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.

[Michael Ellison, Counsel, Criminal Law Policy Section, Policy Sector, Department of Justice]

Thank you very much, Madam Chair.

Thank you for your invitation to appear in relation to Bill C-218, an act to amend the Criminal Code, sports betting. I'm pleased to appear before the committee in my capacity as counsel within the criminal law policy section of the Department of Justice.

Today I'm joined, as noted, by my colleague Carole Morency, who is senior general counsel and director general of the criminal law policy section.

I'd like to take this opportunity to offer some brief comments on Bill C-218 and the structure of the gaming and betting provisions of the Criminal Code and to discuss the differences between Bill C-218 and Bill C-13.

Bill C-218 proposes to decriminalize single-event sports betting by permitting provinces and territories to offer games or betting products concerning the outcome of a single sporting event, if they choose to do so, as what's called permissible lottery schemes under the Criminal Code.

Under Bill C-218, decriminalization would be achieved by repealing a single paragraph within the Criminal Code that currently excludes single-event sports betting from the definition of what is a provincial or territorial lottery scheme. This paragraph, along with the rest of the gaming and betting provisions, is located in part VII of the Criminal Code. The general structure of these provisions can be broken down in the following manner.

First, all gaming and betting activities are prohibited by default in Canadian law. From this general prohibition on gaming and betting, we find two carve-outs or exceptions, if you want to call them that, for legal gaming and betting.

The first carve-out or exception is the federal system of parimutuel betting on horse racing that my colleague from the CPMA just described. While many aspects of the horse racing industry are indeed regulated by the provinces and the territories, the actual parimutuel system of betting is regulated by the CPMA. As was just noted, it's a special operating agency within Agriculture and Agri-Food Canada.

Now, the second carve-out from the general prohibition on gaming and betting is in the form of the provincial and territorial lottery schemes. This carve-out has been in place since 1969-70; it permits provinces and territories to offer a very broad range of games that involve elements of chance or betting products.

We refer in the Criminal Code to provinces and territories “conducting and managing” these lottery schemes, and in fact this is very similar to regulating these lottery schemes. However, in limited circumstances the provinces and territories may also license other entities to operate lottery schemes. Typically we see this in the form of charitable lotteries. These charitable lotteries would be licensed by the provinces and territories.

This brings us back to Bill C-218. Subsection 207 (4) of the Criminal Code defines permissible lottery schemes. We find there the definition of what a “lottery scheme” is. So long as provincial and territorial authorities regulate gaming products within this definition, they are legal activities.

While the definition is broad, Parliament has maintained certain exclusions to this definition, and these exclusions in effect make specific activities once again subject to the general prohibition and therefore illegal.

The exclusion from the definition of a permissible lottery scheme that is the subject of Bill C-218 is found in paragraph 207 (4)(b) of the Criminal Code. This paragraph prohibits the provinces and territories from offering betting products on single-event sporting events. Repealing this paragraph would therefore leave the provinces and territories unrestricted in their ability to offer gaming and betting products that they consider appropriate for races, fights, single-sport events or athletic contests.

Bill C-13, in contrast, retains some of the language found in this paragraph and introduces the term “horse race”. The effect is that Bill C-13,, unlike Bill C-218, would retain the federal role of regulating systems of betting on horse racing across the country. Presently, in this paragraph, the terms “race” and “single-sport events” operate to prohibit provincial and territorial activity in this field.

Those are my comments, and I think my five minutes have just run out.

I'd like to thank you again, Madam Chair and everybody, for the invitation to my colleague and me.

[Lisa Foss, Executive Director, Canadian Pari-Mutuel Agency, Department of Agriculture and Agri-Food]

Thanks very much.

Good morning, Madam Chair and members of the committee. Thank you very much for the opportunity to speak with you today. I'm the executive director of the Canadian Pari-Mutuel Agency, CPMA. Let me start by explaining a little bit about the CPMA.

The CPMA is a special operating agency situated within Agriculture and Agri-Food Canada that regulates and supervises parimutuel betting on horse races. The legislative authority was established in the 1920s.

The mandate of the CPMA is to ensure that parimutuel betting on horse racing is conducted in a way that is fair to the betting public.

You might not be familiar with the term “parimutuel”. Very simply, it's a form of betting that is pool-based, where the bettors are competing with each other for a portion of the pool. The winners divide the total amount of the bet—that is to say, the pool—in proportion to their bets, less a predetermined percentage for the management of the pools by the racetrack operators, applicable provincial taxes and the CPMA's federal levy.

The CPMA's funding model is set up under the Revolving Funds Act, which means it does not receive any government funding. Rather, its revenue is generated through a 0.8% levy applied against each dollar bet in Canada on horse racing.

The total amount bet in Canada on horse racing in fiscal 2019 was $1.2 billion, which generated an annual revenue of just over $9 million for the CPMA. The sector and the CPMA rely on the revenues earned from this betting to fund their operations. Over the last decade or so, these funds, the total amount bet in Canada, have been declining steadily. In the last 20 years, they have dropped by about 27%.

With the funds generated through its levy, the CPMA currently monitors parimutuel betting at 31 racetracks and 145 betting theatres. Betting theatres might be something that you're familiar with at your favourite sports bar. The CPMA has a staff of 31. I'm going to very quickly highlight the three buckets of things that we do.

First, we provide regulatory approval and oversight for betting on parimutuel horse races. This includes, for example, ensuring accurate calculations of the amounts retained by the racetrack operators and the amounts paid out to the winners. We investigate complaints, and we audit systems.

Second, we issue betting permits and licences to Canadian racetracks and their associated betting theatres.

Third, we deliver the equine drug control, or anti-doping, program to deter the unauthorized administration of drugs and medications to racehorses. This national program ensures consistency and helps maintain the integrity of the sport. In an average year, the CPMA tests approximately 25,000 samples of blood or urine. Where a drug violation is found, a certificate of positive analysis is issued by the CPMA. It is up to the province to adjudicate and impose penalties on the violation. For example, that could be a fine or a suspension.

While the CPMA is focused on betting and equine anti-doping, it's the provincial governments that regulate the sport itself. For example, it is the provinces that assign the race dates; officiate the races, with judges and stewards; and license the racetracks, owners, trainers and jockeys.

Now, very quickly, I would like to address the technical elements of Bill C-218 as they relate to horse racing.

Bill C-218 is silent on horse racing, which means that if Bill C-218 proceeds as currently drafted, it could be interpreted as permitting the provinces and territories to conduct and manage all forms of betting on horse racing, including parimutuel betting, which is an area that is currently regulated by the federal government through the CPMA.

If the provinces and territories were to offer and regulate betting on horse racing, it could take customers away from the racetrack operators, who currently are the only entities issued betting permits by the CPMA. This would put further pressure on the horse racing industry and the revenues base of the CPMA.

That's it. I think that's my five minutes.

I'd be very happy to answer your questions related to regulating parimutuel betting on horse racing.

Thank you.

[Kevin Waugh, Conservative, Saskatoon—Grasswood, SK]

Thank you, MP Masse, for all your work on your bill and for piggybacking with me on my private member's bill, Bill C-218.

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

Thank you, Madam Chair.

Mr. Waugh, it is no secret to anyone that the Bloc Québécois is in favour of your bill.

We in the Bloc Québécois also feel that there are a number of reasons to leave the governments of Quebec and the provinces to manage this industry and use the profits that it generates as they see fit. We are on the same wavelength in that respect.

Could you quickly explain to us the difference between Bill C-13 and Bill C-218? We understand that Bill C-218 would repeal the paragraph in question completely, whereas the proposal in Bill C-13 is to keep the provision as it applies to horseracing.

If Bill C-13 is passed, would you be satisfied? Does our choice have to be to completely remove the paragraph in its entirety?

[Kevin Waugh, Conservative, Saskatoon—Grasswood, SK]

Thank you very much, Madam Chair and all members of the justice committee, for inviting me here today to discuss Bill C-218, the safe and regulated sports betting act.

This important piece of legislation seeks to make a rather simple change to the Criminal Code to remove the long-standing restriction against betting on single-sport events, fights and races.

By the way, I was very happy to see the broad support this legislation received in the House of Commons last week and the positive remarks made by all colleagues from all parties.

Single-event sports betting already takes place in this country, and it is a massive industry. According to some estimates, the single-event sports betting industry is worth $14 billion per year. Unfortunately, due to the fact that it is banned under the Criminal Code, this betting all takes place through offshore betting websites and black market bookmakers, most of whom have ties to criminal organizations like the Hells Angels.

This, in and of itself, spawns a variety of problems. First of all, the fact that single-event betting remains prohibited means that the provinces, which are typically responsible for management of lottery and betting systems, are totally unable to regulate this industry. As such, none of these websites or bookmakers are subject to any regulation or taxes.

Not being subject to regulation or government oversight, these websites have no consumer protection requirements, aren't required to maintain or support problem gambling programs, and don't reinvest or spur any further economic activity in the communities that they generate their profits from. This means that all of the profits from such wagers go straight into the pockets of foreign website operators and criminals. In the case of criminal organizations like the Hells Angels, which operate the black market betting rings and websites across this country, the money generated goes on to fund other forms of criminality, providing increased risk to the safety of our communities.

While parlay betting, which requires bettors to select the winners of multiple games correctly, is legal and already exists as a product available in Canada, parlay-betting products like Pro-Line and Sport Select generate only a small fraction of the sport betting in this country, approximately $500 million per year. These products are naturally less attractive to bettors, as the odds of succeeding in their wagers are greatly reduced, so they seek avenues to bet on single events and go toward avenues that most bettors don't realize are actually restricted in this country.

By removing these restrictions in the Criminal Code and putting single-event betting into the hands of the provincial governments, the provinces will be able to offer the products that bettors actually want to bet on and take betting out of the hands, then, of this black market. Organizations such as the Western Canada Lottery Corporation, Lotto-Quebec, Ontario Lottery and Gaming Corporation and others that the governments might entrust with these products have experience in these industries and are highly regulated to ensure that consumers are well protected.

It also means that the billions of dollars that currently go to offshore sites and criminal organizations are actually going back into our communities, creating jobs and supporting community programs.

Many provincial governments and their regulators have expressed their support for this proposal, as have amateur sport organizations like Canada Soccer; professional sport leagues, including the National Hockey League, the National Basketball Association, Major League Baseball, the Canadian Football League and Major League Soccer; and community organizations, plus municipal governments.

In closing, Madam Chair, the legalization of single-event sport betting provides a much-needed opportunity to tackle illegal gambling in this country and create new opportunities for economic development and new avenues for a variety of sectors, especially given the difficult times that we find ourselves in.

Bill C-218 has widespread support, both in the House and across this country.

I trust that in the name of good policy we can work together to get this legislation through this committee and to the rest of the legislative process.

Again, thank you, Madam Chair, and all members of the committee, for your time here today. I'm more than happy to answer some questions.

[The Chair, Liberal, Iqra Khalid]

We will start the second hour of this meeting.

For the duration of our study of Bill C-218, I welcome Mr. Masse, who will be replacing Mr. Garrison throughout this study.

Brian, welcome to our committee. It's really good to have you.

I know we're all quite familiar now with the Zoom technology, but I'll remind members to speak slowly and clearly, to please unmute when they are speaking and to mute when they are not speaking.

With that, I welcome Mr. Waugh, who is here by video conference, even though he's in Ottawa.

As a reminder, I have a one-minute card and a 30-second card for members as we go through our questioning, just to make it easier for everyone.

Mr. Waugh, you have five minutes to make your opening remarks.

Single Event Sports Betting

[Brian Masse, NDP, Windsor West, ON]

Madam Speaker, yet again I rise in the chamber to discuss single event sports betting, as the chamber voted overwhelmingly in favour of Bill C-218, which would permit each province to determine how to regulate legal betting, so revenues can flow, jobs can be created and the billions of dollars feeding organized crime, bookies and off-shore operators can end. The bill was originally proposed by NDP MP Joe Comartin, and later me, and I was pleased to withdraw it, to permit the member for Saskatoon—Grasswood to join the efforts, and he has done good work.

This decades-plus adventure has been an exhilarating tale. Indeed, it passed in the House before dying in the Senate, but now some members, including the Prime Minister, have changed their vote. That is not a weakness, but a strength, speaking to the urgency of fixing the problem. Among the drama has been the recent government bill, Bill C-13, introduced with some doing victory laps, chest thumping, high fives and slapping backs, yet the government scuttled its own efforts, having never brought it to the floor for debate. Ironically, I defended the government, as I think the Minister of Justice deserves credit for drafting good legislation.

As we go forward, I want to thank the members who supported the bill, including unanimously from the NDP, the bloc and the Green Party, and the Liberals and Conservatives who did not. I remain open to helping to work on this issue.

I thank David Cassidy and Ken Lewenza from Unifor 44, Mayor Dilkens, and Eddie Francis, Rakesh Naidu and Matt Marchand for being on this journey.

Criminal Code—Speaker's Ruling

[The Speaker, Liberal, Anthony Rota]

Following the order raised earlier today, I would like to make a statement on Bill C-13, an act to amend the Criminal Code with regard to single-event sports betting and its similarity to Bill C-218, an act to amend the Criminal Code with regard to sports betting, standing in the name of the member for Saskatoon—Grasswood. As members are aware, both bills seek to amend the same provision of the Criminal Code as it relates to single sports betting.

While Bill C-13 was introduced in the House on November 26, 2020, and has yet to be called for debate by the government, the general provisions surrounding single sports betting have in fact not only been debated in the House during consideration of Bill C-218, but a decision was made yesterday by the House on the general principle of allowing all single sports betting, and the bill was referred to the Standing Committee on Justice and Human Rights. The House is now placed in an unusual situation where a decision was made on one of two very similar bills standing on the Order Paper.

The Chair recognizes that both bills are not identical; they are, however, substantially similar as they both amend the exact same provision of the Criminal Code for similar purposes.

Both Bill C-218 and Bill C-13 seek to amend the same paragraph of the Criminal Code as it pertains to sports betting. Bill C-218 repeals paragraph 207(4)(b) of the Criminal Code in its entirety, to make it lawful to conduct and manage a lottery scheme that involves betting on a race, a fight or a single sporting event. As for Bill C-13, it conserves the paragraph, but seeks to amend it to make single sports betting lawful, except for bets on a horse race.

The rule of anticipation, which prohibits the same question from being decided twice by the House within the same session, is explained in the following manner at page 568 of House of Commons Procedure and Practice, third edition:

The rule of anticipation becomes operative only when one of two similar motions on the Order Paper is actually proceeded with. For example, two bills similar in substance will be allowed to stand on the Order Paper but only one may be moved and disposed of. If a decision is taken of the first bill (for example, to defeat the bill or advance it through a stage in the legislative process), then the other may not be proceeded with.

This makes clear that if two bills are similar, without being substantially the same, both may be placed on notice, introduced and given first reading, and both could even be debated at second reading, provided that the House has not taken a decision with respect to either of them.

Given the decision of the House yesterday afternoon, the question therefore before the House is, following the adoption of Bill C-218 at second reading, should Bill C-13 be permitted to proceed further in the legislative process?

In adopting Bill C-218 at second reading, the House has agreed to the principle of the bill and consequently has agreed to repealing the portion of the Criminal Code that deals with sports betting. While there are examples where the House has repealed sections of an act already amended by another bill adopted by the House in the same session, this is not exactly the situation before us today. Instead, since Bill C-218 seeks to completely repeal paragraph 207(4)(b) of the Criminal Code, it seems to the Chair that it would not be possible for Bill C-13 to continue in the legislative process, as it would seek to amend a paragraph of the Criminal Code that would no longer exist upon adoption of Bill C-218. In fact, the Chair notes that other avenues would be open to the House to achieve those same ends, such as through amendments proposed to Bill C-218 during the committee's study. As a consequence, the Chair has difficulty seeing how the House could now move forward with Bill C-13 after it has adopted the larger principle of repealing the very portion of the Criminal Code that Bill C-13 seeks to amend.

Consequently, as long as Bill C-218 follows its course through the legislative process during this session, Bill C-13 may not be proceeded with. As was mentioned during the intervention yesterday, as well as previously by the member for Saskatoon—Grasswood, members who wish to further review or amend the provisions included in Bill C-218 should follow the proceedings and take part in discussions during the hearings of the Standing Committee on Justice and Human Rights.

I thank all members for their attention.

Criminal Code

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, I rise on a point of order. I would like to provide input on a decision that was asked of the Speaker earlier today. I will make my intervention short, and I thank the Speaker for the indulgence.

I rise today to provide input on a matter that was raised by the member for Kingston and the Islands this morning and further discussed by the official opposition House leader. I would like to discuss the significant and meaningful difference between Bill C-218 and Bill C-13.

First, the member for Kingston and the Islands, when he spoke in the House on Wednesday, February 17, stated:

We also proposed to engage the provinces, territories, indigenous communities and organizations that have expressed an interest in discussing how gambling is regulated. We believe Bill C-13 is substantively different from Bill C-218, as it includes a horse racing provision and achieves its objectives through different means.

I agree with this statement. The government member is correct and is stating the facts. The bills are substantially different. This was found in an analysis conducted by the subject matter experts at the Library of Parliament in a section of a research report comparing Bill C-13 and Bill C-218.

The report looks at how Bill C-218 would repeal paragraph 207(4)(b) of the Criminal Code in its entirety. The consequence would appear to be that betting on a single sport event or athlete contest would then be permitted, since those activities would no longer be excluded from the definition of “lottery scheme”, but so would be betting on other types of activities referred to in that paragraph, notably all types of races.

By way of contrast, Bill C-13 would amend paragraph 207(4)(b), rather than repealing it, so that the following activities would continue not to be permitted lottery schemes: “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”.

In other words, Bill C-13 would continue to exclude betting on horse racing as a type of lottery scheme the provinces could engage in. The governmental materials issued on Bill C-13 confirm the explanation that the regulation of single event sports betting would be up to the discretion of each province and territory, with the exception of horse racing, which would remain regulated and supervised by the Canadian Pari-Mutuel Agency.

As the experts have pointed out, there are very significant differences in both bills.

Next I would like to discuss the process. The place to decide which of these significantly different bills merits further progress is in a relevant committee, which would examine both bills in detail, hear from stakeholders and make considered determinations. The committee would then vote on these bills and resolve which one should proceed to third reading.

I trust the legislative process of the House. The procedures, evaluations and safeguards are built-in. We should trust it and allow members to carry out their duties as legislators, which will result in the most robust and thorough bill.

It is unfortunate, Mr. Speaker, you have been put in this situation. This mismanagement of Bill C-13 has caused delays. It has been debated constantly, and taken on and off the calendar, which has created confusion and concern, and has led to these unnecessary circumstances.

Business workers and communities have been waiting long enough to have this substantial issue addressed. I have had the privilege of being a member of this chamber since 2002. During all these years, I have witnessed that the tradition of the House, when it is uncertain, is for the Speaker to allow the debate and the process to continue. I hope we can uphold this time-honoured practice.

I appreciate the indulgence of the House today in allowing me to speak to this issue. I did not want to want to intervene in the momentum of the debate today, but I had to given what the government has done.

[The Chair, Liberal, Iqra Khalid]

Oh, sorry, Mr. Fortin. The meeting is on Tuesday, but I'm talking about the deadline to submit your witnesses for Bill C-218.

[The Chair, Liberal, Iqra Khalid]

I will look through the schedule to see if we can find an opening for a subcommittee meeting. At this time, it seems that it is not going to be possible as we are giving drafting instructions and then starting the study on Bill C-218. However, we will absolutely make sure that you have ample opportunity in a steering meeting to speak to your motion as well.

I understand the limitations on time right now. I just want to quickly see, Monsieur Fortin, if Monday the 22nd by noon is okay for witnesses from each party. With the 12 witnesses, excluding Mr. Waugh as the sponsor, it would be four witnesses for the Conservatives, four for the Liberals, two for the NDP and two for the Bloc.

Are we agreed on that breakdown for Monday, February 22 at 12 noon?

Monsieur Fortin.

[The Chair, Liberal, Iqra Khalid]

The next thing, as I had outlined in our last meeting, is that on Tuesday coming, in the first hour, we'll be giving drafting instructions to the analysts for this study on domestic violence. For the second hour, I am proposing that we invite the sponsor of Bill C-218, Mr. Waugh, to come and speak to his private member's bill. Then, we will have two further meetings on Bill C-218, then one for clause-by-clause, and then we will get back to our established schedule.

[Rob Moore, Conservative, Fundy Royal, NB]

We can have a subcommittee meeting on this, but I'm presuming that would mean that after we deal with Bill C-218 we would then return to our previous schedule for COVID-related impacts on the justice system.

[Rob Moore, Conservative, Fundy Royal, NB]

Madam Chair, what is your suggestion regarding the timing for Bill C-218 in terms of days of study? You're suggesting the first hour would be the second hour of our meeting on Tuesday, and then we'd have a full meeting on—

[Arif Virani, Liberal, Parkdale—High Park, ON]

We've just concluded four meetings and the testimony is fresh in our minds. My respectful suggestion would be that we use the time we had allotted next week to wrap up this study and give direction to the analysts, etc. Once that's done, if there's a gap in between when the analysts are bringing back the report, etc. and the final conclusion in tying up this report, we can commence Bill C-218 at that time.

I think two meetings ought to be sufficient. I think there's all-party support for this bill, so it should be a fairly quick analysis of Bill C-218 on safe sports betting.