However, as a result of the lack of success with regard to this initiative, both Quebec and British Columbia are re-thinking their roles as operators of a gaming site, and the Maritime Provinces, originally involved in the six province consortium, have already left the said consortium.

Due to the anti-gaming provisions, most online

gaming sites are forced to “set-up shop” offshore to avoid any and all criminal liability. This has led to what has become known as the “Foreign Operator Principal”. However, the provisions of the Code, as currently drafted, fail to secure an equal monopoly for the online market as a result thereof. This is primarily because the jurisdiction of the Code is restricted to within Canada's borders, and as such any and all operations that emanate from outside cannot be regulated by it.

This is how many of the larger and credible operators, such as Party.Bwin

and William Hill, enter the Canadian market and accept Canadian players; that is, the totality of their operations is outside of Canada, offshore, and thus is said to not be in breach of the anti-gaming provisions of the Criminal Code.

The same is not the case in the United States, where up until 2006 online gaming was tolerated. In October of 2006, the U.S. government created and passed the Unlawful Internet Gaming Enforcement Act (UIGEA) which prohibited the facilitation of payments made by Americans to online gaming operators, whether situated in the U.S. or not. At that time, many online operators were “head-officed” in “tax havens” so as to avoid having to pay taxes. As a result, a lot of revenue being earned from U.S. residents, was not staying in the country. It was the government's belief, that by enacting UIGEA, online gaming would come to a halt, or at the very least slow down. To the contrary, however, it only got bigger and more popular, without any real substantial reduction in U.S. online gaming business; in fact, prior to the events of April 15, 2011 (Black Friday), the U.S. was the largest market for online gaming.

Realizing that their plan perhaps backfired on them, several governments at the State level and even the Federal level, over the past few months, have been attempting to enact and pass legislation that would bring gaming back into the U.S. legally, and with it, the hundreds of millions of dollars of lost foreseeable revenue. A thorough analysis of the proposed bills show their plan is not to compete with the Poker Stars and Full Tilts of the world, but rather to regulate online gaming, and generate revenue through licensing fees and taxes.

Also realizing the amount of potential revenue, several Canadian provinces, in 2010, sought to legally bring online gaming into Canada, however not in the same manner as in the U.S. In 2010, the Quebec government announced plans to open the very first provincially-operated online gaming site, www.EspaceJeux.com, in hopes of earning a piece of the billion dollars gaming industry. By February of 2011, www.PlayNow.com, British Columbia's online gaming site, joined forces with Quebec on the Canadian Poker Network allowing only residents from both provinces to play against each other.

Although appealing to many due to the control measures and ways to monitor a person's gaming habits, many players do remain hostile to the idea as they are limited to only playing with residents of Quebec and/or British Columbia, as opposed to the tens–if not hundreds–of thousands of players playing online from around the world.

Based on all of the foregoing, we believe that of the paths chosen by the U.S. and Canada, the licensing and regulatory scheme of the U.S. is wiser, for two simple reasons. For one, as an operator rather than a regulator, provincial governments will have to compete with sites that have been around for over a decade, which offshore sites have much more knowledge, know-how, tools, and experience than they do–and most importantly–have a solid player base to draw from. Secondly, as an operator as opposed to a regulator, provincial governments will have to “take the heat” for any and all complications that may arise from play on their site, rather than 'punish' a clandestine private operator, and hence avoid any and all negativity in the eyes of the public.

It is no surprise that governments, both in Canada and the U.S. are well aware of the monetary benefits of online gaming; however, the billion dollar question remains as to whether governments should recognize the legitimacy of this industry and enter it as a regulator or attempt to compete in it as an operator.

Which decision will be the right one? Only the future can tell.

By Morden C. Lazarus, Edwin D. Monzon, Brian T. Hall and Cory R. Levi, with the law offices of Lazarus Charbonneau (www.LazarusCharbonneau. com) located in Montreal, Quebec (Canada).