The Price Edward Island Court of Appeal ruled April 24 that the provincial government does not have the authority to issue the Earth Fund a license to operate the Earth Future Lottery. The court said that because ticket purchases could be accepted from outside the province by means of the Internet, the lottery was not being "conducted and managed in the province" as required by the criminal code.
The court was also of the opinion that a charity could not operate a lottery in which computers were used to access or purchase tickets, register the ticket numbers or advertise and promote the lottery.
Marshall Pollock, president of Lottery Management (PEI) Inc., the company hired by the Earth Fund to operate the Lottery on its behalf, explained that the latter point not only affects the Earth Fund's license, but has significant ramifications for charitable lotteries across Canada.
"The court ruling also affects those charities in British Columbia and Alberta, who now use the Internet or e-mail to promote and sell their tickets within their own province, as well as dozens of other charities in Ontario and elsewhere in Canada which employ computer-driven telemarketing services to do the same," Pollack said. "If they can't use telemarketing and computers to sell tickets and register numbers, these charitable lotteries will go out of business."
The Earth Fund, meanwhile, remains committed to the lottery. "While we are disappointed with the court's ruling, we remain committed to supporting humanitarian and environmental charities through the Earth Future Lottery," said Maurice Strong, president and founder of the Earth Fund. "As a Canadian charity we hoped to be located in Canada, however, given the court's decision, we are now reviewing our options."
Pollock said the company was committed to operating in Prince Edward Island. "It's a shame that the province will lose the 20 or so full-time jobs and $6-9 million for environmental programs," he said, "but the biggest losers are the charities."
The Earth Fund and its strategic partners, EF Marketing SA, will announce its plans once a decision has been reached. Lottery Management (PEI) Inc. Director of Public Affairs & Customer Service Kelly Hickman was not willing yet to give more information on future developments.
Boudewijn Poelmann, the CEO of Holland-based Novamedia (which holds 50 percent of the shares in EFL), however, was able to comment.
"Of course we are disappointed by the decision of the Court of Appeal." Poelmann said. "Now we have the following possibilities: We appeal with the Supreme Court of Canada; Temporarily we operate in the jurisdiction of Prince Edward Island only; we move our operations to another jurisdiction; we stop any operations.
"These are our options in order of importance. There is a good chance that we will appeal and start at the same time with our operations in PEI. Pollock opted for Costa Rica. Novamedia is not in favor of that possibility. For our Internet (operation) Goodlot.com (100 percent owned by Novamedia), we operate from Curacao and we have a legal license there. We have until now very good experience with the authorities in Curacao."
Lottery industry analysts indicated over the weekend that a merger between the Earth Future Lottery and Goodlot.com is a possibility, although Poelmann said that won't happen.
"No chance," Poelmann said. "We will not melt into one lottery. With Goodlot.com we have an ongoing operation, selling tickets worldwide. We have just one license for one lottery in Curacao, so the suggestion is also not correct that Goodlot.com can share that license with EFL. EFL and Goodlot.com will remain two different lotteries with two different entities. It is correct, we have in Curacao one more license, however, that is for sports betting only."
On September 3rd, 2001 the Government of Prince Edward Island (PEI), located in the Canadian Gulf of St. Lawrence. opposite of New Brunswick and Nova Scotia, filed a reference in the Supreme Court of PEI (Appeal Division) to obtain a ruling on whether
The legal battle began Sept. 7, 2000, when the Interprovincial Lottery Corporation filed a claim in Ontario, arguing that the Earth Future Lottery would violate the criminal code. In response to that claim the government of Prince Edward Island brought the case to province's Supreme Court.
EFL's good causes are: Doctors without Boarders, IUCN, HSUS, Earth Council and ICLEI.
Goodlot.com's good causes are: UNICEF, Amnesty International, n(o)vib, WWF, BirdLife, Plan. Greenpeace and Goodlot Fund.
Novamedia has operations in Uzbekistan (Ecolot), the Netherlands (National Postcode Lottery and the SponsorBingo Lottery, Sweden (BingoLotto) and in Curacao (Goodlot.com). Operations in Germany, the biggest European market, where Novamedia has won licenses in four of the German States, are still battled in court.