Atlantic Lotto, VLTs and Online Gambling

Minister of Finance Tom Marshall recently did an interview on the CBC’s St. John’s Morning Show and discussed how online gambling is eating into Atlantic Lottery Corporation’s profits.  These profits have drifted down by millions of dollars in recent years, mainly owing to loss of business to offshore gambling sites. 

The Province of Newfoundland and Labrador is one of the four Atlantic provincial shareholders in ALC.  Somehow, the mistaken assumption has arisen that these offshore gambling sites are not against the law, and if they are nothing can be done about it.

I think they are against Canadian law, and there are technologies that can block access to these sites which can be implemented for very little expense.  I’ve been told by people in the know that Newfoundland and Labrador is losing about $33 million a year due to failure to act on this.

From the standpoint of the class action against ALC over the VLT deception, the Minister’s interview constitutes an interesting admission that ALC is in competition with these offshore sites.  Why is that important?  Because ALC has informed the court that they intend to bring a special application in April 2012 to challenge the idea that they are subject to the deceptive marketing provisions of the Competition Act.  Their argument will be that the Competition Act does not apply to ALC because they have a statutory monopoly and do not compete with anyone.  Unfortunately for this argument, the Minister says they do compete.  Many a beautiful theory has been slain by an ugly fact!

Certification will be heard in April 2012 – finally!  Certification is very important because it determines whether the action can proceed as a class action.  We remain optimistic about success in obtain certification.  Then we’ll see what ALC knows about the dangers of VLTs.