The Canadian Television and Telecommunications Commission recently issued a ruling that struck down Bill 74, a budget bill which would have forced ISP providers operating in the province of Québec to block illegal gambling websites. Under Bill 74, ISP companies that failed to block illegal gaming websites could have faced fines of $100,000 per violation.
Bill 74 was passed on May 17, 2016, and took effect the following day. The bill received immediate criticism from both ISP providers and internet watchdog groups. ISP providers were upset because the bill required them to incur the costs of blocking the illegal websites. The internet watchdogs argued that the bill was a form of censorship. Québec’s Finance Minister Carlos Leitao defended Bill 74 claiming that preventing people from using illegal online gambling websites was an issue that concerned the “health and safety” of the people of Québec
In July 2016, the Public Interest Advocacy Centre (PIAC) filed a legal challenge on the grounds that Bill 74 violated Canada’s federal Telecommunications Act. PIAC maintained that Bill 74’s goal was not to protect the health and safety of the people, but rather an attempt to “corral” money into Québec’s regulated lottery. Bill 74 estimated that taking money away from illegal online websites would result in $27 million dollars more a year for Loto-Quebec’s online portal, EspaceJeux.com.
The perception that Quebec’s government was simply eliminating competition rather than protecting the health and safety of its citizens angered proponents of online gambling such as Hartley Henderson, who wrote a scathing critique for the Off Shore Gaming Association decrying Bill 74 for its hypocrisy. Henderson points out that is not uncommon for states to be hypocritical in their regulation of online gambling websites. For example. both Germany and France heavily regulate gambling websites despite the fact both countries take in significant revenues from various forms of gambling. In the United States, some casino owners, such as Sheldon Alderson, have lobbied heavily for regulations against online gambling websites based on moral grounds. Still, Henderson feels that Bill 74 puts Québec government’s hypocrisy on a new level since the regulation of ISPs was a result of EspaceJeux.com’s poor revenues. He is also concerned about the unfairness of forcing the ISP providers to pay for having to block the websites noting that the United States practices a similar injustice by forcing banks to monitor transactions to illegal online gaming sites. Finally, Henderson ridicules Leitao’s defense of the bill as a public health and safety issue by pointing out that people also lose large sums of money on EspaceJeux.com.
In addition to the legal challenge from PIAC, Bill 74 also faced another possible legal challenge from the Kahnawake tribal nation. While most illegal gambling sites are offshore and have no legal jurisdiction in Canada, the Kahnawake nation sits within the province of Québec where the Kahnawake Gaming Commission claims that it can operate as a sovereign nation that is not subject to Canadian law.
Despite its failures, Bill 74 may have curtailed some illegal gambling in Canada. Back in May after Bill 74 became law, gaming technology supplier NetEnt stopped offering games in Canada by implementing a network-wide ban on its services. In a statement to its customers, NetEnt said that illegal gambling activities threaten its business strategy and that it would have “zero tolerance” for illegal activities.
It is important to remember that the decision on Bill 74 does not change Canada’s ban on using online gambling websites. With the exception of EspaceJeux.com, online gambling remains illegal in Québec and throughout Canada. The end of Bill 74 simply allows people living in Québec to look at online gambling websites without actually playing on them.