Justice Committee on Feb. 25th, 2021

[Brian Masse, NDP, Windsor West, ON]

It does. The thing is, it doesn't solve Ms. Foss's problem with their situation in terms of the structural discrepancies between continuing to have the drug tests and the [Technical difficulty—Editor] costs incurred in that, and the percentages that she can raise back to 1% from 0.8%. It doesn't change that, though.

[Michael Ellison]

No, it does not change that.

[Brian Masse, NDP, Windsor West, ON]

Thank you.

I'll move to Mr. Hansen, please. You brought up a really good point that I don't think gets a lot of attention. You also help your clients with processing financial transactions.

I know organized crime does it in a different way for illegal sports betting. Maybe you can talk about the protections you provide for your consumers by that measure, because I don't think that's discussed enough as regards the abuse and the violence that goes on with the underground black market economy versus that of a regulator that has accountability. Also, could you highlight a little bit about your process for financial transaction?

[Zane Hansen]

As casino operators, we follow and operate under the guidelines set out through FINTRAC, which basically ensure that there are high standards placed around financial transactions.

We have to fill out forms for any transaction over certain dollar thresholds, and people have to verify their source of funds when they're coming to partake on our gaming floors when they bet at certain levels. By legislating single events, you can then apply those same standards to single-event wagering that takes place. I think that would vastly improve that area as well.

[Brian Masse, NDP, Windsor West, ON]

That's a key point because obviously the Hells Angels and others don't use FINTRAC, whereas you can actually track the financial movement of larger sums of money. Is that correct?

[Zane Hansen]

Yes. With single-event wagering, you're primarily in an online and mobile context. Your players all have to be registered with you. Then if they have dollar-volume activities in their accounts that exceed certain thresholds, there's further due diligence and information that has to be provided on their source of income and source of funds. It's a much more sound environment.

[Brian Masse, NDP, Windsor West, ON]

Thank you.

[The Chair, Liberal, Iqra Khalid]

We'll now go into our second round of questions for five minutes, starting with Madam Findlay. Please go ahead.

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

Thank you.

Thank you to all of you for being here today. We very much appreciate it.

I only have five minutes, so we'll get into it quickly.

This would be for the justice department. Can you comment on the prevalence of criminal activities related to single-game betting on the black market? As part of that, is there is any data out of the U.S. you can reference where single-game sports betting has been legalized?

I don't know who wants to go for that.

[Michael Ellison]

First of all, on the link to organized crime, I think the best resource for the committee is the Criminal Intelligence Service Canada. They put out a public report on organized crime in Canada. In particular, the 2019 public report is just accessible off their website. It draws the link specifically between unregulated gambling activities and organized crime, in particular with motorcycle outlaw groups and other forms of organized crime.

The problem, of course, is that because it's a grey or a black market, it's incredibly difficult to get data on potential dollars flowing or potential betting activity.

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

Would you suggest we look for data from the U.S. where it has been legalized? It might be of benefit to us.

[Michael Ellison]

Yes, of course. I think one of the best resources is the State of New Jersey. In fact, committee members will find that there are reports I believe monthly from the Office of the Attorney General in New Jersey. Since decriminalization in 2018, I believe, that state was at the forefront of litigation, so as soon as there was an opportunity to legalize, they did.

They release monthly reports outlining the various revenues coming into the state through betting, including single-event sports betting. You'll also find a number of news articles referencing those reports. There are very large amounts of money going to the State of New Jersey. It's on the forefront.

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

Thank you.

First, Mr. Hansen, I'd like to thank you for your GameSense responsible gambling program. I understand that it provides education and resources with respect to problem gambling. It has been said one of the benefits of legalizing single-event sports betting is that there would be an ability for more revenues for greater protections for people who may be suffering from or susceptible to gambling addictions.

I wonder if you would consider imposing daily limits to reduce the risk of problem gambling.

[Zane Hansen]

Thank you, Member Findlay.

Certainly it's something that we can entertain. We often work closely with our provincial counterparts and regulators on those matters. The online nature of single-event betting that I mentioned earlier gives you the opportunity to put a number of controls in place that way: for time of play and for the amount that could be wagered in any given time period as well. Definitely, those options are there for us.

For us, we always take a long-term view. We have to live in our markets over the long term, so protecting player interests and having a long-term customer base is very important for us.

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

Thank you.

According to the website bet365, one of the most popular offshore gambling apps, it allows users to deposit up to $50,000 to their account instantly, using a credit card. Would you place limits on credit card sports gambling or transaction amounts?

[Zane Hansen]

I would definitely anticipate as we start to design the program that we would do that. We have bet limits on pretty much every form of gaming we provide, and for every form of gaming we provide, we fully inform the customers on the odds and the nature of the game they're playing. The online activity and sports betting would be no different.

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

Thank you.

I see that there's not enough time to ask another question. Thanks to all of you for being here. We really do appreciate it.

[The Chair, Liberal, Iqra Khalid]

Thank you very much, Madam Findlay.

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

Go ahead, sir.

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

Thanks, Madam Chair, and thanks to all of our witnesses.

For me at least, this is a bit like watching an online gambling seminar. I'm learning a lot through this discussion, as I did from our first witness on Tuesday, who, I should add, did a great presentation too.

Thank you to Mr. Ellison for his earlier explanation, because I have to admit that I was very confused in trying to distinguish between single-event betting and parimutuel betting. I'm not a big gambler, but in the few times that I've been out to the racetrack, I bet on one race at a time and pick a horse to win, place or show. That much I'm able to figure out on my own.

Am I correct in understanding that when I do that it's a form of parimutuel betting?

[Michael Ellison]

Yes, to keep it relatively simple, the only form of legalized betting on horse racing currently in Canada is through the parimutuel system. There's a bit of confusion—rightfully so—because the term “parimutuel” is very expansive, and it could encompass a lot of different forms of betting. At the end of the day, it's pool based, and that is what you would do if you're going to the racetrack today to bet. You're betting under the CPMA regime, and it is single-event sports betting—or one form of it.

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

I'm confused, then, in how allowing single-event sports betting on hockey games, football games, etc., impacts on the horse racing industry.

[Michael Ellison]

There are two potential impacts, I suppose.

One is that allowing single-event sports betting on hockey games, let's say, could still attract the betting audience away from horse racing. That is one possibility. It might be a low possibility, but it is one to consider.

The second is that it doesn't have perhaps a large impact. The other impact is that provinces and territories, by legalizing single-event sports betting in the manner that this bill and Bill C-13 propose—by targeting this paragraph of the Criminal Code—would let provinces and territories set up schemes for any kind of sporting event. That would also include horse racing. If a province then took action after legalization, they could set up, for example, fixed-odds betting on horse racing, or their own parimutuel system on horse racing, or any other form of betting that they can dream of, really, and that would directly compete with the system that the CPMA runs.

I'd be happy to elaborate.

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

Yes, you're going to have to, because when I go to Woodbine and I bet on horse X to win a race, isn't that single-event betting with fixed odds?

My odds aren't locked in when I place that bet. Is that the distinction?

[Michael Ellison]

Exactly. When you go to Woodbine, it is single-event sports betting, because it's the outcome of a single race, and it's parimutuel betting, which is pool based, and the odds that you see are not fixed. Those odds will change up until the point that the race starts. You can place your bet five minutes before the race starts and then the odds will change after you've placed your bet. Once the race starts, it's essentially locked down.

I defer to Ms. Foss if I've missed any of the details there, but that's my understanding of the difference.

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

I'd like to hear from her too.

Your point is, then, if I go and place a bet and everybody in the world thinks I know what I'm doing and they all chase my bet, the odds are going to go down, whereas in single-event sports betting, in terms of the odds, you're locked in. That's the fear for the horse racing industry, or am I misunderstanding?