Reference re iGaming Ontario, 2025 ONCA 770

Reference re iGaming Ontario

Court Information

Court: Court of Appeal for Ontario

Citation: 2025 ONCA 770

Date: November 12, 2025

Docket: COA-24-CV-0185

Judges: Tulloch C.J.O., Gillese, van Rensburg, Hourigan and Dawe JJ.A.

Parties and Counsel

Applicant

Attorney General of Ontario

Counsel:

• Josh Hunter
• Ananthan Sinnadurai
• Hera Evans
• Jennifer Boyczuk

Interveners

Proponents of the Proposed Model:

• Canadian Gaming Association
• Flutter Entertainment plc
• NSUS Group Inc. and NSUS Limited

Opponents of the Proposed Model:

• Atlantic Lottery Corporation
• British Columbia Lottery Corporation
• Lotteries and Gaming Saskatchewan
• Manitoba Liquor and Lotteries Corporation
• Mohawk Council of Kahnawà:ke

Counsel for Interveners:

• Matthew Milne-Smith, Chanakya A. Sethi, Sarah J. Cormack (Lottery Coalition)
• Nick Kennedy (Mohawk Council)
• Graeme Hamilton, Teagan Markin (NSUS)
• Scott C. Hutchison, Kelsey Flanagan, Brandon Chung (Flutter)
• Danielle M. Bush, Adam Goldenberg, Gregory Ringkamp, Rachel Abrahams (Gaming Association)

Hearing: November 26-28, 2024

Reference Question

Would legal online gaming and sports betting remain lawful under the Criminal Code if its users were permitted to participate in games and betting involving individuals outside of Canada as described in the attached Schedule? If not, to what extent?

Overview

This reference concerns the interpretation of section 207(1)(a) of the Criminal Code, which permits the government of a province to "conduct and manage a lottery scheme in that province" in accordance with provincial law.

The Attorney General of Ontario sought the court's opinion on whether Ontario could permit players in its regulated online gaming scheme (iGaming Ontario) to participate in peer-to-peer games and sports betting with players located outside of Canada through "pooled liquidity" arrangements, while continuing to exclude players from other Canadian provinces and territories unless there is an interprovincial agreement.

Majority Decision

Tulloch C.J.O., Gillese, Hourigan and Dawe JJ.A.

Answer to Reference Question

The majority answers the first reference question in the affirmative: legal online gaming and sports betting would remain lawful under the Criminal Code if users were permitted to participate in games and betting involving individuals outside of Canada as described in the Schedule, provided that:

1. Ontario continues to conduct and manage the iGO Sites through its agents;
2. Players located outside Ontario but within Canada are not permitted to participate without an agreement between Ontario and the relevant province or territory; and
3. Ontario maintains the necessary level of control and regulation over the Ontario-based aspects of the scheme.

Key Findings

1. Earth Future Decisions Are Not Determinative

The majority found that while Reference Re Earth Future Lottery (P.E.I.) addressed the same phrase "conduct and manage a lottery scheme in that province" found in section 207(1)(b), the Earth Future decisions do not determine the outcome of this reference because:

• Earth Future was decided under a different statutory provision (s. 207(1)(b) rather than s. 207(1)(a))
• There are material factual differences between the Lottery in Earth Future and the Proposed Model
• The Supreme Court's endorsement was only "substantially" for the reasons of the PEI Court, creating legal uncertainty about which aspects were approved
• The broad statements in Earth Future about all of section 207 were obiter dicta

2. The RSC Test Does Not Apply

The majority rejected the Attorney General's submission that the phrase "in that province" should be interpreted to mean "having a real and substantial connection to that province" based on the real and substantial connection (RSC) test developed in constitutional law cases.

The court found that:

• The RSC test is a common law doctrine rooted in different legal contexts (private international law, constitutional limits on provincial legislation, and the territorial scope of federal legislation)
• The issue here is not Ontario's legislative or regulatory authority, but its operating authority to conduct and manage a lottery scheme within a specific statutory exemption
• Accepting the RSC test would render the words "in that province" redundant
• The RSC test has not been applied to statutory interpretation of Criminal Code exemptions in this manner

3. Textual Analysis Favours a Broad Interpretation

The majority found that a textual analysis of section 207(1)(a), while not definitive, favours a broad interpretation that does not preclude international play:

• The section is silent on whether provincial lottery schemes can be linked with foreign countries
• Parliament did not expressly prohibit international linkages, though it did expressly prohibit them in other contexts (e.g., s. 207.1(1)(b) for cruise ship gambling)
• The phrase "in that province" is capable of being read both narrowly (within geographical boundaries) and broadly
• The section expressly permits interprovincial lottery schemes "in conjunction with" another province, suggesting Parliament was not intent on having schemes remain strictly within territorial boundaries
• Parliament's failure to expressly restrict international linkages, when it did so in other provisions, suggests an intentional omission

4. Contextual Analysis Supports the Broad Interpretation

The majority's contextual analysis examined section 207(1)(a) within the structure and scheme of Part VII of the Criminal Code:

• Section 207(1)(e) permits the interprovincial marketing and sale of lottery tickets, reflecting Parliament's intention to give provincial governments freedom to allow gaming across borders
• Parliament distinguished between provincially-run or licensed lotteries and foreign lotteries in section 207(1)(e), placing special confidence in provincial governments' ability to conduct and manage lotteries in a way that protects the public interest
• The definition of "lottery scheme" in section 207(4) contains specific exclusions (three-card monte, punch board, coin table) and Parliament addressed concerns about horse racing through section 204, but was silent on international linkages
• Section 207.1(1)(b) expressly bars cruise ship lottery schemes from being "linked" with other schemes, but no similar restriction appears in section 207(1)(a)

The majority rejected the Lottery Coalition's contextual arguments:

• The requirement that Ontario "conduct and manage" the scheme provides restrictions on international elements
• The use of different terminology ("place" vs. "in that province") does not preclude international play, as Ontario would still conduct and manage the participation of players in Ontario
• Parliament's express authorization of foreign gambling activities in other sections does not preclude international elements in section 207(1)(a)
• The prohibition against foreign lotteries in section 206(7) does not prevent Ontario from conducting and managing a scheme with international linkages

5. Parliament's Purpose Supports the Interpretation

The majority examined Parliament's purpose in enacting section 207(1)(a):

• The 1969 amendments reflected a conscious shift from criminal prohibition to regulated oversight by provincial governments
• Parliament intended to give provinces a "local option" to decide whether to permit lottery schemes and the conditions attached to them
• The 1985 amendments removed the federal government's ability to conduct lotteries, reflecting Parliament's view that provinces were best placed to oversee them
• Parliament's purpose was to decriminalize and regulate gambling to further public safety and to allow for provincial choice reflecting varied public sentiment across the country

The majority found that a purposive analysis favours the interpretation that permits international play:

• The advent of the internet has made it very difficult to prevent people in Canada from accessing offshore gaming sites, which are unregulated and do not generate revenue for provincial governments
• Allowing Ontario to regulate players within its borders who wish to play online games against players outside Canada advances public safety by bringing such gaming under protective regulation
• This furthers provincial choice by enabling Ontario to address the social and economic impacts of online gaming while preserving revenue and providing accountability to voters
• These consequences align with Parliament's purpose of having provinces regulate gaming to minimize harm

6. Dynamic Interpretation Principles Apply

The majority found that applying the modern principle of statutory interpretation to section 207(1)(a) is consistent with dynamic interpretation:

• The modern principle requires courts to interpret legislation according to textual, contextual, and purposive analysis to find a meaning harmonious with the Act as a whole
• Dynamic interpretation enables Parliament to achieve its goals without having to reopen the statute in response to changing circumstances and new technologies
• A restrictive interpretation would undermine Parliament's purpose by leaving extraterritorial online gaming unregulated in Ontario, fostering the harms Parliament intended to prevent

Dissenting Opinion

van Rensburg J.A.

Answer to Reference Question

Van Rensburg J.A. would answer the first reference question in the negative: legal online gaming and sports betting would not remain lawful under the Criminal Code if users were permitted to participate in games and betting involving individuals outside of Canada as described in the Schedule.

As for the second question ("If not, to what extent?"), the dissent would respond that the international liquidity aspect, which is the raison d'être of Ontario's Proposed Model, would contravene the Criminal Code gaming prohibitions, and the exemption in section 207(1)(a) would not apply.

Key Findings

1. Agreement on Earth Future and RSC Test

Van Rensburg J.A. agreed with the majority that:

• The Earth Future decisions do not determine the outcome of this reference
• The RSC test does not apply to the interpretation of section 207(1)(a)

However, the dissent emphasized that the rejection of the RSC test is significant because it was a central plank in the Attorney General's argument.

2. The "Two-Scheme" Characterization Is Artificial

The dissent rejected the majority's acceptance of the "two-scheme" model (an Ontario scheme linked to an international scheme):

• At the game level, players who bet against each other would not play separate games; they would play together in a single game at the same time, using the same rules and pooling their bets
• The very reason for the Proposed Model is to provide this opportunity
• From the perspective of the players, there would be a single game; each time a game is played, there is a single lottery scheme
• The two-scheme approach confuses the "lottery scheme" required by section 207(1)(a) with the separate operation of the iGO Sites and International Sites
• The fact that the Proposed Model would operate across jurisdictions with different laws does not dictate that there are two or more lottery schemes; it simply means the laws of multiple jurisdictions would be engaged
• Section 207(1)(a) itself, which contemplates "a lottery scheme in that province, or in that and the other province" undermines the "two-scheme" argument—where a lottery scheme crosses one province's boundaries into another, there is a single "lottery scheme" conducted and managed by both provinces

3. "In That Province" Requires Territorial Conduct and Management

The dissent interpreted "in that province" to mean entirely within the province's geographical boundaries:

• The plain meaning of "in that province" is within the territorial boundaries of the province
• The language does not refer to the government conducting and managing a scheme "serving players in that province" "connected to" that province, or "in part within that province"
• The territorial meaning is consistent with the meaning of the same or similar words used in other subsections of section 207
• Where Parliament intended to refer to actions outside the province or country, it used different words (e.g."place" in s. 207(1)(h)"other province" in ss. 207(1)(a), (e), (f))
• Section 207(1)(a) refers to "the government of a province, either alone or in conjunction with the government of another province" authorizing Ontario alone or in conjunction with another province, and not in conjunction with international entities
• Giving a territorial meaning to "in that province" is consistent with the policy objectives of the Criminal Code gaming prohibitions and exemptions—to prevent and address the potential harms of gaming by ensuring the province controls the games and gaming framework

4. Dynamic Interpretation Does Not Apply

The dissent rejected the application of dynamic interpretation principles:

• Telus instructs that the degree to which a provision is capable of applying to new circumstances is an interpretive question that must be answered by reading the text in context and consistent with the legislature's purpose
• This is not a case where Parliament adopted a "broad" and "open-textured" approach
• The fact that there have been technological changes since section 207(1)(a) was enacted does not justify ignoring the plain meaning of "in that province"
• Courts have declined to take a dynamic approach where doing so would raise issues of policy more suited for legislative resolution
• Parliament amended the lottery scheme exemption provisions in 1999 (adding s. 207.1 for international cruise ships) and as recently as 2021 (amending s. 207(4)(b) to include bets on single sport events)
• It is not for the court to do by "interpretation" what Parliament chose not to do by enactment

5. Ontario Must "Conduct and Manage" the Entire Scheme

The dissent found that for Ontario to "conduct and manage" a lottery scheme involving international play, Ontario would need to exercise a level of control over the games and international operators similar to that of iGO in respect of the current iGaming Scheme:

• Ontario expressly disclaims control over operators who operate the International Sites
• The Schedule specifies that "operators would not act as agents of iGO in operating the International Sites"
• Key aspects of iGO's conduct and management (ensuring player identity and eligibility, game eligibility and rules of play, audit and oversight, anti-money laundering, responsible gambling, anti-cheating) would not apply to International Sites
• While the AGO proposes that agreements would be negotiated with international operators, foreign state gaming regulators, or foreign jurisdictions, Ontario cannot conduct and manage the Proposed Model while not doing so outside of Ontario

6. The Proposed Model Contravenes the Criminal Code

The dissent found that whether the Proposed Model is conceived as a single lottery scheme or two (or more) schemes, Ontario's conduct in relation to the international aspects would contravene the Criminal Code:

• Section 206(7) makes it clear that the offences in section 206 apply to certain conduct regarding foreign lotteries, including their advertising, marketing, and conduct and management
• While Canadian criminal legislation is territorial unless specifically declared otherwise, actions that occur within Canada in connection with foreign lotteries remain contrary to the Criminal Code
• The issue is not whether people in other countries should be allowed to participate in provincially-run lottery schemes, but whether a provincially-run lottery scheme can extend beyond the province's borders without contravening the Criminal Code
• Justice Minister Turner in 1969 agreed that there was "a very valid reason for keeping foreign lotteries illegal" because provinces can set the terms of domestic lotteries under provincial license and have absolute control, whereas there is no way of controlling the operation of a foreign lottery
• If a person takes actions in Canada that are prohibited by sections 206 and 207(3) with respect to a foreign lottery, they can be subject to criminal liability
• Ontario, iGO, and iGO Operators could not lawfully take any actions with respect to a foreign lottery that are prohibited by section 206, simply because the lottery is operating outside of Canada
• Ontario would necessarily be engaged in activities in relation to a foreign lottery if it, or iGO or its agents, were to enter into the anticipated agreements with international operators, foreign state gaming regulators, or foreign jurisdictions
• Ontario would need to take extensive upfront steps to implement the Proposed Model, including determining which entities to partner with, negotiating agreements, and determining revenue sharing models
• The anticipated agreements would include provisions related to revenue sharing, permitted types of games, and data exchange
• Ontario's conduct in relation to the international aspects would contravene section 207(3) and potentially sections 206(1)(a) and 206(1)(d)

Statutory Framework

Section 207(1)(a) of the Criminal Code

The provision at issue reads:

Notwithstanding any of the provisions of this Part relating to gaming and betting, it is lawful for the government of a province, either alone or in conjunction with the government of another province, to conduct and manage a lottery scheme in that province, or in that and the other province, in accordance with any law enacted by the legislature of that province.

Related Provisions

Section 206 prohibits a broad range of activities related to lottery schemes, including advertising, marketing, and conducting and managing lottery schemes.

Section 206(7) applies the prohibitions to foreign lotteries, including their advertising, marketing, and conduct and management.

Section 207(3) provides that it is an offence to do anything for the purpose of a lottery scheme that is not authorized by section 207.

Section 207(4) defines "lottery scheme" to mean "a game or any proposal, scheme, plan, means, device, contrivance or operation described in any of paragraphs 206(1)(a) to (g), whether or not it involves betting, pool selling or a pool system of betting" subject to certain specified exceptions.

Section 207(1)(b) permits charitable or religious organizations to conduct and manage a lottery scheme in that province under a license issued by the Lieutenant Governor in Council.

Section 207(1)(e) permits the government of a province to agree with the government of another province that lots, cards, or tickets in relation to a lottery scheme authorized under section 207(1)(a)-(d) may be sold in the province.

Section 207.1(1)(b) permits lottery schemes on international cruise ships but expressly bars them from being "linked, by any means of communication, with any lottery scheme … located off the ship."

Current iGaming Scheme in Ontario

Structure

• Internet gaming in Ontario is governed by the federal Criminal Code and three provincial statutes: the Alcohol and Gaming Commission of Ontario Act, 2019, the Gaming Control Act, 1992, and the iGaming Ontario Act, 2024
• iGaming Ontario (iGO) is an Ontario government corporation and agent of the Crown in right of Ontario
• Private gaming companies (iGO Operators) have entered into Operating Agreements with iGO and offer internet games and sports betting to players in Ontario through various websites and mobile applications (iGO Sites)
• The Alcohol and Gaming Commission of Ontario (AGCO) regulates all lottery schemes in Ontario, including the iGaming Scheme

Current Restrictions

• Players participating in legal online gaming and sports betting must be located in Ontario
• Players are not entitled to participate in games or betting involving players located outside of Ontario
• This is described as a "closed" or "restricted" liquidity scheme

Games Offered

• Games involving players betting against "the house" (e.g., casino games like slots, blackjack, roulette, sports wagering)
• Peer-to-peer games in which players compete against one another directly for a "pot" comprised of each player's wagers, less a "rake fee" paid to the iGO Operator (e.g., poker, bingo, daily fantasy sports betting)

Proposed Model

Key Features

• Players in Ontario would be able to participate in peer-to-peer games and sports betting involving players outside of Canada
• Players in Ontario would access games through iGO Sites
• Players outside Canada would access games through International Sites (websites or applications available in their jurisdictions)
• Players located outside Ontario but within Canada would not be permitted to participate unless there is an agreement between Ontario and the relevant province or territory
• iGO would continue to conduct and manage the iGO Sites through its agents, the iGO Operators
• Operators of International Sites would not act as agents of iGO and would remain subject to their own jurisdiction's legal and regulatory regime
• Ontario would choose which jurisdictions and/or international operators are allowed to participate and would put contractual conditions on their participation

Liquidity Pooling

• The key feature is the addition of international "pooled liquidity"
• Funds forming the betting pools available to be won by all players at a table or in a fantasy sports league would come from players located in Ontario and from players located outside of Canada
• This contrasts with the current "closed liquidity" scheme limited to Ontario players

Practical Details

• Many practical details about how the Proposed Model would operate remain undetermined
• Ontario would enter into agreements with international operators, foreign state gaming regulators, or foreign jurisdictions
• It is unclear who in the government of Ontario would choose the jurisdictions or entities and who would negotiate agreements
• The agreements could potentially govern matters such as rules of play, maximum bets and rakes, minimum ages of participating players, anti-money laundering policies, and requirements to prevent players in other Canadian provinces from accessing the sites

Analysis of Majority Decision

Statutory Interpretation Methodology

The majority applied the modern principle of statutory interpretation, which requires courts to interpret legislation "according to a textual, contextual and purposive analysis to find a meaning that is harmonious with the Act as a whole."

The analysis proceeded in three stages:

1. Textual Analysis: Examining the ordinary meaning of the words used
2. Contextual Analysis: Considering the statute's structure, scheme, and internal consistency
3. Purposive Analysis: Identifying and giving effect to Parliament's intention

Textual Analysis

The majority found that a textual analysis of section 207(1)(a), while not definitive, favours a broad interpretation:

• The section is silent on whether provincial lottery schemes can be linked with foreign countries
• Parliament did not expressly state that a provincially-run lottery scheme can be linked with a foreign country, but neither did it expressly prohibit all such international linkages
• Parliament's linguistic competence implies that omissions are deliberate if an express reference is expected
• Canadian criminal legislation is territorial unless specifically declared otherwise, so Parliament can reasonably be taken to have decided that the question of whether people in other countries should be allowed to participate in provincially-run lottery schemes is a matter to be determined by the governments of those countries
• The phrase "in that province" is capable of being read both narrowly (within geographical boundaries) and broadly
• Significant textual signals weigh against the narrow geographical interpretation:
  • Section 207(1)(a) expressly allows provincial government-run lottery schemes to cross interprovincial borders with the agreement of affected provinces
  • Parliament did not dictate the form or structure of these agreements; it merely requires that provincial governments work "in conjunction" with one another
  • This signals that Parliament was not intent on having provincial government-run lottery schemes remain strictly within provincial territorial boundaries
  • Parliament can be inferred to have similarly had no objection to provincially-run lottery schemes being linked with other countries, as long as the operation of the schemes in Canada remains under the conduct and management of a provincial government and does not extend into other provinces without their government's consent

Contextual Analysis

The majority's contextual analysis examined section 207(1)(a) within the structure and scheme of Part VII of the Criminal Code:

• Lotteries and gaming have a "double aspect": Parliament may criminalize them under section 91(27) of the Constitution Act, 1867 to protect public morality, while provinces may regulate them under sections 92(13) and (16) to address local impacts
• The broad reading of section 207(1)(a) accords with the approach Parliament expressly took in relation to "lottery schemes" involving the interprovincial marketing and sale of lottery tickets (section 207(1)(e))
• Section 207(1)(e) reflects Parliament's intention to give provincial governments the freedom to allow the marketing and sale of lottery tickets from other provinces within their borders, without requiring those governments to assume responsibility for directly overseeing how those lotteries are run, while continuing to prohibit the marketing and sale of foreign lottery tickets
• Parliament placed special confidence in the ability of provincial governments to conduct and manage lotteries in a way that would promote and protect the public interest in all places where tickets are sold
• The definition of "lottery scheme" in section 207(4) contains exclusions for "three-card monte, punch board or coin table" and Parliament addressed concerns about pari-mutuel betting on horse racing through section 204, but was silent on whether a province can link its own government-run lottery scheme to a foreign lottery scheme
• Parliament's decision to expressly require lottery schemes on international cruise ships (section 207.1(1)(b)) to be entirely self-contained, but to not put any similar restriction on lottery schemes conducted and managed by provincial governments under section 207(1)(a), supports the inference that this latter omission was intentional

The majority rejected the Lottery Coalition's contextual arguments:

1. Anomaly Argument: The Lottery Coalition argued it would be anomalous for Parliament to have intended that provincial governments could engage in activities with international elements under section 207(1)(a) without any restrictions. The majority responded that section 207(1)(a) does impose restrictions: the requirement that provinces "conduct and manage" in-province gaming pursuant to provincial legislation. Ontario honours this requirement under the Proposed Model by conducting and managing the participation of players in Ontario.

2. Distinctive Language Argument: The Lottery Coalition argued that Parliament uses distinctive language in various provisions within section 207 to refer to extraterritorial activities, suggesting different meanings. The majority responded that there is no inconsistency between Parliament's use of "in that province" and "place" because Ontario would still conduct and manage the participation of players in Ontario under the Proposed Model.

3. Express Authorization Argument: The Lottery Coalition argued that where Parliament expressly authorized foreign gambling activities, it did so with unambiguous language signaling a clear departure from the general prohibition against foreign lotteries. The majority responded that the sections relied on by the Lottery Coalition demonstrate that where Parliament intended to impose restrictions on international elements, it did so explicitly, and the choice to not make such an explicit prohibition in section 207(1)(a) is telling.

4. Legislative History Argument: The Lottery Coalition argued that the legislative history is clear that Parliament intended foreign lotteries to remain illegal. The majority responded that section 207(1)(a) does not constitute an exception to the general prohibition against foreign lotteries. Under the Proposed Model, Ontario would not conduct and/or manage a foreign lottery, nor would it permit foreign lotteries to operate in Ontario, although some of the games Ontario conducts and manages in Ontario would now have links to foreign jurisdictions.

Purposive Analysis

The majority examined Parliament's purpose in enacting section 207(1)(a):

Legislative History:

• By 1956, a Joint Committee of the Senate and the House of Commons recognized that the then-existing prohibitions on lotteries were ineffective, fostering public contempt for the law and creating opportunities for fraud
• The committee recommended reforming and relaxing the prohibitions against lotteries and favoured provincial regulation
• In 1969, Parliament reformed the Criminal Code to exempt federally and provincially conducted and managed lottery schemes from the prohibitions, empowering provinces to regulate them to use generated revenues responsibly
• The 1969 amendments reflected a conscious shift from criminal prohibition to regulated oversight by federal or provincial governments
• Justice Minister John Turner expressed Parliament's intention: "We feel that public opinion in this country is not unanimous about it and that it might vary from region to region. We are, therefore, leaving it to the regions, as that public opinion may be interpreted by provincial governments that their provincial Attorneys General have control over whether or not there should be lotteries permitted within provincial boundaries."
• Turner further explained: "Through its criminal law the federal government says: 'That is your business. We are withdrawing from the field. We are giving you the option. You decide in terms of the opinion of your own people in the province whether you want a lottery scheme. If you do, the conditions that you attach to such scheme[s] are a provincial matter'."
• Further amendments in 1985 removed the federal government's ability to conduct and manage lotteries, reflecting Parliament's view that provinces were best placed to oversee them
• After these reforms, provinces began to permit and regulate other forms of gaming besides lotteries, such as casinos
• In 2021, the Criminal Code was amended to enable provinces and territories to conduct and manage "lottery schemes" involving betting on a single sport event or athletic contest
• In 2022, Ontario began conducting and managing sports betting, lottery, and casino games online through its agents, the iGO Operators

Parliament's Purpose:

The majority found that Parliament's purpose in enacting section 207(1)(a) was to:

• Decriminalize and regulate gambling to further public safety
• Allow for provincial choice that would reflect varied public sentiment about gambling across the country
• Replace federal criminalization of lottery schemes with provincial regulation, thereby minimizing harm and empowering the provinces to make gaming policy within the broad parameters established by the Criminal Code

Application to the Proposed Model:

A purposive analysis favours the interpretation that permits international play because:

• The advent of the internet has made it very difficult to prevent people in Canada from accessing offshore gaming sites, which are unregulated by Canadian authorities and do not generate revenue that provincial governments can use to provide public services
• Allowing Ontario to regulate players within its borders who wish to play online games against players outside Canada advances public safety by bringing such gaming under protective regulation, thereby reducing risks such as fraud and addiction
• This furthers provincial choice by enabling Ontario to address the social and economic impacts of online gaming, while preserving revenue and providing accountability to voters
• These consequences favour interpreting "in that province" flexibly because they align with Parliament's purpose
• A restrictive interpretation would undermine Parliament's purpose by leaving extraterritorial online gaming unregulated in Ontario, fostering the harms Parliament intended to prevent
• Unregulated online games may "expose individuals in Ontario to the risks associated with unlawful gambling, including cheating, fraud, and problem gambling" which is precisely the situation Parliament intended to prevent by empowering provinces to regulate gaming within the province

Dynamic Interpretation

The majority found that using the modern principle to interpret section 207(1)(a) is consistent with dynamic interpretation:

• The modern principle enables Parliament to achieve its goals without having to reopen the statute in response to changing circumstances and new technologies
• This is particularly important in the context of internet gaming, where technology has changed dramatically since section 207(1)(a) was enacted

Analysis of Dissenting Opinion

Framing of the Issue

Van Rensburg J.A. disagreed with the majority's framing of the interpretive question. The majority framed the issue as whether there is anything in section 207(1)(a) that would preclude a provincially-operated scheme from "linking to" an international scheme. The dissent framed the issue as whether Ontario, as the proponent of the Proposed Model, would fit within the terms of this specific statutory exemption.

The "Two-Scheme" Model

The dissent rejected the majority's acceptance of the "two-scheme" characterization of the Proposed Model:

1. Game Level: At the game level, players who bet against each other would not play separate games; they would play together in a single game at the same time, using the same rules and pooling their bets. The very reason for the Proposed Model is to provide this opportunity. From the perspective of the players, there would be a single game; each time a game is played, there is a single lottery scheme.

2. Confusion of Concepts: The two-scheme approach confuses the "lottery scheme" that is required by section 207(1)(a) to be conducted and managed by a province in that province in accordance with provincial law, with the separate operation of the iGO Sites and the International Sites.

3. Multiple Jurisdictions: The fact that the Proposed Model would operate across jurisdictions with different laws does not dictate that there are two or more lottery schemes; it simply means the laws of multiple jurisdictions would be engaged in order for players from different jurisdictions to be able to play together.

4. Interprovincial Analogy: Section 207(1)(a) itself, which contemplates "a lottery scheme in that province, or in that and the other province" undermines the "two-scheme" argument. Where a lottery scheme crosses one province's boundaries into another, there is not two schemes interacting with one another but a single "lottery scheme" that is conducted and managed by both provinces.

5. Artificial Distinction: The "two-scheme" approach is artificial and provides the AGO with a way to sidestep the requirements of section 207(1)(a) by asserting that only the current iGaming Scheme must comply with its requirements, while severing from the analysis the aspects that provide for international liquidity.

Interpretation of "In That Province"

The dissent interpreted "in that province" to require territorial conduct and management entirely within the province's geographical boundaries:

1. Plain Meaning: The plain meaning of "in that province" is within the territorial boundaries of the province. The language does not refer to the government conducting and managing a scheme "serving players in that province" "connected to" that province, or "in part within that province."

2. Consistency with Other Provisions: The territorial meaning is consistent with the meaning of the same or similar words used in other subsections of section 207. Where Parliament intended to refer to actions outside the province or country, it used different words (e.g."place" in s. 207(1)(h)"other province" in ss. 207(1)(a), (e), (f)).

3. Interprovincial Cooperation: Section 207(1)(a) refers to "the government of a province, either alone or in conjunction with the government of another province" authorizing Ontario alone or in conjunction with another province, and not in conjunction with international entities.

4. Policy Objectives: Giving a territorial meaning to "in that province" is consistent with the policy objectives of the Criminal Code gaming prohibitions and exemptions. To prevent and address the potential harms of gaming, what is required is not simply the regulation of players in a province, but for the province to control the games and the gaming framework in which they participate. This is achieved by ensuring that the lottery scheme is conducted and managed by the province "in that province."

Rejection of Dynamic Interpretation

The dissent rejected the application of dynamic interpretation principles:

1. Telus Standard: Telus instructs that the degree to which a provision is capable of applying to new circumstances is an interpretive question that must be answered by reading the text in context and consistent with the legislature's purpose. This is not a case where Parliament adopted a "broad" and "open-textured" approach.

2. Technological Change: The fact that there have been technological changes since section 207(1)(a) was enacted does not justify ignoring the plain meaning of "in that province."

3. Policy Matters: Courts have declined to take a dynamic approach where doing so would raise issues of policy more suited for legislative resolution.

4. Parliamentary Action: Parliament amended the lottery scheme exemption provisions in 1999 (adding s. 207.1 for international cruise ships) and as recently as 2021 (amending s. 207(4)(b) to include bets on single sport events). It is not for the court to do by "interpretation" what Parliament chose not to do by enactment.

Conduct and Manage Requirement

The dissent found that for Ontario to "conduct and manage" a lottery scheme involving international play, Ontario would need to exercise a level of control over the games and international operators similar to that of iGO in respect of the current iGaming Scheme:

• Ontario expressly disclaims control over operators who operate the International Sites
• The Schedule specifies that "operators would not act as agents of iGO in operating the International Sites"
• Key aspects of iGO's conduct and management would not apply to International Sites
• While the AGO proposes that agreements would be negotiated with international operators, foreign state gaming regulators, or foreign jurisdictions, Ontario cannot conduct and manage the Proposed Model while not doing so outside of Ontario

Criminal Code Violations

The dissent found that whether the Proposed Model is conceived as a single lottery scheme or two (or more) schemes, Ontario's conduct in relation to the international aspects would contravene the Criminal Code:

1. Section 206(7) Application: Section 206(7) makes it clear that the offences in section 206 apply to certain conduct regarding foreign lotteries, including their advertising, marketing, and conduct and management.

2. Territorial Application: While Canadian criminal legislation is territorial unless specifically declared otherwise, actions that occur within Canada in connection with foreign lotteries remain contrary to the Criminal Code.

3. Legislative Intent: Justice Minister Turner in 1969 agreed that there was "a very valid reason for keeping foreign lotteries illegal" because provinces can set the terms of domestic lotteries under provincial license and have absolute control, whereas there is no way of controlling the operation of a foreign lottery.

4. Criminal Liability: If a person takes actions in Canada that are prohibited by sections 206 and 207(3) with respect to a foreign lottery, they can be subject to criminal liability. Ontario, iGO, and iGO Operators could not lawfully take any actions with respect to a foreign lottery that are prohibited by section 206, simply because the lottery is operating outside of Canada.

5. Ontario's Proposed Actions: Ontario would necessarily be engaged in activities in relation to a foreign lottery if it, or iGO or its agents, were to enter into the anticipated agreements with international operators, foreign state gaming regulators, or foreign jurisdictions. Ontario would need to:

   • Determine which entities to partner with
   • Negotiate agreements
   • Determine revenue sharing models
   • Engage in ongoing active engagement with international operators, foreign state gaming regulators, or foreign jurisdictions to manage the Proposed Model
   • Transfer player funds
   • Enforce the agreements' provisions

6. Scope of Agreements: The anticipated agreements would include provisions related to revenue sharing, permitted types of games, and data exchange. Ontario would be actively involved in assessing and investigating whether the "linked" jurisdictions could meet its requirements for minimum standards of transparency and regulation.

7. Criminal Code Violations: Ontario's conduct in relation to the international aspects would contravene section 207(3) and potentially sections 206(1)(a) and 206(1)(d).

Key Issues and Principles

1. Statutory Interpretation

The case illustrates the application of the modern principle of statutory interpretation, which requires courts to interpret legislation according to textual, contextual, and purposive analysis to find a meaning harmonious with the Act as a whole.

Textual Analysis:

• The ordinary meaning of words is the starting point
• The text's ordinary meaning is generally presumed to reflect the intention of the legislature
• The ordinary meaning plays a dominant role where it is precise and unequivocal

Contextual Analysis:

• The court must consider the statute's structure and scheme
• Provisions form a cohesive, internally consistent framework
• The presumption of consistent expression applies: where language used in two provisions within the same statute is identical, it should be given the same meaning

Purposive Analysis:

• Interpretations that advance the statute's objectives should be adopted
• Interpretations that defeat or undermine legislative purpose should be avoided
• The court must maintain a clear focus on identifying and giving effect to the intention of Parliament

2. The Real and Substantial Connection Test

The majority rejected the application of the RSC test to the interpretation of section 207(1)(a):

• The RSC test is a common law doctrine rooted in different legal contexts (private international law, constitutional limits on provincial legislation, and the territorial scope of federal legislation)
• The issue here is not Ontario's legislative or regulatory authority, but its operating authority to conduct and manage a lottery scheme within a specific statutory exemption
• Accepting the RSC test would render the words "in that province" redundant
• The RSC test has not been applied to statutory interpretation of Criminal Code exemptions in this manner

3. Reference Decisions and Precedent

The majority addressed the precedential value of reference decisions:

• References provide advisory opinions to the executive branch of a government which are not binding as precedent
• However, in practice, court decisions in references are treated as judicial decisions
• When the Supreme Court allows or dismisses an appeal for "substantially" the same reasons as a lower court, it can be challenging to extract legal principles from the lower court's decision and determine their significance
• Such decisions from the Supreme Court create legal uncertainty because it is difficult to know what the Court believes the law is, as it fails to elaborate on how substantially it agreed with the Court of Appeal
• Broad statements in a lower court decision that are not essential to the decision are obiter dicta and are not binding

4. Dynamic Interpretation

The majority found that applying the modern principle of statutory interpretation to section 207(1)(a) is consistent with dynamic interpretation:

• The modern principle enables Parliament to achieve its goals without having to reopen the statute in response to changing circumstances and new technologies
• However, dynamic interpretation is not appropriate where Parliament has adopted narrow and focused language
• Courts have declined to take a dynamic approach where doing so would raise issues of policy more suited for legislative resolution
• Courts will also be reluctant to do so when Parliament has already addressed, albeit in a different manner, the "new social realities" on which the party seeking a dynamic interpretation relies

5. Implied Exclusion Maxim

The dissent addressed the majority's use of the implied exclusion maxim:

• The maxim is based on a reader's legitimate expectation that the text in question will refer to a particular thing expressly
• When this expectation is not met and the text is instead silent with respect to the thing in question, the inference is that the legislature intended to exclude it
• The force of the implication depends on the strength and legitimacy of the expectation of express reference
• The better the reason for anticipating express reference to a thing, the more telling the silence of the legislature

Conclusion

The majority of the Court of Appeal for Ontario answered the first reference question in the affirmative: legal online gaming and sports betting would remain lawful under the Criminal Code if users were permitted to participate in games and betting involving individuals outside of Canada as described in the Schedule to Order-in-Council 210/2024, provided that Ontario continues to conduct and manage the Ontario-based aspects of the scheme in accordance with provincial law and excludes players from other Canadian provinces and territories unless there is an interprovincial agreement.

The dissent would have answered the first question in the negative, finding that the Proposed Model would contravene the Criminal Code because it would require Ontario to conduct and manage aspects of the lottery scheme outside Ontario's territorial boundaries, contrary to the plain meaning of "in that province" in section 207(1)(a).

The decision represents a significant development in the interpretation of section 207(1)(a) of the Criminal Code and the scope of provincial authority to regulate internet gaming. The majority's approach emphasizes the importance of applying modern statutory interpretation principles in a manner that gives effect to Parliament's purpose and adapts to changing circumstances and technologies, while the dissent emphasizes the importance of adhering to the plain meaning of statutory language and the territorial limitations on provincial authority.