Canadian Lotteries Say Supreme Court Should Reject Ontario’s DFS, Poker Proposal

Ontario’s proposal to let Torontonians play online poker or paid DFS contests with Texans and other rivals abroad could be a slippery legal slope and should be rejected, a coalition of government-owned lottery corporations says. 

“While the issue today is international liquidity, the next case may involve a province seeking to assert authority to conduct lottery schemes that extend across the country,” the Canadian Lottery Coalition (CLC) said in a factum filed Feb. 13 to the Supreme Court of Canada. “And indeed, even if that is not what Ontario proposes de jure at this time, it is what it proposes de facto given the ubiquity of illegal gambling using International Sites among Canadians outside Ontario.”

The factum is connected to the coalition’s effort to overrule a majority decision of the Court of Appeal for Ontario that was released in November.

That four-judge majority said “yes” to the Ontario government’s question of whether it would be legal for the province's online gamblers to participate in "peer-to-peer" games like poker and DFS with people outside of Canada.

Well, looks like I do have one more Ontario DFS update to provide this year: the Atlantic, BC, and Manitoba lotteries have filed a notice of appeal with the Supreme Court of Canada regarding the Ontario iGaming liquidity reference. pic.twitter.com/iZ63msKZYO

— Geoff Zochodne (@GeoffZochodne) December 23, 2025

However, the CLC says in its Supreme Court filing that “Ontario’s proposed scheme flouts” Canada’s Criminal Code. And, according to the lotteries, the Supreme Court should grant their appeal and say “no” to the province’s attempt to pool its iGaming liquidity with that of foreign jurisdictions.

One of the chief concerns of the lotteries is the alleged conduct of brands tied to Ontario-regulated operators. Those brands, the lotteries charge, are wooing customers in other Canadian provinces, while Ontario's online gambling regime "turns a blind eye to illegality." 

So-called "unlawful operators" diverted an estimated $1.86 billion in profit in 2023 away from provincial governments and the programs and services they provide, the CLC claims.

"Though Ontario’s proposal does not identify specific international platforms that would be included in the model, there is every indication that Ontario means to partner with the international affiliates of current iGO operators who today operate the International Sites that illegally solicit Canadians outside Ontario," the CLC factum says.

So, the wheels are now turning to try to get a ruling on Ontario's proposed iGaming pooling from Canada’s highest legal authority. The lottery coalition was an intervener in the Ontario appeals court reference (acting as, arguably, the de facto opposition, making similar points to the above), and it filed a notice of appeal with the Supreme Court of Canada in December. 

Bad neighbours?

That government-owned lotteries of other provinces are trying to derail Ontario’s effort also shows how contentious things have become since Ontario launched a regulated market for online gambling in 2022.

Ontario’s iGaming market was the first of its kind for Canada, permitting private-sector operators to come under provincial regulation and take bets in exchange for a cut of their revenue. It also welcomed so-called “grey market” operators, companies that offer online sports betting and iCasino in Canada while only being licensed to do so abroad or outside a given province. 

Although Ontario estimates it has channeled most online gambling in the province onto its regulated sites, there is still a sizable “grey” or “black” market that exists in other provinces.

The CLC alleges some of the brands in Ontario are using their regulated status there to recruit customers in other provinces as well, and that Ontario does little to stop this.

This is the raison d'être of the CLC, which the factum notes was founded in 2022 “in response to concerns arising from private operators illegally promoting their online gambling offerings” in coalition members' jurisdictions.

The members currently involved in the appeal are the government-owned lottery corporations of the Atlantic provinces, British Columbia, and Manitoba. A footnote in the coalition’s factum says Loto-Québec intends to try to join them in the attempted appeal.

The factum also claims that “the stakes for Canadians are high” in this matter.

“The undisputed evidence shows that the private gambling operators with whom Ontario has already joined hands use their legal platforms in Ontario as springboards to promote illegal international websites … to Canadians outside Ontario,” the filing says. “Although Ontario baldly asserts that Canadians outside Ontario would somehow be barred from participating under its hypothetical scheme (and the Court of Appeal majority predicated its opinion on that claim), no evidence supports it.”

Meanwhile, Ontario’s government believes sharing so-called online gambling “liquidity” with foreign jurisdictions could bolster the Ontario sports betting and iGaming market.

That competitive market boasts more than 80 regulated sites offering sports wagering, casino games, poker, and bingo. However, the province’s rules include a requirement that all participants must be in Ontario, denting the poker scene and making DFS uneconomic for operators.

Enjoying Covers content? Add us as a preferred source on your Google account

Better for bettors is always possible

So, while billions are now being bet every month with Ontario-regulated operators, there are no provincially regulated operators in Ontario offering “pay-to-play” daily fantasy sports contests.

DraftKings and FanDuel shuttered their DFS contests in the province and instead went live in 2022 with online sports betting and iCasino in Ontario. The province's competitive iGaming market is still the first and only regulatory framework of its kind in Canada.

In other words, Ontario may have a lot of regulated iGaming options, but it doesn’t have everything gamblers may want.

Moreover, the province is still leaking at least some iGaming revenue to operators that are not locally regulated and taxed. So, in February 2024, the provincial government referred a question to its top court about the legality of linking up with international partners.

First hit on today's big news for Ontario DFS.

In short, it looks like a win for those who want DFS back in the province. And while a win's a win, there's still a dissenting judge and the possibility of further appeal. More to come.https://t.co/CupbMHWwyK @Covers

— Geoff Zochodne (@GeoffZochodne) November 12, 2025

A province asking for such a ruling is a rare thing, and that it involves online gambling increases the rareness of the situation. Still, the Ontario government believed it would be legal, and four of the five judges on the panel agreed in their November decision.

"The advent of the internet has made it very difficult to prevent people in Canada from accessing offshore gaming sites, which are unregulated by Canadian authorities and do not generate revenue that the provincial governments can use to provide public services," the Ontario appeals court’s majority opinion said. "Allowing Ontario to regulate players within its borders who wish to play online games against players outside Canada advances public safety by bringing such gaming under protective regulation, thereby reducing such risks as fraud and addiction.”

But the CLC factum argues the appeals court majority was mistaken and “sidestepped” a previous Supreme Court decision known as “Earth Future.”

In that case, the Supreme Court unanimously agreed that for provincially licensed gambling to be deemed “in that province” under a section of the Criminal Code, it had to be actually run and controlled within that province.

While the Ontario DFS/poker reference technically involves a different part of the Criminal Code, it still includes the language “in that province.”
 
The Ontario judges, the CLC says, “interpreted identical statutory language differently to permit the Ontario government to launch online lottery schemes in collaboration with international operators, many of which currently operate illegally throughout the rest of Canada.” 

What's more, the lotteries say the appeals court basing its opinion on the assumption that players in other provinces will be blocked from the games involving Ontarians and their international counterparts is an issue.

The lotteries contend that assumption "contrasts with Ontario’s refusal to accept any responsibility for illegal conduct of affiliates of (iGaming Ontario) operators in the rest of Canada."

We got this

Ontario's government has yet to file its own factum with the Supreme Court of Canada. Still, the province has argued it would be on solid legal footing with its proposal.

Ontario, the province claims, would still be "conducting and managing" iGaming even if it involves international players because the players in Ontario would be under provincial oversight and the players abroad under the umbrella of their regulatory regimes. They’d all just be playing in the same game, according to rules agreed upon by the jurisdictions in which they live.

Ontario could also strike agreements with other provinces and pool its iGaming liquidity with that of B.C., Manitoba, or Nova Scotia, but has not. It’s possible it still may with Alberta, which has broken with other provinces and is preparing to launch an Ontario-like iGaming market.

"Many practical details about how the Proposed Model would operate remain undetermined," November’s majority opinion from the Court of Appeal for Ontario noted. "The (Attorney General of Ontario) has explained that Ontario will enter into agreements with international operators, foreign state gaming regulators, or foreign jurisdictions. However, it is unclear who in the government of Ontario will choose the jurisdictions or entities with which Ontario would enter into agreements and who would negotiate these agreements." 

Pages related to this topic