The legality of betting on a single sporting event in Canada may take the spotlight again following a recent US Supreme Court decision, Murphy v. NCAA.[1] In Murphy, the court held that a US federal law that prohibited US states (other than certain states including Nevada[2]) from authorizing sports betting was unconstitutional. As a result, it is expected that states may enact regulatory schemes authorizing single sport betting in order to boost tax revenue and potentially tourism. In fact, at least 18 states are expected to introduce legislation this year which would regulate sports betting.[3] In Canada, by comparison, the Criminal Code[4] prohibits single sport betting. While single sport betting may again become the subject of Parliamentary debate following the recent American developments, it remains illegal in Canada.
US Law
The law which was struck down in Murphy was the US federal Professional and Amateur Sports Protection Act,[5] which barred states from sponsoring, operating, advertising, licensing, or authorizing sports wagering. In particular, the court found that the law violated the US Constitution's 10th Amendment, which prevents Congress from forcing states to participate in federal regulatory regimes.[6] Supporters of that law, including the major sports leagues such as the NFL, NHL, NBA and MLB, had claimed that allowing sports betting could undermine the integrity of games by incentivizing match-fixing. However, proponents of the decision emphasized that Americans have been betting on sports for years via illegal bookmakers and by opening the door to state regulation, billions of dollars can be diverted away from criminal bookmaking organizations. Proponents also argued that bringing the industry out of the shadows may reduce rather than increase corruption in sports.
Canadian Law
In Canada, Section 207 of the Criminal Code permits provinces to conduct or authorize persons to conduct "parlay betting" -- betting on multiple sporting events on the same ticket.[7] However, section 207(4)(b) specifically makes it illegal for provinces to conduct or authorize persons to conduct single sport betting,[8] also known as "head-to-head betting". Three private member's bills have attempted to change the law. In 2011, Bill C-627[9] sought to repeal Section 207(4)(b). However, it did not progress beyond its first reading in the House of Commons. Then, in 2014, the 2011 Bill was reinstated in the form of Bill C-290,[10] which garnered unanimous support in the House but was never voted upon by the Senate. Finally, in 2016, the similar Bill C-221[11] was defeated at second reading in the House.
The same concerns about single sport or head-to-head betting that animated parties in the US Murphy decision have been voiced in Canada. On the one hand, opponents of the various private members bills have claimed that allowing head-to-head betting would undermine the integrity of sport, worsen the gambling addiction problem in Canada, and would not do enough to divert resources from criminal organizations. This view stems partly from the perception that illegal bookmakers directly extend credit to bettors and typically offer better odds than legal bookmakers, thereby perpetuating the black market for betting.[12] On the other hand, supporters of the bill claimed that permitting head-to-head betting would redirect around $14 billion that is spent annually by Canadians on illegal betting[13] to municipalities and provinces that benefit from regulated sports betting. In turn, this revenue could be spent on various public goods such as infrastructure and healthcare. In addition, proponents claimed that significant revenue could be generated from Americans who live closer to Canadian border towns than to Las Vegas.[14]
Now that many American states are regulating single sport betting, will Canada act to equalize the playing field and implement -- whether as a private members bill or a government bill -- a repeal of Section 207(4)(b) or any broader reform? As this remains speculative, potential industry players are reminded that the practice remains illegal in Canada notwithstanding the changes in the US; with a penalty for breach of Section 207(4)(b) of up to two years' imprisonment.[15]
For further commentary regarding the legality of gambling-related activities in the Canadian context, contact Andrew C. Alleyne, Partner, Fasken.
[1] 584 U.S. 16-476 (2018) [Murphy].
[2] Nevada, Montana, Delaware, and Oregon were exempted as they already permitted limited sports betting operations prior to the coming into force of the law.
[3] Associated Press, "Report: 18 States May Introduce Sports Betting Bills in 2018", Sports Illustrated (9 January 2018), online.
[4] RSC 1985, c C-46, s 207(4)(b) [Criminal Code].
[5] 28 U.S.C. § 178 (2016).
[6] Murphy, supra note 1 at 24-25.
[7] Criminal Code, supra note 4.
[8] Ibid.
[9] Bill C-627, An Act to amend the Criminal Code (sports betting), 3rd Sess, 40th Parl, 2011.
[10] Bill C-290, An Act to amend the Criminal Code (sports betting), 2nd Sess, 41st Parl, 2014.
[11] Bill C-221, An Act to amend the Criminal Code (sports betting), 1st Sess, 42nd Parl, 2016.
[12] House of Commons Debates, 42nd Parl, 1st Sess, No 74 (16 June 2016) at 1740 (Mr. Bill Blair).
[13] Ibid at 1405 (Mr. Brian Masse).
[14] Ibid at 1745-1750 (Ms. Tracey Ramsey).
[15] Code, supra note 4 at s 207(3)(a)(i).
