Virgin Games Pulls out of Canadian Market
April 13th, 2007
Citing "a review of the legalities of online gambling within Canada”, U.K.-based Virgin Games this week informed its Canadian customers via e-mail that it will withdraw from the Canadian market on April 13. The decision is consistent with the policies of WagerWorks, a subsidiary of land-based gaming machines provider International Game Technology (IGT) and the gaming software supplier to Virgin.
"Due to recent developments in the global Internet gaming environment and following a review of the legalities of online gaming within Canada, we have determined that it is inappropriate for us to continue accepting online wagers from Canada," The notice continued.
Virgin's announcement follows the emigration of other companies doing business in the I-gaming space. Most recently, online payment company Neteller said on March 26 that it would no longer process transactions from Canada and Turkey due to the risk to its ongoing business in both regions.
Before Neteller left, Curacao-based sports book VIP pulled out of Canada, followed by Antigua-based online casino group English Harbour.
The surprising announcement and the vagueness of the language left players as well as industry observers scratching their heads.
Michael Lipton, a partner at Toronto-based law firm Elkind & Lipton said there has been no recent legal activity in Canada to precipitate the changes.
"There is no new legislation," Lipton said. "There are no recent cases that have been reported. There have been no press releases or media to suggest that in Canada. There has been no announcement by any governmental agencies to suggest that the law enforcement attitude has in anyway changed. But that's only a snapshot in time. The question of whether or not you can accept best from Canadians will still depend upon whether or not the Canadian courts take jurisdiction in those circumstances. And when all of the elements of the operation are offshore except having a customer that places a bet from Canada, there is still a question of jurisdiction. I'm not saying that you can do it and I'm not saying that you cannot do it, but there's a question of jurisdiction and one must very carefully examine all of the circumstances before making a determination whether the court will take jurisdiction."
The only situation that I can envision with IGT is that it is a land-based supplier of gaming equipment registered in a number of jurisdictions in Canada," Lipton continued. "As part of its registration it may have to acknowledge to a gaming commission or a gaming regulator in Canada that it cannot allow WagerWorks to be involved in Internet gaming with anyone, which would entail accepting bets from Canadians."
And that seems to be the case with Virgin Games.
"Due to the current legal climate in North America, WagerWorks (our casino software provider) has taken the decision to stop accepting online wagers from Canada from the 13th April 2007," Pierrick Leveque, affiliate marketing manager for Virgin, told gambling information site Online-Casinos.com.
One could theorize that companies such as IGT that have subsidiaries involved in Internet gaming may be required by the land-based regulators in Canada to filter out Canadians because of the attitude of some gaming regulators, which may have been the catalyst for Virgin's departure.