| The Saga of Bill 152: Legislation Barring Advertising for Online Gaming A recent amendment to consumer protection legislation
in the Province of Ontario in The new Ontario legislation was introduced as a small part of a large omnibus bill entitled “Bill 152, An Act to modernize various Acts administered by or affecting the Ministry of Government Services.” Part 8 of Bill 152 purported to amend the Consumer Protection Act, 2002 (the “CPA, 2002”) to render advertisement and marketing in support of online gaming illegal. Part 8 of Bill 152 will be hereinafter referred to simply as “Bill 152.” As Bill 152 was first drafted (the “First Reading version”), it would have had a far-reaching effect on the advertisement and marketing of online gaming in Ontario. It soon became apparent to us that the government did not intend the effect of its legislation to be as far-reaching as was the case, and the government was soon convinced to substantially amend Bill 152. On October 18, 2006, during the course of a live radio program in which the writer took part, Gerry Phillips, the Minister of Government Services stated that Bill 152 would not apply to “play-for-fun” websites, where players stand no chance of losing money or money’s worth (“.net sites”). He further stated that it would not apply to communications from outside Ontario on the basis of their being received in Ontario. This publicly-articulated legislative intent of Bill 152 was reiterated by spokesmen for the Minister in the days that followed. However, it soon became apparent that the language of the First Reading version of Bill 152 was not in accordance with the publicly-stated intent of the government. One section of the First Reading version could have been applied to advertisements for .net sites, due to peculiar wording inserted into a provision aimed at “sponsorship agreements.” This was buttressed by the definition of “internet gaming business” found in the First Reading version. This was defined to effectively mean a business that operated a .com site, and in practice the application of this definition would have made the focus of the offence created by Bill 152 the overall “business” of the entity being advertised, rather than the functionality of the site actually being promoted by such advertisement. The First Reading version of Bill 152 also included a definition of “advertise” that did not require that the “print, publication, broadcast, telecommunication or distribution” in question originate from within Ontario, or be directed at an Ontario audience. As a result, the First Reading version of Bill 152 left open to interpretation whether it could apply to activities outside Ontario that reached an Ontario audience. Further, the definition of “advertise” included language that could have created liability for Internet search engines. These were clearly unintended consequences of Bill 152. Final Version of Bill 152 The writer made these points known to the government, whereupon amendments were introduced in Second Reading which gave rise to the Final Version of Bill 152: (1) The Final Version of Bill 152 made it clear that it is the functionality of a website that is essential in determining whether advertising for that site is an offence, as opposed to the overall business activities of the entity operating that website; (2) “Sponsorship relationships” only give rise to an offence if they promote a .com website; (3) The provision creating the offence states that “no person shall advertise an internet gaming site that is operated contrary” to the Canadian Criminal Code (the “Code”); (4) Geographical limitation on the application of Bill 152 is explicitly set out: “a person advertises an internet gaming site only if the advertising originates in Ontario or is primarily intended for Ontario residents”; and (5) The definition of “advertise” has been amended to specifically provide that it “does not include a link generated as the result of a search carried out by means of an internet search engine.” Impact of Bill 152 The Final Version of Bill 152 became part of the law of Ontario on December 20, 2006. Due to the amendments obtained at Second Reading stage, it appears that Bill 152 does little if anything to alter the state of the law from where it stood prior to its passage. The Code already contains a number of provisions making it a criminal offence to advertise illegal gaming and betting. Any advertising for websites offering sportsbooks and “real money” games of chance is already in contravention of the Code, and any provincial legislation to that effect is repetitive. Bill 152 merely opens another parallel avenue through which that activity might be prosecuted. There may be a “loophole” for advertising regarding games of mixed chance and skill, although that theory has not been tested in court in any case of which we are aware. As a result, most reputable media outlets in Ontario only accepted advertisements for .net gaming sites prior to the passage of Bill 152. Indeed, the self-regulatory guidelines of the television industry make it practically impossible to promote any other kind of online gaming using that medium. It may be that Bill 152 fills the “loophole” mentioned above concerning advertising for game of mixed skill and chance through its comprehensive definition of “internet gaming site,” although this is questionable. However, in practice very little advertising was being conducted in reliance on that “loophole.” Most poker website advertising remains as it was, being of the .net variety. Conclusion To a large extent, Bill 152 should have little effect
on the vast majority of advertising already being conducted in However, it remains that case that all advertising that originates in Ontario or that is primarily intended for an Ontario audience should be carefully reviewed by legal counsel, with an eye to both ensuring compliance with both the Code and ss. 13.1 of the CPA, 2002. This is the case for both new advertising that commenced after ss. 13.1 of the CPA, 2002 came into force on December 20, 2006, and old advertising that predates that provision. Michael D. Lipton, Q. C. is a senior partner and head of the Gaming Law section of Elkind & Lipton LLP in Toronto and the current president of the International Masters of Gaming Law. Kevin J. Weber is an associate with Elkind & Lipton LLP and a member of the Gaming Law section. |
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