, a gaming attorney with Gaming Counsel. “There are exceptions for the provincial lottery monopolies; they and their advertisers can advertise freely.”
So to some extent Scrimshaw is right to question offshore gaming sites advertising their platforms at Canadian sporting events, as they don’t fall into the caveat permitting provincial lotteries to advertise their online platforms.
However, so-called ‘dot.net’ advertising has been allowed by broadcasting authorities in Canada for many years, meaning offshore gaming sites can advertise certain domain names provided certain conditions are met, such as proving they have no links to ‘real-money’ gaming or betting sites.
“Dot.net advertising has been, and continues to be, permitted in Canada when it comes to gaming and betting. That means advertising referring to, and routing to, free-play sites without links or popups to real-money sites are allowed,” Hoegner says.
Scrimshaw argues that offshore online gaming operators are using “innocuous non-commercial sites” to “seamlessly transition people into real-money gambling”. Such accusations are hard to prove, which may help to explain why the Crown Prosecution is yet to challenge an off-shore gambling site for advertising in Canada to date.
Hoegner believes this is because off-shore operators have no physical nexus in Canada, coupled with the Crown Prosecution’s lack of interest in taking action against such companies. Furthermore, moving forwards he says there seems to be no real desire to clarify or change law relating to off-shore online gaming sites advertising in Canada.
“The broadcasting industry may tighten its rules somewhat, but I don’t anticipate any changes to the Criminal Code over this. I don’t think this is a concern for many at this stage, and even if it were to become a concern, changes to federal legislation in gaming and betting can be very difficult and take a long time,” Hoegner adds.
So it seems that offshore internet gambling sites are able to advertise their free-to-play games at sporting events in Canada. Indeed, they may incur the wrath of state lottery bosses, but they won’t face prosecution, not for the time being at least.