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When Ontario opened its online gambling market to private operators in 2022, many in the industry hoped that it would start a wave of regulated regimes across Canada. Two years later, Alberta has taken steps to follow suit, announcing in June that it would launch its own regulated online gambling market.
“Now, the question is what’s next,” said Jack Tadman, managing partner at GME Lawyers, in Toronto.
It is only natural that attention would turn to the country’s second most populous province, Quebec. As is the case in most provinces, online gambling remains under monopoly control, with government-owned Loto-Quebec the only permitted operator.
Financially, the market could be a significant one for the private industry.
Reliable figures for the size of Quebec’s grey market are unsurprisingly hard to come by, but a survey from the Quebec Online Gaming Coalition, a group of operators pushing for an end to the monopoly, suggests that only one in four online casino or sports gamblers in the province use Loto-Quebec.
The monopoly made C$438m from online gambling last year, so if its share of revenue was similar to its share of players, the offshore market may have brought in around C$1.2bn.
Meanwhile, private operators in Ontario have generated C$2.4bn in revenue as of March 31. With around 9m residents, Quebec is about 60 percent the size of Ontario.
According to Vixio GamblingCompliance forecasts, a competitive online gambling market in Quebec could generate more than C$1.9bn in revenue in its first year, including from Loto-Quebec.
The coalition, formed last year of bet99, Flutter Entertainment, Entain, DraftKings, Apricot, Betway, Games Global and Rush Street Interactive as its members, has been the most consistent voice pushing for an open market.
However, Tadman fears the group of operators’ goals are too “transparent” to win political support.
“Really it’s just an industry lobby group. And it’s made up of members who are already offering gambling services in Quebec, that the province considers not really legal,” Tadman said. “So, there’s been pushback on that.”
Some of that pushback has been in the form of a lobbying battle waged by the Canadian Lobbying Lottery Coalition, a coalition of lottery corporations that includes Loto-Quebec, which has lobbied for national advertising standards that would restrict advertising by unlicensed operators, among other items.
“To me, there is no grey zone in Quebec,” said Jean-Francois Bergeron, president and CEO of Loto-Quebec, during an appearance at the Canadian Gaming Summit in June. “If it’s not Loto-Quebec, it’s not legal.”
But is a potentially lucrative regulated market likely to open any time soon?
Paul Burns, president and CEO of the Canadian Gaming Association, said that given provinces’ limited ability to fight offshore sites, enticing players to the legal market with a competitive offering is necessary.
“Of the consumers in Ontario, about 70 percent to 80 percent had been in the grey market. And they chose to commit, and I think that’s a testament to the marketplace,” Burns said. “And you’ve seen higher level of consumer protection and you’ve seen economic benefits all over the province.”
Quebec has made efforts in the past to order internet service providers to block the websites of offshore operators, but this was struck down by Canada’s Supreme Court in 2021.
Meanwhile, polls suggest many players may not understand the legal status of offshore operators. According to Ipsos, only 54 percent of the province’s residents could correctly answer that Loto-Quebec holds the monopoly on online gambling.
So far, there has been little concrete progress. There is no bill in the works in the National Assembly of Quebec, and in February, a finance ministry spokesperson told the newspaper La Tribune that there are no plans to follow in Ontario’s footsteps.
“[Ontario’s] changes may have led to overexposure to online gambling advertisements and a trivialisation of gambling,” the spokesperson said. “This is not what we want in Quebec.”
Burns said he is “puzzled” by the lack of action, given the strength of the offshore market.
“Canadians kind of have a long history with offshore sites and it's grown into a fairly significantly sized market in the country,” he said. “Provinces have continued to make changes, but there hasn’t been the will to open the market up in any fashion, whether it’s an open market like Ontario or limited licenses like some US states.
“They’re choosing to ignore the tools to fix [the offshore market],” Burns added.
That comes despite renewed certainty over the legal status of a licensed market.
When Ontario opened its market, some raised questions over whether its system went beyond the requirement under Canadian federal law for provinces to “conduct and manage” gambling, but a May ruling by an Ontario Superior Court judge upheld the licensed regime as lawful, seemingly giving other provinces more certainty to open their own markets to private participants.
“We haven’t had a great deal of case law in the ‘conduct and manage’ field before,” Burns said. “And this does provide provinces a lot of comfort on how they can proceed. In fact, it shows that Ontario has actually exceeded what they could have done. Provinces should take comfort in the fact that they have clarity.”
In Quebec, however, instead of legal roadblocks, it seems the hold-up is more political.
One aspect is the increased availability of gambling via mobile devices.
The Ministry of Finance cited the “massive arrival of mobile phones” as a reason for its opposition to opening up the market.
Psychologist Dr. Louise Nadeau chaired Quebec’s Working Group on Online Gambling, which released a formal report in 2014 calling for an end to the monopoly. But ten years on, she has changed her mind, and said phones are the reason why.
“When we did the report, it was ten years ago,” she said. “You didn’t have the total invasion of cell phones that you have today. Nothing has changed as rapidly in ten years as gambling.”
“Now, I’m a believer in monopolies,” Nadeau added.
