Canada Court Grants Standing to CGA in VLT Case

The Canadian Gaming Association (CGA) has been fighting to participate in the case of Atlantic Lottery versus Babcock. The CGA filed a motion to intervene in support of the lottery and its suppliers.

Earlier this month, the Supreme Court of Canada granted the CGA’s motion.

The Seven-Year Case

It all started in 2012 in Newfoundland and Labrador.

Two men, Douglas Babstock and Fred Small, filed a lawsuit against the Atlantic Lottery Corporation (ALC) claiming their video lottery terminals (VLTs) were deceptive, addictive, mesmerizing, and dangerous when used as intended.

The men believed that the ALC unlawfully gained revenue from VLTs and violated the Newfoundland and Labrador criminal code. They claimed that the lottery machines were falsely put in place to make people believe that they could win money. Actually, they were more likely to lose.

When news circulated about the case, more people wanted to join. The court ruled that it could become a class action lawsuit in 2017. As many as 30,000 people joined the suit. The only requirement was that they played VLTs from April 2006 forward.

The ALC won the first rounds of cases, but the plaintiffs won in the Newfoundland and Labrador Court of Appeal in 2018. More appeals took the case to the Supreme Court of Canada.

Enter the CGA

The Canadian Gaming Association is a national trade association that represents the gambling industry of Canada. The organization promotes the economic value of gaming, but further, it uses research and best practices to advance the industry and facilitate dialogue among stakeholders in and around the industry.

Considering itself uniquely qualified to support the ALC in court, the CGA filed its motion to intervene earlier this year. And on October 11, it was granted.

McCarthy Tetrault LLP’s litigation group is representing the CGA. Partner Brandon Kain said, “We look forward to drawing on (the CGA’s) deep expertise in the gaming industry to craft a compelling submission to the Supreme Court.”

CGA President and CEO Paul Burns said the entire gaming industry has a stake in the outcome of the case. He said the CGA now has “an excellent opportunity to persuade the Supreme Court to implement a clear and balanced approach to this part of the criminal code.

Burns added that the CGA’s standing in the gaming community will bring a broad perspective and support for the ALC. “We can ask the Supreme Court to adopt a principled framework that benefits the industry as a whole,” he asid.

The Case for VLTs

It should be no surprise that the CGA’s home page first points to the economic benefits of VLTs, which are located at more than 4,680 sites across Canada. There are more than 34,000 machines in circulation.

The benefits of VLTs, along with other kinds of gambling like casinos and internet gaming, contribute billions to the GDP and labor of every province. The multi-billion-dollar industry is an essential part of the hospitality industry and raises important revenue to fund government and charitable programs.

In this case in particular, though, the CGA will argue that VLTs do not violate the Competition Act of Canada or violate the 1710 British statute regarding deceitful gaming. The antiquated statute was used by the plaintiffs to accompany their deceitful gaming charge regarding the VLTs, but the Court of Appeal rejected those claims.

Much at Stake

It is unclear when the Supreme Court of Canada will rule.

The CGA hasn’t even presented its supporting claims to the court yet. But they will likely do so before the end of 2019.

As a class action lawsuit in the hands of the Supreme Court judges, the outcome of the case will have wide-ranging consequences either way.

A favorable ruling for ALC will keep lottery providers, casino operators, and all relevant suppliers, retailers, and workers safe for the foreseeable future. They will be safe from litigation and claims that the machines are unfair.

Should the court rule for the plaintiffs, however, the exact wording of the decision could have a deep impact on lottery operators around the country, far beyond just the ALC.

Thousands of retailers have come to depend on the profits from the VLTs for their bottom lines. They may be hit the hardest by a ruling against the ALC, but all organizations that currently benefit from VLT revenue will feel the affects of a ruling against the ALC.

The future of the entire VLT industry, which spans the country, depends on it. The plaintiffs in the case not only want VLTs removed from all venues, they want monetary compensation for their mental and financial troubles. A massive ruling against the ALC could cost more than anyone could anticipate.



Jennifer Newell

Jennifer Newell

Jennifer Newell has been writing about poker and gambling since 2004. From her days in the WPT offices to covering summers of WSOP tournament action, she also followed gambling legislation to Washington D.C. and women-only poker to the Bahamas. Meanwhile, she lived in Los Angeles and Las Vegas for many years before moving back to her hometown of St. Louis, Missouri. Now, Jen travels less, writing about poker and online gambling from her home with her two dogs watching her every move. In her spare time, she follows politics, works on her never-finished novels, and learns Italian in the hopes of retiring to Italy someday.

If you want to know more, you can follow Jen on Twitter @WriterJen


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