Ontario set to bet on legalized online gambling
Ontario is poised to roll the dice on Internet gambling as British Columbia, the United States and other jurisdictions clear the decks for legalized online gaming.
“At this point it’s something we can’t ignore,” a government official told the Star Friday. “It’s something that we’re exploring.”
While it’s not clear how soon Ontarians could be playing Texas Hold ‘Em poker, roulette or baccarat on their computer keyboards through a provincially run website, the government is clearly warming to the idea. Some experts estimate online gambling is growing at a rate of 20 per cent annually.
The policy signal comes just months after Ontario Lottery and Gaming Corporation chairman Paul Godfrey, on his first day on the job in February, said it’s time the province took a look at online gambling.
“Money is going out of this province to other provinces as well as offshore sites,” warned Godfrey, who was brought in by Premier Dalton McGuinty’s government to put the scandal-plagued lottery corporation on a solid footing.
At the time, Finance Minister Dwight Duncan said it was too early to say whether Internet gambling was in the cards for Ontario – which is fighting a $19.7-billion deficit this year as the Liberal government approaches a re-election fight in October 2011.
But the tide on Internet gambling appears to be turning around the world, with governments softening their views on outright bans in favour of regulating and profiting from gambling that is already taking place under their noses.
British Columbia, for example, estimated in July that its residents are spending $100 million a year on offshore gambling websites. B.C. became the first province or state in North America to offer legalized online casino gambling. The proceeds from its site www.playnow.com, which launched last month, go to services like health care and education.
Quebec and the Atlantic provinces have also expressed interest in following suit.
“We’re noticing it is happening and it’s slowly turning our heads,” the government official added Friday, noting the developmental work is up to Crown-owned Ontario Lottery and Gaming.
OLG took in $1.9 billion last year—an important source of revenue for the cash-strapped government—but has been losing market share to offshore betting sites.
The lottery corporation deferred to its political masters when contacted Friday, saying it has nothing more to say than Godfrey’s pronouncement in February.
“We are always exploring new and innovative business lines, including Internet gaming,” a spokesman said.
“Like all gaming jurisdictions in Canada, we are closely watching what is happening in B.C., and elsewhere in Canada, for that matter.”
But any moves to legalize online gaming will have to overcome concerns from groups concerned about problem gambling, given that many believe Internet betting is more fraught with peril for addicts than going to a casino.
That’s because of the high speed and instant gratification from online gambling, which can be done at home with a high level of privacy.
The U.S., a huge market estimated at $5.4 billion last year, is on the cusp of ending a four-year ban on Internet gambling—an industry estimated at $20 billion worldwide.
The fact is that in jurisdictions where Internet gambling is illegal, millions of people go to gaming websites domiciled in other countries.
That means cash is leaving jurisdictions such as Ontario and the U.S. while governments have no control over the gambling web sites. That has prompted some advocates to argue it’s better to gain control—and scoop up more revenue—by legalizing the activity and getting a piece of the action.
As the law now stands in Canada, the federal criminal code would allow internet gaming only if operated by a province or its delegate, such as OLG.
McGuinty has long said that “in a perfect world” Ontario would not have to rely on gambling revenue at all and has acknowledged the government needs the cash.
His most recent comments on online gaming came late last month when he told reporters: “I know B.C.’s gone there; Quebec’s gone there. And I’ll wait for the advice of the Minister of Finance on that.”
A Liberal source said Internet gambling could be structured to drive business to OLG’s struggling casinos by awarding credits to players for use in casinos, along with the lottery corporation’s hotels and restaurants.
