Loto-Quebec says it lacks tools from authorities to confront illegal online gambling
MONTREAL -- Loto-Québec says it lacks the tools it needs to compete with illegal online gambling sites, asking police forces and federal lawmakers to do more to stop these companies.
The new president and CEO of Loto-Québec, Jean-François Bergeron, made the comments while speaking to an audience of business people on Wednesday at the Board of Trade of Metropolitan Montreal.
He spoke about the difficulties the Crown corporation is having when it comes to carving out a place for itself in the online gaming sector.
"We're going to do our part, but there's public security that has to do its part; there's the federal government -- because it's a criminal law -- the federal government has to do its part," he told The Canadian Press after his speech. "We are not putting pressure (on public security and the federal government) because we are on the same team, but they are aware. There is work to be done."
ILLEGAL AND ABUNDANT
Although there are countless online gambling ads that promote free gambling platforms -- which is legal -- many are gateways to paying platforms, which are not.
These illegal offers, according to Bergeron, are abundant and the system serves to advantage them because they are not encumbered by the regulatory constraints that govern Loto-Québec.
This is what we call the "grey market," he explained to his audience.
"It's half legal. The free games they offer us through their TV ads are legal, but we all know that their business model is not based on free play. It's pay-to-play and that's not legal," he said. "With the exception of horse racing and bingo, if it's not Loto-Québec, it's not legal. There is no ambiguity."
A TIPPING POINT
Bergeron spoke at length on the notion of simplification, both as a business model and as a condition for his organization's success.
He says one of the major constraints facing the company is the enrollment process.
"We need to simplify the process when a customer comes to us... It's complicated to open an account with us," he said. "That's the first tipping point for players. It's more than just opening an account and putting in a credit card. There are a lot of checks."
He adds Equifax is also working behind the scenes to validate information, such as age.
"Verification is more than just a 'yes or no I'm of age.' It's more complicated for us than for the illegal market. They just want a credit card number," he argued. "If they were physical sites, the stakes would not be the same. We would just close their doors; it would be easy. It's not so easy on the web."
COMPETITION IN SPITE OF EVERYTHING
Bergeron insists Loto-Québec has no plans of giving up.
"Loto-Québec is determined to compete with illegal operators. We must continue to do better, we must continue to improve our offer," he said. "If Loto-Québec does not take its place, others will, but it will not be with the same ethics, the same responsibility and it certainly will not be for the benefit of Quebec."
Nevertheless, things won't be easy. He gives the example of sports betting.
"We are currently touring the sports teams that also advertise with these illegal operators to tell them look, it's true that the product they offer on TV is legal, but you know now," he said. "Last year, two years ago, there was ambiguity about these business models. Now we know that it's not legal, the pay-to-play, so there's a reputational concern. Organizations that continue to partner with them should question the reputational risks because it is increasingly understood that they are not legal."
Officials in Ottawa say they came to the realization about the illegal gambling sites a little too late.
Until recently, betting on a single game was not allowed; you had to bet on combinations of games.
"It's only since Aug. 27 that the federal government has allowed the provinces to do this. Before that, it was multi-event betting. We weren't allowed to do single event betting," he said. "Otherwise, we would have done it a long time ago. Everyone was asking for it."
Bergeron adds until illegal players are removed, legislators must provide provincial Crown corporations with a more level playing field.
-- This report by The Canadian Press was first published in French on Nov. 11, 2021.