19 April 2008

Legalities Regarding On Line Gambling In Canada And Much More

The Toronto Star has an interesting article regarding the Mohawk's Kahnawake gambling operation in Quebec...OK, not really Quebec because it is being challenged (and rightfully so) as being on Native Indian sovereign territory which is similar to an offshore location where gambling is legal.


The legality of the online gaming industry in Kahnawake is pretty tricky to navigate, and a political hot potato to boot. It's safe to say there's a lot of grey area here:

• The Canadian Criminal Code, like U.S. laws, prohibits wagering over telephone lines. Gambling operations in Canada also require a provincial gambling licence.
I think an exception has been made regarding horse racing for companies licenced in Canada.

• Games that involve a cost, chance to win and a prize are considered a lottery scheme under the Criminal Code. Benefiting from the operation of such events may also be against the Criminal Code.
I love the word "may." But if true, that means office NFL football and NHL hockey pools are criminal as well.

• In 1985, the federal government handed the authority to conduct lotteries or gaming events over to the provinces. The Criminal Code (Lotteries) Amendment Act was passed in exchange for the provinces agreeing to contribute $100 million to the Calgary Winter Olympic Games.

A recent World Trade Organization decision says that online gaming, when done legally from a jurisdiction such as Antigua or Kahnawake, is legal under international trade law.
The US is currently in violation of the WTO laws. They are trying to buy their way out, but in the end, they can't even enforce the ridiculous ban currently in place.

• In the U.S., Internet gambling is illegal with the Unlawful Internet Gambling Enforcement Act of 2006. It prohibits U.S. banks from processing transactions tied to online gambling, but leaves a loophole for bets on horse racing.
And the US laws didn't help the horse racing industry one bit. No extra occurred due to the attempt at eliminating the competition.

MIT's Internet gaming traffic fell by half when the U.S. law was passed, but now the company reports it's hotter than ever due to enforcement woes.

In 2005, MIT(Mohawk Internet Technologies), which pays no taxes, made $17 million (U.S.) on revenues of $24.7 million.
Of course, the Indian operation pisses off WEG, whose idea of competing for their market share is to eliminate the competition.

From the article: 'The fact that Kahnawake doesn't collect taxes and has been allowed to operate outside federal gambling law rankles the Woodbine Entertainment Group, who argue their market share is being eroded by illegal online gambling.'

Bottom line is that Betfair is legal here as long as they don't do business on servers located in Canada.


'In 1996, most know that the pari-mutuel tax on wagering was reduced from 7.5% to 0.5% as part of the slots at racetracks program. The industry of course, took this mostly for themselves.

From the ORC directive:


Under an incentive to provide much needed impetus to the industry, the Ontario Government reduces the provincial pari-mutuel tax on wagering from 7.5% to .5% with the balance to be returned to industry to be used as agreed to in the signed Memorandum of Understanding between the government, the ORC and the newly formed Ontario Horse Racing Industry Association (OHRIA).

With the wagering conference coming up this month (in Quebec), I think it is time to have voices heard to right this wrong, and grow Ontario racing.'

Pull the Pocket will be at the conference. He proposes this:

'This tax going back into the industry must be repealed and a mechanism must be put in place where it is returned in an immediate 7% takeout reduction for all tracks in Ontario.

When we listen to Woodbine or other track and horseman execs they often complain that Pinnacle is "stealing" their customers because they offer a 5% rebate. Well, you guys have a 7% rebate that you can give us now that would crush the offshores you complain about.'

If you are interested in being heard (he is presenting the comments to racing execs, etc.), leave a comment on his post. Here is the link.

Read the rest of the post as well, as he gives excellent reasons as to why the reduction should happen.

It was a good betting card with 10 races of mostly filled fields. The type of a card that I would of bet over $1500 on in the days before slots (when the sucker money was still in the pools). How many bettors tapped out by the 5th race? If takeouts would be at normal levels, perhaps, these bettors would have been able to last longer before tapping out (their bankroll going into the day would have been larger in most cases). Even people who cashed early may have struggled having money to bet in the last race.

Even so, Woodbine lagged behind three tracks that are available at Premier Turf Club. Mountaineer did over $2.1 million yesterday, while Hawthorne did $2.7 million and Keeneland did $5.8 million.

The industry is hurting right now, but Woodbine has no business having the 6th highest track takeout in North America. Some blame recession fears for the drop off in horse race action, but then explain why online poker, Betfair, and rebate shops have increased business. Gamblers are becoming more and more price sensitive collectively.

As of Tuesday, there were less than 400 horses (which includes 2 year olds). Racing resumes in two weeks. Get ready for a lot of 6 horse fields. Good for the owners, bad for betting. And their exactor takeout of over 26% is just insane.
I'm pulling for the track to survive, but they realistically should have cut down to 60 days because of competition from Presque Isle Downs and falling revenues from slots making their purse structure very unattractive. Horsemen never want to cut days. They are their worst enemies. Pay me now, who cares about what happens later, is the typical horseman's viewpoint.
Horsemen really should be seen and not heard in order for the game to run properly and for growth to have a chance.


I've always said that the signal fee is too small that tracks charge, and a one third, one third, one third solution (split between horsemen, track owners, and ADW's) isn't a bad one if everyone complies with it. I just think that one third should be equal to 4-5% of what is totally bet...yeah, that means total track takeout should be universal at between 12-15%.
Meanwhile, the time couldn't be worse to pull stunts like holding back on any signals (with horse race betting declining everywhere), including especially the Kentucky Derby. If there is one day that attracts possible new blood into the game it is the first Saturday in May.
If horsemen could do it, they would raise takeouts by 10% if all that extra money went into purses. They really have no clue about churn and turning off potential bettors. Kind of like Woodbine personified.

NYRA bars a trainer

New York Racing Association officials have denied trainer Gregg Matties stalls for the Belmont spring meet and asked him to leave the grounds of their tracks after being alerted to irregular betting patterns in wagering accounts involving the Matties family.

"There were patterns of wagering activity at account wagering sites that we weren't happy about," NYRA's president, Charles Hayward, said. "We have reason to believe the accounts were in family-member names. We're not saying there was any race-fixing or anything like that going on."

Hayward said NYRA was made aware of these irregular betting patterns by the Thoroughbred Racing Protective Bureau.

Several members of the Matties family have competed in handicapping tournaments around the country. Paul and Duke Matties, who are brothers of Gregg, finished 36th and 56th in the Daily Racing Form/National Thoroughbred Racing Association Handicapping tournament in Las Vegas in January.

Matties, who had stalls at Belmont during Aqueduct's winter meet, won four races from 29 starters during the inner-track meet. He was 0 for 3 over the main track. His last runner, Debating, finished third in a $20,000 claiming race here on Wednesday and was claimed.
My sources tell me that the Matties' are huge bettors (a G-note a race). Well known to the major industry players.
Also, this barring is due to a large bet cashed by one of the trainer's family members on a horse who paid $19 (trained by Matties). The horse in question, apparently was Too Drunk To Call. He won on February 27th at Aqueduct with an 88 Beyer. His next start on a dead rail produced a 75 Beyer (he was 7-2 and finished fifth). Horses bounce, don't they? Next start (March 27th), he did something he never did before, took a lead out of the gate, went wire to wire, getting away with a 1:14:1 three quarter split in a mile and sixteenth race (the first two were a mile and seventy), and wound up romping home by more than 5 lengths while earning a lifetime best 92 Beyer.
Horses many times run their lifetime bests in wire to wire performances, as they are not under any pressure throughout the race to do anything that might impede on their breathing.
I see nothing wrong whatsoever with this victory. And the fact he paid so much is due to the fact that the public usually give way too much credit to the most recent race.

There could be more to this. I don't know. If I get more info, I will post it.

Family members and friends of horsemen make up a very large chunk of today's pools.
Where do you draw the line when it comes to what a family member can bet on. These Matties brothers (not the trainer) do a lot of research, to my understanding. If their system says play the brother's horse or even bet against it, I see nothing wrong. I also see nothing wrong with asking the trainer about the current condition of the horse. How can you even think about stopping this?

Rumour has it that Matties has been given his stalls back after threatening to sue NYRA. Good for him. He should sue regardless. Who does NYRA think they are?


Unknown said...

Ok--if there was no race fixing, what WAS the problem? The game is filled with garbage. If your going to accuse someone, accuse them. Full disclosure or don't say anything.

Anonymous said...

Full disclosure from a racing organization? Go to WEG's website and try to find takeout info on their own product. I'll save you time, you won't find it.

Anonymous said...

I agree with you about these. Well someday Ill create a blog to compete you! lolz.