Court of Appeal for Ontario

Date: October 8, 2025

Docket: M56301 (COA-25-CV-1138)

Motion Judge: Gomery J.A.

Between

SBG-Skill Based Games Inc. Applicant (Appellant/Moving Party)

and

Registrar, Alcohol and Gaming Commission of Ontario Respondent (Respondent/Responding Party)

Counsel

For the moving party: Scott C. Hutchison and Brandon Anand Chung

For the responding party: Ananthan Sinnadurai and Michael J. Sims

Heard: September 22, 2025

Reasons for Decision

Introduction

[1] The appellant, SBG-Skill Based Games Inc. ("SBG"), moves for a stay pending appeal of the application judge's declaratory judgment. It also seeks other injunctive orders against the respondent Registrar, Alcohol and Gaming Commission of Ontario, including a stay of a bulletin the Commission issued on April 23, 2023 (the "Bulletin"), requiring liquor licensees in Ontario to ensure that the appellant's "GotSkill?" game is not operated in their commercial establishments.

[2] The motion is dismissed, for the reasons that follow.

Background

[3] This litigation centers on the characterization of the newest version of SBG's GotSkill? game, currently installed for play on touch-screen terminals in 170 to 180 commercial establishments in Ontario, most of which are licensed to serve alcohol.[1]

[4] To play GotSkill?, a player purchases credits that they can wager on successive rounds of play. GotSkill? undoubtedly involves some level of skill: a player must successfully perform a hand-eye coordination exercise to win their bet on any given round. The application judge found, however, that the outcome systematically depends on chance such that it is a game of mixed chance and skill and meets the definition of a "game" under s. 197(1) of the Criminal Code.[2] As a result, GotSkill? cannot legally be played in bars and other licensed premises in Ontario.[3] Licensees who host GotSkill? could be fined or lose their liquor licence.[4] They could also face criminal prosecution for operating unlicensed gambling facilities.

[5] This is not the first time that GotSkill?'s classification has been litigated.

[6] In 2018, Play for Fun applied to the Ontario Superior Court of Justice for a declaration that the version of GotSkill? then on the market was not a game under s. 197(1) of the Criminal Code.[5] Schreck J. found in Play for Fun's favour, but this court overturned that decision: Play For Fun Studios Inc. v. Registrar of Alcohol, Gaming and Racing, 2018 ONSC 5190, 49 C.R. (7th) 133, rev'd 2019 ONCA 648, 56 C.R. (7th) 465 ("Play for Fun (ONCA)"), leave to appeal refused, [2019] S.C.C.A. No. 365. Writing for the unanimous panel, Juriansz J.A. reaffirmed earlier caselaw that a game of mixed chance and skill intrinsically involves a "systematic resort to chance" to determine outcomes: Play for Fun (ONCA), at para. 18. He concluded that GotSkill? was a game of mixed chance and skill from the perspective of an ordinary player because "[t]he incentive in continuing to play is in order to gain an opportunity to win a greater prize which may or may not be available, depending on chance": Play for Fun (ONCA), at para. 26.

[7] Immediately after the court released Play for Fun (ONCA), SBG modified GotSkill? and submitted the new version to the respondent for its review. The most significant change is a player may, if they choose, see the vast array of prizes (up to 1300) offered in five future rounds before deciding whether to play.

[8] After a lengthy review period, the respondent concluded in late 2022 that GotSkill? remains a game of mixed chance and skill. On April 19, 2023, it issued the Bulletin directing Ontario licensees to ensure that GotSkill? was no longer operated on their premises by May 15, 2023.

[9] In response, SBG applied to the Divisional Court for judicial review and a declaration that the modified version of GotSkill? was not a game under s. 197(1) of the Criminal Code. The application was later transferred to the Superior Court as an application for declaratory relief. Following a hearing in July 2025, the application judge dismissed the application: SBG-Skill v. Registrar, Alcohol and Gaming Commission, 2025 ONSC 4938.

[10] The appellant is now appealing this decision. The question is what will happen pending this court's determination of the appeal. The respondent did not take any enforcement action against establishments where GotSkill? was installed in the years before the Play for Fun 2025 decision, or since the appellant rolled out the modified version of the game. Even after issuing the Bulletin, the appellant agreed to refrain from enforcing it pending the application judge's decision. This agreement has now come to an end.

[11] It is in this context that the appellant seeks a stay of the application judge's judgment and an order preventing the respondent from enforcing the Bulletin.

Analysis

(1) Is there a serious issue to be determined on appeal?

[12] On a motion for a stay or an interlocutory injunction, the court should consider whether the moving party has shown that: (1) there is a serious issue to be determined; (2) if the order sought is not granted, the moving party will suffer irreparable harm; and (3) the balance of convenience favours the proposed order: RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, at p. 334; Circuit World Corp. v. Lesperance (1997), 33 O.R. (3d) 674 (C.A.), at pp. 676-677.

[13] After considering these factors, the court will determine whether the interests of justice call for the order sought: Longley v. Canada (Attorney General), 2007 ONCA 149, 223 O.A.C. 102, at para. 15; Zafar v. Saiyid, 2017 ONCA 919, at para. 18. The strength of the moving party's argument on one stage may compensate for its weakness on another: Circuit World Corp., at p. 677.

[14] The respondent concedes that the appeal is not frivolous or vexatious. I agree. It meets the low bar of a "serious issue to be tried".

[15] On the other hand, the merits of the appeal appear marginal. The application judge applied this court's interpretation of a game of "mixed chance and skill" at s. 197(1) of the Criminal Code in Play for Fun (ONCA). The appellant alleges errors of mixed fact and law. The application judge made findings based on his assessment of the evidence on the record. This court will defer to such findings in the absence of a palpable and overriding error.

[16] In its written argument on this motion, the appellant suggests that the Play for Fun (ONCA) decision does not comprehensively resolve how a game like GotSkill? should be assessed. It is hard to see how this argument could prevail, given that this new litigation raises precisely the same issues as the earlier litigation in respect of the same game, albeit since modified.

[17] The lack of strong grounds of appeal will become relevant when I consider whether the interests of justice favour the order sought by the appellant.

(2) Will the appellant suffer irreparable harm if the motion is not granted?

[18] I conclude that the appellant will suffer irreparable harm if the motion is dismissed, but that the harm is overstated.

[19] According to Antonio Carvalho, SBG's president and Chief Executive Officer, if licensed establishments cannot offer GotSkill?, SBG will lose 99% of its revenue stream, it will no longer be able to function as a going concern, and "its reputation will suffer tremendously."

[20] As the respondent concedes, a loss of revenue resulting from the respondent's enforcement of the application judge's decision would constitute irreparable harm. The appellant is foreclosed under provincial law from taking an action against the respondent for any acts in good faith in the exercise of their functions.[6] The appellant will therefore have no means of recovering its lost revenues from the respondent even if it wins the appeal: RJR-MacDonald, at p. 341.

[21] I also agree with the respondent, however, that the appellant may well lose revenues even if I grant this motion, due to the legal jeopardy that licensed establishments face if they continue to host GotSkill?. The appellant is not seeking an order requiring licensees to continue to offer the game. The application judge concluded that GotSkill? falls within the Criminal Code provisions which prohibit unlawful gambling. In the wake of this decision, hosting the game could attract civil liability to landlords and players. Given these risks, licensees may reasonably elect to stop offering GotSkill? even if this court stays the respondent's enforcement of the application judge's decision and the Bulletin.

[22] I likewise give limited weight to Mr. Carvalho's assertion that SBG will suffer tremendous reputational loss if I do not grant this motion. The application judge's decision has attracted media attention, particularly within the gaming industry. A stay will not negate the reputational impact of that determination.

[23] Finally, although I accept that a loss of 99% of its revenues would deal a heavy blow to the appellant, this situation is distinguishable from that in Ontario v. Shehrazad Non-Profit Housing Inc., 2007 ONCA 267, 85 O.R. (3d) 81. In Shehrazad, MacPherson J.A. granted a stay of an order obtained by the Ministry of Municipal Affairs and Housing appointing a receiver over a not-for-profit social housing corporation for the purpose of selling the corporation's housing projects to another not-for-profit corporation. This represented an existential threat to the corporation because, once the projects were sold, they could not be reacquired. It is not clear to me, on the evidence on this motion, that the appellant's business would be unable to recover from a temporary interruption of its operations, even if it suffered a permanent loss of revenues as a result.

[24] Mr. Carvalho asserts that, in the absence of the orders sought, third parties will suffer irreparable harm. The appellant's 13 employees, 24 sales representatives and distributors, and 10 contractors will be laid off. The establishments that host GotSkill? will no longer get a portion of the profits from the game's operation. The appellant will cease making charitable donations to groups such as Mothers Against Drunk Driving.

(3) Does the balance of convenience favour granting the orders sought?

[25] This factor requires "a determination of which of the two parties will suffer the greater harm from the granting or refusal of an interlocutory injunction, pending a decision on the merits": Manitoba (A.G.) v. Metropolitan Stores Ltd., [1987] 1 S.C.R. 110, at p. 129. Potential harm to third parties may also be relevant.

[26] I find that the balance of convenience favours the respondent. Granting the orders would harm the broad public interest in enforcing duly enacted laws and, more specifically, the public interest in enforcing laws regulating gambling and alcohol designed to protect minors and other vulnerable members of society. This outweighs any irreparable harm that the appellant and third parties will suffer if the injunctive orders are not granted.

[27] In general, courts must be "sensitive to and cautious of making rulings which deprive legislation enacted by elected officials of its effect": RJR-MacDonald, at p. 333. Accordingly, for "a public authority, the onus of demonstrating irreparable harm to the public interest is less than that of a private applicant": RJR-MacDonald, at p. 346. Injury to the public interest is presumed to flow from staying enforcement of legislation premised on a statutory duty to promote or protect the public interest. As the Supreme Court said in RJR-MacDonald, at p. 346:

The test will nearly always be satisfied simply upon proof that the authority is charged with the duty of promoting or protecting the public interest and upon some indication that the impugned legislation, regulation, or activity was undertaken pursuant to that responsibility. Once these minimal requirements have been met, the court should in most cases assume that irreparable harm to the public interest would result from the restraint of that action.

See also: Maple Ridge (District of) v. Thornhill Aggregates Ltd. (1998), 54 B.C.L.R. (3d) 155 (C.A.), at para. 9; Saskatchewan (Minister of Environment) v. Redberry Development Corp. (1987), 58 Sask. R. 134 (Q.B.), at para. 18, aff'd (1992), 100 Sask. R. 36 (C.A.).

[28] Applying these principles, I find that the public interest would be harmed if I granted the orders sought. The respondent Registrar is appointed by the Commission's board to oversee enforcement of provincial liquor and gambling legislation.[7] The Alcohol and Gaming Commission of Ontario is mandated to exercise and perform its duties in the public interest, as well as "in accordance with the principles of honesty and integrity, and social responsibility".[8]

[29] Beyond the presumptive interest in enforcing laws specifically enacted in furtherance of the public interest, the respondent has presented uncontradicted evidence of irreparable harm to vulnerable members of the public if the motion is granted.

[30] In his affidavit, Karl Rempel, a senior manager in the Commission's Technology Regulation and iGaming Compliance branch, points out that legal gambling activities are subject to a regulatory framework designed to address the harms they pose, including addiction and access by minors. Operators of such activities are required to have trained employees "who provide information on the risks of gambling, self-exclusion programs, monitoring of problem gambling behaviours, and supports and interventions as required." These restrictions ensure that minors and other vulnerable individuals do not engage in unlawful betting. Most establishments hosting GotSkill? serve alcohol; some of them are sports restaurants or grills that anyone, including children, can access. These establishments are not required to maintain the safeguards described in Mr. Rempel's affidavit. The operation of GotSkill? therefore gives rise to all the risks that the regulatory regime restricting unlawful gambling is designed to mitigate.

[31] I accordingly find that the harm to the public interest in general, and to vulnerable individuals including children in particular, is significant.

[32] The appellant argues that the idea that immediate enforcement is needed to protect against public harm is at odds with the respondent's tolerance of GotSkill? over the past nine years. GotSkill? was deployed in Ontario in 2016. The respondent allowed it to remain in establishments where it was already installed after tentatively concluding in September 2017 that the version then on the market might contain a systematic element of chance. The respondent continued to refrain from taking enforcement actions during the Play for Fun litigation, while it considered the modified version of GotSkill? for over two years, and again during the current round of litigation in the Divisional Court and Superior Court. It is only since the application judge dismissed the application that the respondent has advised that it will no longer delay enforcement of the April 2023 Bulletin, absent a court order requiring it to do so.

[33] I do not accept the appellant's argument that the respondent's actions undermine its evidence about public harm.

[34] GotSkill?'s categorization as a game of mixed chance and skill, as opposed to a game of pure skill, was legally unresolved until August 2019, when this court issued the Play for Fun (ONCA) decision. Within weeks, the appellant modified the game and represented that this modification changed its categorization. The respondent thereafter was either assessing GotSkill? or had accepted the appellant's proposal that the classification of the modified version of the game should once again be subject to judicial determination. In the interim, the respondent maintained the status quo, that is, it permitted establishments to continue to host the game terminals. During some of this time, establishments hosting GotSkill? were in any event closed due to COVID-19 pandemic restrictions.

[35] The respondent cannot be faulted for suspending enforcement activities to permit the parties to exchange their positions and to seek the courts' assistance in resolving their dispute. But it was not bound to maintain the suspension indefinitely. Were I to accept the appellant's argument that the respondent's restraint undermined its position on this motion, this would discourage the respondent, and other regulatory agencies, from attempting to resolve compliance issues with industry stakeholders cooperatively. Agencies would infer that, if they agreed to suspend enforcement activities pending the determination of a dispute, this would undermine their ability to compel immediate enforcement even after a court ruled in their favour.

[36] The respondent has furthermore explained why it has now concluded that it must stringently enforce the Bulletin. There has been a proliferation of electronic betting games like GotSkill?, which purport to be strictly skill-based but where a player's success in beating the machine is inherently contingent on luck. The respondent has moved to shut down the operation of similar games in licensed establishments. Its continued tolerance of GotSkill? is inconsistent with this.

[37] I have found that the appellant will suffer some irreparable harm if its motion is not granted. I also accept that some third parties will likely suffer a loss of income. But I am not persuaded that these monetary harms outweigh the harm to the public interest that the respondent is mandated to protect, and the potential harm to vulnerable members of society, including children and individuals in the grip of addiction, if the orders sought by the appellant are granted.

Do the interests of justice require the orders sought?

[38] The appellant has shown that there is a serious case to be tried, but the appeal appears to seek a re-litigation of issues that have already been tried. It has established that it will suffer irreparable harm if the respondent begins enforcing the application judge's decision and the Bulletin immediately. On the other hand, the balance of convenience favours the respondent.

[39] Having stepped back to consider the situation holistically, I find that it is in the interests of justice that the motion be dismissed. I shall, however, set an expedited hearing date so that harm to the appellant and any third parties is mitigated.

Disposition

[40] The motion is dismissed. Pursuant to the parties' agreement, no costs are ordered. I order the following timetable:

(1) The appellant shall perfect the appeal by October 17, 2025.

(2) The respondent shall file a factum and any responding record by November 17, 2025.

(3) The appeal shall be heard on January 9, 2026. The appellant is allocated 1 hour and 15 minutes for argument. The respondent is allocated 1 hour.

"S. Gomery J.A."

Footnotes

[1] The parties differ on the current number of establishments where GotSkill? is played. Nothing turns on the precise figure.

[2] R.S.C. 1985, c. C-46.

[3] Licensing, O. Reg. 746/21, s. 43(1) under the Liquor Licence and Control Act, 2019, S.O. 2019, c. 15, Sched. 22.

[4] Liquor Licence and Control Act, 2019, ss. 13, 68.

[5] Play for Fun Studios Inc. owns the intellectual property in GotSkill?, which it licenses to SBG.

[6] Alcohol and Gaming Commission of Ontario Act, S.O. 2019, c. 15, Sched. 1, ss. 10.1, 10.2. The Crown Liability and Proceedings Act, 2019, S.O. 2019, c. 7, Sched. 17, s. 11(2) likewise prevents any cause of action against a Crown officer, employee or agent "in respect of a regulatory decision made in good faith" by a person who has suffered any harm or loss as a result of that decision.

[7] Alcohol and Gaming Commission of Ontario Act, ss. 1(2), 7(1).

[8] Alcohol and Gaming Commission of Ontario Act, s. 3(2).