Despite growing concerns from stakeholders, Ontario recently launched its provincially regulated iGaming Ontario – a risky bet on a new online gaming market where digital gaming companies will win big, while yet again First Nations stand to be amongst some of the hardest-hit.

According to the province, iGaming allows Ontario to capture revenues from the unregulated digital gambling sector, which operates in a legal grey area. But despite the province’s claims, the current stakeholders who will be hurt have raised myriad concerns regarding the viability of the model and its impact on Ontarians. The government disregarded the requests of stakeholders to pause its implementation until existing gaming agreements were reviewed and constitutional obligations were met – creating legal risks for the province.

Instead, the government could have upheld its commitment to economic reconciliation through a shared jurisdictional approach. Oversight of gaming cannot be a unilateral endeavour of the province. The model must ultimately increase the efficacy of revenue-sharing and its resulting benefits to Indigenous Peoples.

For decades, Ontario has maintained a highly regulated, limited gaming market. The province’s monopoly over gaming activities, which was granted through a 1985 agreement with the federal government, has limited entrants into the market, preventing wide proliferation of casinos and lottery gaming options. It has long been the government’s position that the maintenance of a limited market is critical to ensuring that gaming can be conducted in a socially responsible manner.

Ontario’s gambling profits flow from a hidden tax on the vulnerable

A reasonable approach to maintaining such a market would have included tethering iGaming to existing land-based gaming operations. That approach would benefit from the expertise of casino operators and their access to responsible gaming resources while respecting existing agreements between the parties.

Attempts to compete with the province have historically been quashed through legal avenues – particularly Criminal Code provisions. Indigenous governments that have established gaming facilities on First Nations’ lands have faced criminal charges for violating provisions that defied the province’s control over gaming. The restrictive approach has in many cases shut out Indigenous participation and economic development opportunities for First Nations, although there are some successful examples.

Ontario’s long history of controlling gaming is part of what makes its approach to iGaming so puzzling. The model creates a largely unlimited market for internet-based gaming, as long as operators can jump relatively low financial and regulatory hurdles – a far cry from its previous position about conducting gaming responsibly. To many stakeholders, including Indigenous governments, municipalities, and labour organizations, the province’s approach to iGaming prioritizes a fast implementation over a safe one. It’s going all in with someone else’s money.

Following the government’s January announcement regarding iGaming’s launch date, First Nations, including Mississaugas of Scugog Island First Nation (MSIFN), which I represent, voiced their objections to the province’s model. To my community and many others, the province’s rushed gaming strategy is a threat to our collective futures. For MSIFN and other First Nations across southern Ontario, past investments in gaming activities have provided a source of economic activity that supports further job creation and community development. Participation in the gaming sector has allowed Indigenous governments such as ours to build economic opportunities in our First Nations.

Twenty-five years ago, MSIFN opened the doors to the Great Blue Heron Casino – the product of immense risk-taking and ambitious investments. That investment was the catalyst for additional economic development in the community, creating job opportunities for MSIFN members and supporting our cultural revitalization efforts. Revenues generated by the casino have allowed us to provide health care, education and housing to members. Most recently, our First Nation was able to lift a long-term boil-water advisory because we could provide clean drinking water to our residents. All of this while donating more than $35 million to local charities, individuals and local governments since its inception.

Those advancements are now at risk. Research has shown that the introduction of iGaming will strip away revenue from casinos and thus the funds that our First Nation relies on to move forward. Funds required to operate water-treatment systems or provide health care are at risk of quickly disappearing. In spite of these concerns being raised in multiple requests by our council and others, the government has refused to consult with affected Indigenous governments – a violation of its constitutional duty to consult and accommodate First Nations that are impacted by its policies.

In informal meetings with Indigenous leaders, the government has not explained how, or even if, it will address iGaming’s revenue cannibalization or its employment impact on Indigenous communities.

Following the government’s quiet announcement of the launch of iGaming, MSIFN, Six Nations of the Grand RiverShawanaga First Nation and the Mohawk Council of Kahnawà:ke voiced concerns over the province’s failure to provide consultation. To each, gaming either contributes to their First Nations’ economies or is seen as an opportunity for growth. Yet, despite requests to the province, the government refused to develop accommodations to address our concerns.

Through its actions, the government has suggested that the introduction of a gaming platform is a greater priority than protecting the already fragile economies of First Nations. The government’s rejection of requests for consultation both offends the principle of nation-to-nation relations, which it’s obligated to maintain with Indigenous governments, and defies its many claims about reconciliation. The current model ultimately missed the opportunity to increase revenue-sharing and economic opportunities, which could have been achieved through the creation of a shared regulatory environment. The province cannot claim to be committed to a respectful path forward when it willingly runs roughshod over the serious concerns of Indigenous governments.

The adverse impacts – as noted by gaming stakeholders, including labour organizations, municipalities and gaming operators – are not limited to Indigenous governments. Recently released models suggest that iGaming will trigger layoffs – with the brunt of those impacts being felt by working-class families in host communities across Ontario. When asked, bureaucrats and parliamentary assistants were unable to offer anything resembling a cohesive plan to prevent sector-wide layoffs – in fact, they couldn’t even confirm that iGaming operators would be required to set up shop in the province.

Similarly, the province’s strategy has left communities that host casinos in a place of uncertainty about the future of their fiscal plans. Host communities benefit from a portion of revenues generated at casinos in their area, with those funds used to support services such as health care and education. Naturally, a reduction in gaming revenue will mean fewer funds to maintain existing standards of care. Those impacts will be felt most profoundly by those who rely on municipal services, particularly vulnerable community members. Without amendments to their agreements, local governments will be forced to revisit their financial plans and make challenging decisions about a path forward. For many, it will be devastating.

Finally, through its new program, the government will bring gambling into the living rooms of families across Ontario – allowing almost anyone with internet access to place bets. Given the ongoing criticism of iGaming Ontario’s weak approach to preventing problem gambling, it puts into question the province’s rhetoric about its commitment to responsible gaming. The proven safeguards that casinos use to limit problem gambling and prevent underage patronage aren’t present on gaming sites – and Ontario’s hands-off approach does no favours for users.

While the government’s efforts to capture currently unregulated iGaming revenue is proactive in theory, its approach will have devastating impacts when put into practice. The province’s rush to enact iGaming has resulted in an incomplete strategy to mitigate harms to Indigenous governments, municipalities and Ontarians at large. It makes one wonder about the driving force behind the government’s full-court press.

Should the province wish to maintain a monopoly on gambling, it should be required to prove that it can conduct all aspects of gaming in a way that respects the public interest. Yet, through its rushed approach, and willingness to put the futures of First Nations, workers, land-based operators and gaming users in jeopardy, it hasn’t proven that. The government should review its model and consider creating a system that shares oversight roles, and ultimately the economic benefits created by gaming. Given the magnitude of what each group stands to lose, and what offshore companies outside of the province stand to gain, the government’s model is a bet that the province can’t afford.

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Kelly LaRocca
Kelly LaRocca is the chief of Mississaugas of Scugog Island First Nation. LaRocca leads major economic and cultural initiatives for MSIFN, including investments in drinking water infrastructure.

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