Moved third reading of Bill C-218, An Act to amend the Criminal Code (sports betting).

He said: Honourable senators, I rise today to speak to Bill C-218, the safe and regulated sports betting act, as Senate sponsor. This bill seeks to regulate single-event sports betting in Canada, strengthen consumer protections to ensure the safety and well-being of those participating, bring legal and taxable revenues inside our borders to invest back into Canadian communities and direct this activity away from organized crime groups and offshore accounts.

I would like to thank my colleagues for working to get this bill to this point, in particular those who spoke at second reading along with Senator Wetston, chair of the Banking, Trade and Commerce Committee, and my fellow members of that committee for their dedicated analysis and focus on this bill during our meetings two weeks ago.

A special thank you also goes to Kevin Waugh, Member of Parliament for Saskatoon—Grasswood, for introducing this bill in the other place and for being a strong advocate for increased regulations, consumer support and community empowerment with respect to single-event sports betting.

I also want to thank my colleague Senator Cotter, the official critic for Bill C-218. His depth of knowledge on this specific subject and his wise counsel throughout the process have been invaluable.

It is also important to acknowledge all of the outreach and messages I’ve received from Canadians who see this as a positive step forward for our country — community members who are hopeful that this will result in increased funding for essential public priorities.

Colleagues, in my presentation to you today, I will discuss four key issues: what we heard at committee; the legal coverage of match fixing in the Criminal Code; participation of Indigenous communities in the gaming industry; and Canada and the Council of Europe Convention on the Manipulation of Sports Competitions, also known as the Macolin Convention.

Just to provide a brief overview, sports betting has been legal in Canada for decades — since 1985. However, there is a line in the Criminal Code, section 207(4)(b), that makes it illegal to bet on a single-sport event. Canadians can legally bet on two games that are bundled together, but they cannot bet on one of those games alone.

The provincial lottery corporations offer parlay bets, which are bundled bets on two or more games, and Canadians only receive a payout if they can successfully wager on all games. This results in the ironic situation of the Criminal Code of Canada that mandates that more gambling take place, as bettors are required to bet simultaneously on multiple games instead of just one.

This requirement vastly tips the playing field away from Canadians who wish to bet legally. In an industry where there are concerns around problem gambling and addiction, it seems counterproductive to compel Canadian bettors to participate in more betting than they may wish, and thereby pointing them to the unregulated offshore sites that offer single-event sports betting.

Colleagues, you’ve heard that $14 billion is being spent by Canadians on single-event sports betting. These bets are being placed every day on offshore gambling sites. These black and grey market activities are happening outside of Canada’s legal framework and therefore are not subject to any regulations and taxes are not being collected on revenues. Additionally, billions of dollars are going into the wrong hands every year.

If someone in Canada wants to bet on a hockey game today, it would be as simple as downloading an app on their smartphone and placing that bet. The organization operating that app — and there are many — would then process the financial transaction through offshore accounts circumventing Canada’s legal frameworks and regulatory structures.

To make matters worse, many consumers who are actively participating in single-event sports betting through these organizations and their respective apps are not even aware of the fact that the activity is not legal in Canada.

Canadians are placing billions of dollars worth of bets annually through these sites that go entirely unregulated in Canada and are not held to our consumer protection and safety standards. These same Canadians are, oftentimes unknowingly, being exposed to the risks that accompany that. In fact, when dealing with unregulated betting, there are no Canadian regulations around when a payout is deposited, if ever.

As previously mentioned, Canada’s provinces and territories have jurisdiction over regulations, licences and other matters pertaining to gaming and betting. The provincial and territorial governments have developed and fine-tuned responsible gaming practices and regulatory frameworks to ensure the integrity of the industry and the safety of those participating.

These governments have been seeking this change for years, and they are ready to respond to it quickly and responsibly. Their regulations and regulatory frameworks are currently in place and would apply to single-event sports betting if this bill passes and the activity can be regulated.

While we cannot dictate the regulatory practices of Canada’s provincial governments, what we can do is make this modification to one line of the Criminal Code, thereby empowering them to safely bring single-event sports betting within Canada.

The regulations that would be enacted and bolstered around this activity are tangible and urgently needed. Examples of how potential safeguards could protect Canadians, just to name a few, are age and identity verification, safeguards to protect the integrity of matches and prevent match fixing as well as prohibitions on players, coaches and officials from wagering on sports.

These numerous protections and safeguards are necessary to decrease the risks associated with problem gambling in our communities, but they can only be implemented if this bill is passed.

Currently, there are no provincial safeguard regulations pertaining to single-event sports betting given the underground nature of existing operations. This makes it more likely that minors will participate in betting and more challenging to detect match fixing.

Colleagues, hundreds of millions, perhaps billions of dollars would be unlocked to support addiction research, youth sports programming, health care and education among other priorities. This contrasts with where the revenues from single-event sports betting are currently going.

The community benefits of passing this bill would extend even past those arising from the taxation of and the revenues from legal gaming operations. Estimates show that, within two years after removing single-event sports betting from the Criminal Code, almost 2,700 jobs would be created in Canada. These good jobs would have the average salary in the industry in excess of $65,000 per year.

While these figures are compelling, colleagues, I would not stand here and ask that we support this bill for economic reasons alone. It also makes sense, it is right, and it has Canadian communities at its core. It is for these reasons that there is widespread and sweeping support for this bill, support from provincial governments, community groups, sports leagues, labour unions, lottery corporations and indeed, colleagues, individual Canadians.

Many of Canada’s Indigenous communities are strong supporters of this change to the Criminal Code as it would empower them to work with provincial governments to offer this and collect necessary revenues. A letter from the Saskatchewan Indian Gaming Authority, or SIGA, to the Senate stated:

. . . we simply want the opportunity to compete and offer a product demanded by our customers. We currently see the unregulated grey market conducting business in our province with no benefit back to our stakeholders.

These are their words, colleagues, not mine.

SIGA is a fully non-profit organization that reinvests 100% of its net income from gaming operations into Saskatchewan First Nations communities with the goal of strengthening Indigenous communities through “. . . employment, economic growth, positive community relations and achieving financial self-reliance.”

Colleagues, SIGA represents 74 First Nations in Saskatchewan.

Just this morning I had a call from Chief Sheldon Kent of the Black River First Nation of Manitoba. He also sits on the Assembly of Manitoba Chiefs, and he sits on the gaming committee of the assembly. He is forcefully and fully supportive of this legislation.

SIGA’s President and CEO Zane Hansen appeared at the first committee meeting and he explained that this would not create new types of gaming. He said:

It’s happening now, but it’s happening by operators who aren’t licensed to regulate it in our province. Moving this into a regulated atmosphere, we can deliver it well, safely and with a high level of integrity.

Paul Burns, President and CEO of the Canadian Gaming Association, touched on the importance of safeguards and addictions programming at this same meeting. He stated:

What we’ve seen is that Canadians do like to bet on sports, but we have also seen that we have some of the best world-class responsible gaming programs. A recent piece of research published through the Alberta Gaming Research Institute also shows that problem gambling rates in this country over the period of time between 2002 and 2018 decreased by 45%. Our education programs are working . . . .

Mr. Burns added that organized crime groups with sports-betting operations are happy to extend credit to bettors. He said:

There are less than a handful of casinos in this country that will actually extend you credit and it’s like applying for a mortgage. . . . There are lots of differences that will come with a regulated, controlled marketplace.

Commissioner of the CFL, Randy Ambrosie expressed that the support for the bill from the CFL is rooted in ensuring the integrity of sport in Canada, creating strong regulatory standards and providing economic benefits to sports leagues and communities. He said that passing this bill would positively impact “. . . all of us in the sports and entertainment industries as we work to build our businesses back.”

At the committee, we heard from the Alcohol and Gaming Commission of Ontario and the British Columbia Lottery Corporation about the positive changes to Canada’s regulatory landscape that would result from this bill’s passage and the community funding that would be unlocked.

Stewart Groumoutis from BCLC explained:

While more than $1 billion is estimated to be wagered annually in B.C. on sports, we know B.C. players are already making single-events sports bets by heading south of the border to Washington State casinos or using unregulated offshore websites. Neither of these options return revenue to the province of B.C., nor do they support B.C. jobs. . . .

Shelley White, CEO of the Responsible Gambling Council, or RGC, expressed her support for the bill as well. As explained by Ms. White, “RGC is a Canadian, non-profit charitable organization whose purpose is to prevent problem gambling and reduce its impacts.” She also stated that, “Canada is regarded as a leader in responsible gambling, and we are proud to be part of this.”

Her testimony expressed the council’s concerns with the unregulated nature of this industry in Canada:

Left unregulated, as it is currently, vulnerable people are at risk. It’s with these people in mind that we speak to you today. RGC believes that it’s in the best interests of Canadians and Canadian society that Bill C-218 should be passed.

This would permit provincial authorities to establish a regulatory framework for single-event sports betting, with consumer protection at the heart of the regulations.

Colleagues, Chief Gina Deer and Chief Ross Montour from the Mohawk Council of Kahnawà:ke testified at committee as well. I spoke to Chief Deer many times. I had Zoom calls with a number of chiefs. They certainly ensured that the committee and I were well informed on this.

Chief Deer stated:

Let me be clear: Our community endorses the essence of Bill C-218. Indeed, Canadians should have the right to bet on single sports or athletic events.

She went on to say that while the bill is a “positive move for Canada’s gaming industry,” it does not properly consider the interests of Indigenous people. Chief Montour added that they are looking for a “carve-out” in the Criminal Code. We heard their concerns and we understood them. The issue, though, is deemed outside the scope of Bill C-218, and indeed outside of federal jurisdictional authority over gaming, which lies with the provincial governments and has since 1985.

I understand that the Honourable David Lametti, Minister of Justice and Attorney General of Canada, is undergoing consultations with Indigenous communities and stakeholders regarding, and I quote from his letter, the role of “Indigenous nations and communities in relation to gaming.”

I encourage the provinces and territories to work with Indigenous communities and other relevant groups to come to agreements with respect to gaming and to ensure that they would be fully able to benefit from the economic gain that would come from the passage of this bill, and the committee attached an observation to this effect.

The observation reads:

The committee is of the opinion that, where appropriate, provinces and territories should work with First Nations and relevant groups on agreements related to gaming.

A final point that I would like to speak to is one that was discussed in depth during the committee hearings, and that is match fixing and manipulation.

We heard in this chamber from Senator White at second reading about the risks associated with match fixing. I would like to thank my colleague Senator White for his attention to this issue.

Senator White stated in his second reading speech that “. . . in Canada today it is not illegal to fix a match.” While I agree that match fixing is an important priority, I, along with the committee’s expert witnesses and contributors, disagree on the state of its legality in Canada and on the right path forward.

I reached out to the Library of Parliament to prepare a research brief on the legal framework around match fixing in Canada. It is, of course, impartial and rooted in fact. The brief explains that, while there is not a provision in the Criminal Code that explicitly mentions match fixing, there are a variety of provisions that cover the act of match fixing, and I will explain why this provides stronger legal coverage.

The most applicable Criminal Code provisions are section 209, section 380 and section 465.

Section 209 most directly applies to match fixing as it criminalizes “Cheating at play,” meaning that anyone:

. . . who, with intent to defraud any person, cheats while playing a game or in holding the stakes for a game or in betting . . .

— has committed a crime.

Section 380 criminalizes fraud. This provision has not only been used to prosecute match fixing, but has also been upheld by the Supreme Court of Canada through R. v. Riesberry. The Library of Parliament brief states that the Supreme Court agreed with the Court of Appeal that the facts of the case met the requirements to be considered fraud based on the fact that Mr. Riesberry:

. . . intended to create an unfair advantage for his horses in their races. This is a finding of fact that Mr. Riesberry knew that his dishonest conduct put bettors at risk of deprivation. That, after all, is what cheating is.

A key feature of match fixing is often bribery, which would satisfy the criminal requirements under the fraud provision in section 380.

Section 465 covers conspiracy, and when combined with another provision like the other two I’ve mentioned:

. . . would allow for individuals who work with other individuals for the purpose of match fixing to be prosecuted, even if they themselves do not fix the match.

The brief goes on to state:

It should also be noted that all that is required for this offence to be made out is an agreement to commit a criminal offence and an intention to act on the agreement. It is not necessary to carry out the act. This would allow, for example, for both a person who pays a referee to throw a match, and the referee themselves, to be prosecuted, even if one or both parties does not follow through.

A legal opinion from the law firm of McCarthy Tétrault comes to similar conclusions and adds that section 462 pertaining to money laundering could also be used to cover aspects of the match fixer’s crime.

It is clear that match fixing is indeed illegal in Canada through multiple provisions of the Criminal Code that work together to provide legal coverage. Additionally, the Supreme Court has verified this. Any arguments claiming that match fixing is legal simply because there is not a direct mention of it in the Criminal Code are not accurate.

What’s more, colleagues, is that having a provision in the Criminal Code that directly prohibits a specific crime can actually pose a substantial risk to the potential for conviction, as it leaves more room for legal loopholes. By contrast, having multiple broader and more encompassing provisions ensure that there is legal coverage for more aspects of the crime. For example, if you have a law that criminalizes robbery, it is not necessary to have specific laws that criminalize robbery from a bank, a grocery store, a gas station or a pharmacy. It would actually be counterproductive to have those laws, as it leaves room for the laws to be challenged on specificity.

Donald Bourgeois, an expert in gaming law called to the bar of Ontario in 1984, appeared at committee and spoke to this issue and other legal matters. When I asked him about this concern, he stated:

When you start to become very specific in criminal legislation, you run the risk of the Crown not being able to prove each of the elements. So the risk of having a very detailed provision is that you will not be able to gather the evidence, and you will not be able to prove all of the specific elements beyond a reasonable doubt. The more specific you get, the more the Crown has to prove specific elements in order to get a successful conviction.

Deputy chair of the committee Senator Wallin also directly asked Mr. Bourgeois whether a specific match fixing section of the Criminal Code is necessary. He replied that, no, this is not needed, adding:

I think it’s covered in two ways. One, there is an existing Criminal Code provision in section 209, which combines with section 380, dealing with fraud. The Supreme Court of Canada has very clearly stated that dishonest activity, not just during the game but leading up to the game, is sufficient.

He went on to say:

The second aspect is that the regulatory structure, combined with a connection to law enforcement, as well as others within the sector, allows the regulatory structure to prevent the problems arising from match fixing.

Mr. Bourgeois discussed the Supreme Court of Canada Riesberry decision, adding:

. . . we have a very clear indication from the Supreme Court as to what constitute elements of the offence. Again, as I indicated, the only reason we know that Mr. Riesberry exists is there was a regulated structure that gave the information that was necessary in order to get a conviction.

Mr. Ambrosie from the Canadian Football League also commented on this, explaining that:

Information and data are shared between sports organizations, sports book operators, gaming regulators and law enforcement to ensure fair and honest competition on the field, because the integrity of our game means everything to us, and we will work to protect it.

David Phillips, COO of the Alcohol and Gaming Commission of Ontario, added that:

The fight against international match fixing requires a highly coordinated effort between regulators, law enforcement, sports leagues, operators and independent market monitors.

And this bill would give Canada that regulated marketplace that is a prerequisite to catching match fixing when it does happen.

Colleagues, there is an international treaty that focuses on combating match fixing titled the Convention on the Manipulation of Sports Competitions, also known as the Macolin Convention, which opened for signatures on September 18, 2014. One of its key underpinnings is that there is a regulated marketplace so that match fixing will be discovered in the first place, instead of going under the radar due to a lack of regulations.

Paul Melia, President and CEO of the Canadian Centre for Ethics in Sport, who specializes in ensuring the integrity of sport in our country, supports Canada examining:

. . . the value of signing on to the Macolin Convention as a way to further ensure we are protecting the health and safety of our athletes and the integrity of sport.

However, he made clear during his committee appearance that passing Bill C-218 should come first in sequence in order to ensure that we have a regulated marketplace prior to potentially signing the convention.

He stated:

I think the passing of Bill C-218 and the regulatory framework that would support it is a necessary first step.

Colleagues, the committee added another observation to the bill to this effect which reads:

The committee strongly encourages the federal government to sign the Council of Europe Convention on the Manipulation of Sports Competitions in order to align with international practices on combatting match fixing, and to work with the provinces and territories — which have jurisdiction over gaming — in this regard.

The Senate, of course, cannot compel the federal government to sign on to any international treaty, which is why the committee wrote the observation this way.

It is important to note that, while over 30 countries have signed the convention, very few have ratified it. It has not been ratified by Germany, the United Kingdom, France or any country outside Europe. So while it may be important for Canada to align itself with international best practices, it is most important that we start by ensuring that our laws and regulations are in place to deter criminal activity and to fortify the integrity of our institutions and operations.

To reiterate, colleagues, there is widespread support for this bill from very credible stakeholders with expertise on the relevant issues.

This legislation strengthens consumer protections and has safeguards that provide support for problem gambling and addictions. It dries up revenue streams going to organized crime groups and offshore accounts, redirecting them to legal operations that will be subject to taxation and regulatory measures. It unlocks hundreds of millions of dollars in taxes and revenues annually that can be reinvested into critical programs and communities. It will create well-paying jobs across the country. Colleagues, it is time to bring single-event sports betting into the light of day. Thank you.

Senator Wells, there are a number of senators who wish to ask a question. Will you take a question?

I would be pleased to, Your Honour.

Thank you very much, senator, for your question. It is an important question.

First, it goes to the question of jurisdiction. As I said in my speech — and I believe I said this in my second reading speech as well — Canada delegated the authority for gaming and the regulations around gaming to the provinces. I understand that the Mohawk Council of Kahnawake has tried, a number of times, to engage in discussions around licensing and gaming with the responsible authority, which is the province.

I mentioned in my speech that I spoke to Chief Sheldon Kent of the Assembly of Manitoba Chiefs and asked him specifically about that. I jotted it down because I thought it was important. He said:

Any consultation should be on the full suite and broader inclusion of First Nations, not just on one line in one bill.

I understand — and I am sure you are aware as well — that our Attorney General and Minister of Justice, David Lametti, has written to First Nations across the country regarding the broad discussion about the inclusion of First Nations, and specifically with regard to section 35.

The other part of your question was about the bill being sent to the Committee on Banking, Trade and Commerce, a committee qualified to examine this issue, and the fact that it did not go to the Legal and Constitutional Affairs Committee. That debate happened here in the Senate and it was the Senate itself that made that decision.

Honourable senators, before Senator McCallum poses her supplementary question, there are a number of senators who have questions and we are limited in terms of time. Therefore, I will ask each senator if they have a question and a supplementary. If any senators wish to ask further questions, I will put their names on a list for second round.

Thank you, Senator McCallum. The audio was not great, but I think I understood your question, namely why is this not being done on a broad scale?

First, the jurisdictional authority for gaming rests with the provinces. In fact, in the case of my province, Newfoundland and Labrador, the province has a partnership with the three other Atlantic provinces and the authority rests under the Atlantic Lottery Corporation.

In relation to consultations with specific groups — or even the encompassing groups in Manitoba, Saskatchewan and Quebec, as you mentioned — I go back to the comment that I heard directly from Chief Kent of the Black River First Nation in Manitoba. Section 35 discussions happen broadly across Canada. I would not dare select three or five or nine provinces to have specific conversations on an item specifically related to section 35, which we recognize is a big part of consultation and inclusion.

I think the broader section 35 discussion rests with Minister Lametti. I know that letters have been exchanged, and those consultations may be beginning or under way. Certainly, an approach has been taken on that. Still, the jurisdictional authority on gaming rests with the provinces and territories.

I think that’s as far as I can go in terms of speaking about something outside the jurisdiction of the federal government, where the Senate rests.

Senator Wells, as sponsor of Bill C-218, I rise today to draw attention to the concerns of the horse-racing industry.

This industry extends far beyond the jobs of jockeys and horse trainers — impacting the tourism, agriculture, manufacturing and gaming industries. In fact, the horse-racing industry is responsible for 50,000 full-time job equivalents across rural and urban Canada and contributes $5.6 billion annually to the national economy.

Like many industries, though, horse racing has been deeply impacted by the COVID-19 pandemic. While the horse-racing industry was already facing increased pressure with the threat of potential unintended consequences caused by the legalization of sports betting, this industry supports the principle of Bill C-218. However, they are hopeful that parliamentarians understand the potential negative impacts on horse racing.

Senator Wells, can you confirm that under the new proposed legislation, fixed-odds wagering on horse racing will not be permitted and the horse-racing industry will be protected? Thank you.

Thank you, Senator Black. I can confirm that. In fact, you may know that a government bill in the other place, Bill C-13 — proposed and rejected because Bill C-218 was already on the Order Paper — was dealt with by the Standing Committee on Justice and Human Rights, and that specific issue. This bill was amended there to specifically provide for protection of the horse-racing industry.

Would the honourable senator take a question, please?

Of course, Senator White.

Thank you. You referred to the inability to deal with First Nations issues, as it is being managed by the province. But is it not the Criminal Code of Canada, under section 207, that allows the provinces to manage lotteries today? The suggestion by the Mohawk Council was that they be included with the provinces and territories in terms of the ability to manage and administer their own lotteries, as provinces now have the ability to do.

Thank you, Senator White. I want to confirm that your question is whether the Mohawks of Kahnawake should have a role to play in the management.

You suggested that it was a provincial issue, but the reality is the foundation of lotteries is federal. It’s under section 207 of the Criminal Code, which is why we are here today.

You are absolutely right. It is under federal jurisdiction that has been delegated to the provinces since 1985. The Criminal Code of Canada is obviously a federal code, so it’s permitted under the federal Criminal Code to include something like that, but the management and regulation of gaming has been delegated to provincial and territorial authority.

I understand that. I listened to the hearings of the Standing Senate Committee on Banking, Trade and Commerce. The suggestion it was outside the parameters of the federal government is not true because it’s federal legislation that allows the provinces to do it. In fact, under section 207, it could be changed to say, for the government of a province, either alone or in conjunction with the government of another province, could have been added, or a First Nation or Indigenous group that has an agreement with the Government of Canada could have been added if it had chosen to do that, but in fact the Banking Committee did not consider that.

Certainly, a number of things could have been added if the government had chosen to do that, but they haven’t done that, so we can only work with what we have in front of us.

Senator White, I will come back to you if we have time. I’m going to move on. I said one question and supplementary, and then I will come back. Senator McPhedran, please go ahead.

My question is to Senator Wells. Do you agree that First Nations not covered by pan-provincial Aboriginal corporations or agreements with a province have no constitutional right to conduct and manage their own gaming operations as an element of their own self-governance?

Thank you, Senator McPhedran. It’s far beyond my ability or scope to suggest what rights the First Nations have under operations that are under provincial jurisdiction as delegated to it by the federal government.

I can’t have an opinion on that. It’s outside the scope of the bill and outside the scope of what the Senate might consider if it’s under provincial authority.

If the honourable senator would take another question, please.

Of course.

In your response earlier, you stated that had the government chose to do that, they could have done that, but this is not a government bill. It’s a private member’s bill, so the government was not involved in the development of this legislation. Why did the committee not give consideration since the government was not involved?

Thank you for your question. Even though it’s a private member’s bill and not a government bill, if it should pass this chamber unamended, it becomes a law of Canada and subject to the laws of Canada, whether it’s a private member’s bill or government legislation. It happens to be a private member’s bill because it got there first.

The fact that section 207 exists doesn’t change the one line in this bill for the change in the Criminal Code, so I see it having a very indirect effect on that.

I appreciate your response, senator, but in fact in the summary of the bill it states, “. . . make it lawful for the government of a province, or a person or entity licensed by the Lieutenant Governor in Council of that province,” so there must have been some thought given that other than provinces would be involved in the management of lottery schemes, even though today only provinces are actually involved in the administration of those schemes.

Having watched and read what was said in the Banking Committee, my question is why a Justice official wasn’t brought in to walk through whether this was an appropriate time to consider providing gaming authorities to the First Nations who had asked for it and then were given it in the original lotteries act. My point is I don’t know that there was enough of a discussion, having watched the Banking Committee, and maybe back to the question earlier about whether the right committee handled this because it was not considered and no witnesses were brought forward.

Thank you, Senator White. Again, I’m not going to comment on why the Banking Committee was chosen. There were qualified senators on that who brought in expert witnesses where there was need. The witness list was decided by the steering committee recommendations from other committee members and other senators.

The fact that one line in the Criminal Code under Bill C-218 would be changed does not have an effect on the regulatory structure — and I recognize you asked about the regulatory structure within provinces and the roles of First Nations within those regulatory structures — but Bill C-218 changes one line in the Criminal Code. It doesn’t enter into the discussion about jurisdictional issues as to why some are included and why some are excluded. In fact, it’s not germane to the discussion because it changes one line of the Criminal Code simply allowing betting on single event sports, not on jurisdictional analysis as to why some were included and others not. I think your question makes the bill seem more expansive than it is, and it is not the case.

Senator White, I have another Senator who wants to ask a question.

Senator Wells, you shared the committee’s observation. How do you suggest that provinces take action here? Can you share specific suggestions based on your extensive consultations with First Nations?

Thank you, Senator McPhedran. Here is what will happen, and we heard this from the British Columbia Lottery Corporation: With the removal of the prohibition on single event sports betting, nothing else will change. So instead of having to bet on a parlay, which I discussed, you can bet on a single event. You can bet on the Habs and Las Vegas in their next game, and you won’t have to add another match that you hope goes your way. Nothing in the operations or regulatory structure will be affected by this bill, other than you will be permitted to bet on a single event. Whether that would include consultations regarding First Nations or the regulatory structure or anything like that, nothing will change. There will just be a modification to the app or the betting process that allows you to wager on a single event.

Would you take a question, Senator Wells?

Of course, Senator Dalphond.

Thank you for this interesting speech. I also watched the witnesses that appeared before the Banking Committee, and there was a lawyer who appeared on the last day on the last panel. He referred to the Supreme Court case Riesberry, 2015, where the Supreme Court concluded that drugging a horse that will participate in a horse race could be seen as a fraud, because the person drugging the horse is using fraudulent means. But the Supreme Court refers to the following finding:

The trial judge found that Mr. Riesberry, as a licensed trainer, was bound by rules barring possession of syringes and use of the drugs in question in order to enhance performance: Ontario Racing Commission, Rules of Standardbred Racing, 2008 . . .

There is a government regulatory system that made the act committed by Mr. Riesberry against the rules and, therefore, a fraudulent means. Therefore, the fraud charge could be laid.

When I look at the players in a football league or soccer players, I don’t think there are provincial regulations that apply to those sports. Are you saying we will need provincial regulations for the fraud charge to be possible?

Thank you for your question, Senator Dalphond. No, I’m not saying that. They still would be subject to the provisions of section 209 and the other two sections that I mentioned; they still would be subject to those. That would not change. So these are federal laws against fraud, cheating at play, and I can’t remember the last one, but it would include bribery and all the things that are federal statutes now and prohibited under federal statutes. That wouldn’t change at all.

If I understand properly what you are saying, the offence of cheating would still be possible but not the offence of fraud against provincial regulations making the behaviour a prohibited behaviour.

If they do it in Canada, it would be subject to Canadian law. Just because the regulation of a sport or a regulation of a bet might be provincial, if someone commits a fraud that is a federal indictable offence, then that comes under the laws of Canada, whether it’s fraud or bribery. These are federal offences, as you know.

With pleasure.

Thank you, Senator McCallum.

Any interference from the provincial authorities to any groups that are participating in gaming, whether approved by the province or not, does not come under the purview of this bill. I’m not sure there are laws involved in that, but because it doesn’t come under the purview of the bill — colleagues, I don’t want this to be overcomplicated in any way. This is a bill that allows single-event sports betting. Any of the structures around regulatory platforms and the operation of gaming in a province is only associated with this bill in a tertiary way but not the focus of this bill.

Senator Wells, your time has expired.

Senator Cotter, before you begin, I have to apologize in advance that I will be interrupting you in about five minutes.

Your Honour, it reminds me of something that was written on the headstone of a person who had died that read, “I expected this,” and I’m expecting you will interrupt me in five minutes’ time.

I have a set of remarks and, with respect, in order to try to keep them organized, I might make a few references to some of the questions that were posed to Senator Wells. He has offered an extensive explanation and justification for the wisdom of this bill and I don’t want to repeat very much of that.

I think it would be helpful to speak to a few of the points that were discussed in a preliminary way and first observations. I’m always uncomfortable engaging Senator Dalphond on legal points, but I want to speak a word or two about the concept of the crime of fraud.

I obtained a legal opinion from an eminent criminal law scholar on the very point that Senator White raised in the discussion about the effectiveness of the existing Criminal Code provisions. I would like to focus these remarks on fraud.

Fraud requires that the Crown prove an act of “. . . deceit, falsehood or other fraudulent means . . . .” The courts, including the Supreme Court of Canada, have given a broad interpretation of some other fraudulent means. It helps that Mr. Riesberry was violating the rules of the horse racing association when he did what he did, but almost anything unlawful is seen by the courts to fit into the category of “other fraudulent means.” As a result, fraud has a wide scope of applications. I’ll come back to that in one the sets of remarks I will make later.

With respect to the questions that were posed by Senator White regarding the bill and whether it could have been amended to include the references that he and the Kahnawake First Nation proposed, it’s a legitimate point, but I think it asks for the bill to go so far beyond just the question of what it was proposing to amend in the Criminal Code as to offer a restructuring of the gaming regime in the country. That would mean not just the question of single-event sports betting but all of gaming — the gaming work that is now done professionally at Kahnawake and in other jurisdictions in the country as well.

With respect to Senator McPhedran’s question about whether there is an inherent right to gaming, upon which the Kahnawake First Nation justifies its work, that has never been authoritatively litigated in this country. I will speak to that in my main remarks. In many cases it is the subject of legitimate debate and some trial courts have heard evidence on the question, but it has not been definitively resolved. It has provided a basis for Kahnawake to pursue gaming, including online gaming, in this country — and uninterrupted, as I understand — but other jurisdictions, including my own in Saskatchewan, have constructed a different framework that I will speak to when I can complete my complete remarks.

I will turn to what I would say at the outset of the remarks and then move on.

I wanted to offer a series of explanations and justifications, but I think Senator Wells has covered that territory extremely well. As is pretty obvious, I’m not much of a critic of this bill — in fact, I’m a supporter of it. All of the arguments he advanced are true, and even those witnesses at the Banking Committee who were skeptical or had reservations supported the adoption of the legislation combined with a satisfactory regulatory framework.

I want to make three points. I want to give you an analogy and offer a personal story in my remarks. My role here is to try to persuade you that, even if you have some cautions, this is still a worthwhile bill to support. I will feel like I am arguing as an advocate for a wise decision to approve.

The legislation in fact doesn’t create a single-event sports betting market, it just legalizes it and regulates it. That market already exists in the grey and dark corners that trouble us. That was a point made by PricewaterhouseCoopers in an extensive report they did. In addition, they wrote:

. . . regulatory oversight within Canada’s sports betting market can facilitate greater levels of player protection and sporting integrity and can guard against money laundering and other illegal activities that may occur in the “grey and black market”.

As Senator Wells identified, all of the leading entities for whom integrity is critical to this question — integrity of sport and integrity of gaming — expressed support for the bill provided that regulation was rigorous. That’s the Responsible Gaming Council of Canada we heard about, the Canadian Centre for Ethics in Sport and all of the professional leagues for whom the absence of integrity destroys their industry.

Second, it’s useful to keep in mind that the 1985 amendments that transferred gaming to the provinces were also part of federal-provincial comity. It transferred a resource-generation initiative to the provinces and in that sense it was a constructive development in federal-provincial relations. This amendment, in a small additional way, will do the same.

I would say, anticipating I could get interrupted at any moment, if you have even a gnawing concern that the provinces are not capable of getting this right, I would ask you to have a bit more confidence in them. In the architecture of our federation, provinces have more responsibilities than in any other federative nation in the Western world, and they do a pretty good job of administering it: health, education, the world of work — 94% of workers in Canada work in the context of provincial jurisdiction — the administration of justice, major aspects of the economy and — I would remind you this one is needed — what binds us together as a country perhaps more than any one thing, as a badge of identity for Canadians, is Medicare. That’s the product of the mind and heart of a prairie premier and a team of brilliant provincial advisers.

Have some faith in the provinces to get this right. They have so far.

Honourable senators, it’s now six o’clock and pursuant to rule 3-3(1) and the order adopted on October 27, 2020, I’m obliged to leave the chair until seven o’clock unless there is leave that the sitting continue.

If you wish the sitting to be suspended, please say “suspend.”

Suspend.

I hear “suspend.” The sitting is suspended until 7 p.m.

My grandfather was a decent God-fearing man who attended church every week. He was a devout Roman Catholic and always on the lookout for converts. Once a friend asked him, “Bill, could I come along to your church and learn how things go there?” My grandfather, on the lookout, as I say, took him along, and they sat in the church service on Sunday. Something happened at the beginning of the service, and the friend leaned over and asked my grandfather, “What does that mean?” My grandfather explained. A little bit later in the service, the friend leaned over and asked again, “What does that mean?” My grandfather patiently explained. About halfway through the service, the priest went over to a lectern at the side of the church and carefully removed his watch, as I am doing now, and set it on the lectern. The friend leaned over and asked, “What does that mean?” My grandfather shook his head sadly and said, “Not a damn thing.” When my two hours is up, Your Honour, I hope you will give me a signal.

I was observing a few aspects of the sports betting bill, and I would like to turn to a third point, then an analogy and then a personal story.

The third point — and here I should acknowledge that this concern was raised to me by Senator White, and I thought it one that deserved serious consideration — is not so much about the laws on match fixing but on what might be an Achilles heel on the subject of sports betting; not its effects on major league sports, but the vulnerability at lower levels of sport where players, coaches and officials are less well-paid and potentially more susceptible to the temptation to be bought off to throw a match or shave points in a sport. A legal sports betting regime doesn’t add to that risk. If risk does exist, it’s already there, but still.

Another example where a regulatory framework can do good work comes from the U.S. I have a number of research students working with me this summer, mostly law students. They are doing terrific work. On this topic, two of them, Meghan Johnson and Rhett Kehoe, took a look at the U.S. where sports betting has been legal since 2018.

Here is what they learned. To date, 23 states have put in place legal, regulated sports betting regimes. A comfortable majority of them have excluded — that is, made illegal — betting on some sports where the risks are greater, for example, betting on college sports, or minor league baseball. This won’t prevent unscrupulous people from acting unscrupulously outside the legal regime. Laws rarely make bad people good, but the legal regime can be structured not to countenance it. Making these kinds of behaviours clearly unlawful can reinforce and assist in prosecuting the criminality of the behaviour.

I think that a regulatory regime here can actually help.

Now, to an analogy: I have a lifelong friend. We grew up in Moose Jaw together. His name is Dave. We have been friends for 50 years. We went to university at the same time. We didn’t have much money, so we took out student loans. We worked summer jobs and part-time jobs during the year. He worked hard and did well.

A number of years ago, he rose to become the CEO of a steel company. He is now retired from that work, but he is the chair of the board of directors of one of the largest steel companies in North America. When that happened, as a show of loyalty, I bought a few shares in the company.

What I immediately learned was that the shares in the company are surprisingly volatile. The day it was announced he was the chair of the board, the share price dropped by 10%. I was confused about the volatility of the shares of such a large company, which was, as I say, one of the largest steel companies in North America. Dave explained to me that his company is a trading company rather than an investing company. They trade 20 to 30 million shares a day. It’s volatile. People are constantly trading their shares, and they are not investing in the steel company so much as trading in it. This got me thinking about day traders in the stock market.

Day traders are the thousands of Canadians — my knowledge on this is limited, so you’ll have to forgive me if this feels like Grade 4; that’s about as much as I know — who buy and sell shares in the stock market in the course of a single day or within a few hours in the course of a day. They do this based on their analysis of whether the stock price will go up or down that day or in the next hour.

They bet on the price movement of the stock’s share, for example, by buying it for $10 a share at the opening of the market and selling it when it goes up to $11 an hour later. They bet in favour of the stock, or the opposite: They think that the stock price is going to go down, so they sell the shares at the beginning of the market for $10, and then they buy them an hour later when the share price has dropped to $9. They short the shares, and they have to buy them back to cover their sale at a higher price. They bet against the stock.

This is mostly done online. The day trader has a relationship with a trading entity, often a bank, through which they make purchases and sales of the shares. That entity, say, the Bank of Nova Scotia’s trading platform, places the purchase and sale orders for them in the stock market, completes the transactions on their behalf and charges a small fee or commission. The transaction attracts a small tax.

I have shared this analogy with Senator Marwah and he didn’t want me to use the next phrase, but to try to make my point I’m going to anyway. People place these “bets” essentially millions of times a day. The Bank of Nova Scotia does not use this word, but the Bank of Nova Scotia’s online platform is their “bookie,” a very honourable and principled bookie but a bookie nonetheless. The betting framework is carefully regulated by the bank’s trading arm, the stock exchanges and government agencies.

Day trading doesn’t add value to the economy the way investing in a company does, but we are fine with it. People place their bets; sometimes they win, sometimes they lose. With the thrill of victory comes the agony of defeat from time to time.

I will continue with the analogy for a moment.

Sometimes there is stock manipulation and people get taken advantage of. A stock trader learns — though nobody else does — that the CEO of a company had a heart attack last night. This usually drives down the price of a stock. He sells the shares before anyone knows and this prevents a loss. Alas, some unknowing person bought the shares at too high a price.

Or worse, there is a major fraud under way. A Canadian gold mining company announces that it has found gold in vast quantities in a mining exploration in Indonesia. People frantically buy shares in the company. The shares skyrocket. The discovery of gold is a complete hoax. Fraudsters “salted” the mine with flecks of gold to give the appearance that it was a discovery of vast amounts of gold. When this is discovered, the share price plunges to zero. This is a true story; those who bet on the company were bilked. Many people, mostly in Western Canada, lost billions of dollars.

The same thing happened to my grandfather — my plumbing, hockey-playing, God-fearing grandfather — in his retirement. He didn’t have billions to bet with as, perhaps, some other plumbers do, but he did bet on one of these sham companies and lost his shirt, or at least part of it.

Somebody rigged the game of buying and selling shares in these companies and someone lost — unfairly. Someone fixed the match, so to speak. To protect these people from this rigging of the game, one option would be to make trading in stocks illegal. We don’t do that. It would be ridiculous.

What we do is we strengthen the regulation to make the trading fair. We go for transparency. We establish rules about the timely disclosure of material information. It is made public that the CEO of the company had a heart attack last night, so maybe you shouldn’t buy their shares today. To put it in a sporting context, the Saskatchewan Roughriders football quarterback fell in the shower last night, broke his arm and won’t be playing in the Banjo Bowl this weekend, so maybe you shouldn’t bet on their team.

Some might say you shouldn’t bet on their team anyway.

We established disclosure requirements on insiders to prevent forms of trading on inside information. We put in place oversight mechanisms to enable public agencies to track and monitor the stock markets to identify and investigate unusual patterns of transactions, to detect and investigate and, if necessary, prosecute wrongdoing.

All of this was done within the existing legal framework of Canada where the Criminal Code does the job well in cases of criminal misconduct, and regulatory agencies, virtually all of which are delivered under provincial jurisdiction, do a good job at regulating financial markets. This is what our colleague Senator Wetston did in exemplary fashion in his previous career.

We legalize and we regulate. I hope you are seeing the analogy to sports betting.

It would be a mistake, I think, to give up on or ignore the sports betting market, especially as this market is going to thrive underground anyway and in problematic ways. It is far better to decriminalize and regulate the market in ways that enable us to significantly better address the vulnerabilities that it already creates.

I support this bill because it seems to me to be the right way to go on the subject, but I have another motivation as well, ultimately connected to Indigenous opportunity. For this, I will recount a personal story. It’s a story I have never shared publicly before.

As I have mentioned previously, I served as a deputy attorney general in Saskatchewan for five years in the mid-1990s. This was a time when governments and others were turning their minds to gaming and casinos, the regulation of which had been, as Senator Wells noted, turned over to the provinces in the 1985 amendments to the Criminal Code, authorizing the provinces to “conduct and manage gaming.”

As Saskatchewan was slowly, reluctantly turning its mind to gaming and casinos, a First Nation in the southeast of the province went ahead and opened its own casino. This was — let me use these words — “inconsistent” with the Criminal Code. After a period of operation, the RCMP came in and shut down the casino, and took custody of all the gaming equipment and cash at the casino. Criminal charges were laid. The First Nation and its leadership were none too happy. There is more to the legal aspect of the story, including an exercise of great wisdom, it turned out, by the Saskatchewan Court of Appeal, but I want to share a personal aspect of this story that I think is related to this legislation today.

A couple of days after the RCMP intervention — a raid, I think it’s fair to call it, handled with as great care as possible but a raid nevertheless — I received a call from the assistant commissioner of the RCMP. The deputy commissioner is the highest RCMP authority in the province. Larry Proke was the deputy commissioner, known to some of you in this chamber. He was someone who had an outstanding career in police leadership. He informed me that the RCMP had received credible information concerning threats on the lives of three people in government as a result of the shutdown of the casino. One of those three was me. He wanted to arrange for my house to be guarded at night by RCMP officers until the threat had been addressed and fully investigated.

When the most senior RCMP officer in the province calls you regarding something like that, you listen. My house was guarded at night, and I took to driving my kids to school in the mornings until the threat had dissipated.

I won’t speak much about my own emotions connected with all of this other than to say it was a mixture of confusion, anger and a bit of fear. But for me personally, what came next was more important and directly connected with what we are discussing today.

Gradually, I began to consider what would have motivated people — good, decent people — to make those kinds of threats. I actually thought I knew who was behind the threats. Slowly, I began to understand. I am not the most insightful guy in the world — my family would confirm that — but I eventually got there, and I want to invite you to come there with me tonight.

Imagine that you are in a leadership position at a First Nation. Your community is on a small postage stamp of land. The history of your community is that your people were more or less shoved onto this land a century ago. The land is not very productive. There is no economy to speak of. There are few jobs. You feel that Ottawa is not providing enough money for basic services, health, social services and education that your community desperately needs. Young people leave and move to the cities, where they are marginalized, feel marginalized, looked down upon, get mixed up with the wrong people and their lives in the cities too often spiral downward. Too many lives end up in darkness.

You are inclined to curse the darkness, but that isn’t going to change much. You want to make a difference. You have an idea. You have seen how Indian casinos near Phoenix, Tuscaloosa or Albuquerque have brought prosperity to Indian bands in the United States. Maybe on a small scale, the same thing could happen for your First Nation.

You and your colleagues agree to cobble together what band resources you can. This is not a venture where you can go to the Bank of Nova Scotia and take out a mortgage. You buy some second-hand slot machines and gaming tables, and get some people with expertise in gaming to help you set up. Young people from your community get hired and trained, and you open up a casino. Lo and behold, people come. They gamble. They lose a little bit for the most part — that is kind of the way casinos work. Money starts to accumulate to pay salaries for your young people and to flow money back to your community.

Instead of cursing the darkness, you have lit a candle. And then, just as hope for prosperity for your community arrives, so does the government to shut you down. Who wouldn’t be angry?

I had to get outside of myself and outside of my role as a senior legal person in the government to see some of this. I didn’t see it all at once.

The story, though, has a happy ending. Following a wise decision on the criminal matter at the Saskatchewan Court of Appeal, we dropped the criminal charges and sat down at the negotiating table. I am not all that supportive of gaming, but my reflections led me to understand both the need and opportunity for First Nations to become part of the gaming economy. I became a proponent.

We struck a framework agreement, one that I championed. On the sticky question of jurisdiction — and here I’m thinking of the legitimate concerns of Senator McCallum — we agreed to disagree. What I proposed in this framework agreement was that the Federation of Sovereign Indigenous Nations would write a “whereas” clause asserting that gaming was an inherent right. I wrote a “whereas” clause asserting that the province’s authority to conduct and manage gaming came pursuant to the Criminal Code. Then we got down to the business of creating a mutually agreed upon professional framework for gaming in the province.

With respect to revenues, First Nations would get half and the province would get the other half. To ensure fairness, the profits were equalized. Under provincial legislation, the Saskatchewan Indian Gaming Authority, a non-profit entity to which Senator Wells spoke, would be established. It would run the Indian casinos under the mutually agreed framework of rules.

The SIGA profits would be shared among all 74 First Nations in the province. Whether you were of the Whitecap Dakota First Nation where the Saskatoon casino was located — and a profitable one it is; my sister loses money there on a regular basis — or the Cumberland House Cree Nation or Cote First Nation far away from the casino market, this arrangement has generated good jobs in the thousands for Indigenous people in Saskatchewan, plus opportunities for Indigenous business and tens of millions of dollars that flow to those 74 First Nations to hire additional teachers, nurses, social workers and teachers’ aides, based on each First Nation’s own needs.

It hasn’t solved the many challenges faced by First Nations communities, but it was one step on the road to reconciliation before that word became fashionable.

Now let us jump to today. The bill we are considering today will create modest additional opportunities for First Nations to participate through their gaming structures in a legal, regulated sports betting market. In Saskatchewan, it will generate 50 or so good jobs. It will generate another $10 million to $20 million a year flowing back to Saskatchewan’s First Nations in the way that I described. It is supported by SIGA, the gaming authority, and by the 74 First Nations of Saskatchewan. It won’t solve the challenges faced by First Nations, but it will help.

Here is the point connected to the discussions we’ve had over the last few days about Bill C-15 with respect to reconciliation with Indigenous peoples: It won’t always be easy, and it won’t arrive in one big bang. It will arrive in the form of a thousand threads of accommodation. Many will be small and thin. Perhaps this one is. But those thousand threads of accommodation woven together, of which this is one, will create the fabric of reconciliation with Indigenous peoples.

Even if I had reservations about the wisdom of this bill, which I do not, it would be difficult for me — and I hope difficult for you — to oppose it and stand in the way of this strand in the fabric of reconciliation. I hope you can see your way through to supporting this bill.

Let me close with this: If this bill is adopted into Canadian law, I intend, at the next Banjo Bowl, to try my hand at sports betting for the first time and place a $20 bet on my beloved Saskatchewan Roughriders, even if the quarterback breaks his arm the night before the game, however unwise some of you may think such a bet would be. Perhaps Senator Plett will try his hand by betting on the Blue Bombers and we can compare notes after the game.

Thank you, hiy hiy.

Yes, I would.

It’s easiest for me to speak about Saskatchewan. I think the model I’ve described has been a constructive partnership among First Nations and with First Nations and the province. That model has actually been adapted and adopted in other parts of the country to the credit of other jurisdictions.

If one is thinking about First Nations who may be operating without partnerships with the province, this legislation has no effect on them. It doesn’t compromise their ability to operate. Those are choices that they get to continue to make. I understand the line of argument, and I’m not unsympathetic to the jurisdictional argument. I think we finessed it in Saskatchewan. It just seems to me that a line in the Criminal Code is not the place on which to focus for the construction of our jurisdictional framework that reaches, and I think should reach, far beyond the question of gaming, and particularly single-event sports betting.

Would the honourable member take a question, please?

Yes, certainly.

I’ll start by thanking the researchers you brought in, because I think it’s relevant that the researchers talk about the 19 states in the U.S. Each of those states operates like Canada does, in that we have one piece of legislation that manages sports betting, as we would a country.

The comments in particular about not allowing university sports, as an example. Certainly an issue that was raised in 2013 and again now is: Who will be included in a betting regime? There is no amendment brought forward, not even an observation, in fact, that would not allow betting on Junior C hockey, for example. Why was no consideration given to either the sports body having to approve being entered into the regime or even excluding a certain age group?

Thank you, Senator White. I think those are good questions, but they’re actually questions for the provincial regulatory authority as they are in, let’s say, the state of Kansas or Oklahoma. My understanding is that the framework that provinces have, and have available to put in place for this, are ready to go, and nothing operates until that regulatory framework is in place. Each province will make its own choices.

Part of the reason I mentioned Tommy Douglas in my remarks, though not specifically by name, is that I think it’s inadequate not to have confidence that the provincial regulatory authorities will do their jobs well here. Aside from the fact that provinces can do this work well — and they do this kind of regulatory work across wide spectrums of our lives well — they have an enormous interest in the integrity of the betting regime being maintained and succeeding, because its failure erodes the whole enterprise. I don’t like to use the phrase “skin in the game,” but they have a critical commitment to integrity, and I think they will make the kinds of choices that you and I hope they would make to protect the more vulnerable range of sports here.

If I may, Senator Cotter, I understand that, but whether it’s Oklahoma, New Jersey or New York, those states actually drafted the legislation as we are doing right now. They didn’t receive it from the federal government. They are at the exact same level as we are. Really, they made the decision in their legislative process, not always in their administrative process, to exclude NCAA football, as an example, tier 3. Wouldn’t this be the place for that amendment to occur now, rather than putting it onto the provinces, who may or may not make the right decision? I’m not suggesting they will all make the wrong one, but I’m not suggesting they will make the right one either.

I think they make a choice. There was, let me call it, a grand bargain struck in 1985 to reconstruct the world of gaming, gambling and lotteries. You transfer the whole range of gaming jurisdiction to the conduct and management of the province. You can invite the province then, and you should expect the province to put a regulatory regime in place. Whether they did it by passing a law or writing regulations in relation to conduct and management of gaming, I don’t think it makes very much difference. You might like legislative oversight in Saskatchewan or British Columbia for it, but you’re going to get the same outcomes.

With respect, I have not heard anybody say that the regulatory frameworks for gaming that exist in these other provinces, as it is now, have failed because it’s done through a regulatory process.

Would Senator Cotter take another question?

Yes, certainly.

Thank you, senator. I enjoyed your speech very much. Whenever you speak, it is always well researched and well delivered.

My concern — and it is the same question that I’ve been asking — is no matter how much regulation there is in place, the problem of addiction is something that is of great concern to me. You haven’t addressed this in your speech. I would like to hear your opinion on the problem of addiction.

Thank you for the question, senator. There is the potential for addiction in all ranges of gaming and gambling. Quite frankly, it’s the one reservation I have about it — not the fact that somebody might decide to risk their money and lose it, but get caught up too significantly.

That’s happening now. I’ve forgotten the exact numbers, but the fact of the matter is that it is suggested that Canadians bet $13.5 billion a year on single-event sports betting. Some of that is being done by people who have, unfortunately, become addicted to it. They’ve been drawn into it too much. They have a range of vulnerabilities, and it feeds this worry.

One of the things is we have no idea who they are because all of that betting is taking place in some form of darkness or semi-darkness. This legislation might increase the amount of betting that takes place — moderately, I expect — but it will bring much of that into the light and will enable responsible gaming regimes that exist now to engage with those people who are at risk. I understand the strategy is to try to prevent it — if not prevent it, identify it and then treat it, if that’s the language. Responsible gaming organizations, like the one that Senator Wells referred to, have done not only excellent, but high-quality-level research to know how to do this well if they can get access to and partner with gaming agencies that are responsible.

Well, you know, the illegal market isn’t particularly responsible. They don’t really have an interest in addressing vulnerable gamblers and potential addicts. They don’t have their own responsible gaming program. Right now, in the legal framework of gaming, gaming facilities and regulators are investing $125 million a year to address responsible gaming. The statistics suggest that the level of addictive gaming is declining. It’s still not a complete answer, but there will be more invested as a result of this coming above the table and revenues being generated that can be used by gaming authorities. My understanding of the evidence that we heard is they are committed to doing that.

So it doesn’t provide a perfect answer, but in my view addressing addictive gaming will be improved from the current circumstances with a legal and regulatory framework.

The fact that you just said bring it “into the light,” I think is something that I had not heard from the witnesses, so thank you for that, senator.

Would Senator Cotter take another question?

Yes.

Senator Cotter, I’d like to come back to what you told us about the agreement with the FSIN, the Federation of Sovereign Indigenous Nations. I would like to know if this agreement came before or after the 1996 Supreme Court ruling in Pamajewon.

You may recall that, in that case, the Supreme Court considered whether a First Nation had an Aboriginal right to keep a common gaming house. You spoke about working in the office of Saskatchewan’s Attorney General in the mid-1990s, and I know that the Attorney General was one of the intervenors, along with other provincial attorneys general. Did this agreement come before or after the Supreme Court ruling?

As is often the case in Saskatchewan, we are kind of an advance party visionary on these questions. This agreement was made before the litigation to which Senator Dupuis refers, and it was, as I think I described, a practical solution to not let jurisdictional disagreement get in the way of what seemed like an opportunity for the province but also for First Nations.

My understanding is that, at that time, Saskatchewan’s approach was to allow First Nations to keep common gaming houses under their Aboriginal or treaty rights, which left the issue entirely in limbo. There is nothing to prevent a court from one day concluding that this right exists, if it is proven, and that it would set aside the bill we are studying.

I think that’s correct. The bill in this consideration doesn’t speak to that question. In terms of the specifics of Saskatchewan, charges were laid in the matter of the casino raid I described. Everybody was convicted. First Nations people were involved, including some American people who were assisting in the running of the casino. A number of those convictions were upheld at the Court of Appeal, but First Nations people and the community argued there was a treaty right to gaming. The Court of Appeal felt that that evidence was inadequate and sent the matter back for retrial. That was the point at which the government and prosecutors, with encouragement from me, elected not to proceed with the charges and instead negotiated the framework I talked about.

So the definitive answer to the treaty-right question was never addressed in the courts. It was, in a sense, set to the side so that we could move on with an agreement that met everybody’s expectations.

Senator Cotter, would you be willing to take another question?

I certainly would, yes.

Both today and in your speech at second reading you gave us very folksy examples of ordinary people placing small wagers on sports games. If that’s what we were talking about, I would have no concerns about this bill. What I am very concerned about is that I believe this bill lays the groundwork for very-high-volume sports betting in the midst of games, where a company like Rogers, for example, proposes to set up a platform. You can imagine betting not just on the outcome of the game but on the outcome of every play, and you are betting in real time and betting extremely quickly on digital platforms. There might be thousands of micro-bets in each game. I think the potential for addiction is far greater, far more akin to something like a video lottery terminal, or VLT, than conventional sports betting.

I’m wondering, when your answer to Senator Moncion was very hopeful about addiction, if you have given consideration to the fact that we are not talking about people making friendly wagers on the Roughriders or the Elks, but instead this kind of instantaneous, very quick digital platform where the money would move very quickly, and people would be watching and betting on their phones. It would be instantaneous. There would be that instant adrenalin rush, which is part of that addiction cycle.

I’m just wondering if you have given consideration to the way in which new online technologies weaponize this kind of wagering.

Thank you. I had a decent understanding of some of these questions with respect to gaming in the 1990s. I served on the board of directors of the gaming framework corporations. One of the things I learned then and, in fact, I was reminded of it implicitly in the question that Senator Black asked earlier about horse racing, is that one of the great challenges of horse racing is that the feedback is slow. You have to wait for a whole race. You go for a whole evening, and how many races are there in the course of an evening or an afternoon? Not too many. What happens with people in gaming is the more instantaneous feedback feeds their enthusiasm, and people are, I guess, losing patience with waiting.

So I accept the legitimacy of the premise of your question, senator, but that can be said about almost anything now. You gave the example of VLTs, and they seem to me to be shockingly addictive. Quite frankly, that may also be true. Let me speak about two people I know who are day traders.

Senator Cotter, your time has expired. Are you asking for five more minutes?

Leave is not granted. Resuming debate, Senator White.

Honourable senators, today I will speak to Bill C-218, which will alter sports betting in Canada, allowing bettors to make bets on individual events, even segments of an event, rather than multiple events, as is the law in Canada today. There are several areas I wish to speak to in this bill, but I will focus on one specific concern. My focus today will be on sports betting and the inevitable match fixing that will occur when we move to single-event betting.

As noted in the bill and spoken to by the sponsor, the critic and others, allowing for single-event betting will require a change in the Criminal Code. When we bring single-event betting into Canada, we will have a problem with match fixing. Every other country does, so why would we be different? This bill will see growth in betting on sports, not just the games between first-tier sports like the NHL, NBA and others, but as well between and within any other league or match the province wants.

In other countries — European, Asian as well as Australia — we see single-event betting in junior soccer leagues, badminton tournaments, friendly cricket matches and electronic sporting events. It’s not just the events. How about whether a specific player will score in the next game, get a penalty or get in a fight? You name it. If the province wants to, and the bettor is willing to, it can be wagered. What if a league said, “No thanks, not us?” Well, that’s too bad. As a league, the athletes do not have the ability to refuse. It isn’t about them. It’s about gambling. We will see what the U.K. and Australia have seen: lower-level sports included.

This bill would open up single-event betting for whatever purposes the province wants, and, as I stated, we already know how bad their addiction has become. They will certainly open up amateur sports to this betting. It’s not about sports. It’s about gambling.

What about match fixing? In countries where single-event betting is legal — Europe, Australia, Asia — we have seen dramatic and extensive instances of game fixing in cricket, soccer matches — I could go on.

Declan Hill, a Canadian journalist and author, wrote in his PhD thesis and in his book The Fix specifically about the problems of match fixing and the potential for that here in Canada. I mention Dr. Hill as he is one of the foremost experts in the world, speaking at conferences and universities around the world to educate on the problem of match fixing. He wrote in The Globe and Mail in December that if we legalize single-event betting in Canada, we must make match fixing illegal, which it is not in Canada today.

Declan Hill was not a witness in the hearings of the Standing Senate Committee on Banking, Trade and Commerce, or BANC, even though his name had been put forward. He was not a witness at the House for the same reason. He could have imparted wisdom to this committee and their decision making. He states categorically that the greatest threat to the integrity of sport in Canada is match fixing. He says the reality is that the issue will not be the big game where team one is expected to lose to the better team, team two, and instead the weaker team wins the game. He says the games being fixed will be the same game, but the spread will indicate that the weaker team will lose by two goals instead of losing by four. You see, the public expected a loss and they got a loss. The bookmakers predicted a loss and they got a loss. However, they lost outside the spread, causing millions of dollars to be won or lost as a result of the fix. He also indicates it’s likely to be in the second or third tiers of sport. It’s not at the top of the sport where the fix will occur. There is less publicity and lower scrutiny in the lower levels.

The CEO of the Canadian Centre for Ethics in Sport, Paul Melia, states that legalizing bookmaking:

 . . . comes with associated risks to the safety of our athletes and the integrity of Canadian sport through the threat of match manipulation.

He continues, stating that:

Match manipulation is linked to organized crime. It takes advantage of vulnerable athletes, officials, coaches and other support staff in order to fix the outcome of a sporting competition . . .

He stated that in a confidential review that was conducted, the sports found to be at high risk include:

 . . . badminton, combat sports, cricket, e-sports, Canadian Football League, certain leagues of the Canadian Hockey League, the Ontario Hockey League, the Western Hockey League, soccer and tennis.

He continued in saying, “Once this legislation is passed, the risk to these sports may grow even higher.” Melia said fixing need not involve the final outcome of any crooked match, but rather anomalies such as whether, in tennis, the athlete is going to double fault in the second game of the second set.

Richard McLaren, who authored a 2016 report into state-sponsored Russian doping, and David Howman, a former Director-General of the World Anti-Doping Agency, painted an alarming picture about match fixing at a symposium on match manipulation gambling in sport in Toronto in 2019. McLaren, a Canadian law professor and CEO of McLaren Global Sport Solutions, said that doping and match fixing combined were the two biggest issues affecting the integrity of sport, yet manipulating outcomes was a bigger problem. He said:

What makes sport different than entertainment is unpredictability. Fixing results removes the greatest and most important characteristic, that unpredictability . . . . If it loses unpredictability because of fixed results the passion for sport is diminished and that is a much bigger issue.

He stated that match fixing has become increasingly pervasive in recent years across a number of sports.

Let’s talk about Canada. In 2012, the CBC produced a story about match fixing in the Canadian Soccer League. They identified that up to 42% of all games were manipulated or fixed. While the result cast Canadian soccer in poor light, action was taken by sports officials — but not by the courts and not by law enforcement or prosecutors. Why not? They said that Canada is limited in its ability to prosecute match fixing because there are no specific provisions in the Criminal Code to prevent such activity.

One of the concerns I have with the passing of this bill is that passing it appears to be more important than passing it right. It can be seen clearly in BANC when my friend Senator Wallin asked Mr. Paul Burns, the CEO of the Canadian Gaming Association, about match fixing. His response tells the story that those opposing this amendment — the one I will make — want to be heard when he said, “We firmly believe that there are already provisions in the Criminal Code . . . .” He goes on to state that the Criminal Code has a section called “Cheating at play” — section 209 — that states:

Every person who, with intent to defraud any person, cheats while playing a game or in holding the stakes for a game or in betting is guilty of . . . an indictable offence . . . .

When I met with our lawyers, they were clear that this refers to cheating in a game of chance, not sport — cheating in a card game or bingo game, and I could go on. However, here is the key piece of evidence and interesting to the core of what I think is going on when I say clearly that people pressing for no amendment are doing so solely to expedite the legislation and not to ensure the legislation is done properly.

Rick Westhead, a senior correspondent for TSN, did an investigation into the Canadian Soccer League scandal I mentioned earlier, where 42% of the games were manipulated. He asked Mr. Paul Burns of the Canadian Gaming Association what he thought about there being no criminal charges in relation to the Canadian Soccer League. This Paul Burns, the same one I spoke of when he said to BANC that there was legislation for match fixing, had quite a different idea during his interview. Specifically, when asked about charges in relation to the Canadian Soccer League, he stated:

It’s not easy in Canada because we don’t have specific match-fixing laws like they do in the U.K. and Australia.

The sponsor of the bill in the other place stated that this same Paul Burns has done a lot for them in preparing for this legislation. I’m not suggesting Mr. Burns is doing anything other than what the Canadian Gaming Association expects him to do. He is certainly not acting on behalf of sport, though, or ethics in sport, or Canadians or us.

He works for “. . . a national trade association that represents leading operators and suppliers in Canada’s gaming, sports betting, eSports, and lottery industries. . . .”

When proponents speak to the belief that the Criminal Code of Canada already has us covered, it is simply not true. If you don’t believe me, or if you don’t believe the foremost expert on match fixing, Declan Hill, or if you don’t believe the investigators in relation to the Canadian Soccer League investigation — having left dozens of potential criminal charges there — then maybe we believe the star witness of both BANC and the committee in the House, Paul Burns, the CEO, when he said there was no law against it like there was in the U.K.

In the United Kingdom, the government believed their legislation was not sufficient to combat match fixing and enacted the Gambling Act with a new offence entitled “Cheating” drafted in such a way so as to address the variety of match-fixing offences that arise and provide a sufficient deterrent. Each Australian state had to enact similar legislation when they approved single-event betting, and I believe we must do it here today as well. In fact, I would argue, having heard from the sponsor when he talked about the difficulty of having to find the elements in an offence, I would suggest that match fixing would provide clarity around the elements that would be required rather than fraud.

A reminder: Some will argue that the current law “Cheating at play” — 209 of the Criminal Code — is sufficient. Discussions with the former lawyer who managed this legislation through the House and Senate in 2013, and with legal representation in the Senate, clearly show that it is not for sport — it is for games, as in betting and gambling. As for timeliness, which continues to be raised, we in the Senate try to get it right. For this bill to be right, it must make match fixing illegal as well.

As for timing, the reality is that some in the committee had my amendment before their first meeting and failed to call a single witness specific to match fixing, including Declan Hill who lives in Ottawa. They could have fixed this themselves, trying this on their desks in the committee, but chose not to act on it. I am asking you to support an amendment that will correct that error. I ask you to support this amendment. Let’s send the amended bill back to the other place fixed.