Internet, charity lotteries? Not yet in Canada, courts rule

Internet, charity lotteries? Not yet in Canada, courts rule

CHARLOTTETOWN — “The internet age presents new challenges to the enforcement of gaming laws” PEI Chief Justice GE. Marshall wrote in a decision barring a licence to the Earth Future Lottery. The Supreme Court of Canada upheld the PEI courts without comment.

According to the judgement the gaming provisions of the Criminal Code of Canada does not permit charity lotteries on the internet to operate in Canada. Among the reasons given were:

* A province may license gaming to operate within a province. An internet lottery is illegal because its purpose is to market throughout Canada and the world.

* A lottery manager must be able to control and limit sales e.g., to persons over 18 years of age, which an internet lottery does not permit.

* An internet lottery would have been equivalent to a slot machine or video gaming device.

The Earth Fund and Lottery Management (P.E.I.), is owned by the Earth Fund, Toronto, and headed by former UN Under Secretary General Maurice Strong. It was tentatively approved for a license by the PEI government. However, the government referred questions about the legality of an internet lottery to the provincial courts.

The office for the lottery was to be located in Montague, PEI where it might have employed 20 persons.

However, The Earth Fund had contracted with Amsterdam-based Novamedia, which develops, maintains and operates gaming systems for charities in the Netherlands, other parts of Europe, and Uzbekistan.

Novamedia communications director Mildred Hofkes told Community Action that the company “believes the decision is a loss not only for the province but especially for the environment.

The lottery was supposed to create more than 20 full-time jobs in Montague and pump between $6$9 million into provincially operated environmental groups.”

Tickets would have sold for US$50 each. Novamedia, according to its website, would receive 50% of the funds raised. The company reports that it has handled more than 2.6B [euro] (C$41B) in gaming transactions since 2000.

The Earth Future Fund planned to distribute the funds to environmental protection organizations and to Medicins sans frontieres, all with offices in Canada. The licence was opposed by provincial lottery and gaming corporations in all but the Atlantic provinces.

The Earth Fund’s application for charitable registration had been turned down three years earlier by the Minister of Revenue because “the lottery operation is a business that is its only activity.”

“There’s nothing in the Criminal Code relating to Internet lotteries,” Provincial Treasurer Pat Mella said. “Its absence more than anything else hasn’t given the Supreme Court anything to interpret, it’s just not there. Obviously, the Criminal Code was written at a time when we didn’t have the Internet.”

To read the judgement go to website.

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