An Issue Of Illegal Gambling In Canada
“Cause the house always wins. Unless, when that perfect hand comes along. You bet and you bet big, then you take the house” (“Ocean’s 11, George Clooney”). Ready to reclaim his losses, Danny Ocean of the famous Ocean’s 11 franchise once declared this to his successful casino owner nemesis, thus cementing and forever romanticizing the concept of gambling. For years, the media has built a certain mystique around the idea of gambling and crime, portraying it as provocative and sensuous, a risqué business that makes headlines. This, however, takes away from the adverse reality of gambling.
Gambling is defined as the activity of betting on the result of an uncertain event, and is dependent on factors such as skill, probability and the ever-elusive luck. Gambling activity in Canada has been broadly accepted in the public domain since 1969, with its legalization in many forms, thus leading to increased interest and participation from the general public. However, with the swift growth of legal gambling in Canada, there have also been adverse consequences, at the forefront of which is illegal gambling. This refers to activities such as bookmaking, keeping a common gaming house, administering unauthorized electronic gambling machines, that breach the Criminal Code of Canada. According to police officials, gaming regulators and RCMP respondents, while legal gambling formats seem to be well regulated, account of illegal gambling is acutely inadequate. While officials have a general understanding of the scope of illegal gambling, they are typically unable to glean accurate statistics through official records. This is due to the fact that illegal gambling is now typically perceived by the general population as a “victimless crime” or a form of entertainment; it has lost its social stigma and is therefore not reported as often.
However, this is a highly deceptive scenario, considering that illegal gambling is closely linked with numerous forms of deviance and hard criminal activity. With the decriminalization of gambling, there is a sense of uncertainty that has caused, what Smith and Wynne write is, “inconsistent policy, limited research and evaluation, inadequate funding for gaming regulation and enforcement, and little concern for the potential social consequences of gambling,” thus allowing illegal gambling to flourish.
Gambling has been a historically prevalent human activity, varying in its perception within different cultures and times. It has been perceived as a sin, a vice, a weakness in human nature, an adult model of play, and as a way to combat existential anxieties related to chance occurrences. Gaming sticks were popular amongst indigenous groups, and card games like poker, blackjack and dice games were brought to North America by European immigrants. Illegal gambling particularly prospered in Canada’s biggest cities before, during, and after World War II, the main forms being horse race bookmaking and unauthorized casinos. At the time, the general public displayed anti-gambling attitudes, which was evident in the presence of the Ontario police agency’s anti-gambling squad and lawful inquiries associating illegal gambling with crime.
The law has historically taken a rigid view towards gambling, as in 1892, the first Criminal Code of Canada made gaming houses, lotteries, and gambling at public events a criminal activity. In 1910, an amendment in the Code permitted pari-matuel betting, which includes the division of losers’ stakes among winners, a cut of which goes to the track, horsemen and state. The change also permitted occasional gambling for charitable or religious reasons, as well as for agricultural exhibitions. The Code’s gambling-related provision underwent major changes in the years 1969 and 1985, which caused a shift in the position of gambling from criminal prohibition to legalization. The change in 1969 was spearheaded by Quebecois politicians, which brought about permission for provincial governments to run lotteries and include casinos within charity gambling activities. The 1985 amendment gave more power to the provincial governments, granting exclusive control over licensure of several gambling formats and devices used (video lottery terminals e. g. VLTs, slot machines, etc. The trend has been toward a reduction of federal authority over gambling. These amendments generated billions of dollars for provincial governments, thus establishing gambling as a major business industry.
According to the Ontario Illegal Gaming Enforcement Unit which was created in 1997, there were 1370 illegal gambling events, 2069 people charged, 3517 charges made, and 2034 machines seized. Illegal gambling houses have been linked to approximately three murders and 25 armed robberies in Toronto annually, while in Western Canada 3-5% of the population has a gambling problem. Illegal gambling is not omnipresent throughout Western Canada, but is widespread across the four biggest cities of Vancouver, Calgary, Edmonton and Winnipeg, as well as some medium-sized cities. While illegal private gaming houses are present in almost all major cities in Canada, the lower mainland area of British Columbia is a hub of illegal gambling.
The Chinatown districts in the four big Western Canadian cities house many unlawful gambling activities specifically for Asian players, where stakes and losses are extremely high amidst fan tan and mah jong games, including cars, homes, and businesses being laid on the line. Illegal gambling operations take place in a range of venues such as social clubs, restaurants, bars, etc. and players are typically males in a variety of careers such as professionals, blue collar workers, and criminals. Amongst the most popular forms of illegal gambling are sports betting with a bookmaker, card clubs, unlicensed VLTs and offshore lottery sales; nearly 7-14% of online bookmakers’ customer base consists of Canadians, who illegally wager over $10 billion annually on sports events such as March Madness, with a large chunk of money landing in offshore online sports books.
Sports betting is, in fact, the highest determinant of gambling revenue for organized crime groups (OCGs). Illegal gambling houses depend on OCGs for money and protection, while OCGs, in turn, use illegal gambling as a foundation upon which to build crimes such as loansharking, money laundering, corruption and drug trafficking. Groups such as the Hells Angels, Asian-based and Eastern-European-based groups use these activities to finance and pave their path towards legitimate businesses, further solidifying their criminal operations, and thus embedding organized crime in the community. Addicted illegal gamblers also run the risk of exposing themselves to loan sharks or extortionists, who may send them down a detrimental path of unintended crime. Moreover, illegal gambling has the potential to adversely impact the economics of legal gambling since it offers better odds, longer hours of operation, higher stakes, telephone betting and credit. This has the potential of directly harming provincial finances that depend on legal gambling revenue.
Due to the different games and different provincial regulations in gambling across Canada, legal issues relating to it are rather complex. Online gambling, where gaming sites are located offshore in countries with welcoming gambling rules, is usually referred to as a “legal grey area”, as the legal provisions become unclear in international waters. Even if the Criminal Code of Canada restricted it, enforcement of such a restriction is mostly nonexistent due to the complications of international extradition. The major concerns pertaining to online gambling include the inadequacy of international law, neglect of regulations, fluidity of funds and anonymity.
With the gambling activities being present in cyber-space, they are above basic provincial laws, and make the users susceptible to fraud, credit card theft, and under-age crimes. In addition, although law enforcement authorities are well aware of illegal gambling venues, they hardly ever start investigations into them. This is due to the time and resource-consuming nature of such undercover operations, the lackluster and trivial token penalties ultimately granted by courts, as well as the increased focus on crimes perceived as more severe. Provincial gaming regulatory bodies, that are responsible for regulating legal gambling operations have, instead, taken up the mantle by hiring law enforcement agents like former police officers to their organizations and mounting criminal investigations to make up for the lack of official law enforcement.
However, this situation generates gaps in the law enforcement system that can be capitalized on by resourceful criminals, and also endangers the integrity of the Criminal Code of Canada. Municipal police and RCMP either need to begin treating illegal gambling activity as a real crime, or provisions need to be made to give more authority to provincial gaming regulators interested in combating such operations. In addition, as per the recommendation of the Canada West Foundation in its report Gambling in Canada: Final Report and Recommendations, a national up-to-date study of Canadian gambling activity should be initiated in order for us to understand its scope, regulation and impact on Canadian society.
Our society, as well as legislators, police, and the judiciary need to overcome the notion that illegal gambling and its detrimental side-effects are insignificant, because gambling is a multi-billion-dollar enterprise that monopolizes the attention of millions of Canadians.
