Bill C-218 (Historical)

Safe and Regulated Sports Betting Act

An Act to amend the Criminal Code (sports betting)

This enactment repeals paragraph 207(4)‍(b) of the Criminal Code to make it lawful for the government of a province, or a person or entity licensed by the Lieutenant Governor in Council of that province, to conduct and manage a lottery scheme in the province that involves betting on a race or fight or on a single sport event or athletic contest.

[Chief Michael Delisle Jr., Chief, Mohawk Council of Kahnawake]

Thank you, Chief Deer.

I'll start with a brief history of gaming in Kahnawake. The Kanyen'kehà:ka, Mohawk in English, have engaged in gaming and sports betting since time immemorial, a fact that has been confirmed by historical research. Games of chance and wagering on sporting events such as lacrosse have always been and continue to be an integral part of Kanyen'kehà:ka culture and central to our relationships with other nations. In 1996, as an assertion of our inherent right to self-determination, Kahnawake enacted the Kahnawake gaming law, an assertion that is clearly also reconcilable with subsection 35(1) of Canada's Constitution Act, 1982.

Over the following 25 years we utilized our own ingenuity and resources to build a successful, sound and reputable gaming industry in both the online and land-based sectors. Online and land-based gaming in Kahnawake is licensed and regulated by the Kahnawake Gaming Commission. Its pragmatic and thorough approach to regulation has earned the commission a reputation of being fair, diligent and well respected.

From an economic perspective, gaming in Kahnawake is a socio-economic initiative. Gaming produces significant revenues that are used for a variety of community projects we would not otherwise be able to recognize. It employs hundreds of people, both from Kahnawake and elsewhere, and facilitates valuable workforce development.

Kahnawake's sports betting brand, Sports Interaction, is operated by Mohawk Online, a company wholly owned by the Mohawk Council. Profits from Sports Interaction have been benefiting our community and have most recently provided us much-needed relief from costs stemming from the COVID-19 pandemic.

The Kahnawake gaming industry is a perfect example of an indigenous community's succeeding. We are facilitating economic self-sufficiency to take care of our evolving needs. In our 25 years of operation we have exercised our jurisdiction over gaming openly and conscientiously. We have done so with the knowledge and support of members of the current federal government, such as Minister Lametti.

First, we must be clear that Kahnawake does not take issue with the intent of the code being amended to permit provinces to facilitate sports betting. We recognize Bill C-218 as a positive move forward for Canada's gaming industry. However, we do take issue with the bill's failure to consider, accommodate and reconcile the interests of indigenous peoples.

In its present form the bill threatens the economic resilience of Kahnawake's gaming industry. Simply put, Bill C-218 perpetuates an injustice to indigenous communities that resulted from an agreement between Canada and its provinces in 1985, whereby authority to conduct and manage gaming was exclusively delegated to the provinces. At that time indigenous peoples were not consulted, nor were our interests considered or accommodated. We were simply closed out. What happened in 1985 was a stain on the honour of the Crown.

While it is true that since 1985 some provinces have made efforts to accommodate indigenous interests and share some portion of gaming revenues, this is not the case in Quebec. To date, Quebec has not entered into any agreements to share in gaming revenues with indigenous communities, nor has it ever indicated a will or intent to do so. In short, advancement of Bill C-218, unless it is amended, will result in a deepening of the injustice experienced by indigenous communities, including Kahnawake, since 1985. Worse, Kahnawake's gaming industry will so severely be affected it could face total decimation.

The present state of the single events sports wagering market is frequently described as being under control of either organized crime or offshore interests. To be very clear, Kahnawake's gaming industry is not operated by organized crime nor offshore interests. The fact is we occupy ourselves with good and honest social responsibility and have built a gaming industry that we stand behind as being integrous. This fact must be considered in your deliberations.

I'll pass it back now to Chief Deer.

[Chief Gina Deer, Chief, Mohawk Council of Kahnawake]

[Witness spoke in Mohawk]

[English]

We are pleased to address you today concerning Bill C-218, to make note of the impacts it will have on the gaming industry in our community and to recommend bill changes, amendments, and accommodation or reconciling with the interests of Kahnawake and other first nations in Canada.

I will turn it over to Chief Mike Delisle for some of the history.

[Dave Drew, Finance Committee Member, Central Ontario Standardbred Association]

Thank you and good afternoon.

I want to point out that Bill O'Donnell is one of the top drivers in North America. He was inducted into the Harness Racing Hall of Fame both in Canada and in the United States, and also inducted into Canada's Sports Hall of Fame. He has been tireless in his efforts and continues to work full time on improving racing.

In support of having legalized and regulated single sports wagering, and in order to help protect the livelihoods of approximately 50,000 Canadians who are involved in and contributing $5.6 billion to our economy every year, we are recommending two small but very important changes to Bill C-218.

A key to protecting horse racing is ensuring that provincial governments and those contracted to provide single sports wagering pay their fair and appropriate share to the horse-racing industry for the costs of breeding, raising horses, training horses and conducting races.

Currently horse racing is fully regulated and is very much integrated between the racetracks, owners, trainers, jockeys and drivers. The wagering dollars are a very significant piece of supporting horse racing by first helping support funding. The current illegal betting that is happening on horse races prevents us from earning a large piece of that revenue, so we do not want to see additional organizations set up that could put as their portfolio the racing of horses without having to support the integrated portion of that, which involves the costs of putting on races, the costs of breeding, etc.

The answer to that element is embedded in a November 26, 2020, government bill, Bill C-13. That provided a solution under paragraph 207(4)(b). The amendment that is recommended is as follows:

(b) bookmaking, pool selling or the making or recording of bets, including bets made through the agency of a pool or pari-mutuel system, on any horse-race; or

That includes an exemption for horse racing so that others cannot simply add horse racing onto their portfolio. It would be excluded from fixed-odds single sports wagering but would continue on under the regulated current system.

The second small but important change would be to provide historic horse racing as a parimutuel wagering product whereby people can wager on the outcome of horse races that have been held in the past. This has been implemented in Kentucky. It's been implemented in Virginia, and it has provided sources of parimutuel wagering, which help support the current horse racing business.

In order to allow for historic horse racing, the word “horse-race” in subsection 197(1) simply needs to be removed. Our recommendation regarding the word “bet” is that it be defined as follows:

bet means a bet that is placed on any contingency or event that is to take place in or out of Canada, and without restricting the generality of the foregoing, includes a bet that is placed on any contingency relating to a fight, match or sporting event that is to take place in or out of Canada save and except that, with respect to a horse-race, bet means a bet that is placed on any contingency or event in or out of Canada;

That would remedy the issue and allow historic horse racing, which we see as a vital addition to the product.

These two changes would make a significant difference to the lives of the 50,000 people who are involved in horse racing in Canada.

[Bill O’Donnell, President, Central Ontario Standardbred Association]

Good afternoon. Thank you, Madam Chair, for this opportunity to present to your committee.

My name is Bill O'Donnell. I am the president of the Central Ontario Standardbred Association, which represents and supports the horse owners, trainers, drivers, caretakers, tradespeople and others who participate in horse racing in Ontario's 12 standardbred tracks.

I have been involved in horse racing all my life, as an owner, breeder, trainer and driver. I am currently the vice-president of the Ontario Standardbred Adoption Society, or OSAS for short, which is where we find homes for retired racehorses. I am also a director on the Ontario Racing board.

Our association supports the proposed expansion and regulation of single-event sports wagering in Canada but wants to ensure that our agriculture-based horse-racing industry is protected in the process.

I'd now like to turn our presentation over to Dave Drew for more details about our recommended changes to Bill C-218.

[Rhéal Fortin, Bloc, Rivière-du-Nord, QC]

Thank you, Madam Chair.

If the Nordiques come back to Quebec City, I want to know before anyone else. I'll have bets on that.

My question is for Mr. Melia.

I understand that the Canadian Centre for Ethics in Sport covers a number of sports, not just hockey, for example.

I would like to hear your views on the issue of including horse racing betting in Bill C-218.

There is a debate right now. Some would like to see horse racing bets excluded and others think they should be treated the same as any other sports bet.

[Sandy Hawley]

Well, I'm not really an expert on legislation, but I think Bill C-218 includes horse racing for single sport betting.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

To the Canadian Centre for Ethics in Sport, I think your requests are very reasonable. They would be good things to do, even outside the legislation—also within it—in terms of regulations and so forth. They may not be specifically here but should be accomplished and set as a goal. Thank you for your presentations and your commitment to these measures. It makes important strides for several reasons.

To Mr. Hawley, on the historical horse racing, it seems to me that the horse-racing industry is looking more for a revenue stream than really anything else.

I have a lot of empathy because the provincial government under McGuinty closed the Windsor raceway despite the fact that we introduced a charity casino, which actually made a profit and was doing okay. We lost all the subsequent benefits, as you mentioned.

I have empathy for you right now, jealousy even, with your being in Kentucky. It's actually a quicker drive from Windsor to Kentucky, where you are, than it is from Windsor to Ottawa.

I really have a lot of empathy, but I guess the problem is this: Would you not agree that historical racing is based on fiction and algorithms? That makes it a little bit different. You could do the same thing with historical betting on hockey, football, anything.

Perhaps that might need some more thought, and provincial regulations could offer a better path. Would you not agree that might be better? If not, what is a specific amendment that you want for C-218?

My understanding is that it would require several...and perhaps even different legislation that could actually scuttle this one. Maybe you can comment on that, please.

[Sandy Hawley]

Yes, sir.

We actually have tremendous technology at Woodbine, and of course at racetracks across Canada. We have HorsePlayerInteractive, which is a way of betting on horses. I think that if the government would allow it, Woodbine would be a big part of Bill C-218.

[Sandy Hawley]

Yes, sir.

We're definitely not against single sports betting. It's just a thing that we hope we can help regulate in some way.

As I mentioned, there are a number of jobs that depend on this. I mentioned a few jobs, but there are many more that I could mention. I think it's very important that there be an amendment on C-218.

[Keith Wachtel, Chief Business Officer and Senior Executive Vice-President, Global Partnerships, National Hockey League]

Thank you, Madam Chair, and members of the committee.

My name is Keith Wachtel. I'm the chief business officer and senior executive vice-president of global partnerships at the National Hockey League. I'm here today with my colleague, Conal Berberich, a vice-president in our legal department.

We would like to thank you, Madam Chair, and the committee members, for inviting us here today to share with you the NHL's journey and experience on the topic of single-event sport wagering.

First, the National Hockey League supports Bill C-218, the proposed Canadian federal legislation to eliminate the provision in Canada's Criminal Code that prohibits provincial governments from offering wagering on a single sport event. Though the NHL had previously opposed single-event sports wagering, for the reasons we stated publicly on the record, the reality is that the landscape in North America has changed. Our experience in the United States since 2018 has demonstrated that a well-regulated marketplace that both advances and protects the interests of relevant constituencies can be established in a safe and responsible manner.

Since the Supreme Court of the United States' 2018 decision in Murphy v. the NCAA overturned the Professional and Amateur Sports Protection Act, the American Gaming Association reports that 25 states and the District of Columbia have passed legislation that permits, or will soon permit, single-event sports wagering. In that regard, we point to the growing number of commercial relationships that are being formed within the NHL, including U.S.-based league-level relationships with currently five, and soon to be more, major sports books.

As part of our league-wide policies that govern these relationships, sports books are required to, among other things, represent and warrant that they are licensed and legally compliant, including enforcing age verification and geo-gating requirements; taking appropriate steps to monitor wagering on the NHL and share information; offering only appropriate bet types; and promoting responsible gaming. As part of the NHL's U.S. efforts, we have partnered with industry trade groups and have committed resources in support of responsible gaming, including public service campaigns.

All interested constituencies are aware that such a change in the law governing sports betting in Canada will present both opportunities and certain challenges, as it has in the United States, as we collectively navigate the new sports betting landscape. Establishing a level playing surface across the North American sports betting landscape will promote transparency, fairness and responsibility for all stakeholders in the space, as well as for the public.

We believe that any sports betting legislation should provide a comprehensive framework that appropriately takes into account and adequately balances the diverse interests of the various constituencies. Accordingly, we strongly believe the key elements of any legislation should, among other things, provide for appropriate consumer protections and technological safeguards, for example, age and geographic restrictions, abuse or addiction hotlines and the like; ensure the protection of intellectual property rights; permit leagues and governing bodies to restrict the types and timing of bets that might be placed on games, for example, certain so-called prop bets that might lend themselves to a perception of inappropriate incentives or behaviour; and appropriately allocate resulting revenues across the various stakeholder groups.

Although the National Hockey League has no concerns regarding the integrity of our game, we take our responsibilities in this regard seriously, as reflected by the extensive, ongoing monitoring we undertake in the normal course, both internally and via leading global experts in the space, such as Sportradar.

The National Hockey League provides family entertainment and has worked tirelessly since its inception in 1917 to earn and maintain a reputation for the absolute integrity of its competition for the good of the sport and our fans, irrespective of any legislative changes across Canada and the United States related to single-event sports wagering. We prohibit, and will continue to prohibit, all National Hockey League employees and players from engaging in any wagering on National Hockey League games.

Madam Chair, thank you again. We look forward to the committee's questions.

[David Shoemaker, Chief Executive Officer and Secretary General, Canadian Olympic Committee, Canadian Centre for Ethics in Sport]

The timing is right for Canada to expand sports betting. This bill has the potential to unlock new growth opportunities, reduce illegal betting and generate revenues for both the sport industry and governments. Our interests are in ensuring that single sport betting is introduced in a responsible, effective and profitable manner.

First is responsible, the impacts of Bill C-218 may include an increase in match manipulation and gambling, which we believe poses at least as much risk in amateur and Olympic sport where athletes don't earn big incomes and large amounts of betting still take place.

The International Olympic Committee has created a code on the prevention of manipulation of competitions. In 2020, together we organized a workshop in Canada on match manipulation. Many international sport organizations have established integrity units to safeguard their sports and to educate and protect athletes. A focus on protection and education will be required going forward. A portion of incremental tax revenues should be earmarked for mental health care and addiction education.

Second is profitable. Deloitte estimates that within five years of legalization, Canadian sport betting could grow to $28 billion a year. We must ensure that revenues are distributed back to the principal content providers that stage the events, in our case, a member national sport organization, many of whom operate on shoestring budgets, to enable them to provide increased support to athletes at all levels of the sport system.

Last is effective. National sport organizations will need support. In establishing infrastructure to ensure betting integrity and in monetizing all available channels, including partnerships with sport betting companies, media rights and data sales, we must equip sport organizations with the tools and support to capitalize on the expansion of sport betting.

We believe the expansion of betting options can be a game-changer and if we focus on betting being responsible, effective and profitable, we can all win.

Thank you.

[Paul Melia, President and Chief Executive Officer, Canadian Centre for Ethics in Sport]

Thank you very much.

Good morning, Madam Chair and members of the committee.

The Canadian Centre for Ethics in Sport is pleased to be here today with the Canadian Olympic Committee with whom we've been collaborating to examine the impact of Bill C-218 on Canadian sport.

Through this short presentation the CCES will share with you concerns around the increased risk of match manipulation and ways to mitigate that risk. The COC will comment on the potential for revenue generation to support sport development in Canada.

The CCES supports Bill C-218 as we believe a regulated framework is needed to appropriately manage single event sport betting in Canada.

Technology and organized crime have combined over the years to render Canada's current laws regarding prohibition of single event betting all but meaningless. Single event betting on Canadian sports, including by Canadian residents, is already a multi-billion dollar a year business but most of the revenue is going to organized crime. Legalizing and regulating single event betting in Canada would be an effective harm reduction strategy. However, it also comes with associated risk to the safety of athletes and the integrity of Canadian sport.

If Bill C-218 is to move forward, the committee should be aware of the increased risk to athletes' safety and the integrity of sporting competitions posed by match manipulation. Legalized single event betting in Canada will increase the risk of match manipulation. Match manipulation is linked to organized crime, which takes advantage of vulnerable athletes, officials, coaches and other support staff to fix the outcome of sporting competitions.

This is a global issue, and it's already occurring in Canada. Many countries, such as Australia, Great Britain and Germany, are actively addressing match manipulation through legislation designed to prevent, detect and punish match fixing in sport. No such legislation, no such legislative framework, currently exists in Canada. The CCES therefore recommends that the passing of the bill be accompanied by the following specific actions to reduce the risk of match manipulation.

Canada should ratify the Council of Europe Convention on the Manipulation of Sports Competitions, which is open to non-European nations. Australia has done so.

The Government of Canada should require all federally funded sport organizations to: one, demonstrate they have rules in place to manage the risk of match manipulation, including disciplining those engaged in match fixing; and, two, demonstrate that all participants within their sport are educated about the risk.

Incremental costs to the Government of Canada and to federally funded sport organizations associated with the above two recommendations should be covered through the incremental revenue associated with single sport betting.

I will now turn it over to David.

[Sandy Hawley, Retired Thoroughbred Jockey, As an Individual]

Thank you, Madam Chair and Mr. Moore.

My name is Sandy Hawley. I'd like to thank you for this opportunity to speak to you on behalf of the racing industry across Canada.

I was a professional thoroughbred jockey for 30 years, starting at the age of 19 years old. I rode around the world, but mostly in Canada and the United States. I have been lucky enough to receive a number of awards throughout my career, including the Order of Canada. I'm also a member of Canada's Sports Hall of Fame, the U.S. racing hall of fame and the Canadian Horse Racing Hall of Fame. Also, it was a great honour to receive the Lou Marsh award as Canada's athlete of the year in 1973 and 1976.

I'm speaking before you today from my winter residence in which happens to be one of the most historic racing jurisdictions in the world, Kentucky, home of the Kentucky Derby. Despite its rich history, racing here in Kentucky has also faced its challenges recently, but the industry now has a positive outlook thanks to historical horse racing which may single-handedly save the industry.

Horse racing has provided me the opportunity to race around the world and ended up by my meeting my lovely wife Kaoru, who is also a thoroughbred jockey.

As you can see, horse racing has been very good to me. This industry contributes $5.7 billion to the Canadian economy each year and supports over 50,000 jobs across Canada. These jobs depend on revenue from parimutuel wagering on the horse-racing industry. The revenue from [Technical difficulty—Editor] and secures many people's incomes, jobs and livelihoods. These include grooms, hot walkers, trainers, owners, blacksmiths, veterinarians, agriculture workers and jockeys, just to name a few.

There is a deep history of tradition in Canadian horse racing. In fact, just a few years ago, the Canadian horse industry celebrated its 250th anniversary.

I understand the world is changing, and sports betting happens all around the world. Although I'm not an expert in this area, it seems like it makes sense to legalize it so the government can regulate it and use it to create jobs and generate revenue.

I am in favour of single sports betting, but if not done correctly, it could be devastating to our industry and the many jobs within the agriculture and rural communities.

I've always been very proud of Canadian horse racing, notably Woodbine Racetrack, where I rode my first race back in 1968. Horsemen from around the world love to come to race at Woodbine Racetrack for its beautiful facility and hospitality.

I've also worked for Woodbine Entertainment for the last 25 years, since I retired from my riding career, as an ambassador in media and media relations, and I continue to do so.

I mentioned earlier that I spend my winters here in Lexington, Kentucky, where there's historical horse racing, whereby a wager can be made on an anonymous race that happened in the past. Basically it's the same thing as wagering in a live race, but instead there's no need of operating a live race. It uses thousands of anonymous races from the past, which probably include a few of mine, and offer it as a wagering experience for the customer. Similar to betting on a live race, some of the money is given back to the industry to help sustain it. Historical horse racing has literally been the saviour for horse racing in Kentucky, and I strongly believe historical horse racing can have some profound impact here in Canada.

I'm counting on the government to recognize the industry, its hard-working people, its value, and make the right decision on the amendment of Bill C-218 so that betting on horse racing would be excluded. Without the exclusion, it would kill the revenue stream that supports a sport, all the people and the businesses that depend on it. For instance, it would be like trying to drive an automobile without gas or a battery.

On behalf of the entire industry, I am asking this committee to ensure that horse racing has an opportunity not only to survive but also to thrive for another 250 years as it continues to be an important part of the daily lives of so many, as it has been to mine.

Thank you for your time this morning.

[The Chair, Liberal, Iqra Khalid]

I call this meeting to order. Welcome, everybody, to meeting number 25 of the House of Commons Standing Committee on Justice and Human Rights.

Once again we are on Bill C-218. The sponsor, Mr. Waugh, is with us today. He's replacing Mr. Cooper.

Welcome back, Kevin.

Mr. Masse, who is there in person, is replacing Mr. Garrison.

Welcome back.

As well, Vance Badawey is replacing Mr. Virani today.

Welcome, Vance. It's great to have you here today.

Today's meeting is taking place in a hybrid format. The proceedings will be made available via the House of Commons website. Just so that you are aware, the webcast will always show the person who is speaking rather than the entirety of the committee. For Mr. Masse specifically, we ask that you please follow your guidelines and protocols with respect to distancing and such.

As the chair, I will be enforcing these measures for the duration of the meeting. I thank members in advance for their co-operation. To ensure an orderly meeting, I will outline a few rules to follow.

For interpretation, you will see a choice at the bottom of your Zoom screen. Please select the language that you would like to listen to. You can speak in either of the official languages of your choice. Before speaking, please wait until I recognize you by name. If you are on video conference, please click on the microphone icon to unmute your mike. For those in the room, your microphone will be controlled as normal. When you are not speaking, your microphone should be on mute.

As a reminder, all comments by members and witnesses should be addressed through the chair. With regard to the speaking list, I do have a speaking list that is available [Technical difficulty—Editor]

[The Chair, Liberal, Iqra Khalid]

No, I meant the Canadian Football League, but perhaps we can revisit that based on what you're advising us. We'll have a conversation with the clerk afterwards and ensure that they're represented here at least. The actual league, the CFL, did advise us that they'll be providing written submissions regardless.

Just so members are aware, at our next meeting on Thursday, we will be having Minister Lametti appear in the first hour, and then the second hour will be officials only. We'll be meeting about the supplementary estimates (C) 2020-21 and the main estimates for 2021-22. Keep that in mind as we go into our next meeting.

We have a break week in between, and then March 23 will be the last meeting on C-218. On the 25th, the first hour will be dedicated to considering the draft report for the coercive conduct study, and then in the second hour, we'll go into clause-by-clause for Bill C-218.

Those are my updates with the agenda.

Mr. Moore, I see your hand is raised.