Advertising issue in Canada

I'm not sure this is the right place to post such an issue but here goes.

I have been trying to figure out if it would be possible to advertise an online casino in Canada. I have a stable business plan that would require I be able to target regions within Canada with advertising of an online casino but I don't know if this is legal in all provinces or if it is even permitted at all by the criminal code.

Can an online casino be advertised via radio/billboards/newspapers/etc or would it be a flat out no?

I am afraid it is an outright no as it assists operating an illegal activity. But frankly it is a very grey area right now.

Maybe you could move it offshore etc. but hire counsel if you take that path

This article below is from 2004, the information may not have been updated...

http://www.gaminglawmasters.com/arti...ine_canada.htm

MARKETING and ADVERTISING OF ONLINE GAMING IN CANADA

At present, it is illegal to operate online gaming in Canada. Any online gaming enterprise with a “real and substantial connection” to Canada is operating in violation of Canadian criminal law.

In 1998, law enforcement authorities demonstrated what they believe constitutes a “real and substantial connection” between an online gaming enterprise and Canada sufficient to justify prosecution. The Vancouver offices of Starnet Communications International Inc. (“Starnet”) were raided by police, after Starnet made the mistake of keeping computer servers that were necessary to place wagers in its Vancouver office (the rest of its servers were in Antigua). In 2001, Starnet pled guilty, and forfeited approximately C$6 million as proceeds of crime.

Where an online gaming operation originates from entirely outside Canada, with no Canadian participation in its conduct or management, Canadian authorities have not attempted to exert jurisdiction. In such cases, the only Canadian connection is that the enterprise allows Canadians to bet online. Canadians, it should be noted, break no law by betting; all legal proscriptions are aimed at the persons who conduct or operate illegal gaming enterprises.

There are many online gaming enterprises that operate from entirely outside Canada, accepting bets from Canadians, but with no element of its operations emerging from Canadian soil – neither servers, nor personnel, nor money in Canada. If such an enterprise does more than passively accept bets from Canadians, and actively solicits their gaming, what is the legal position of Canadian marketing firms employed by the foreign enterprise, or Canadian media outlets that carry its advertisements? The online gaming enterprise itself remains outside the jurisdiction, but the advertising and marketing arms would operate within reach of Canadian law enforcement. In such circumstances, is it legal to market and advertise online gaming to Canadians, and if so, what are the best mechanisms for doing so?

The applicable provisions of the Criminal Code are subsections 202(1) (g), (h) and (i), and subsection 206(1) (a). Advertising online casino-style games (a “proposal, scheme or plan for…disposing of any property by lots, cards, tickets or any mode of chance whatever”) would violate ss. 206(1) (a); if the advertisements were transmitted by “radio, telegraph, telephone, mail or express,” ss. 202(1) (i) would be violated as well. Advertising an online sports book would be an “offer, invitation or inducement to bet on, to guess or to foretell the result of a contest, or a result of or contingency relating to any contest,” in violation of ss. 202(1)(h). Subsection 202(1) (g) applies to online sports books as well, making it an offence “to import or bring into Canada any information or writing” that would promote or be of use in “gambling, book-making, pool-selling or betting on a horse-race, fight, game or sport.” This latter provision applies regardless of whether the race, fight, game or sport takes place in Canada, but it does not apply where the information or writing in question is contained in “a newspaper, magazine or other periodical published in good faith primarily for a purpose other than the publication of such information.”

If the persons conducting the marketing campaign were present in Canada, a significant portion of the activities constituting the offence would be taking place in Canada, and accordingly the “real and substantial” link required to exert criminal jurisdiction would be established.

However, the facts on the ground belie this conclusion. Newspapers and radio stations in Canada regularly carry advertisements for offshore online gaming enterprises offering both casino games and sports betting. There is no indication that the authorities are interested in prosecuting the Canadian newspaper publishers or radio stations carrying these ads.

Television advertising of online gaming is constrained by the Telecaster services of the Television Bureau of Canada. This is a voluntary and self-governing clearing house for all forms of television advertising, to which a large proportion of the major television broadcasters in Canada subscribe. Telecaster’s policy regarding gaming that is not licensed by a Canadian provincial government adheres to the strict wording of the Criminal Code: “…if a broadcaster advertised the unlicensed scheme it would be liable under s.206 (1) (a) which makes it an indictable offense to make, print, advertise or publish or cause or procure to be made, printed, advertised or published any proposal, scheme or plan which in any way disposes of property by lots, cards, tickets or any mode of chance whatsoever.”

Why Has No One Been Prosecuted For This Activity?

It has been argued that where a Canadian provides support services for gaming, such as marketing and advertising, where the gaming occurs in an originating jurisdiction in which it is legal, a prosecution would not be in keeping with the policy of the anti-gaming provisions of the Code. A telling exemption found in ss. 207(1) (h) of the Code sheds some light on this:

Section 207 (1) notwithstanding any of the provisions of this Part relating to gaming and betting, it is lawful

(h) for any person to make or print anywhere in Canada or to cause to be made or printed anywhere in Canada anything relating to gaming and betting that is to be used in a place where it is or would, if certain conditions provided by law are met, be lawful to use such a thing, or to send, transmit, mail, ship, deliver or allow to be sent, transmitted, mailed, shipped or delivered or to accept for carriage or transport or convey any such thing where the destination thereof is such a place.

This exemption is narrow in scope, relating only to the export of printed material related to gaming to jurisdictions where it is legal to use such material. However, it does appear to suggest that the public policy enunciated by the Code is not offended by carrying on support activities in Canada in connection with an online gaming enterprise that is legal in its home jurisdiction.

The federal nature of Canadian law and government is also a factor. Having ceded the power to regulate and control of gaming to the provinces in the 1980s, the government of Canada is now reluctant to become actively involved in gaming issues. The Criminal Code specifically allows the provinces to operate gaming conducted through a computer. To date, no province has availed itself of this exemption to conduct its own online gaming, but if such a gaming enterprise were to emerge, prosecutions for advertising “competing” online gaming could take on a political tone.

“Safe” Marketing

The writer believes that the employment of marketing staff present in Canada by foreign online gaming enterprises, who actively manage a marketing campaign from Canadian soil, would be perilously close to the “Starnet” barrier. The chance of prosecution would be higher than necessary. The safest method of marketing online gaming is to have no marketing personnel present in Canada, and to merely advertise passively through radio and print media. The only Canadian presence would be the ads themselves, in print and on radio.

MICHAEL D. LIPTON, Q.C. and KEVIN J. WEBER
Elkind, Lipton & Jacobs LLP
June 2004