Ontario Auditor General Speculates On Legality Of Online Sports Betting

The Office of the Auditor General of Ontario questions whether online gambling and sports betting “may be open to legal challenge under Canada’s Criminal Code.”

The opinion was shared in a 12-page report from Auditor General Bonnie Lysyk earlier this month. A conflict of interest and illegal delegation of authority may jeopardize the Ontario sports betting laws in place.

According to Lysyk’s report, a provincial government must have significant oversight and management of any gaming operation under Canadian law. “To fulfill the ‘conduct and manage’ requirement, a provincial government needs to be actively involved in the delivery of gaming activity,” the report says.

Currently, provinces are allowing gaming partners to make many of the decisions regarding casino and sports betting operations. But Ontario has yet to enter into such an agreement, create their own sportsbook, or iCasino enterprise. However, sportsbooks like DraftKings have expressed interest in working in the province.

The report, titled “Internet Gaming in Ontario,” is not necessarily a criticism. It’s more of a chance to air the possible pitfalls of the current legislation to the public. This would allow regulators to adjust their plans.

Lysyk writes: “Consideration for whether a province has illegally delegated the ‘conduct and manage’ function in a gaming scheme to a private entity has been the subject of past legal challenges in Canada. We conclude that iGaming Ontario’s business model could be subject to legal challenges.”

Recommendations Given By The Auditor General

iGaming Ontario will oversee online sports betting in Ontario. It has yet to release a detailed plan for the regulation and operation of online casinos and sports betting apps. Therefore, reports such as the one from the Auditor General serve as a reminder of their obligations under Ontario law.

In her report, Lysyk urges iGaming Ontario to “take appropriate steps to ensure compliance with the Criminal Code” prior to launching. Ontario expects to open the market with online casinos and sports betting apps in Q1 2022. It’s the only province to suggest that they will work with private sportsbooks like DraftKings.

The Auditor General expressed concern that Ontario has yet to reveal much substantive information about its plans regarding online betting. Lysyk says the province needs to ensure “ensure the integrity and fairness of games offered by private-sector operators,” in her report.

“Under Ontario’s new model for internet gaming, key responsibilities to maintain integrity and fairness have been entrusted to the private sector such as direct testing of internet gaming systems, game design, gaming systems, determination of payouts, and odds-setting,” the Auditor General said.

Ontario Government’s Response On Sports Betting

The annual report from the Auditor General did include responses by the Ministry of the Attorney General. For conflicts of interest, the government has policies in place for the Board of Directors on iGaming Ontario. Policies are currently “being updated” for the AGCO.

Any dismantling of the current reporting system faces “operational risks and fiscal impacts.” Essentially, the government hopes to have all disclosures in place to keep the connection between the AGCO and iGaming Ontario.

As for the other potential issues with disclosure on fairness and integrity, the Ministry points to the Registrar’s Standards for Internet Gaming. The AGCO has been developing rules to keep match integrity intact, such as limiting who can bet and participant requirements. The organization is also creating a separate iGaming Compliance Unit that works with similar financial and data groups.

About the Author

Dan Holmes

Dan Holmes is a contributor to Toronto Sports Media and has written three books about sports. He previously worked for the National Baseball Hall of Fame and Major League Baseball. He enjoys writing, running, and lemon bars.