By SUE BAILEY
http://cnews.canoe.ca/CNEWS/Canada/2004/09/03/614904-cp.html
OTTAWA (CP) - The Federal Court has been asked to decide whether Canada's first government-sanctioned Internet gambling site is legal.
The Ontario Racing Commission suggests a rule change quietly made last year by former agriculture minister Lyle Vanclief outstretched his legal authority. As a result, a popular racetrack betting site launched last January by Woodbine Entertainment Group could be illegal, it says. At stake is HorsePlayer Interactive, a novel online site that's bringing in about $1 million a week in wagers. Unless the government decides otherwise, the site will continue operating while the court challenge unfolds.
"There is good reason to believe that the regulation is . . . invalid," says the racing commission in its application to the court.
"The minister does not have authority to make by regulation a definition of the term 'telephone' ...," says the document filed Aug. 24.
At issue is a rule change that allowed horse-racing bets to be placed not just by telephone but by "any telecommunication device."
Unlike provincially run casinos and lotteries, horse-racing is regulated by the Canadian Pari-Mutuel Agency under the federal Agriculture Department.
The agency argues that telephone betting has been allowed for years, and that the change simply allows players to do on a computer what they can do by phone.
Gambling addiction experts called it a sea change in Canadian policy that could unleash a flood of legalized Internet betting sites. They fear that expansion of online wagering will increase rates of pathological betting.
The Criminal Code allows provincial governments to run Internet "lottery schemes" such as online casinos. The Atlantic Lotteries Corp., owned by the four Atlantic provinces, started offering virtual lottery tickets last week. No other provinces have taken advantage of the option.
More than 2,000 other betting sites available online tend to be based offshore to skirt Canadian legal restrictions.
The racing commission is responsible for licensing Ontario racetrack operators and ensuring they act in accordance with the law, says its Federal Court application.
The court's decision could take up to two years.
A spokesman for the commission was not immediately available.
A Woodbine Entertainment Group spokesman says the court action doesn't square with the commission's duty to promote horse racing.
"We're absolutely flabbergasted and, frankly, offended that the Ontario Racing Commission has filed the application in an area over which they don't have jurisdiction," said Nick Eaves, senior vice-president of marketing and business development.
"I mean their mandate is to do that which is in the best interest of Ontario racing. And essentially, what they're doing is being the instigator in an action which, if successful, would have the effect of discontinuing one of the only recent services in the Ontario racing business that's actually attracting new customers and really performing in a way that our customers have told us they want."
Eaves says the regulation change was made through the proper federal channels and should be upheld.
Gambling critic Sol Boxenbaum, head of the Montreal-based counselling firm Viva Consulting, says the Woodbine site should be suspended until the court rules.
"Gambling on the Internet is illegal because it's too difficult to regulate," he said. "My concern is that young children would have access to it, and that compulsive gamblers could be worsened by the fact that they can do this thing from the privacy of their own home."
In its defence, Woodbine says that players must provide proof of age and deposit cash in an account either by cheque or credit card.
http://cnews.canoe.ca/CNEWS/Canada/2004/09/03/614904-cp.html
OTTAWA (CP) - The Federal Court has been asked to decide whether Canada's first government-sanctioned Internet gambling site is legal.
The Ontario Racing Commission suggests a rule change quietly made last year by former agriculture minister Lyle Vanclief outstretched his legal authority. As a result, a popular racetrack betting site launched last January by Woodbine Entertainment Group could be illegal, it says. At stake is HorsePlayer Interactive, a novel online site that's bringing in about $1 million a week in wagers. Unless the government decides otherwise, the site will continue operating while the court challenge unfolds.
"There is good reason to believe that the regulation is . . . invalid," says the racing commission in its application to the court.
"The minister does not have authority to make by regulation a definition of the term 'telephone' ...," says the document filed Aug. 24.
At issue is a rule change that allowed horse-racing bets to be placed not just by telephone but by "any telecommunication device."
Unlike provincially run casinos and lotteries, horse-racing is regulated by the Canadian Pari-Mutuel Agency under the federal Agriculture Department.
The agency argues that telephone betting has been allowed for years, and that the change simply allows players to do on a computer what they can do by phone.
Gambling addiction experts called it a sea change in Canadian policy that could unleash a flood of legalized Internet betting sites. They fear that expansion of online wagering will increase rates of pathological betting.
The Criminal Code allows provincial governments to run Internet "lottery schemes" such as online casinos. The Atlantic Lotteries Corp., owned by the four Atlantic provinces, started offering virtual lottery tickets last week. No other provinces have taken advantage of the option.
More than 2,000 other betting sites available online tend to be based offshore to skirt Canadian legal restrictions.
The racing commission is responsible for licensing Ontario racetrack operators and ensuring they act in accordance with the law, says its Federal Court application.
The court's decision could take up to two years.
A spokesman for the commission was not immediately available.
A Woodbine Entertainment Group spokesman says the court action doesn't square with the commission's duty to promote horse racing.
"We're absolutely flabbergasted and, frankly, offended that the Ontario Racing Commission has filed the application in an area over which they don't have jurisdiction," said Nick Eaves, senior vice-president of marketing and business development.
"I mean their mandate is to do that which is in the best interest of Ontario racing. And essentially, what they're doing is being the instigator in an action which, if successful, would have the effect of discontinuing one of the only recent services in the Ontario racing business that's actually attracting new customers and really performing in a way that our customers have told us they want."
Eaves says the regulation change was made through the proper federal channels and should be upheld.
Gambling critic Sol Boxenbaum, head of the Montreal-based counselling firm Viva Consulting, says the Woodbine site should be suspended until the court rules.
"Gambling on the Internet is illegal because it's too difficult to regulate," he said. "My concern is that young children would have access to it, and that compulsive gamblers could be worsened by the fact that they can do this thing from the privacy of their own home."
In its defence, Woodbine says that players must provide proof of age and deposit cash in an account either by cheque or credit card.
