Quebec Betrays the Whole Internet for $27M


Ken Whyte Blog

Quebec is trying to block on-line gambling sites. That might not be a bad thing when you consider that Quebec’s suicide rate leads all other provinces, and that there is a demonstrable link between folding your hand and, well, folding your hand.

But Quebec is not concerned for victims of on-line gambling, nor is it looking to block all on-line gambling sites. The province only wants to block gambling sites that compete with its own gambling sites. You see, the province is a gambling revenue junkie. It is so desperately addicted to the pile of money it gets from licensed gaming that it is prepared to wreck the internet to ensure no one shares any of it.

To be fair, Quebec is not Canada’s only gambling revenue addict. Alberta, B.C., and Ontario are similarly hooked. Each – each - takes in more gaming revenue than Nevada. All ten provinces and three territories book about $16 billion from lotteries, casinos, and VLTs. Quebec’s only claim to distinction in this crowd is that it is Canada’s dumbest gambling revenue addict. Earlier this year, it passed legislation, Bill 74, requiring Internet Service Providers (ISPs) to block access to any and all gambling websites not licensed by Loto-Quebec.

Yes, that’s crazy. Currently, ISPs – think Videotron, Rogers, Shaw, etc. -- are not required to block any sites, of any kind, anywhere in Canada. That’s what is meant by an open internet, or net neutrality, a principle honored in this country and the rest of the free world. ISPs are expected to be blind, treating all data on the internet equally.

There are a lot of issues raised by Bill 74: ISPs are regulated at the federal, not the provincial level. There’s also the Charter of Rights and Freedoms. But the biggest issue is the precedent set by the legislation. When you decide to start censoring the internet in order to balance your budget, where do you stop? Block businesses that haven’t paid their taxes? How about an internet toll? And what about your other political objectives? Impose the language laws on-line? Aid police surveillance? Block the niqab?

I’m not an absolutist on net neutrality. There may be rare occasions when it is in the public interest to block a site, and I don’t mind the voluntary efforts of ISPs to obstruct kiddie porn sites (the only instance of blocking that I’m aware of in Canada). But blocking gambling sites that prey on human weakness better than Loto-Quebec preys on human weakness does not cross the threshold of reasonableness.

The three scariest things about this whole move? First, Quebec is monopolizing gambling in the name of “consumer protection,” which leads us back to the suicide rate.

Second, there’s actually very little additional revenue to be had through Bill 74. Loto-Quebec, according to its most recent annual report, posts revenues of $3.6 billion. After giving away about $1.3 billion in prizes and commissions, and spending most of another billion on employee benefits and “other expenses,” it produces a net profit of $1.23 billion. Which is to say that Loto-Quebec is already raking it in. The estimated upside from blocking offshore competition and wrecking the internet? A mere $27 million a year. That’s a rounding error. That’s peanuts. That’s ten per cent of “other expenses.” That’s the irrationality of the addict.

Third, the other provinces are perfectly capable of being as stupid as Quebec. All they need is to be able to say “But Quebec did it first.”

The matter is destined for the courts, and it is difficult to see how Bill 74 will survive its jurisdictional challenges. Nevertheless, it would be more satisfying, and a better object lesson to other gambling revenue addicts within our great federation, to see Quebec withdraw the legislation out of shame than to see it struck down by law.

While we’re at it, lets take governments out of the disgraceful and fundamentally dishonest (“consumer protection”?) business of fleecing the people they are elected to serve. Sixteen billion dollars a year is obscene. It’s time for an intervention. Send the provinces to rehab. Tell them to cut spending, raise taxes, and live right.