Law Times

Law Times • June 6, 2011 FOCUS Ontario opens door to online gambling But lawyers foresee possible legal problems for the province BY DARYL-LYNN CARLSON For Law Times O ntario announced last summer that the province would be of- fering online gambling begin- ning in 2012. Th e move gave the green light to the Ontario Lottery and Gaming Corp. to keep up with other provinces, including Brit- ish Columbia and Quebec, that have legalized online gaming. At the time of the an- nouncement, Finance Minister Dwight Duncan said OLG was losing upwards of $400 million per year to off shore gambling web sites and that, as a result, it needs to become competitive on a global scale. It's expected that during the fi rst fi ve years, OLG could generate more than $500 million for the province through online gambling. But Ontario could learn some lessons from the B.C. experience. After launching its online casino at PlayNow. com in July 2010, it later expe- rienced a major privacy breach that prompted it to shut down for almost two months after some participants' fi nancial in- formation was compromised. Lawyers anticipate there could be some legal problems for the province if something like that happens here as well. David Elder of Stikeman Elliott LLP in Ottawa, whose practice includes communica- tion, competition, and privacy law, says Ontario can take note of British Columbia's experience in order to ensure the site is se- cure and there are no breaches of participants' credit card numbers or other personal information. "What the provinces face is similar to what any businesses would face if they're taking pay- ments online and that is that they have an obligation to make sure that any and all fi nancial data is protected by reasonable security safeguards," he says. Elder adds, however, that the province is generally protected under information and privacy provisions from any lawsuits stemming from a security breach. "It can be diffi cult to sue the gov- ernment because they're covered under the Privacy Act, so in a sit- uation if somebody was wronged and there was a data crossover and their fi nancial information was accessed, there should be an alternative course of action." In the meantime, Elder points out that the B.C. gov- ernment reimbursed web site users for any money they lost and has since enhanced secu- rity for the online casino. B.C. lottery offi cials blamed the security breach on a tech- nological glitch called a data crossover in which players' pri- vate accounts were switched, thereby enabling them to view other participants' fi nancial information and use that to place bets and gamble. In Elder's view, the Ontario government will have to do am- ple due diligence to ensure its online gaming site is secure. If it doesn't, it's possible OLG or the province could fi nd themselves subject to legal ramifi cations, if not an actual lawsuit. "Th e organizations would Ontario should take note of the B.C. experience with online gam- bling, says David Elder. have a legal obligation to en- sure that data is protected by reasonable security safeguards," Elder says. Javad Heydary, chairman and managing director of Hey- dary Hamilton PC, notes there are risks in any online transac- tion. "Whenever you're dealing with information in an elec- tronic format which gives you the ability to gather substantial amounts of information from diff erent entities, you always have the risk of breaches," he says. "So it doesn't matter what the information relates to, there is always a risk." He points out that U.S. authorities recently charged 11 people with bank fraud, money laundering, and illegal gambling following an inves- tigation into online gambling web sites in that country. Th e founders of Internet gambling companies PokerStars, Full Tilt Poker, and Absolute Poker were included in the arrests that sought upwards of US$3 billion in forfeitures and penalties. At least three Canadians are among a few people not yet ar- rested. U.S. offi cials are now working with Interpol and oth- er law enforcement agencies to try to track them down. Heydary says that as a result of the U.S. incident, he believes there needs to be more laws re- lated to any kind of gambling. "I've been saying for years that we need the whole indus- try to be more closely regulat- ed and there are grey areas that need to be addressed." "Th is is an area that poses problems for any government if it is not more closely regu- lated," he adds, noting that as gambling can lead to mental- health or addiction problems, it should be something that governments work to limit rather than encourage by mak- ing access to it easier through web sites available at home at any time of the day. PAGE 13 THE RIGHT MIX OF RESOURCES FOR YOUR EMPLOYMENT LAW PRACTICE EMPLOYMENT SPECTRUM AN ONLINE RESEARCH SERVICE Get online access to our leading authored works, covering everything from wrongful dismissal to occupational health and safety - all integrated with case law and legislation. And you'll be able to search Dismissal Notice Periods and get results that link to full-text decisions. Plus, you can generate reports summarizing your search results with calculated averages. Commentary includes: • Canadian Employment Law – Stacey Reginald Ball • Canadian Health and Safety Law: A Comprehensive Guide to the Statutes, Policies and Case Law - Norman A. Keith • Dismissal and Employment Law Digest - Howard A. Levitt • Employee Obligations in Canada – James A. D'Andrea • Illness and Disability in the Workplace: How to Navigate Through the Legal Minefield – James A. D'Andrea • The Employment Bulletin: Legal Issues in the Workplace – Editor-in-Chief Natalie C. MacDonald (Grosman, Grosman & Gale LLP) • The Law of Dismissal in Canada, Third Edition – Howard A. Levitt A classification scheme, topical indices and a citator make research easier. PDFs of both reported and unreported decisions are easy to print and download. For pricing information, contact an information solutions specialist today at 1-866-609-5811. CANADA LAW BOOK® Untitled-8 1 www.lawtimesnews.com 6/1/11 10:43:39 AM

• Cover
• Return To Practice
• SCC Expose?
• Focus On Internet/E-Commerce Law