First Nation Mounts Ontario Sports Betting Challenge

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Ontario sports betting

Ontario sports betting is about to face a challenge, and not a terribly surprising one.

The Mohawk Council of Kahnawàke has launched a constitutional challenge against commercial sports betting in Ontario. The MCK filed its notice of application in November in the Ontario Superior Court against iGaming Ontario and the Attorney General of Ontario

During a press conference, MCK Council Chief Mike Delisle, Jr., said the MCK hopes the court will find the Ontario system “illegal and halt the activity” as it seeks an exemption or political carve out for First Nations gaming entities to operate online gaming in Ontario. Since Canadian lawmakers began discussing amending the Criminal Code to allow single-event sports wagering in 2021, the First Nations have sought explicit inclusion in gaming language.

Delisle said Mohawk Online operates legally across Canada through its sovereign jurisdiction of the Kahnawake Gaming Commission.

“Our goal is to protect our jurisdiction that we have built for over 25 years, acquiring an AGCO permit would obviously diminish if not extinguish that. The tax issue is another aspect to our objection, as we will not pay taxes to a foreign government entity,” Mike Delisle, Jr. told LSR this month.

What MCK wants in Ontario sports betting case

MCK alleges iGaming Ontario is in conflict with the Criminal Code because it is not “conducting or managing” online gaming in Ontario, but allowing private operators to do it themselves for a share of revenue. The council also said that the Ontario regulations disregard First Nations’ rights to operate and regulate gaming.

“The plain facts are that Ontario’s actions are causing a significant loss of important revenues for our community. Until these actions were taken, we were operating legally, safely and successfully across Canada. To be shut out of Ontario – by far the largest province in Canada – will have devastating effects on a source of income that has supplemented programs and services in our community for the last two decades,” Delisle, Jr. said in a statement.

For more than two decades, the MCK operated in Ontario through its Mohawk Online subsidiary, regulated through its Kahnawàke Gaming Commission. The MCK’s announcement said the court challenge is the last resort following attempts to open conversations with the provincial government. 

Earlier this year, the MCK and the Six Nations of the Grand River signed an agreement to “defend, by any means possible” the indigenous jurisdiction over gaming. Other First Nations groups are not yet part of the action, but Delisle said MCK has received support from numerous groups.

Ontario challenge foreshadowed

There was some First Nations opposition as single-event sports betting in Canada worked through legalization in 2021. Provincial lotteries began to roll out sports betting products in August 2021.

As Ontario worked to open up its commercial sports betting market in April 2022, the MCK was vocal in its displeasure and intention to continue operating its sportsbook, Sports Interaction, in the gray market. Entain acquired Sports Interaction owner Avid Gaming, which licensed the sportsbook to Mohawk Online, in February.

Ontario regulators ended a transition period for unregulated operators Oct. 31. Sports Interaction received an Ontario license and transitioned to the regulated market in August. Delisle said Mohawk Online remains involved with Sports Interaction in the rest of Canada, but has removed itself from its Ontario operations leaving it to Entain.

Ontario market growing, slowly

Ontario iGaming operators took CAD $6.04 billion (USD $4.4 billion) during the third quarter of 2022, up from CAD $4.07 billion during the second quarter when commercial online gaming launched in the province. The operators generated CAD $267 million (USD $192 million) in revenue during the quarter.

Those numbers do not include Ontario Lottery and Gaming or gray market operators, including established brands like Sports Interaction. The iGaming Ontario reports do not separate iCasino and sports betting.