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The highest court in Ontario is set to consider whether the province’s regulated online gaming sites can legally allow local gamblers to play with people outside Canada.

The case, which is scheduled to be heard Tuesday (November 26) through Thursday in Toronto, was commenced in February with the release of an from Premier Doug Ford’s administration.

The order asks the to rule on the question: “Would legal online gaming and sports betting remain lawful under the Criminal Code if its users were permitted to participate in games and betting involving individuals outside of Canada?”

Most affected by the ruling will be peer-to-peer games such as daily fantasy sports or poker. Currently, any fantasy sports or online poker game offered by a registered operator in Ontario must be restricted to players within the province and not allow Ontarians to play in global pools.

Ontario’s attorney general believes it should be legal for local gamblers to play against users abroad, but Ford’s administration seeks to clarify whether doing so would be lawful under Canada’s Criminal Code.

In a court filing, the attorney general for the province argues that “when a provincial government conducts and manages a lottery scheme, it has the right, by its constitutional authority over gaming and the deference afforded to that authority by , to determine the design of the scheme that is in the best interests of its citizens”.

Allowing Ontario sites to combine players with international platforms is being opposed by lotteries from other provinces, however.

The Canadian Lotteries Coalition (CLC), which represents government-owned lottery operations in British Columbia, Quebec and six other provinces, argues that some of Ontario’s regulated operators are doing business in their jurisdictions without local approval, using affiliated companies, costing them revenue.

In an October 29 filing, attorneys for the CLC wrote that “Ontario’s argument is profoundly misguided.”

“Ontario’s proposed scheme involves joining hands with these illegal operations in service of its goal to share ‘liquidity’ across borders. Although Ontario baldly asserts that Canadians outside Ontario would somehow be barred from participating under its ‘hypothetical’ scheme [to allow international liquidity], no evidence supports that claim, and the record before this court shows the opposite is true today.

“Ontario insists that the exact details of its proposed scheme have not been and will not be determined until the reference question is answered in the affirmative,” the CLC argues.

“The reference question posits a hypothetical scenario, Ontario urges, after which iGaming Ontario and the [Alcohol and Gaming Commission of Ontario] can make a decision on who the counterparties providing shared liquidity will be.”

“But when asked whether the counterparties might include the International Sites, Ontario’s principal witness stated that at a hypothetical level, I think that could happen.”

The Mohawk Council of Kahnawake, Canadian Gaming Association (CGA), NSUS Group and NSUS Limited, and Flutter Entertainment have filed factums with the appeals court in Ontario.

“This court has not been asked to decide whether the proposed model would be practicable or advisable. Nor are the activities of international gaming operators before this court,” the CGA wrote in its filing. “Rather, this court faces a simple question of statutory interpretation: whether the proposed model would be permitted under section 207(1)(a). It would be.”

In a 23-page filing, the CGA argued that, properly interpreted, Canada's federal Criminal Code “does not support a distinction between conducting and managing a lottery scheme that is located entirely in the province, whether or not that lottery scheme is connected to lottery schemes outside Canada, and conducting and managing a lottery scheme that is located in the province and that also extends beyond Canada."

“The proposed model belongs in the first category, but it would also be lawful in the second,” lawyers for the CGA wrote.

Attorneys for PokerStars- and FanDuel-owned Flutter agreed that the province’s plans were permissible under federal law and that enabling international liquidity would “mean more available players, more available games and types of games, more significant opportunities for players, and more revenue for the province."

“Ontario would not be alone in enacting this model: France, Portugal, Spain, and certain U.S. states already have regulatory apparatuses that permit pooled liquidity,” Flutter added.

It is unknown when the Ontario Court of Appeal will issue its ruling on the case.

In May, the Ontario Superior Court ruled that the province’s competitive model for iGaming does not violate restrictions on regulated gambling established by the Canadian Criminal Code. The ruling addressed a legal challenge filed in late 2022 by the Mohawk Council of Kahnawake.

The First Nation located near Montreal also issues licenses for online gambling operators serving Canadian and international markets.