Mystery Surrounding Canadian Province Online Gambling Initiative

Online gambling start-ups in Canada have faced opposition and generated controversies. But the drama unfolding in the small province of Prince Edward Island is quite unusual. If reports are true then the provincial government has lost a million dollars without getting anything in return.

The story began last fall when the Finance Minister Wes Sheridan announced that the provincial government had given the Mi'kmaq Confederacy a loan to try to start up online gambling regulation. The announcement was met with a lot of criticism, but there is much more in store now. The loan amount has been reported at one million dollars and it appears that it may not be repaid. Therefore the public accounts committee has asked the auditor general to check out exactly what the terms and conditions of the deal were.

First of all there is a dispute over the amount of the loan. Sheridan has claimed that the loan was for less than $1 million. Steven Myers of the public accounts committee has disputed this stating that they know for sure that it is seven figures. The exact quantum of the loan is less important then what the likely outcome of the transaction is. The Mi'kmaq Confederacy has taken a stand that under the terms of the loan they are only liable for repaying it if their efforts generated online gambling revenue. Since that did not happen, the Confederacy is claiming that they do not have to pay back anything. Hence the terms of the agreement will be examined very carefully by the auditor general. The question is not yet being asked as to why online gambling revenue was not generated.

The opposition is having a field day. They are questioning the entire modus operandi. It has also been stated that the plan involved trying to develop a major Canadian payment processor for all provinces, which is probably illegal under current federal law. The better option would have been to support the Atlantic Lottery Corporation's efforts to have a unified front for online gambling regulation. Prince Edward Island could also have pushed for an amendment to Canadian federal law to allow issuing licenses to foreign operators. The other provinces also want this because their own lottery corporations have not been able to wean players from offshore licensed gambling sites and the revenue targets are not being met. Prince Edward Island chose the worst possible option available. A big state like British Columbia faced technical glitches in its efforts to offer online gambling.

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