CANADIAN RACETRACK MONOPOLY ENTERS KAHNAWAKE FRAY (Update)

7 March 2008

Either stamp out online gambling in Canada or let us enter the market say race execs


Following the suggestion by Canadian Minister of Justice Rob Nicholson that he may act against the online gambling interests of the Kahnawake first nation enclave in Quebec province, Canadian racetrack owners are adding their voices to the debate. And what they're telling Ottawa is they want to see online gambling in Canada stamped out, or a change in legislation to allow them greater access to the billion-dollar industry.

Liberal MP Roy Cullen, whose Etobicoke North riding includes Toronto's Woodbine Racetrack, said yesterday he plans to follow the Minister of Justice's lead by introducing a private members' bill that would require financial institutions and credit card companies to block Internet betting transactions.

Cullen claims that current laws prohibit all forms of Internet gambling in Canada with three exceptions: lotteries in provinces that allow online ticket sales; bettors who have telephone accounts at horse-racing tracks; and private bets between individuals. But he complains that the law is not being enforced.

The MP says that the problem is offshore operators, among them the 400 or so online poker and sportsbetting websites licensed and operating from the Kahnawake reserve just south of Montreal.

Track owners say that while they add to local employment and pay taxes, they labour under myriad restrictions. Most important, they are allowed to take online bets only in their local areas even as offshore operators can take all sorts of sporting bets from anywhere without supporting the industry.

"It's having a severe impact on our business," said Jane Holmes, vice-president of corporate affairs for Woodbine Entertainment Group, which estimates it has lost about $200 million to other sites.

"They take a lower commission on the bet because they don't have infrastructure costs and pay purses. How many jobs are they creating here? None," Holmes said. "If we tried to do what they're doing, we would lose our licences. It provides them with an unfair competitive advantage."

Cullen said he has met with law enforcement officials but they tell him the issue is a low priority.

"Woodbine Racetrack is in my riding, I work with them a lot and they create economic activity and jobs in Etobicoke North. And when they tell me their market share is being eroded because there are players in the game that are operating illegally but no one is doing anything about it, I stand up and listen," Cullen said.

Federal Justice Minister Rob Nicholson has said that he plans to look into the issue.

"Following recent concerns surrounding Internet gambling in Canada, the minister has asked his officials to examine whether the enforcement of the Criminal Code provisions could be assisted with other measures. Our office has also indicated to stakeholders that we are willing to listen to their suggestions as to how we could best address this issue," Genevieve Breton, the minister's director of communications, said.

In the summer of 2007, a joint federal-provincial working group was created to look at Internet gambling. The committee has yet to report back to the justice ministers.

The Mohawks of Kahnawake consider themselves a sovereign nation and say Canadian laws prohibiting online gambling do not apply to them.

Joe Delaronde, spokesperson for the Mohawk Council of Kahnawake, said the council sent a letter to the government outlining its Internet plans nine years ago, but never received a response.

"If they really want to come to some sort of resolution on this, the best idea would be to contact our grand chief and talk about it. We're very open to discussion," he said.

He doubts the federal government would try to shut down the Kahnawake sites. "It would be very unwise of the government. This operation is taking place in our jurisdiction."

Delaronde said that the council is indifferent to changes in legislation that would allow horse-racing tracks to expand into all sports betting online. "If the Canadian government changes their laws and allows that, it's free enterprise, it's a competitive market."

Online Casino News courtesy of InfoPowa