As the province of Québec faces a record $11 billion deficit, the coalition pushing for the province to create a regulated online gaming market noted last week that the province is missing out on significant tax revenue a potential open market could create.
The Québec Online Gaming Coalition (QOGC), which is funded by major online gaming firms like DraftKings, Flutter Entertainment, Entertain, and Rush Street Interactive, is hoping to see the province become a more competitive market as seen in Ontario and currently being considered in Alberta.
The group noted in a statement that the coalition “deplores the fact that the Québec government has decided to deprive itself of substantial tax revenues by refusing to regulate the online gaming market on its territory.”
Missed Opportunity?
Québec gaming officials recently detailed some of the province’s third-quarter revenue. Loto-Québec controls all regulated online gaming platforms in the province. QOGC is hoping to change legislators’ minds on the issue and recognize that more provincial revenue could be seen via the addition of new operators along with funds already coming into Loto-Québec.
“Since its launch, the coalition has been offering a concrete solution to help the Québec government counter the effects of the budget deficit,” coalition spokesperson Nathalie Bergeron said. “Regulating the market for private online gaming operators would enable the Québec government to obtain additional royalties estimated at a minimum of $230 million annually.
“This sum would be in addition to the revenues already provided by the Crown Corporation. These revenues could be reinvested in key sectors of the Québec economy, such as health and education, to the benefit of all Quebecers.”
The coalition argues that opening the market could also create many well-paying jobs. The Ontario model has contributed $523 million in revenue to provincial and municipal governments, and nearly $1.6 billion to the provincial gross domestic product during its first year of operation, Bergeron noted. She noted that changes need to be made in how the province operates online gaming.
“At a time when the government is asking Crown Corporations, including Loto-Québec, to optimize and increase efficiency in order to find savings, Québec cannot afford to deprive itself of significant sources of new revenue,” Bergeron said. “The minister must review Loto-Québec’s mandate and set up an independent regulatory body to ensure that gaming in Québec is properly supervised. After all, the Crown Corporation’s mission is to offer both safe gaming to Quebecers and contribute to public revenues. Our recommendation meets both these objectives.”
Recommendations in favor of a licensing and tax system for private operators and the creation of an independent regulatory body have been issued since 2014, the QOGC noted, including by the Task Force on Online Gaming.
Dr. Sylvia Kairouz (research chair in the study of gambling at Concordia University), the Institut national de santé publique du Québec (INSPQ), and the Direction régionale de santé publique de Montréal have all also called the creation of a body to oversee all gaming in Québec, including Loto-Québec.
“The minister missed an opportunity to send a clear signal in his budget, following Alberta’s example last week, to take action towards implementing regulations that would protect Quebecers while boosting government revenues,” Bergeron said. “Instead of listening to the experts, who have been calling for regulation of the online gaming market for over 10 years, Quebec prefers to protect Loto-Québec’s monopoly, to the detriment of public services and the Québec society that receives them.”
Facing Pushback
Whether the QOGC can change some minds remains to be seen. Loto-Québec has opposed any move toward a more competitive market so far.
After the release of a QOGC survey in December that showed that only 26.6% of players use Loto-Québec’s online casino and sports betting platform, officials with the crown corporation responded that many of those in the coalition are already operating unregulated games in the province.
“Some members of the coalition formed to promote responsible gaming and a new regulatory framework in Québec are violating Canada’s Criminal Code by illegally offering games to Québec residents, which raises serious doubts and questions about their actual intentions,” spokesman Renaud Dugas told Gaming News Canada. “In Québec, the rules could not be clearer: if it’s not Loto-Québec, it’s not legal. Loto-Québec is the only organization that can offer a 100% legal online casino and sports betting website in the province.”
However, some sports leagues operating in Canada are also pushing for a more open market – including the Canadian Football League, Major League Soccer, and the National Basketball Association.
The leagues believe an independent regulatory body could help ensure game integrity and responsible gaming. The budget deficit possibly could convince some legislators that it’s time to add more operators to online gaming in Québec.
