Change may be coming to gaming conducted by Canada’s First Nations

Gaming and betting laws in Canada have seen significant legislative changes in the past few years, and this trend of upheaval is showing no signs of slowing down. Notable recent reforms include single-event sports betting becoming legalized on August 27, 2021, and Ontario’s regulated iGaming regime launching on April 4, 2022, which allows for private iGaming operators and gaming related suppliers to register with the Alcohol and Gaming Commission of Ontario in order to provide iGaming products to residents of Ontario.

The Canadian legal gaming landscape and laws recognizing Indigenous rights are about to undergo a potentially enormous change if Bill S-268 (the “Bill”), entitled “An Act to amend the Criminal Code and the Indian Act”, becomes law.

The Bill seeks to amend the Criminal Code of Canada in order to provide the governing body of a First Nation with “exclusive authority to conduct and manage a lottery scheme on its reserve and to license the conduct and management of a lottery scheme by other persons and entities on its reserve”, so long as the governing body of that First Nation provides notice of its intention to do so to the government of Canada and the government of any province in which the reserve is located. The Bill seeks also to amend the Indian Act to grant the council of the band authority to make bylaws regarding the operation, conduct, and management of those proposed lottery schemes.

There is a distinction among First Nations, Métis, and Inuit.

“Indigenous peoples” is a term for all of the original peoples of Canada and their descendants.

“First Nation” refers to a group of Indigenous peoples that the Canadian federal government officially recognizes as an administrative unit under the Indian Act, or that functions as such without official status. The term excludes Inuit and Métis peoples.

“Inuit” refers to a circumpolar people who live primarily in four regions of Canada: the Nunavut territory, Nunavik, Nunatsiavut, and the Inuvialuit Settlement Region, collectively known as Inuit Nunangat.

“Métis” does not have a universally accepted meaning. “Métis” may be used to describe the Métis people as descendants of the historic Métis Nation. Some may use “Métis” to describe all persons of mixed Indigenous and non-Indigenous ancestry who identify themselves as Métis.

Although the Bill recognizes the inherent and treaty rights of all Indigenous peoples, the Bill proposes providing the governing body of a First Nation the exclusive authority described above.

Gaming in Canada today

Currently, the Criminal Code of Canada makes gaming and betting illegal in Canada unless the gaming activity is conducted and managed by a provincial government, subject to some exceptions. In order to stay on-side of the Criminal Code provisions outlawing gaming generally (and on-side of the constitutional authority granted to the Provinces under our Constitution), the Provinces must be the operating mind of the gaming activity. Any lottery schemes in Canada must currently, therefore, be conducted and managed by a provincial government. Even on their own reserve lands, First Nations currently cannot offer gaming products like lotteries without them being conducted and managed by a Province.

The Provinces have jurisdiction to pass gaming legislation to govern gaming within that province, such as B.C.’s Gaming Control Act and Regulations. However, the Provinces are currently required to conduct and manage all gaming activities offered and must take on a conduct and management role even in partnerships with offshore gaming operators such as those in Ontario’s new iGaming regime. The Provinces cannot unilaterally amend the Criminal Code of Canada to change who may conduct and managing gaming in Canada because the Criminal Code is federal legislation.

Bill S-268, therefore, would end the Provincial governments’ effective monopoly on the conduct and management of lotteries in Canada.

Ongoing reconciliation between First Nations and the Canadian Government

Indigenous peoples have lived in Canada since time immemorial. Indigenous peoples developed laws and systems of governance long before colonization, and Indigenous laws and governance have continued to the present day despite colonization. Initially, European newcomers and Indigenous people made trade agreements and treaties that were supposed to establish peace between their nations as equals.

However, although colonial governments promised Indigenous peoples the right to live as they had always done, they soon began the project of colonization. The first Indian Act was enacted in 1876 and continues to be Canadian legislation that affects First Nations communities. Although many discriminatory provisions have been removed from the Indian Act, it continues to govern all matters related to “Indian” status, bands, and reserves, and therefore, still affects the lives of Indigenous people today. 

Since the beginning of colonization, Indigenous people have resisted colonization. Indigenous laws and rights continue to be further revived. Canada enacted the Constitution Act in 1982, which contains the Canadian Charter of Rights and Freedoms and other provisions. The Constitution Act recognizes and affirms “the existing aboriginal and treaty rights of the Aboriginal peoples of Canada” in its Section 35. Section 35(2) of the Constitution Act defines the “Aboriginal peoples of Canada” as including “the Indian, Inuit, and Métis peoples.” In December 2015, the Truth and Reconciliation Commission of Canada released a final report that included 94 Calls to Action in order to redress the legacy of residential schools and advance the process of Canadian reconciliation.

Bill S-268’s preamble: recognizing the inherent rights of Indigenous peoples

Although preambles are not enforceable laws in and of themselves, the Bill’s preamble is important in that it outlines the legal basis for the proposed changes. It states that:

“Whereas Parliament recognizes the Inherent and Treaty rights of Indigenous peoples, including their rights to their lands, to self-determination and of self-government;

Whereas these Inherent and Treaty rights encompass the right of Indigenous peoples to regulate activities such as gaming, betting and lotteries on their lands;

Whereas the Government of Canada is committed to implementing the United Nations Declaration on the Rights of Indigenous Peoples, which emphasizes the urgent need to respect and promote the Inherent and Treaty rights of Indigenous peoples of the world;

And whereas the protection of Aboriginal and Treaty rights — recognized and affirmed by section 35 of the Constitution Act, 1982 — is an underlying principle and value of the Constitution of Canada;”

In other words, the Bill isn’t suggesting that Canadian lawmakers give Indigenous peoples new rights, but rather suggests that Indigenous peoples already have inherent and treaty rights to regulate activities such as gaming, betting, and lotteries on their lands. It remains to be seen what further impact this wording would have on Canada’s legal frameworks regarding Indigenous peoples should Bill S-268 become law.

Although the Bill states that its proposal is based on existing inherent and treaty rights of Indigenous peoples, it still requires that First Nations provide notice of their intention to exercise those rights before exercising them. The Bill does not, however, give explanation as to why First Nations should need to provide Canadian and provincial governments prior notice.

Proposed Criminal Code and Indian Act amendments

As described above, the Indian Act continues to affect the lives of First Nations communities and individuals. Therefore, the Bill proposes changes both to the Criminal Code and to the Indian Act in order to make the changes needed to legalize First Nations conducting and managing lotteries on reserves.

The proposed amendments allow for “a governing body of a First Nation or such other person or authority as may be specified by the governing body, either alone or in conjunction with the governing body of another First Nation or such other person or authority as may be specified by the other governing body, to conduct and manage a lottery scheme on that First Nation’s reserve, or on that First Nation’s reserve and the other First Nation’s reserve, in accordance with any law or by-law enacted by the governing body of that First Nation”. This gives First Nations flexibility in shaping how lotteries on reserves will be conducted and managed.

The amendments also cover charitable gaming licenses, fair or exhibition gaming, amusement park lotteries, and terms and conditions of licenses.

As stated above, Bill S-268 would end the Provincial governments’ effective monopoly on the conduct and management of lotteries in Canada. It would be the first time in modern Canadian gaming law where Provincial governments do not need to be involved at all in for-profit gaming. It changes the regulatory and legal landscape of Canada completely. Now instead of there being a very small number of Provincial governments that can conduct and manage gaming and betting, there would be an enormous increase in the number of governing bodies that can conduct and manage gaming and betting. If Bill S-268 becomes law, hundreds of First Nations could potentially conduct and manage lotteries on their lands, each in accordance with their own laws or by-laws enacted by the governing body of that First Nation.

This is a huge potential change because it opens up possibilities not just of tremendous revenue and financial gains for First Nations, but it is also incredibly empowering for Indigenous peoples when the Canadian government acknowledges the inherent and treaty Indigenous rights to make decisions about gaming on First Nations lands.

Questions regarding the Bill remain open

Although the Bill provides context and changes to the Criminal Code and the Indian Act, there are still many unanswered questions.

First, it is unclear if and when the Bill will become law. The Bill was put forward by Senator Tannas and completed first reading on June 20, 2023. There has been no activity yet on second reading . The Bill needs to complete second and third readings in the Senate and then three readings in the House of Commons in order for it to become law.

Second, details have yet to be finalized surrounding what a gaming regime administered or operated by a First Nation will look like if the Bill does become law. Details regarding a gaming regulator for First Nations, including whether there will be a central Indigenous regulator, are unknown. What will cooperation among First Nations look like in this context? What kinds of resources will be required and how will they be pooled and shared?

Third, if the Bill were to become law, First Nations would be offering “lots, cards or tickets in relation to a lottery scheme… … in the province”. Would First Nations cooperate with provincial gaming corporations or compete with them?  Would the new commercial gaming activities proposed by the Bill include the right to conduct online gaming? Could First Nations take bets from a player located off-reserve, in another province or in another country, so long as the lottery scheme is conducted and managed on-reserve?

The Future of Gaming in Canada

The Canadian government has an ongoing responsibility to further reconciliation between Canadians and Indigenous peoples. According to the Truth and Reconciliation Commission’s 94 Calls to Action, the Canadian government must fully adopt and implement the United Nations Declaration on the Rights of Indigenous Peoples as the framework for reconciliation. Recognizing inherent and treaty rights of Indigenous peoples is central to this. Every industry in Canada, including the gaming industry, must therefore prepare for an increase in proposed laws such as Bill S-268.