Justice Committee on Feb. 23rd, 2021

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

Thank you, Madam Chair.

Good morning, Mr. Waugh. I am pleased to meet you here rather than more formally in a meeting room in the House.

I also understand your passion for this bill and I will say that we in the Bloc Québécois are quite favourable to it.

That said, there are of course some grey areas, as in any legislation. Sports gambling addiction is a major issue, and it concerns us. Loto-Québec already has programs to address it and we feel that the province is in a position to manage the problem.

However, one aspect of the issue came to my attention head-on last week as I was listening to a report on Radio-Canada. Some experts were talking about fixing sports events and telling us that we had to be careful. They pointed out that the criminal underworld, organized crime, can fix a single event easier than it can fix a number of them and, if legislation allowed single event sports betting, it would open the door to abuse. A fix, for example, could be to offer $1 million to a goalkeeper to let in more goals in a hockey game, knowing that the profit would be $2 million or $3 million.

I see that as a major concern and I'd like to know your view. If we allow betting on a single sport event, aren't we running the risk of exposing ourselves to manipulation by organized crime?

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

Thank you for that question, MP Fortin. It was interesting in the House of Commons last week when one of your members stood up and talked about the mob activity in Montreal. It was an interesting speech that your member gave for 10 minutes in the House of Commons in the final reading of the bill.

Like I said, Ethical Sport Symposium two years ago, match manipulation and gambling.... So we're on top of this in this country. It's a concern. They did a white paper in response to this. Canada, I would say, is doing okay, but it is a concern; I am not going to say it isn't. At the same time, what do you say today when we have organized crime along with the offshore sites practically involved in it and we're not getting anything out of this?

I think, when you look at it today, Major League Baseball has a program that spring training is going under right now in Arizona and Florida, where Commissioner Manfred is talking to the teams about this. The National Hockey League has a program. The NBA has a program. All professional leagues have a program. They have staff that are talking to their athletes. They're looking at any manipulation that may or may not happen, but I can't sit here today and tell you it won't happen. I just can't. But the leagues, the professional leagues, are doing their due diligence, and I think in this country maybe we do need a commission to oversee the professional etiquette of sports in this. That's something that may eventually come out of this bill.

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

So you would be in favour of establishing a commission. Rather than waiting for it to be established, is it something that we could act on in parallel to the legalization?

Would it be appropriate to set up a program to tackle the adverse effects of gambling? We know that it's going to generate huge profits. From what I gathered earlier, you do not have exact figures and you do not know how much profit this could generate. Would it be appropriate to look at a certain percentage of the profits being used to fight gambling addiction and, at the same time, the organized crime that can set itself up around sports betting? Could percentages like that be established?

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

Right now, all the provincial authorities.... The Ontario Lottery and Gaming Corporation spends over $100 million a year on addictions, with advertising and so on. Each province across this country, in connection with the lottery corporations, does that. They spend a lot of money on addictions and gambling issues. Could they spend more if the bill passes? Yes, they could. They're going to get a sizable amount of money from single-event game betting.

The parlay betting in this country, run by Pro-Line and Sport Select, has run its course. I mentioned that about $500 million a year is spent in this country, compared with illegal betting of $14 billion.

If this bill is passed, we're speaking of billions of dollars. This is entertainment that people are doing illegally today. It is possible that the betting industry in Canada will go up. It will be an industry worth $20 billion-plus per year when this bill is passed.

[The Chair, Liberal, Iqra Khalid]

Thank you.

Thank you, Mr. Fortin.

We'll now go to Mr. Masse for six minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair, for having me here today as a guest from the industry committee. I look forward to the study.

Thank you, Mr. Waugh, for your work on this bill. It's been very strong, and I know you've reached out across all party lines, including the first time you came to me about this. I really appreciate that.

This work actually goes back to another member of Parliament, my former colleague Joe Comartin. I got involved when he became deputy speaker. He had to recuse himself from legislative work, so he inherited extra money and I inherited his work on this bill, which is about 10 years in the making. These are the deals you make.

At any rate, Mr. Waugh, I want you to talk a bit about the understanding that this law would facilitate the provinces to do what they want with regard to single-event sports betting. It doesn't make them have to do anything either prematurely or right away. They get to roll out their own organized structures and plans as they go down this road.

Maybe you can comment on that, because I think there needs to be an appreciation that each province really defines its own destiny in many respects of this.

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

Mr. Masse, the member for Windsor West, I want to first thank you for all the work you did on your bill. You were the champion in 2016 of Bill C-221, and you've been a great ally to me. I drew number seven overall in the private member's bill draw and came to you right away because I did see the need in this country for single-event betting.

As you well know, the provinces, other than New Brunswick, have spent 30 years regulating lotteries and gaming. They have all the expertise. You're exactly right on that. As I said, I think Quebec and maybe B.C. might get the jump a month in if this bill passes, but there are others that may not bring this bill out for a year. They'll have those discussions.

I can look at the Western Canada Lottery Corporation. The head office is in Leduc, Alberta. They may take a little longer because they're dealing with three provinces and one territory. Will you still go to the corner grocery store to fill out a sheet, or will you go to an app? These are questions that only the provincial authorities are looking at right now. Some are ahead of others, and some may take a little while. We'll see how this goes.

The provinces are ready for this, and I don't have to tell you that this is 10 years in the making. They're still gun-shy on this bill because they have been disappointed in the past, not only with your bill, but with Mr. Comartin's bill and then Bill C-627. However, they are ready, and we'll see where that goes.

[Brian Masse, NDP, Windsor West, ON]

This isn't the first time we've actually modernized our laws. Mr. Joe Comartin, and Shaughnessy Cohen, a Liberal cabinet minister at the time, worked on the dice games with regards to.... It goes back to basically colonial times. It's hard to believe, but it's true.

With regards to the jobs related to this, I think there shouldn't be an underestimation about some of the high-tech sector.... I know there's often a focus on casino jobs or jobs that are immediately related to tourism.

Can you speak a little bit about the value-added jobs from those in the sector? There's a company out there in Halifax and there are app companies elsewhere. There are more than just the hospitality jobs. Could you just touch on that, please?

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

I was surprised when I talked to Zane Hansen in my province last week, after this did get through the House of Commons with a vote of 303 to 15. He's the CEO of the Saskatchewan Indian Gaming Authority. They're working on an app today because their casinos have been shut down seven of the last 12 months. He had over 2,000 employees; he's down to 125 today. We're shut down for another month in Saskatchewan, and he doesn't know when the casinos will open.

On the other hand, this has given them a chance to refit. They've reached out to several companies about gaming to see if they can have an agreement with the provincial government in Saskatchewan for single-event gaming. Everybody is digital now. A good portion of this country has gone digital. This has given companies in this country a real good reset to come forth with ideas on how we can enjoy gaming.

I sit on plane a lot going back and forth, and everyone's playing solitaire. There are others on casino sites spinning slots and so on. You just have to look over a seat or two and you realize how big the entertainment industry is in North America with gaming.

[Brian Masse, NDP, Windsor West, ON]

I just have a minute.

Your notation about organized crime is accurate. As well, if we don't have any revenue stream coming in, I don't think any evidence shows that organized crime is helping sustain social programs to deal with the consequences for those with addiction to gaming or other types of issues that come out of this issue.

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

We know there's $14 billion-plus going to organized crime and off-site websites. Listen, if this passes, do you think we're going to get all that into the provincial authority? Of course not, but we're going to get a good portion of that. That's what we need in my province. We give it back to small communities for arts, culture and sports.

I would say that in this country, a lot of provincial authorities give that money back to these kinds of organizations to make the communities that much better.

You're absolutely right with organized crime. That is an issue that we have to look at in this country.

[The Chair, Liberal, Iqra Khalid]

Thank you very much for that, Mr. Masse and Mr. Waugh.

We'll go into our second round, of five minutes, starting with Mr. Lewis.

Go ahead, sir. You have five minutes.

[Chris Lewis, Conservative, Essex, ON]

Thank you, Madam Chair.

I believe Ms. Findlay is going to take these questions.

[The Chair, Liberal, Iqra Khalid]

Go ahead, Ms. Findlay.

[Kerry-Lynne Findlay, Conservative, South Surrey—White Rock, BC]

Thank you, Madam Chair.

First of all, I want to thank my colleague Kevin Waugh, MP for Saskatoon—Grasswood, for sponsoring this bill. It's a bit of déjà vu for me because when Joe Comartin first brought this up some years ago, I was on the justice committee then, so I'm revisiting this. I think things have evolved quite a bit.

MP Waugh, my riding of South Surrey—White Rock borders on Washington state. They have had legalized single-event betting in tribal casinos. Could you speak to how much economic activity is being lost in border communities like mine where neighbouring U.S. states have legalized single-event sports betting in some capacity?

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

Yes, and thank you, MP Findlay, for the history going back when this bill actually came to the justice committee for the first time. It did pass through the justice committee and into the House, so that was good.

You're losing billions of dollars, especially in British Columbia. There is no question. I look at the single-game betting for sports where you're on the border with Washington. They're going to get a new NHL franchise this fall. They have NFL football. They have the Seattle Mariners of Major League Baseball. You are losing out in millions of dollars that the Province of B.C. could give back to the communities in your neighbourhoods.

I've watched and I've looked at the graph of Pro-Line and Sport Select from B.C., because you were around $100 million and now you're down to $90 million, and the graph is continually going down in the province of B.C. I can tell you, you've lost at least $10 million to $15 million per year on Pro-Line because of that graph. People are finding ways to enjoy gaming. They have left the B.C. Lottery Corporation. They know that.

As I've just told you, in one year I've seen a reduction of at least $10 million in betting alone from the B.C. Lottery Corporation, which could be used in your province.

[Kerry-Lynne Findlay, Conservative, South Surrey—White Rock, BC]

Thank you.

Speaking of that, from my former life, I also know about tax revenues. This could generate considerable tax revenue.

I know the B.C. Lottery Corporation supports the bill. They have said that they expect it could mean $125 million to $175 million in additional annual revenue in B.C.

I know we've spoken a bit already about programs that are out there around treating problem gambling and education. You've looked into this in the most detail. If this bill is passed, what programs in that area would you like to see?

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

I think it's best practices. I have “Responsible Gambling Programming: A Cross-Canada Review” in front of me here, put on by the Canadian gaming authority.

As I've just said to you, the provincial governments have regulated gaming in this country now for the last 30 years. They have a good head start on the addiction program, on the mental health program. They have the expertise.

There has been a ton. This one was from 2020, when the responsible gambling program was put out by the Canadian Gaming Association. This is where some of the money has to go when this bill does pass.

We also know that there are the most vulnerable. This has to continue for the provincial authorities to deal with this, not only in B.C. but in every jurisdiction in this country.

Everybody seems to be on board that yes, maybe we're going to get a windfall, but let's not blow this money. You mentioned $150 million to $175 million if this bill passes in the province of B.C. Let's put some back into the gambling programs and the addiction programs, which as MPs we have no authority over, but we can certainly have those conversations. I've had those conversations with several provincial jurisdictions.

[Kerry-Lynne Findlay, Conservative, South Surrey—White Rock, BC]

I appreciate that.

I think my time is up. The chair is smiling at me indulgently.

Thank you very much, and thank you for being here today.

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

Thank you for your work on this.

[The Chair, Liberal, Iqra Khalid]

Thank you, Madame Findlay.

We'll now go to Mr. Maloney for five minutes.

Go ahead.

[James Maloney, Liberal, Etobicoke—Lakeshore, ON]

Thank you, Madam Chair.

Let me add my congratulations to my friend Mr. Waugh on successfully navigating his bill through the House of Commons. Getting things through the House is never easy, as we all know.

I share your sentiment about working together, a sentiment that's been reinforced in my mind more recently.

For starters, I support this bill, and I understand the reasoning behind it and the issue with respect to illegal gambling. Look, the fact is that I can go out tomorrow and in five minutes place a bet on anything I want for any amount of money I want, and everybody here can. If you don't know somebody, you can find somebody in five minutes.

This makes sense. My concern is the implications that flow from it, because, as we all know, gambling in Canada and here in Ontario, which I can speak to, has been an evolution. You've talked about sports Pro-Line. I remember when that came out. It was monumental. It was groundbreaking stuff. At the time, everybody rushed out and started betting on three hockey games, including me. I did it twice, and the novelty wore off. The concern is that this is going to lead to bigger gambling problems.

I've done some reading. I'm an avid hockey fan. I know that you've talked about sports already, but The Hockey News just came out with its recent edition, which is titled “Money & Power”. In it, there's an article about how the NHL is going to recover from COVID and the impact it's had on them. One of the things they talk about extensively is gambling, and specifically single-game betting.

The road they go down is that these teams are using this as a means to generate more revenue. While they're supporting the issue based on getting rid of criminal activity, greed and desire to make money are sometimes cloaked in nobility, and I think there's a bit of that going on here. Some of these teams are anxiously awaiting this.

In fact, the article makes it very clear the NHL is really hoping this is done in time for the playoffs, because there's a lot of money to be made by the league. It's going to drive fans into rinks, and this is where my question is. Here's what a lot of these teams are going to say: “We are now driving people to bet on games and we're doing it at the games. It's putting bums in seats and putting fingers on bets. We want a piece of the action.”

Do you have any concern that the teams are going to take that greed and advertise, promote and encourage people to participate in this activity in a way that's going to be a detriment to people's mental health and addiction?

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

Thanks for that question, MP Maloney.

Let's be honest with this. Rogers Sportsnet spent billions of dollars on the 12- or 13-year contract they got from the National Hockey League. How do you get that to pay for itself today ? People are not staying.... We saw the Super Bowl, Mr. Maloney, with the lowest ratings since 2006, yet we had a storyline there of one of the great quarterbacks of all time, Tom Brady, against the upstart Kansas City Chiefs.

Yes, the NHL has lost billions of dollars in the last year because of COVID. They desperately want to retrieve some of the money they have lost. We've seen advertising that is going to be taking place around the boards, on the ice and maybe even on the sweaters. I can tell you that one of the major concerns is the TV audience. Ratings are a big concern right now for all sports.

There was an article by Dan Barnes in the Calgary Herald last Thursday, who said that the Canadian Football League needs this bill to pass because they need the younger generation to get engaged in the sport. They are like the NHL. You need bums in seats. The CFL didn't run at all last year. If they don't run this year, I doubt the league will ever get off the ground again.

Yes, this is an avenue that all professional leagues need right now.

[James Maloney, Liberal, Etobicoke—Lakeshore, ON]

Thank you, Mr. Waugh.

I only have 30 seconds, so this is going to be more of a statement that a question. I really do appreciate your efforts on this.

You used the CFL as an example. Somebody brought up rigged games. That's not going to happen in the NHL and the NBA because these guys make so much money that you can't. It's impossible. I would worry more about leagues like the CFL or the Canadian Premier League soccer teams, where these players aren't making a lot of money. There is some basis for concern in that regard in some of these other leagues, depending on how the provinces roll this out, what leagues are allowed to participate and how they're allowed to participate. I just want to make sure these safeguards are on the radar, that's all.

I'm out of time. Thank you.

[The Chair, Liberal, Iqra Khalid]

Thank you very much, Mr. Maloney.

We'll go to Monsieur Fortin for two and a half minutes.

Please go ahead, sir.