Woodbine Site Under Investigation

Although company officials claimed last year that HorsePlayer Interactive was in compliance with Canadian laws, the country's federal Justice Department is now investigating its web site to ensure it is operating legally.

The investigation was launched after a host of competitors of Woodbine Entertainment Group, the operator of HPI, logged complaints that the company was violating Canada's Criminal Code by operating a web-betting service for residents.

Under the code only provincial governments are allowed to operate Internet gambling operations, although none have ventured down the I-gaming road yet.

Woodbine officials had no comment about the ongoing investigation, but told IGN on Monday that the company believes it is operating legally.

Andrew Macdonald, Woodbine's director of business development, said the company didn't launch the site until it got the green light from the Canadian Pari-mutuel Association.

Officials with the CPA were unavailable for comment, but it is believed that the Woodbine site was the first Internet account wagering system that was given approval in Canada.

Justice Department spokesman Sylvain Beaudry confirmed that an investigation was underway.

"There was no change to the Criminal Code," he said. "We've gotten letters in the department on this issue, and we're looking at it."

Beaudry said he couldn't comment further until more is known, likely in a few weeks.

Gambling critic Sol Boxenbaum told the Canadian Press Association that the site should be closed down because it is in violation of federal law.

"They're clearly breaking an existing law that says you can't gamble on the Internet," he said.

Boxenbaum is the head of the Montreal-based counseling firm Viva Consulting and said gambling in Canada should be kept in check, and if Woodbine is allowed to operate the site, the number of problem gambling cases will rise.

"They've decided that they're interpreting the law to define the telephone and the computer as being the same thing," he said. "The public should have a chance to debate the pros and cons before 'opening the floodgates' to Internet gambling."

When the site opened in January, Macdonald explained that the CPA had the ultimate call in what was and wasn't legal in terms of horseracing and betting. Unlike lotteries and casinos, which are operated provincially in Canada, horseracing is regulated by the CPA under the Federal Agriculture Department.

The CPA isn't commenting about the investigation, but when Woodbine launched the site the regulatory body said that it was a natural next step to allow for Internet-based bets since telephone betting has already been allowed for so long in Canada.

Bob McReavy, Ontario manager for the agency, said the regulations were changed last year to include betting on "any telecommunication device."

The system bars players under the age of 19 by requiring proof of age and residency, said McReavy. Money must also be deposited up front to open an account and place bets, he said.

Boxenbaum feels the system is "wide open" for abuse.

"It's very easy today for young people to get an ID from an older sibling or even to forge it themselves," he said. "Let them convince the minister of Justice and have the Criminal Code amended. Until then, it's illegal."

Sgt. Bill Sword of the Ontario Provincial Police illegal gambling unit said his office had also gotten numerous complaints about the site and his office is now working in concert with the federal Justice Department and the CPA.

The new site, HBIBET.com, is the product of a partnership between Woodbine and Canadian e-business firm Whitecap Canada Inc, whose HorsePlayer Interactive system, powers the site.

Users can place bets seconds before post time as well as create a "bet queue" through which future bets can be lined up and placed at the time of the client's choosing.

Woodbine, which has been in expansion mode for two years, also owns and operates The Racing Network Canada, a digital channel and pay-per-view service. The company's goal, Macdonald said, is to integrate the broadcasting service and the Internet site by spring. Doing so would enable subscribers to watch live streaming video of the races on their computers.

Bettors are required to register for the Internet account in person at a track with proof of age and residency. They can then wager using credit cards or funds deposited into an account.