Internet and wireless gaming flickering to life in Canada

Those who love to bet money on sporting events and games of chance and skill are in their element in countries such as the United Kingdom and Australia, where full-fledged casinos are available on mobile phones and other similar devices. Here in Canada, however, all but two of the various provincial gaming corporations have yet to offer product over the wired Internet, never mind the wireless one. "All the conferences now are doing subsets of mobile gaming," says Keith Furlong, deputy director of the Victoria, BC-based Interactive Gaming Council, an international advocacy group for the online gaming industry. "You know how online poker was the big catchphrase? Now everyone’s moving to mobile gaming platforms." Despite the enthusiasm for taking wagering to the World Wide Web in other jurisdictions, however, Canada’s gaming providers are taking a more cautious tack. "None of them have gone to the point of getting involved in wireless or mobile gaming technology," says Michael Lipton, senior partner and chair of the gaming practice at Toronto law firm Elkind Lipton & Jacobs LLP. "That’s not to say they haven’t started to look at it. They are certainly contemplating it." Even online gaming through conventional wireline data networks is currently available in only five provinces: British Columbia, New Brunswick, Prince Edward Island, Nova Scotia, and Newfoundland and Labrador. Four sports wagering games and four lottery products are available for online purchase through the British Columbia Lottery Corp.’s PlayNow web site, while the Atlantic Lottery Corp.’s PlaySphere service offers five types of lottery ticket and two sports-related games. Although it’s possible to check the location of a user to ensure they’re in a jurisdiction where they’re allowed to play such games, critics of online gaming have argued that there is no way to ensure gamers are the proper legal age for the activity. However, both PlayNow and PlaySphere require that users set up an account prior to any gaming, and provide a credit card number for age and location verification purposes. And, says BCLC spokesperson Tamara Ibbott, "If you have a player account but then go to Washington and log onto a computer there and try to play on your account, it won’t work." While these systems rely on identifiers such as IP addresses to trace a user’s location and can be circumvented, they generally work, says Joe Kelly, a lawyer and professor of business law at State University of New York College at Buffalo, noting that online gaming web sites outside the U.S. have had little trouble screening out American would-be players. "When Sun International, Harrah’s and MGM – who are all licenced in the United States – went online, they used facilities to keep out any American player. BetFair in the U.K. has facilities to keep out any U.S. players. I’m not saying it’s 100% perfect, but it’s pretty darn accurate," Kelly says. For its part, Ontario’s gaming authority has all but declared a moratorium on all new gaming initiatives – including online ones – after a policy statement from the province’s Ministry of Economic Development and Trade on January 20. "I suppose our overriding view is that we do see a lot of potential business opportunities, but feel that it’s still very much in its infancy, and we’re certainly not ready to proceed with anything along those lines at this time," says Don Pister, a spokesperson for the Ontario Lottery and Gaming Corporation. Even so, some provinces have begun experimenting with wireless technology in bingo halls, offering players the choice of traditional paper-based bingo pads or a handheld device. Ontario’s pilot project, which was approved before the January 20 directive halting new gaming projects, will see the equipment installed in five bingo halls across the province starting this fall. "The idea is that a person could take this device and be sitting in a more comfortable and enhanced environment rather than the traditional long plywood tables and folding chairs," Pister says. British Columbia already offers a similar wireless bingo system, but in both cases the devices run only within select areas on the premises of the bingo hall, and not over wider, more public wireless networks. The state of Nevada’s gaming commission has also approved local wireless technology for use in casinos. "You would be able to use to wager from a casino, let’s say if you’re by the swimming pool," says Kelly. However, hotel rooms are off-limits to the technology, and any devices smuggled up to a guest’s room will not work. The locality and proximity to gaming premises is key to the adoption of these short-range technologies, and the lack of uptake among publicly accessible wireless systems. The legal question of where the gaming is actually occurring, and under whose jurisdiction and rules, has yet to be settled for all intents and purposes. "Is it occurring where your computer is, and where the bet is being made, or is it at the place where the bet is received?" asks Lipton. In the case of public wireless networks outside of gaming establishments, "if the server is outside of Canada, a very strong argument could be made that the contract is outside of Canada. And, if it’s outside of Canada, then I think an argument could be made that the government has no jurisdiction over that particular transaction," claims Lipton. However, current wireless technology means that transmissions have a short range, necessitating servers well within Canadian territory. Ontario hasn’t nailed down a definition for the point of transaction in online gaming either. "That is a question we have not seen an absolute answer to, and I don’t believe we’ve determined ourselves accurately," Pister says. Although Canada may be slower to adopt off-premises wireless gaming than jurisdictions such as the United Kingdom, there are a growing number of firms here that provide services to the public wireless gaming industry. "There are a lot of companies, especially software companies, that are out of Canada," Furlong notes. One of those is Phantom Fiber Corp., a Toronto-based developer of mobile commerce software for numerous industries, including online gaming. Making products to facilitate gaming isn’t against the law in Canada, as long as the product is used outside of the country. "It’s not gaming software, so we’re not in the gaming transaction ," says Phantom Fiber president and CEO Jeff Halloran. However, wagering-related applications make up more than half of the solutions listed on Phantom Fiber’s web site, with other potential uses including medical settings, remote security, logistics, banking, securities trading, and e-commerce.

Internet and wireless gaming flickering to life in Canada

News | 08/18/2005 4:00 am EDT

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