Environmental Lottery Provokes IPLC's Ire

6 September 2001
A legal battle is being waged by the Earth Fund Lottery, an Internet lottery based in the Canadian province of Prince Edward Island, and the Interprovincial Lottery Corp.

The Earth Fund Lottery, having received a license from the PEI Council in February 2000, was set to become Canada's first online gaming site selling lottery tickets to a worldwide audience.

"When word got out in the lottery industry of the license, then a protectionist attitude began to come together by the Interprovincial Lottery Corp.," said Eugene Rossiter, the Earth Fund's lawyer. "They were concerned, I assume, because it's going to affect their market."

He added, "They maintained some sort of legal action in Ontario. Why they did it in Ontario is beyond me, because the license was issued in Prince Edward Island. Why they would go to Ontario, unless they were forum shopping, is the only thing I can think of."

The IPLC sought to have the Ontario court declare that the Internet lottery was in violation of Canada's gaming laws.

The case has been adjourned, however, and is unlikely to advance until another case, a reference pending before the Prince Edward Island Supreme Court appeals division, is settled.

"A reference is a special legal tool we have here in Canada," said Cindy Wedge, a lawyer from the PEI attorney's general office. "What it is is that governments can state questions that they ask their courts of appeal to answer."

In this particular case, PEI officials are seeking an answer to how the Earth Fund Lottery is structured, in relation to section 207 of Canada's Criminal Code, which outlines provisions for provincial governments to license charitable lotteries.

The Earth Fund is a non-profit charitable corporation trying to raise funds for environmental preservation through the online sale of tickets for its Earth Future Lottery. Each ticket costs $50.

The reference asks whether the provincial government can, as outlined by federal statutes, authorize the Earth Fund Lottery "to conduct, manage and operate the Earth Future Lottery and to advertise, promote, solicit and offer for sale, and to accept and fulfill orders for tickets of subscriptions by means of the Internet or other lawful means of telecommunications."

In addition, officials want clarification of where the ticket sales take place and where the lottery is being controlled and regulated.

Yesterday newspapers began running advertisements notifying the public that the reference has commenced and inviting interested parties to participate. Applications will be argued before the court on October 9.

"That means that any group or organization who believe they have a potential interest in the outcome of this case can apply to our court and say 'we want to be a party here,'" Wedge said. "The court will rule whether or not those organizations or people are permitted to participate."

It's possible that the Earth Fund Lottery, the Interprovincial Lottery Corporation and attorneys general from other Canadian provinces will all apply to participate in the case, she added.

The hearing is slated to occur in January 2002.

Click here to read the PEI Terms of Reference.

Click here to read Section 207 of the Canadian Criminal Code, which relates to lotteries.

Vicky Nolan joined the IGN staff in October 1999. She's best known for inventing fire, the wheel and swiss cheese. She can be reached at vicky@igamingnews.com.