Quebec Blocks Intl Online Gambling, Welcomes Amaya

The Canadian province of Quebec is seizing control of local online gambling.

Plans to Block Providers

Quebec Finance Minister Carlos Leitao announced plans to block IPs of internationally licensed gambling sites unless waivers are obtained from Quebec's provisional gambling regulator.

These plans were disclosed as part of the 2015-16 Quebec budget plan, and emanates structurally from an adaption of the Consumer Protection Act as the law that governs gambling in the province. An amendment will be introduced requiring internet service providers in the region to block “illegal,” unregulated international licensees who have yet to obtain the local waiver.

Local Monopoly Protected

In Quebec's online gambling market context, this measure protects the interests of online gambling site Espace-jeux, which is run by the provincial monopoly Loto-Quebec (Quebec's state-sponsored lottery).

Revenues for Espace are expected to jump with the measure, because of the struggle to gain a foothold in international online gambling that the provider had previously experienced only a 10% share of the $250 million regional online market in competition with internationally licensed sites that will now be blocked.

Government revenues are expected to increase by $13.5 million in the first year of operation, with substantial annual gains of $27 million.

Undue Regional Exercise of Power?

This legislation demonstrates how governments can use their regional authority to their financial benefit in the online gambling context, where competition can be directly limited and influenced by licensing procedures.

Nonetheless, private operators are not entirely shut out. Alternatives have been offered to operators who enter into agreements with the provincial Alcohol, Racing and Gambling Board (RACJ), with further details forthcoming shortly.

Amaya is Still In

There is also talk that selected private online gambling operators will be allowed to continue operating in Quebec, with Quebec-based Amaya Gaming expected to be allowed to offer PokerStars in the new regulated Quebec market.

Concerns remain in the online industry regarding the appearance of government censorship for commercial gain, and precedents for online commerce in general as well as online gambling regulation in particular are sure to result.