By Pierre Garner

January 21, 2022

BURLINGTON, ON

 

Towards the end of last year, the office of the Auditor General in Ontario released a report highlighting the possible legal issue that might arise from the proposed online gaming model. The model is aimed at the privatization of the iGaming industry, which has been under the wing of the Provincial government.

In the 15-page report, “Internet Gaming in Ontario,” Ontario Auditor General Bonnie Lysyk puts to question three major issues; the legality of the model in light of the Criminal Code, the integrity and fairness of a privatized iGaming market in Ontario, and the provincial governance structure of internet gaming.

However, the report has received a lot of criticism, especially from industry folks with vested interests. In response, the office of the Auditor General has noted that it is not against the idea of having a regulated iGaming market. Its only concerned is the technical legalities of the proposed model.

“Ontario remains committed to launching a competitive internet gaming market to help protect its consumers. The province has already designed the online gaming model to achieve this objective in compliance with the Criminal Code,” wrote Natasha Krtajic, the parliamentary advisor and press secretary of the Attorney General.

Background Info on the Status Quo
To understand the allegations made in Lysyk’s report and the reason for criticism, we need to first comprehend the proposed enhancement to the present Ontario online gaming offerings.

Currently, Ontario Lottery and Gaming Corporation, a province-run entity, is the sole legal provider of online gaming services in Ontario. This corporation runs the only legal online bookmaker in the province, PROLINE+.

In light of the Ontario online gaming model, the government has appointed the Alcohol and Gaming Commission of Ontario and its subsidiary, iGaming Ontario to vet and review applications made by private online casinos and sportsbooks operators.

According to the president of the Canadian Gaming Association (CGA), Paul Burns, it’s speculated that the iGaming market in Ontario will be opened up to the private sector by the close of the first quarter of 2022. CGA happens to be the national trade association representing top suppliers and operators in Canada’s eSports, sports betting, lottery, and gaming industries.

With the biggest betting events (Super Bowl and the Winter Olympics) around the corner, the pressure to open up the market for private operators is mounting on Ontario’s government. Fortunately for punters, there are already some online casinos that operate in Ontario as stated by Online-Casino.com.

A Breakdown of the OAG’s Report
According to the report, the government’s plan to privatize the market presents several legal problems. These problems are noted as follows:

Delegation of Decision-Making Powers

The proposed model is designed to pass business risk and decision-making power to private operators. According to the OAG’s report, this delegation of responsibility might fail to satisfy the “conduct and manage” requirements on commercial gambling. The provincial governments are tasked with the responsibility of safeguarding these requirements under the Criminal Code.

“The issue of whether the provincial government has illegally delegated its “conduct and manage” mandate in commercial gaming to a private operator has been a recurring legal subject in Canada,” the report reads.

The Regulatory and Governance Risk
Lysyk mentions that the function of a regulator is different from that of an operator. She also notes that there is an overlap in involvement between the province regulator and the operators in terms of internet gaming in the current situation. That being the case, Lysyk writes that “the model or vehicle itself is what we consider a problem.”

To address the problem, the report recommends that the Ministry of the Attorney General transfers the operating and governance responsibilities of the iGaming Ontario from AGCO, its parent entity. The report further suggests that should iGaming Ontario’s business model meet the “conduct and manage” requirements, its reporting relationship with AGCO should be transferred.
The IGO’s Governance Structure Poses a Potential Problem

The Auditor General expressed concerns that the entity is not well-structured to verify and ascertain the integrity and fairness of games. The report recommended that the IGO inform the Legislature on how it plans to address the issue of integrity and fairness before launching the iGaming market.

In rebuttal, through the Ministry of the Attorney General, the government insisted that the AGCO has well laid out standards for the iGaming market – inclusive of integrity concerns. All online games will have to be third-party tested and certified by an independent lab, and the AGCO has its iGaming Compliance Unit for compliance oversight purposes.

Lysyk’s Response to Criticism on the Report
CGA’s president and CEO, Paul Burn, dismissed the OAG’s report as a mare opinion when recently commenting to The Parleh. When asked about the industry pushback that the report has been receiving, Lysyk challenged the idea that the report’s content is just an opinion.

She holds that what was outlined in the report was nothing but solid facts that have been vetted for accuracy.

“We have no vested interest in the outcomes of this agenda. Our position is unbiased, independent, and objective of the benefits of iGaming in Ontario. The report is factual and free from vested interest,” noted Bonnie Lysyk.

The Auditor general’s office is not oblivious to the benefits of having a regulated privatized iGaming market in Ontario. No. The benefits are difficult to argue against. The report was not suggesting that the model lacks economic legs.

By viewing the report objectively, it becomes clear that what the office of the Auditor General was trying to say is, “We are not completely sure and confident as to how you want to go about this.”

“Our point is that at this point, there are several issues that we need to identify and address. At the end of the day, the iGaming revenue will provide additional revenue for social services such as health. We are not saying that the iGaming market is a bad thing. All we did was question the integrity of the model and how our consumers will be protected once the market launches,” noted the OAG.

Bottom Line
Lysyk is completely aware that big money will always remain a big topic. Noting that the report’s biggest critics are individuals who have heavily invested in anticipation for the new market, she requests them to remain objective and conscious of consumer interests.

By Pepper Parr

December 10^th, 2021

BURLINGTON, ON

 

This is a multi part story.  The first part is about what the Hamilton Commonwealth Games Bid Committee is setting out to do and the part they think Burlington can play .

The second part is about what they are planning on putting together in terms of both a site location and how other stakeholders will be involved.

The third part is the discussion that took place with members of Council and the Bid Committee.

All three parts are very enlightening.  Commonwealth Games are not Olympic Games but they aren’t all that much different.  This is a big deal

 

Get ready to hear a lot about the Commonwealth Games – there are plans in the works to have them take place in Hamilton in 2030 which will mark the 100^th anniversary of the games – which first took place in Hamilton in 1930

At the December 9^th Standing Committee  there was a delegation from Hamilton 2030 Commonwealth Games Bid committee which city manager Tim Commisso introduced and set up why they were talking to Council.

Commisso provided a bit of a context and a more in depth look at an opportunity and that is potential participation in the Commonwealth Games bid which would actually be centered in Burlington on the Paletta King Road property that fronts on Highway 401.

Louis Frapporti  is the chair of the committee that Commisso and senior staff have had some informal discussions adding that at this point “we want to bring it forward to council to formalize a direction with respect to looking at this further by the end of March 2022 which is a relatively short turnaround.”

Frapporti then took Council  through a detailed presentation during which the small lead group was introduced.  It was at this point that the public learned that Paul Paletta had been made President of Penta Properties and that the Penta holdings on King Road would be the local site of the Games.

Palleta, now the President of Penta Properties spoke at length about their role in the initiative.

The King Road site was once the focus of an initiative to build a stadium for the Hamilton Tiger Cats.  That idea didn’t go very far – Burlington City Council did a quick scan of what it would cost and moved away from the idea real quick.  Link to that story set out below.

Antonio Gomez -Palacio CEO of Dialogue design took part in the presentation. He was engaged by the Commonwealth Games bid effort to act as the lead design curator around concept planning for infrastructure for the games. Antonio was also engaged by Penta in relation to the planning around the King Road. site.

The Hamilton Commonwealth Games Bid Committee (HCGBC) has been working on bringing back the games to Ontario for over three years.  The Commonwealth Games authority in Canada and the CGF in the UK, have selected and approved our community bid in relation to 2030 for international submission.

The process began years ago with 16 Canadian communities showing an interest; that was whittled down to the Hamilton bid that is now a regional bid which includes a number of municipalities.

The stakeholder group that is advancing the bid isn’t just a municipal stakeholder group; It is comprised of a variety of different types of stakeholders, including two First Nations, the Mississauga as of the Credit and Six Nations in Brampton as well as a significant array of educational institutions, Not for Profit groups, charities, private sector leaders and others who feel that this these games with their focus on social impact would be a fitting way of marking the centenary of the return of the games to Ontario  and leaving a lasting legacy for the region.

The Hamilton Bid Committee is heading into the final stages of the creation of an international submission and was before Council to explain its relevance to the city of Burlington.  They are working with a number of regional municipalities including the province of Ontario and the federal government to finalize this process.

“The uniqueness of this bid, said Frapporti  “is an attempt at really redesigning multi sport events to make them more relevant to their communities generally and to avoid some of the challenges and concerns regarding costs, and to accelerate their impact in the region so that the citizens of Burlington and all of the adjoining regions that are part of the games bid catchment area can enjoy the benefit of its impacts immediately.

“That’s going to be done in this case by an unusual and very innovative effort to combine private sector partners into the creation and the funding of the games bid upfront, which is an innovation that we have been working to bring to the games. “

“First of all, we’re not proposing, and this is very unique in the history of games in Canada, that any municipality be obligated to provide any funding for any aspect of games infrastructure. One of the innovative elements in our effort is that private sector partners are invited and incented to work with the partner municipalities around delivery of assets that can be used by the games at private sector expense. What we’d like to do, and this is a commitment we’ve made with every municipality, and as a function of our discussions with the province and federal government is to actually use the games to advance your municipal priorities.

“We’ve had the opportunity to review your strategic planning priorities and over the course of the next few months, if we’re fortunate enough to work with you in Penta properties around the King Road site, we would look to be very deliberate in our approach to using this opportunity to address a variety of your current strategic priorities. And notably, and this again is the real innovation in efforts around bids, is to bring P3 or private sector partners into these opportunities from a development perspective, so that development opportunities can get activated immediately inspired by the games, but not dependent upon the award of the games.

“One of the things that we would have you understand in the uniqueness of the Commonwealth Games beyond their having been born in Canada in 1930, is that their value and mission statement is the beginning of  building or creating  peaceful, sustainable and prosperous communities.

“When I got into this effort, I began to appreciate that this wasn’t primarily about a sporting event. It was about a vision and a set of values that the Commonwealth Games and Commonwealth nations propound that we want to integrate in every aspect of the work that we’re doing. It’s, traditionally, at a very high level, the economic assessments of the games themselves as an event; please understand that this is about the event specifically, rather than the work leading up to the event, which we hope to commence with the private sector in a variety of municipalities almost immediately: Insofar as the event is concerned, the measurable impacts from the games have historically produced about one and a half billion dollars in regional GDP between 15,000 to 23,000 hours in full time equivalent jobs.

“There are and will be much in excess of 10,000 volunteers trained in a variety of disciplines for the purposes of conducting the games. The games themselves for a variety of reasons become critical magnet for attracting incremental funding. And this is important from not only senior levels of government, but the private sector. To what extent can we use the game’s opportunity with private sector partners to incent them to make commitments and investments.

“There is a timeline and critical path for the games. We’ve been at this for a number of years, the beginning of the completion of the International things is a bid and at the moment we’re working with the province and federal government and other municipalities to finalize a concept plan, which the province and federal government will then use to determine whether they wish to commence what is referred to as multi party agreement negotiations for the finalization of the bid.

“This process will take the next eight to 12 months.

“We hope to have that done by the fall of this year immediately after the 2022 Birmingham games. The announcement of the 2030 host city is expected to be made in November of 2023.

“Appreciate that the work  we’re doing, which is very novel, is intended to activate private sector development.

“The big concepts for our bid are not what you might expect –  they don’t primarily relate to sports or sporting events. In our case consistent with the CGS priority and focus on building prosperous, sustainable and healthy communities. We are using the UN 17 Sustainable Development Goals as our design rubric.

“As Antonio will explain, are working with Dialogue and the Conference Board of Canada to integrate specific initiatives centered on sustainability and wellness as the focus of our efforts in designing the bid and we hope to activate these sustainability priorities.

“As part of all of the private sector development projects that will be part of the game’s footprint.

“As a result of two years of work looking to redesign the approach to games we came up with a number of core concepts that are important for you to understand. First of all, we acknowledge the concern by many internationally that games are overly reliant on government funding. And so we worked very hard to create a structure that prioritize private sector funding for infrastructure in relation to the games further, we created a structure which anticipates that there is no demand or expectation of prescribed municipal financial support for infrastructure. It’s not that we’re precluding municipalities from making commitments or adding value to specific initiatives that are primarily funded by the private sector.

“But we’re not mandating them as part of the bids.

“This is part of a process that we see unfolding when disability in discussions with a private sector partner work to create something in relation to a development project that would be used as a site for the games that makes sense. But there is no requirement.  Notably, in all of this work, and in the inclusion of private sector partners around specific development projects, we wanted to get away from the idea of the games as an event in time that is something that happens every four years, but to create a movement that in this case, is centered on healthy, sustainable and prosperous communities.

“And in doing that to create a framework by which all of the stakeholders including municipalities, First Nations, private sector partners, educational institutions, and so on, continue to consult and work together, not just in the completion of the bid, but in all the subsequent years from the delivery of the projects and sites and the creation of the programming related to the effort actually important to understand that this is not a single city that not only is it not a municipal baby, it’s not even a local bed.

“What we have done is to expand very significantly the catchment area for the games, in consultation with the province of Ontario and federal government to make the games regional. This adds value to the games expands the impact area for the games, it differentiates the games internationally, it reduces and mitigates the risks of the game to sitting on or being primarily related to one community because we are really focused on expanding the the experience of these impacts and their measurement over time.

“Expanding the games to all of these municipalities has been the work that we’ve been engaged in over the course of the last three years, which has accelerated meaningfully recently. The question of the City of Burlington involvement will be entirely a function of your interest in the interest of private sector partners like Penta and your willingness in the next few months to come up with an approach as to what opportunities the city would like to engage in and have them included.

“So I’m going to turn it over to Antonio here to explain his role and to speak to you from his perspective.”

Part 2 will be Antionio Gomez -Palacio explaining what he will be doing and why.

City Manager Commisso said the time frame given to prepare a response was tight but he felt it could be done.

Related news stories:

Moving the Tiger Cats to the Paletta King Road site