GAMBLING by JulieFaith (CC BY-NC-ND 2.0)

GAMBLING by JulieFaith (CC BY-NC-ND 2.0)


The Trouble With the TPP, Day 35: Gambling With Provincial Regulation

Last year, the Quebec government introduced legislation that would require Internet service providers to block access to unlicensed online gambling sites. It provides that “an Internet service provider may not give access to an online gambling site whose operation is not authorized under Québec law.” The Quebec bill, which is currently before the provincial legislature, is a terrible idea that has been opposed by ISPs and consumer groups. The government views this initiative as a revenue enhancing measure because it wants to direct gamblers to its own Espacejeux, the Loto-Québec run online gaming site. The mandated blocking legislation is unprecedented in Canada and if enacted, it will surely be subject to legal challenge, including the possibility of a constitutional challenge.

The legal challenge may not be limited to constitutional issues, however. The Quebec bill may also be blocked by the TPP, which may be a good outcome, but raises the question of whether a trade agreement is the right way to dictate provincial laws.

How might the TPP apply to provincial online gambling regulation?

Article 10.3 on national treatment provides:

Each Party shall accord to services and service suppliers of another Party treatment no less favourable than that it accords, in like circumstances, to its own services and service suppliers.

The services chapter also includes a most favoured nation requirement in Article 10.4:

Each Party shall accord to services and service suppliers of another Party treatment no less favourable than that it accords, in like circumstances, to services and service suppliers of any other Party or a non-Party.

In other words, countries are required to treat service providers – regardless of which country they come from – in an equal manner. Several TPP countries specifically excluded gambling regulation from the scope of the services chapter. For example, Australia reserved “the right to adopt or maintain any measure with respect to gambling and betting.” Similarly, Singapore reserved “the right to maintain or adopt any measure affecting the supply of betting and gambling services” and Mexico reserved “the right to adopt or maintain any measure relating to investment in, or the supply of, gambling and betting services.”

Given that gambling falls under provincial jurisdiction, Canada did not specifically exclude gambling regulation. Instead, Canada obtained the following exclusion for provincial measures:

All existing non-conforming measures of all provinces and territories.

There is an illustrative list of such measures, but the Quebec rule, which is still only a bill, is unsurprisingly not included.

The exclusion obviously covers existing provincial rules (as well as renewals  and amendments of such measures), but does not address new regulations. There are other policy exceptions in the TPP, but they may not apply here. As discussed earlier in the series, public policy exceptions have failed in 43 out of 44 cases and since the stated purpose of the bill is to increase revenues of a local service provider, the government would have a hard time justifying the exception. I sought comment from the government on this issue, but only received confirmation that there was no direct Canadian reference to gambling due to provincial jurisdiction. This may represent a good outcome – the Quebec bill should be withdrawn – but the broader implications of the TPP for provincial jurisdiction suggests that the deal may create significant limitations on policy making at the provincial level in ways that few might have anticipated.

(prior posts in the series include Day 1: US Blocks Balancing Provisions, Day 2: Locking in Digital Locks, Day 3: Copyright Term Extension, Day 4: Copyright Notice and Takedown Rules, Day 5: Rights Holders “Shall” vs. Users “May”, Day 6: Price of Entry, Day 7: Patent Term Extensions, Day 8: Locking in Biologics Protection, Day 9: Limits on Medical Devices and Pharma Data Collection, Day 10: Criminalization of Trade Secret Law, Day 11: Weak Privacy Standards, Day 12: Restrictions on Data Localization Requirements, Day 13: Ban on Data Transfer Restrictions, Day 14: No U.S. Assurances for Canada on Privacy, Day 15: Weak Anti-Spam Law Standards, Day 16: Intervening in Internet Governance, Day 17: Weak E-commerce Rules, Day 18: Failure to Protect Canadian Cultural Policy, Day 19: No Canadian Side Agreement to Advance Tech Sector, Day 20: Unenforceable Net Neutrality Rules, Day 21: U.S. Requires Canadian Anti-Counterfeiting Report Card, Day 22: Expanding Border Measures Without Court Oversight, Day 23: On Signing Day, What Comes Next?, Day 24: Missing Balance on IP Border Measures, Day 25: The Treaties With the Treaty, Day 26: Why It Limits Canadian Cultural Policies, Day 27: Source Code Disclosure Confusion, Day 28: Privacy Risks from Source Code Rules, Day 29: Cultural Policy Innovation Uncertainty, Day 30: Losing Our Way on Geographical Indications, Day 31: Canadian Trademark Law Overhaul, Day 32: Illusory Safeguards Against Encryption Backdoors, Day 33: Setting the Rules for a Future Pharmacare Program, Day 34: PMO Was Advised Canada at a Negotiating Disadvantage)