Ontario Takes Firm Grip on Online Sports Betting as Legal Challenge Unfolds

The anticipated three-day hearing surrounding the legal challenge to Ontario's iGaming initiative concluded on Wednesday, leaving a decision from Superior Court Justice Lisa Brownstone pending.

At the heart of the matter is the province's claim that iGaming Ontario (iGO), a government agency, acts as "the house" in Ontario's competitive online sports betting market, exerting control over major players like DraftKings and FanDuel.

During the hearing, iGO's legal representative, Scott Hutchison of Henein Hutchison Robitaille LLP, staunchly defended the province's position, emphasizing that contracts with iGO bind private-sector operators before legally operating in Ontario.

Hutchison employed a vivid analogy: "The conductor of an orchestra never touches an instrument, but the conductor is, at the end of the day, responsible for the symphony."

The case, brought forward by the Mohawk Council of Kahnawà:ke (MCK), an Indigenous government organization deeply involved in online gambling, raises concerns about the constitutionality and legality of Ontario's iGaming market.

The MCK argues that private operators, not the province, manage the gambling in Ontario's competitive market.

The stakes are high, given Ontario's transformation into one of the most significant online gambling markets in North America since the launch of its competitive iGaming framework in April 2022.

The framework allows multiple sportsbook and casino operators to take bets from residents in exchange for a share of the revenue.

From October 1 to December 31, 2023, a staggering $17.2 billion was wagered through private-sector sports betting, casino, and poker sites in Ontario, according to iGO's quarterly figures.

The province contends that it wields extensive control, with private operators administratively and contractually controlled through agreements with iGO.

However, the MCK challenges iGO's claim of ownership of overall revenue generated by iGaming, noting that the agency is obligated to hand over approximately 80% of that revenue to operators.

The legal battle delves into the nuanced interpretation of "conducting and managing" as it pertains to online gambling in the context of Canada's Criminal Code.

As the hearing unfolded on Wednesday, lawyers for the Attorney General of Ontario echoed Hutchison's stance, emphasizing the province's extensive control over operators.

They cautioned against granting the declarations sought by the MCK, arguing that such a move could jeopardize the gaming industry in Ontario, which sustained over 12,000 full-time equivalent jobs in its first year.

In response, the MCK questioned iGO's role, arguing that it does not refund or settle bets.

It challenged Hutchison's symphony analogy by likening iGO to someone who hires musicians rather than directing the orchestra.

The intricate legal battle now awaits Justice Brownstone's decision, with potential repercussions for Ontario's thriving online gambling sector.