Passage of Bill 74 in Quebec Seeks to Block Online Gambling Sites

The Canadian province of Quebec passed unprecedented legislation on May 17 when the highly-controversial Bill 74 became a law there, taking effect the following day. Bill 74 is essentially a form of online censorship, banning what the government believes to be any unauthorized websites that compete in the gambling space with EspaceJeux, which runs Loto-Quebec. This law could impact approximately 2,200 sites by blacklisting them, imposing heavy fines on any ISPs that are not in compliance with it.

Loto-Quebec has already begun the 30-day period to choose the blacklist’s targets, which means the domain blocking of unauthorized sites will likely start happening by the end of June. Supporters of the law believe it was passed in the best interest of the province’s citizens to promote public health. But the reality of the situation is that Loto-Quebec is expected to gain an additional $27 million of revenue on an annual basis by knocking out the competition and forming a monopoly in the online gambling market.

It is estimated that Loto-Quebec previously held a 10 percent market share, with the other 90 occupied by the more than 2,000 other sites now targeted by the measure. Opponents of the law argue that the decision to block these sites should be made on a federal level rather than provincial, especially as the first law of its kind in the country.

Fines of up to $100,000 per incident are a steep price to pay for violators of the law, which would again benefit Quebec’s government and Loto-Quebec. Any sites that want to avoid the blacklist need to be approved by being properly licensed in the province, with three already in the works to be added to EspaceJeux’s online gambling offerings, including Montreal-based Amaya, which is the parent company of PokerStars.

Similar efforts to blacklist unauthorized online gambling sites have been made in other parts of the world, most notably Europe. But banned sites continuously find ways around that, furthering their existence by changing their online locations to new virtual addresses every time they are blacklisted. The same thing could happen in Quebec.

In addition, Bill 74 is opposed by the Kahnawake Reserve, whose Gaming Commission has hosted and regulated many of the targeted sites with Mohawk Internet Technologies. Located outside Montreal, the Kahnawake Reserve could challenge the new law in the court system. Another potential opponent is Minister of Canadian Heritage Melanie Joly, who like the ruling Liberal party supports net neutrality and may fight it in court.

It remains to be seen what will eventually happen with Bill 74, but many pundits believe the law will be fought intensely until something changes.