Thank you, Madam Chair.
Good morning, ladies and gentlemen.
Thank you for inviting me here today to provide some commentary regarding Bill C-218. My name was put forward as a potential witness by the Canadian Gaming Association.
One of the arguments made in favour of decriminalizing cannabis in Canada similarly applies to the sports wagering issue. It's a product that millions of Canadians spend billions of dollars illegally to obtain. It is estimated that Canadians spend $10 billion annually through illegal sports betting operations controlled by organized crime.
In December 2019, the Ontario Provincial Police organized crime enforcement bureau broke up a Hells Angels-controlled illegal gambling ring in southwestern Ontario that earned $131 million over a five-year period. Based on the average profit margin of 5% to 6% for a sports book operation, this single organized crime operation would have accepted close to $2.5 billion in illegal wagers over that five-year period.
The OPP alleged that Hells Angels members controlled the illegal gambling ring through five websites. Many of the gamblers utilizing these sites would not understand that the sites were controlled by an organized crime group.
It is important to note that with the organized crime illegal gambling model come criminal turf wars, resulting in assorted violent crimes right up to and including murder. There have been a number of gangland murders in the greater Toronto area alone over the past several years related to the control of illegal gambling marketplaces, including shootings, arson and fire bombings.
There is a severe public safety risk related to that activity, as well as tremendous financial costs associated with responding to, investigating and prosecuting such acts of violence. In addition, investigating organized crime group activities is extremely resource-intensive from human, technology and operational funding perspectives.
According to a 2019 report from Criminal Intelligence Service Canada, or CISC, illegal bookmaking exists in every single region of Canada. While the exact size of the illegal sports book market is not known, it is believed to be significant. Some estimate it is in excess of $10 billion annually.
There are several examples of large-scale illegal betting operations run by organized crime having been broken up by law enforcement. These activities provide revenue to organized crime groups that allow them to fund a variety of other criminal activities.
The public report on organized crime in Canada highlights the use of illegal gaming operations by organized crime groups as a high-profit, low-risk market. It states on page eight:
[Outlaw motorcycle groups] collaborate with other [organized crime groups] in the importation of cocaine and other illicit drugs, and have networks stretching across Canada that facilitate their well-established distribution lines. They are criminally associated to groups that form the [traditional organized crime] network, and are involved with [organized crime groups] involved in illegal online gaming....
On page 12, the report says:
Gaming networks generate millions of dollars of revenue each year, and [organized crime groups] involved in this market use these illicit funds to finance other forms of criminality, such as drug importing and trafficking.
For individual bettors, dealing with organized crime in terms of sports betting brings additional personal risks. Organized crime groups will provide loansharking and allow individuals to far exceed their financial capacity at exorbitant criminal interest rates. Then they will hang the threat of physical violence and other forms of extortion over the borrowers' heads to ensure the repayment of accumulated debts in a timely way.
The Government of Canada has made it a priority to develop new policy and legislation to reduce organized crime activity. The Prime Minister's 2019 ministerial mandate letters for the Minister of Public Safety and Emergency Preparedness and the Minister of Justice and Attorney General of Canada included statements to that end.
The Government of Canada cited that one of its primary reasons for legalizing cannabis was to eliminate the criminal element and reduce organized crime's access to the large profits generated. It's time to apply that same logic to sports wagering and pass the amendment to the Criminal Code to permit single-event sports wagering.
The majority of Canadians who engage in sports betting believe they are engaging in a fun and harmless activity, as it is often presented as being legal and respectable. They are often unaware of the significant profits criminal organizations make as a result.
Bill C-218 will allow for greater regulation and oversight to ensure that Canadians are wagering in a safe and secure environment. A legal, regulated sports betting marketplace will provide the gambler with a safe and secure environment to bet in and the confidence that appropriate, responsible gambling measures are in place.
For more than three decades, Canadian provincial regulators have demonstrated an extremely strong track record in overseeing the development of industry-leading consumer protection safeguards, resulting in safe and responsible regulated gambling environments for Canadian players—