In late-November, the Ontario Court of Appeals will hear a case that will determine if it is legal for Ontario online gambling companies to offer single betting pools that include international jurisdictions. Except, the province’s horse racing community began legal common-pool international wagering 20 years ago.
Sean Pinsonneault, the former Chief Operating Officer and Executive Vice-President with Toronto’s Woodbine Entertainment Group, told PlayCanada the launch of common betting pools for horse racing around 2005 was essential for saving the sport from extinction in Canada.
“It was critical, actually, to operations, because [horse racing] wasn’t sustainable before,” said Pinsonneault, a key figure in establishing what is known in horse racing as commingled betting pools for thoroughbred racing at Woodbine Racetrack and harness racing at Woodbine Mohawk Park.
How common betting pools saved horse racing and could save poker
Betting on horse racing is done via a pari-mutuel system where gamblers are wagering against each other, not the house. The more money in the pool, the more attractive those pools are to gamblers.
Prior to commingling, the same horse race at Woodbine Racetrack, for example, would have a number of smaller betting pools that made it hard to attract wagering — say one in Ontario, another in New York, another in Kentucky, etc.
Today, bettors in New Jersey, Kentucky, New York, Ontario and elsewhere are all betting into one larger pool on that race at Woodbine. That, along with horse field size, drives handle, which is the lifeblood of the industry.
Restricting pools to Ontario effectively killed DFS and poker
It’s the same premise behind online poker and Daily Fantasy Sports (DFS), which were, effectively, killed when an open Ontario online casino and sports betting market launched in April of 2022.
Why? With the launch came restrictions limiting all online gambling to within Ontario’s borders. Previously, DFS and poker operated in a “grey market” that included players from around the world. That made those pools viable. Restricting them only to players in Ontario made the player pool too small to be attractive to customers.
The court case was launched by the provincial government to get a ruling about whether online poker and DFS can legally offer a pool beyond Ontario’s borders.
If approved, it would allow Ontario online poker and Daily Fantasy Sports operators to offer bigger pools that would attract more players.
But didn’t horse racing already establish legal common pools two decades ago?
Pinsonneault, who spent 16 years at Woodbine and now operates his own horse racing wagering consultancy firm, Bluslate Inc., said there is an important distinction between the horse racing case and the case now before the courts.
In Canada, betting on horse racing falls under federal jurisdiction controlled by the Canadian Pari-Mutuel Agency. However, online gambling falls under provincial jurisdiction. In Ontario, that means the Alcohol and Gaming Commission of Ontario and its subsidiary, iGaming Ontario.
That is the reason only Ontario currently offers an open online gambling sector. The rest of the provinces only offer a lone gambling platform provided by the lottery corporation.
It also explains why the case in question is before the Ontario courts.
“[Horse racing is] federally regulated, which is different from the casinos and the sportsbooks,” Pinsonneault said.
Horse racing’s case can still be informative for poker and DFS
Still, the horse racing example not only provides some precedent that international common pools can be established, it also sorted out some of the other legalities that may be pertinent in the Ontario court case.
“When [horse racing] went into the US [in common pools], they wanted to see different things about, obviously, currency exchange, how do we deal with that? How do we balance the pools? What rules are we using? Those kind of things,” Pinsonneault said.
“So, we talked about issues like, ‘Where’s the bet struck officially? Is it struck in your home province when you actually place [the bet] at that location? Is it a server that you have in province, for example?’ We were able to get through that on the horse racing side of things, because I think they considered the bet to be struck still in Canada.”
Pinsonneault said, in all likelihood, if the courts establish it is legal for Ontario to offer common betting pools beyond its borders, poker and DFS operators are first going to look to the rest of Canada.
“I think it’s probably going to be, ‘Let’s focus on Canada. Can we do it intra-provincially first?’ And then can we go beyond that,” Pinsonneault said. “But once you establish the framework for it, it should be easier [to go into the US].”
Though, Pinsonneault did caution that some further legal interpretations are still needed around the US Wire Act. Essentially, that Act currently restricts gambling to each state. But, there is movement to open things beyond state lines.
In recent years, Nevada, Michigan and New Jersey have signed a Multi-State Internet Gaming Agreement (MSIGA) and Pennsylvania is expected to sign on soon, too. The MSIGA allows online poker players in Nevada, Michigan and New Jersey to play in the same pool. It’s exactly what the Ontario government is trying to establish with the court case.
Horse racing now has common pools in US, Europe and Asia
Still, the future appears bright.
Currently, a horseplayer in Ontario can bet into common pools in the US, UK, Ireland, France, Sweden, Hong Kong, Korea, Australia, South Africa and many more places around the world. Most of those same places can bet directly into pools in Ontario, increasingly the likelihood that local bettors will wager.
If the Ontario government is successful in court, more than two decades after horse racing opened up the gambling world, that same premise could mean poker players in Ontario could soon play in legal pools involving players from around the globe.
