Mr. Speaker, I would like to commend the hon. member for introducing Bill C-353. I certainly do not want to go on record as saying that the
Government of Canada should now get into the lottery business on the Internet. I do not think that is the issue here. The issue is quite a different one.
We need to recognize the significance of the Internet in our contemporary society. It affects virtually every part of our daily life. We can do all kinds of things on the Internet. I made a brief list of some of the things that can be done on the Internet.
We can buy, sell, trade, travel, read newspapers and magazines, play the stock market, do banking, talk to politicians, sign out a book at the library and upgrade a computer. We can send a postcard or a greeting. Many other things can be done on the Internet. All of them can be done by text, voice or even video.
Introduced in this area now is Internet gaming; this is now a very real thing. Internet gaming is appearing in many jurisdictions around the world, usually in those jurisdictions where the gaming laws are not nearly as fixed as they are in Canada. Let us look at the situation of Internet gaming in the world today.
The key to success on the Internet and all other casinos is traffic. In other words, a lot of people must participate in the business. Worldwide gambling in recent years has gone from a $500 billion a year industry to over a trillion dollars. That is a rather significant increase. Worldwide it has been estimated that in excess of a trillion dollars is wagered annually on various forms of gambling.
For example in Great Britain over 90 per cent of the population participates in some form of legalized gambling. Australians wager almost $2,700 per capita annually on gaming entertainment.
Conservative estimates for the Internet gaming market in the United States projected a total potential market of $8.25 billion in 1996 and it will grow to $22 billion by 1998. Internationally, market estimates for Europe and the Far East predict potential markets by 1998 of $29.2 billion. This is the market opportunity.
The Internet is a worldwide telecommunications network that allows the users to communicate with one another with no geographic boundaries. That is the issue. As a result of this tremendous flexibility of communications, it has become the next frontier for commerce.
The major inroad envisioned by business in the Internet is the ability to perform large scale, large dollar transactions over the network. That is seen by many as the true power of the Internet, where costs can be substantially reduced for businesses, allowing them to advertise and sell to practically millions of consumers and businesses worldwide.
The member talked earlier about the success of a casino depending upon traffic and many, many people. The Internet has magnified the number of participants tremendously. Therefore, there is a very real potential for people who are interested in this particular business.
Let us look at a couple of facts and figures. Worldwide the gaming market, as we have just indicated, is a trillion dollars plus. In the U.S. it is $400 billion. Earnings of legal U.S. casinos-and we are talking about not only the Internet now, we are talking about all gaming-were $188 billion in 1995. Earnings of traditional illegal bookies were $60 billion in 1995. The market outside the United States is more than $500 billion per year. If we add those numbers up, we will see that a tremendous amount of money is going into the gaming business.
In the Internet there are 50,000 computer networks involving 90 countries. Internet users worldwide are some 175 million, which is expected to grow in the next two years to about 200 million. It becomes very clear that this is a very significant issue.
Who are these people on the Internet? It is rather interesting to look at the demographics of the people who are involved. The typical Internet user is male and 44 years of age. Thirty-nine per cent of them have a college degree and an annual income of about $48,000.
If we compare those statistics to the typical Las Vegas/Atlantic City casino gambler, the proportion of males is 51 per cent compared to 60 per cent on the Internet. The median age is 48 compared to 44 on the Internet. The percentage with college degrees who gamble on land based casinos is 29 compared to 39 per cent on the Internet. The percentage of people with college degrees is much greater in those using the Internet and gambling on the Internet than is otherwise the case. The average income is $43,000 for those using land based casinos compared to $48,000 for those using the Internet. It is a very interesting group of people which is involved in this issue.
Has this become a serious issue in a variety of places? Yes, it has. In fact the Interactive Gaming Council has been formed in the United States to come to grips with this particular issue. What is its role? That new industry organization, the Interactive Gaming Council, has been formed to represent the burgeoning interactive gaming industry. It is currently establishing a framework to address defined issues. It recently met in Scottsdale, Arizona on January 19, 1997.
An assistant attorney general, Mr. Alan R. Kesner from Wisconsin, was the guest speaker. He reconfirmed that law enforcement agencies and regulators need input and guidelines in order to fully understand Internet gaming and to go forward with ideas on regulation and taxation. Mr. Kesner's remarks indicated that there
is an enormous public demand for gaming entertainment as proved by the huge proliferation of gaming throughout the United States and Internet gaming will probably be just another venue.
However, the public must be protected from those Internet casinos which would take advantage of them with all sorts of unfair practices. The hon. member just gave us a rundown, almost a catalogue, of some of the things that ought to be covered. It is a real issue. Here in Canada the question is not whether we will have this, but rather when.
Again I want to underline that I am not necessarily a proponent of gaming of any kind. In fact, I am not. I believe it has some very negative connotations. On the other hand, there are many people who do use it. It is a way in which a lot of charitable organizations and non-profit organizations raise funds and do tremendous good in various communities by supporting junior hockey and a variety of service clubs. So I suppose there is some merit in this area.
Canadians are already gambling on the Internet and money is leaving the country. We need to ask ourselves where the responsibility lies to make sure that if there is going to be Internet gaming that it be done in a way which is more or less controlled, to eliminate fraud, to eliminate abuse and to protect the consumers who are involved.
Just before I got up to speak one of my colleagues on this side of the House said: "If you want to control the Internet, good luck". I think that is true. It is a tough one to control. I am not so sure anybody can, but we do have to take steps to try to do it.
If the committee will come to grips at least with that part, it will have made a major dent into the question because it is very significant. It has to do with the whole issue of privacy which is very significant also. It directly involves our banking community and other financial institutions that use the Internet to transfer huge sums of money from institution to institution and also across international and national boundaries. If nothing else, this bill will have a spin-off in another very significant area.
I want to commend the hon. member who was the parliamentary secretary. And by the way I will interject here to say I wish he were still a parliamentary secretary, but that is none of my business. That is between him and his boss, I suppose.
Is there a responsibility for Bill C-353 for Canada and for the federal government? Yes, I believe there is. The hon. member reviewed some of those provisions, so I will not go into them now. The question is one where we need to distinguish-oh, my goodness, I only have one minute left and this is such an important bill, Mr. Speaker.
I want then to indicate rather significantly that I believe if the government is going to regulate it should not get involved in the actual running of a casino itself. That ought not to be in the bill. If there is any suggestion, and I think there is, that the government might have that permission, the bill should be amended so that it does not do that, but that it can license private persons or private corporations to do it. Regulate them so that the consumers' interests are protected and that money is transferred without getting involved in the laundering business and things of that sort.
In conclusion, we do support the principle of the bill. There are some suggestions and it has the opportunity of moving us forward to truly becoming a leader in the Internet business and on the information highway.