Supreme Court finds against Earth Future Lottery in online lottery case

The Supreme Court of Canada has dismissed an appeal by the Earth Future Lottery and the Attorney General of Prince Edward Island to legalize a proposed Internet-based lottery (CNM Update, Mar. 11/03; CNM, Jan. 23/03). The court apparently heard nothing new in the arguments presented by Earth Future and P.E.I. counsel during a short morning hearing March 11 and dismissed the case after a brief recess for the same reasons as an original determination by the Appeal Division of the Supreme Court of Prince Edward Island. The court dispensed with hearing from the respondents, a coalition of provincial lottery companies, or from interveners. The P.E.I.-based Earth Future Lottery had proposed setting up, on a non-profit basis, a lottery for which tickets could be bought online with the proceeds going to various environmental initiatives. Last year, however, in response to questions raised by the P.E.I. government, the Appeal Division of the Supreme Court of Prince Edward Island stated the opinion that advertising a provincially-based lottery and selling tickets to people outside the province via the Internet would contravene the Criminal Code. Further, because tickets would be purchased online the lottery would constitute a game operated on a computer and thus run afoul of the Code. The case was brought to Canada’s highest court to make a determination on both counts. Justices hearing the case wasted no time in peppering P.E.I. counsel Cynthia Wedge with questions only a few minutes into her allotted time. Justice John Major, who was the most active questioner throughout the morning hearing, was quick to bring Wedge from a discussion of the history of lottery laws in Canada to the Internet and specifically to sections 206 and 207 of the Criminal Code, which define the exceptions that make charity gambling legal and prohibit operating a lottery outside of the province. Wedge told the justices that out-of-province buyers weren’t part of the lottery’s operation but were only "participating" in it. From that point forward, several of the justices including Major, Charles Gonthier, Ian Binnie and Frank Iacobucci, with chief justice Beverley McLachlin occasionally joining them, peppered both Wedge and Earth Future counsel Marlys Edwardh with skeptical questions about how selling tickets via the Internet was any different from physically selling them outside the province and without the other provinces’ consent. Major, in particular, returned several times to his question about whether participation by a person in another province would be proof that the scheme was operating in that province. Wedge countered each time that it would only be operating outside the province if the tickets were sold in that province. But, she said, sales in the proposed lottery would only be completed in P.E.I. where credit card verifications would be finalized. Major, speaking of a hypothetical transaction in Winnipeg, noted that "he’s at least tried to buy it," as Wedge quickly responded, "but it’s not completed." The justices were nonplussed by the semantic acrobatics of both Wedge and Edwardh, however. Binnie, on the questions of whether the lottery would be operated on a computer and whether it was operating outside the province, returned to the broader intent of the laws, saying it was each province’s prerogative to determine which lotteries would operate within its boundaries and that the prohibition against computerized gambling served a public interest. Edwardh, however, noted the danger that a ruling against the lottery would preclude many forms of online gaming. It took no more than a 15-minute recess after an hour of arguments for the justices to return with their decision to dismiss the lottery’s appeal of the lower court’s ruling.

Supreme Court finds against Earth Future Lottery in online lottery case

Broadcast | March 21, 2003

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