By Danielle Bush
Mobile gaming raises a number of interesting legal issues for all participants, directly or indirectly, in the gaming industry in Canada. This paper looks at only one issue, although it is arguably the central, or at least the most challenging, of them all – where do the games played on a mobile phone take place, and would that place, if a specific place does exist, constitute a "place" for the purposes of s. 201 of the federal Criminal Code (the "Code")?
Mobile gaming raises a number of interesting legal issues for all participants, directly or indirectly, in the gaming industry in Canada. This paper looks at only one issue, although it is arguably the central, or at least the most challenging, of them all – where do the games played on a mobile phone take place, and would that place, if a specific place does exist, constitute a "place" for the purposes of s. 201 of the federal Criminal Code (the "Code")?
Mobile Gaming
A "mobile game", at its most fundamental, is a game played on a mobile phone, a smartphone, PDA or any other type of wireless device. Until recently, the technology precluded playing anything other than the simplest of games on a mobile device. However, due to the rapid development of a third generation of mobile technology, things have advanced to the point where individuals can now play games (both "play for fun" and "play for money") with other individuals on their mobile phones.
While games are typically obtained from the wireless carrier who is providing the phone service, they can also be sideloaded onto the device from the Internet. For example, it is now possible to download poker software to a mobile phone from a provider such as bwin’s Ongame and play poker live with other users on your phone.
Section 201 is short and apparently simple. It reads:
(1) Every one who keeps a common gaming house or common betting house is guilty of an indictable offence and liable to imprisonment for a term not exceeding two years.
(2) Every one who (a) is found, without lawful excuse, in a common gaming house or common betting house, or
(b) as owner, landlord, lessor, tenant, occupier or agent, knowingly permits a place to be let or used for the purposes of a common gaming house or common betting house, is guilty of an offence punishable on summary conviction.
Unfortunately the apparently straightforward provisions of this section cannot be understood without reverting to the definitions found in s. 197 of the Code. Those definitions in turn add an extraordinary layer of complexity over top of the two short paragraphs in s. 201. For the purposes of this paper, the operative definitions are:
"common betting house" means a place that is opened, kept or used for the purpose of
(a) enabling, encouraging or assisting persons who resort thereto to bet between themselves or with the keeper, or
(b) enabling any person to receive, record, register, transmit or pay bets or to announce the results of betting; "common gaming house" means a place that is
(a) kept for gain to which persons resort for the purpose of playing games, or
(b) kept or used for the purpose of playing games
(i) in which a bank is kept by one or more but not all of the players,
(ii) in which all or any portion of the bets on or proceeds from a game is paid, directly or indirectly, to the keeper of the place,
(iii) in which, directly or indirectly, a fee is charged to or paid by the players for the privilege of playing or participating in a game or using gaming equipment, or
(iv) in which the chances of winning are not equally favourable to all persons who play the game, including the person, if any, who conducts the game;
"keeper" includes a person who
(a) is an owner or occupier of a place,
(b) assists or acts on behalf of an owner or occupier of a place,
(c) appears to be, or to assist or act on behalf of an owner or occupier of a place,
(d) has the care or management of a place, or
(e) uses a place permanently or temporarily, with or without the consent of the owner or occupier thereof;
"place" includes any place, whether or not
(a) it is covered or enclosed,
(b) it is used permanently or temporarily, or
(c) any person has an exclusive right of user with respect to it;
As has been noted many times by other commentators, these definitions are dated, if not positively archaic. Consequently it is difficult to predict how they will be applied by the courts to a wireless, borderless world. One thing, however, is clear. In order to have a betting or gaming house, one must have a place to which persons resort to play games or engage in betting activities. The question then becomes, for our purposes, whether persons playing games with each other using their mobile phones are resorting to a "place" for the purposes of s. 201.
If they are doing so, then the person that is the owner of that place may be a "keeper" according to the definition set out above, and thus open to prosecution under s. 201 for keeping a common gaming house. Further, there is a theoretical argument that even the players themselves may be open to prosecution under ss. 201(2)(a) since it could be argued that while they are playing games on their mobiles, they are in an (albeit virtual) common gaming house.
Application of s. 201 to Mobile Games
As noted previously, it is now possible to download or sideload software to a mobile which will allow the user to, for example, play poker real-time with other players. It is also possible to play for money on one’s mobile device using that software. There are several different scenarios that are of interest in this type of gaming.
Server-based Mobile Games
A GPRS connection, or even higher speed 3G technologies like HSDPA, can be used to share data globally. It is therefore possible for a large number of mobile games to be connected with a single server and to share data among all of the players. The server acts like a router between the mobile phone users who are playing the game.
If a Canadian is playing poker for money on his mobile using this system, and the server is also located in Canada, is any person in this scenario operating a common gaming house? The first, and possibly the most pressing question is, whether the gaming is being conducted in a "place" as defined in s. 197. As noted, the Code does not provide a definitive definition of that word – rather the drafters of the Code kept the concept open-ended by stating that a place is a place, whether or not it is covered or open, etc. Assuming the courts will apply a very broad interpretation to this word (as the drafters clearly had intended), it is possible that they would find the central server to be a place for the purposes of s. 201. However, the courts are far less likely, in my view, to find the operator of the server to be the keeper of a common gaming house unless the operator was aware of the use of their server for this purpose.
Further, in the same scenario, it is likely there will be a website to which the players link in order to access the server and/or to obtain other services provided by a gaming site such as the transfer between players of monies won and lost. It is possible that the website could also be considered to be a place to which the players were resorting for the purpose of playing games. In that case, and particularly if the website was operated from Canada, the website operator could be charged with keeping a common gaming or betting house.
Peer to Peer Mobile Games
Peer to peer ("P2P") data exchanges are now notorious, primarily as a result of the battles waged between content owners on the one hand, and, on the other, consumers wishing to download and share content without any form of payment to the content owners. The two most famous cases are both American – the Napster case1 closely followed by its successor, Grokster2.
Napster distributed free software that allowed users to share music files. However, they also maintained a central search engine which was critical to the entire operation since it located files residing on users’ PCs or servers and generally acted as a conduit, passing that information between the "peers". Although, in the case of Napster, there was no intervening server on which the data was stored, the Napster construct is somewhat analogous to server-based games because there is an intermediary between the two users (or players) facilitating the transactions.
After Napster was found liable in 2001 for contributory copyright infringement, it ceased operations. However it was almost immediately replaced by Grokster. While Grokster also supplied free file-sharing software, the differentiating factor was that the networks of users were not maintained or controlled by a central body. Instead, the software set up users as part of a system of nodes which interconnected with each other. All of the users on the network communicated with each other without recourse to any central system. Although Grokster was also ultimately found to be guilty of contributory copyright infringement, the advanced P2P networking it pioneered continues to develop and to be used for a wide variety of legal (and doubtless illegal) purposes.
Thus, it is now possible for mobile users to play games with others without the need for a server or a website interface. Clearly, they can also engage in betting and other activities that, if involving actual cash, would likely be deemed to be illegal, all other indicia being present.
The question then is whether, in this scenario, anyone is operating a common gaming or betting house? The really big question is "where is the place to which these players are resorting to play games?"
They are each playing on their own mobile phone. There is no third party intermediary. There is no central server. There is no website to which they must all come in order to play. I therefore see no basis for finding that there is a "place" involved. Without a "place", no gaming house exists and there is no contravention of s. 201.
Clearly this analysis does not address a rather fundamental point. No mobile user could, practically speaking, engage in play-for-money gaming activities if there was not a third party acting as banker and general administrator of the operation of the games. If a party is involved in that capacity, they would likely be exposed to charges under a number of the other sections of the Code addressing illegal gaming, betting and lotteries. However, at the least, it appears they are unlikely to be found guilty of an offence under s. 201.
Danielle Bush of Chitiz Pathak focuses on I-gaming law matters. She can be reached at dbush@chitizpathak.com.
1 A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1013 (9th Cir.
2001)
2 MGM Studios, Inc. v. Grokster, Ltd et al. 545 U.S. 913 (U.S.
Supreme Court 2005)