Justice Committee on March 23rd, 2021

[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.

[The Chair, Liberal, Iqra Khalid]

Thank you.

[Dave Drew]

We appreciate the opportunity to share that information with you.

Thank you.

[The Chair, Liberal, Iqra Khalid]

Thank you very much, Mr. Drew.

We'll now go to the Mohawk Council of Kahnawake for five minutes.

Please go ahead.

[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.

[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]

The committee has the power to recommend amendments that will correct the 35-year-old injustice to indigenous communities. You have the power to accommodate and reconcile the interests of the Crown with those of indigenous peoples. You have the power to urge Parliament to balance the interests of the wealthy and the powerful with the interests of indigenous communities.

Our proposed amendments to the bill were set out in our written submission to the committee. We invite you to consider recommending these amendments in your report, not only because they are compelling legal arguments but to do so is simply to correct some of the wrongs, and it's a just thing to do.

[The Chair, Liberal, Iqra Khalid]

Thank you, Chief Deer.

[Chief Gina Deer]

Thank you.

[The Chair, Liberal, Iqra Khalid]

I appreciate that. I hope the remainder of it comes out in questions.

Last, we'll go to Mr. John Levy from Score Media and Gaming Inc.

You mentioned Hamilton and Toronto. I'm in Mississauga, in the middle.

[John Levy, Chairman and Chief Executive Officer, Score Media and Gaming Inc.]

I'll wave to you every day when we get out of COVID-19 as I'm commuting from Hamilton to Toronto.

[The Chair, Liberal, Iqra Khalid]

Perfect.

Please go ahead. You have five minutes, sir.

[John Levy]

Madam Chair, first of all, thank you for providing me with an opportunity to articulate our full support for Bill C-218 and the legalization of single-event sports betting in Canada.

I'm proud to appear before you today on behalf of theScore, a Canadian innovation success story and third-generation family business. Following in the footsteps of my father, who is a pioneer in the Canadian cable television industry, we have built theScore into a North American leader in sports media, betting and e-sports. Utilizing a technology-led, mobile-first strategy, theScore has become one of the most popular sports media apps in North America. We then capitalized on the emerging regulated sports betting opportunity in the United States and launched an innovative mobile sports book operation that is now licensed in multiple jurisdictions.

In September 2019, we debuted theScore Bet, making history by becoming the first media company to create and operate a mobile sports book in the United States, and theScore Bet is now live in four states with a growing footprint and user base. Our early entry into regulated sports betting has positioned us at the forefront of the robust industry and led to significant growth of our company. In two years our workforce has increased by more than 50% and we're actively hiring at an accelerated pace to support the rapid expansion of our sports book operation.

Canada is now poised to usher in this vibrant industry that has potential to be transformative to our economy. Sports betting has flourished in the U.S. since legalization in 2018. It's created thousands of jobs, generated additional advertising revenue for sports media platforms and sponsorship revenue for teams and leagues, and produced significant tax proceeds for the states where it's legal, all providing a highly regulated system for fans to feel comfortable placing bets on the teams and sports they love. It's clear that a similar thoughtful and modernized legal wagering framework would benefit all Canadians.

The essential component of the public policy conversation around this bill is underscored by quoting the bill's name in full: Safe and Regulated Sports Betting Act. Unregulated and illegal sports gambling is rampant across our country and offers no consumer protections or tax revenues for the provinces. Sports wagering needs to be monitored and regulated with comprehensive oversight to protect the consumers.

Bill C-218 will allow the provinces to implement necessary consumer safeguards to provide for a safe and responsible sports wagering environment. These have been established by provincial and territorial governments for other forms of wagering over decades. Single event sports betting will seamlessly integrate within these regulatory frameworks already in place.

We urge the House of Commons and the Senate to pass Bill C-218 as quickly as possible. In connection with the legalization of single event sports wagering, we acknowledge the need for the horse-racing industry to be safeguarded. We note that Bill C-13, the government version of this legislation, contained language to properly address this issue, and we support an amendment to Bill C-218 that would replicate the approach of Bill C-13, thereby ensuring that the interests of the horse racing industry are protected.

Time is of the essence with the passing of this bill. These gaming revenues represent a significant boost to a recovering economy by incenting job creation and regional economic development in many communities that will see direct and immediate benefits. Until the bill is passed, consumers will continue to remain exposed as they engage with unregulated outfits. There is now widespread industry and clear cross-party support to amend this outdated federal law, and it's time we seize this opportunity.

I thank the members of the committee for their consideration and thoughtful deliberation of this bill and the opportunity to provide my perspective and recommendation.

Members of the committee, thank you very much.

[The Chair, Liberal, Iqra Khalid]

Thank you very much, Mr. Levy. You're very, very punctual with your time. I really appreciate that.

We'll go into our first round of questions for six minutes each starting with Mr. Waugh.

Go ahead, sir.

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

Thank you, Madam Chair.

Welcome to the three groups that have joined us here today.

This question is for the Mohawk Council of Kahnawake.

I go on your website, and you are the first online sports book in Canada with sport interaction. How's that going? How much do you take in per year? Can you share some of those numbers with us today?

[Chief Gina Deer]

We have been doing quite well during this COVID time. There has been an improvement. We have over $4 million, I believe, this year, but, again, COVID has really restricted people from movement, and it has made an improvement on the site.

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

Can you talk about regulatory aspects of your sport interaction? We had the Saskatchewan Indian Gaming Authority here as a witness earlier. Maybe you could talk about the regulatory system that you operate under right now in Quebec. Could you speak to that, if you don't mind?

[Chief Gina Deer]

Are you talking about the regulatory system and the due diligence that is done in order to get a licence?

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

Yes.

[Chief Gina Deer]

There is a very thorough background check of due diligence for people who will be licensed within Kahnawake. The Kahnawake Gaming Commission has player protection as a priority. We offer self-exclusion for players to ensure that, if somebody is a problem player, they would be protected.

Over the years we have worked closely with different jurisdictions to develop and stay on top of all of the forever-changing markets, as we had seen what happened in the U.S. We have made agreements with the State of New Jersey, and we have a memorandum of understanding.

We have worked very hard over the years, and Chief Mike Delisle can attest to that. He has been here from the beginning in the earlier years when all of this started.

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

In your brief, you mentioned that you have had discussions with Minister Lametti. Can you expand on those discussions, and have you talked to the Quebec government about this bill?

[Chief Gina Deer]

We have not talked to the Quebec government about this bill. There has not been much success over the years. Attempts were made to speak with Quebec, but the fiduciary responsibility lies with Canada, in our view.

That being said, we reached out to Trudeau on this bill when we got notification that it was coming forward. We aired our concerns that we had with the bill. We were told that we needed to contact Minister Lametti. We did have a visit from Minister Lametti, ironically, so we didn't even have to contact him. He came to our community, which is a first for Kahnawake. We had a discussion, and we showed him what we do here. We gave him a presentation. He talked about the legitimate gaming architecture that we have created here in Kahnawake.

There have been some, I guess, holdups on getting discussion going on gaming specifically. We did notify Trudeau that some of the discussion was dragging on. He recommended that we attempt to work with Minister Lametti on a workable solution for Kahnawake around gaming.

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

Thank you.

I'm going to go to Mr. Levy.

You have been in this game a long time. Your timing is impeccable. You sold your channel, I think, to Rogers in time, and then you got into gaming before anybody got into gaming. We noticed your channel 10 years ago. You were the first to give odds on it. You have been very successful.

I want to talk about the four states that you have right now in the United States. How's that going? What are you seeing? You're up against the big boys like DraftKings and so on in the United States. Sometimes as Canadian outfits, we often swim upstream, but, man, you have hit a home run against the big boys.

[John Levy]

I think that's kind of the way we are. When we launched our TV network in Canada—and thank you for your question—we were up against the big boys here in Canada, too. We launched in the mid-1990s. TSN had a 10-year head start on us. Rogers was launching Sportsnet. We have never been afraid of competing.

For us, it has always been about having the customer come first. Sports betting was really just a natural extension for us in the context of serving the needs of our consumers.

The repeal of the single-event wagering and introducing Bill C-218 and having it pass would be of enormous growth, not only for our company, but for all Canadians. We're already experiencing what that looks like in the U.S., where we have launched in four states, working with regulators and creating technology that allows us to be part of the solution and not part of the problem, which I think is very important.

We're very excited about the prospect of being able to execute on our home turf and satisfy the needs and the passions of our millions, literally, of sports fans all across Canada who are looking for sports wagering.

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

Have you had any discussions with provincial and territorial authorities here in the country?