Canada Gazette, Part I, Volume 150, Number 24: Regulations Amending the Pari-Mutuel Betting Supervision Regulations

June 11, 2016

Statutory authority

Criminal Code

Sponsoring department

Department of Agriculture and Agri-Food

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

The Canadian Pari-Mutuel Agency (CPMA) regulates and monitors pari-mutuel betting in Canada on horse racing. Section 204 of the Criminal Code is the legislative authority by which the Minister of Agriculture and Agri-Food may make regulations in respect of pari-mutuel betting (Pari-Mutuel Betting Supervision Regulations, the Regulations). The CPMA uses this regulatory framework to ensure the integrity of pari-mutuel betting systems in Canada. The objective of the CPMA is to establish compliance with the Regulations in an efficient and effective manner, thereby protecting the interest of the betting public.

The Regulations were amended extensively in August 2011. Since then, the CPMA has further reviewed the Regulations and identified additional changes that would enhance the predictable operation of authorized pari-mutuel betting systems. In addition, a number of the proposed changes will reduce the administrative and regulatory burden on industry, consistent with the Government of Canada's Red Tape Reduction Action Plan.

The CPMA has also proposed that a drug be added to the schedule of drugs under the advice of the Federal Drug Advisory Committee. Quantitative limits for cobalt would be added to section 2 of the schedule to the Regulations.

Finally, the Standing Joint Committee for the Scrutiny of Regulations (SJCSR) has identified a number of instances where changes would resolve discrepancies between the English and French versions.

Objectives

The proposed changes have benefited from internal review and broad industry consultation. They would help ensure that a modern approach to regulatory oversight is being delivered by the CPMA, and that the objectives of the horse racing industry are being advanced without compromising the integrity expected by the betting public. These changes would also help ensure that an effective barrier is maintained to discourage those who would attempt to influence the outcome of a horse race by administering drugs or medicaments to horses.

Description

The CPMA has identified a number of changes to the Regulations that would help ensure a relevant and comprehensive regulatory framework for supervising the conduct of pari-mutuel betting in Canada on horse racing. Proposed regulatory amendments include the following:

• Extending the duration for which betting permits and betting theatre licences may be issued, for up to three years;
• Clarifying the betting information that race-course associations must make available to the betting public;
• Identifying a secondary source for exchange rates so that bets made in less common currencies may be converted to Canadian dollars and comingled in Canadian hosted betting pools;
• Opening betting accounts in provinces that do not conduct horse racing;
• Establishing requirements for conducting separate pool betting;
• Clarifying the requirements for the CPMA's Equine Drug Control Program;
• Making changes that address inconsistencies in the French and English versions of the Regulations;
• Repealing the regulation that allows Standardbred Canada and the United States Trotting Association to fulfill certain responsibilities related to the conduct of pari-mutuel betting in a province that has not otherwise established an organization to regulate horse racing; and
• Adding the drug cobalt to section 2 of the schedule to the Regulations.

“One-for-One” Rule

The “One-for-One” Rule does not apply to this proposal, as the regulatory amendments would not impose any administrative burden on business.

Small business lens

The small business lens does not apply to this proposal, as the proposed regulatory amendments would not impose any costs on small business.

Consultation

In September 2014, the CPMA met with Racetracks Canada and provincial regulatory bodies to discuss the proposals for updating the Regulations. The CPMA also made available online a discussion document from September 17, 2014, to October 17, 2014, to encourage feedback from the Canadian public and other stakeholders on the proposed regulatory amendments.

The CPMA also consulted with the Federal Drug Advisory Committee, which is composed of veterinarians, pharmacologists and chemists, when proposing to add the drug cobalt to the schedule. The Committee supports this regulatory action.

Rationale

These changes are primarily administrative in nature and would advance the Government of Canada's Red Tape Reduction Action Plan. The changes include extending the current one-year duration for which all CPMA-issued authorizations remain valid. Multi-year approvals would significantly reduce the administrative burden on race-course associations seeking approval to conduct pari-mutuel betting.

Drugs and medications administered to race horses could affect the outcome of a pari-mutuel race. Drugs that are veterinary medications approved for sale in Canada may be administered to a horse but, with few exceptions, including vitamins and some anti-parasitic and antimicrobial agents, must not be present in a horse's system when it races.

Compliance with the CPMA's Equine Drug Control Program is accomplished by testing post-race samples of urine or blood taken from race horses. Positive results are reported to the provincial regulatory bodies for appropriate action under their Rules of Racing. The addition of cobalt to the schedule will be positive because the prohibition of potentially performance-altering drugs and substances will continue to protect the bettor and the integrity of the racing industry. Stakeholders have been advised of the pending addition of cobalt to the schedule.

Implementation, enforcement and service standards

The proposed Regulations would not require any new mechanisms to ensure compliance and enforcement.

The CPMA is adjusting its existing supervisory activities as it moves toward a risk management approach to overseeing authorized betting activity. This includes reliance on remote monitoring and on-site inspections by the CPMA's officers and the use of an independent, automated auditing system that helps establish that licensed pari-mutuel operators continue to comply with all regulations.

There are no costs or environmental impacts associated with this regulatory amendment. No additional resources are required to implement the amendments.

The amendments will take effect on the day on which they are registered.

Contact

Collin Baird
Manager
Legislative Services
Canadian Pari-Mutuel Agency
960 Carling Avenue
Central Experimental Farm, Building 74
Ottawa, Ontario
K1A 0C6
Telephone: 613-759-6630
Fax: 613-759-6230
Email: collin.baird@agr.gc.ca

PROPOSED REGULATORY TEXT

Notice is given that the Minister of Agriculture and Agri-Food, pursuant to subsections 204(8) (see footnote a) and (9) (see footnote b) of the Criminal Code (see footnote c), proposes to make the annexed Regulations Amending the Pari-Mutuel Betting Supervision Regulations.

Interested persons may make representations concerning the proposed Regulations within 45 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Collin Baird, Manager, Legislative Services, Canadian Pari-Mutuel Agency, Agriculture and Agri-Food, 960 Carling Avenue, CEF Building 74, Room 202, Ottawa, ON KIA 0C6 (tel.: 613-759-6630; fax: 613-759-6230; email: collin.baird@agr.gc.ca).

Ottawa, May 24, 2016

Lawrence MacAulay
Minister of Agriculture and Agri-Food

Regulations Amending the Pari-Mutuel Betting Supervision Regulations

Amendments

1 (1) The definition betting theatre in section 2 of the Pari-Mutuel Betting Supervision Regulations (see footnote 1) is repealed.

(2) The definitions Commission, dead heat and pay-out price in section 2 of the Regulations are replaced by the following:

Commission, in respect of a province, means the organization that supervises and regulates races in the province and that is incorporated under the laws of that province or another province; (commission)

dead heat means the official result of a race in which more than one horse finishes in the same position; (égalité)

pay-out price, in respect of a pool, means the amount of money that is payable to the holder of a winning ticket or to an account holder who has made a winning bet, as calculated in accordance with Part IV; (rapport)

(3) The definition horseperson in section 2 of the English version of the Regulations is replaced by the following:

horseperson means any person, group or organization that has an interest in the sharing of purses drawn from an association's percentage and in the scheduling of races by the association, but does not include an officer or employee of an association; (professionnel du cheval)

2 Subparagraph 3(1)(c)(iii) of the English version of the Regulations is replaced by the following:

• (iii) evidence of a signed agreement for the period of the proposed pari-mutuel betting, between the association and the horsepersons who have been approved by the appropriate Commission, addressing the sharing of revenues between the association and those horsepersons.

3 Subsections 3(2) and (3) of the Regulations are repealed.

4 Section 4 of the Regulations is replaced by the following:

4 An association shall submit an application for a permit to the Executive Director.

5 (1) The portion of subsection 6(1) of the Regulations before paragraph (a) is replaced by the following:

6 (1) The Executive Director shall issue a permit, for a period of not greater than three years, to an association if

(2) Paragraph 6(2)(a) of the Regulations is replaced by the following:

• (a) specify the period during which the association may conduct pari-mutuel betting; and

6 The Regulations are amended by adding the following after section 15:

15.1 An approval of a pari-mutuel betting system shall be given for a period of not greater than three years.

7 Paragraph 25(1)(h) of the Regulations is replaced by the following:

• (h) the value of outstanding tickets
  • (i) in the case of an association that is authorized to conduct betting under subsection 90(4) or section 95, for each of the preceding quarters ending on March 31, June 30, September 30 and December 31, as calculated not later than three months after the end of each quarter, and
  • (ii) in any other case, for the preceding year, as calculated not later than three months after the end of that year.

8 The portion of subsection 26(2) of the Regulations before paragraph (a) is replaced by the following:

(2) An association that hosts a pool shall make the following information available to each person who requests it:

9 Subsection 51(4) of the Regulations is replaced by the following:

(4) If a bet is made in foreign currency, the value of the bet for the purposes of calculating the applicable deductions and pay-out prices shall be determined by converting the foreign currency into Canadian currency at one of the following rates of exchange as applicable:

• (a) if the foreign currency is one for which the Bank of Canada quotes a rate of exchange with Canadian currency,
  • (i) the rate of exchange quoted by the Bank between those currencies at noon on the day before the day on which the post time of the first race of the racing card is scheduled, or
  • (ii) if there is no rate referred to in subparagraph (i), the most recent rate of exchange quoted by the Bank between those currencies at noon on a day before the day on which the post time of the first race of the racing card is scheduled; or
• (b) if the foreign currency is not one for which the Bank of Canada quotes a rate of exchange with Canadian currency, the rate of exchange quoted between those currencies on the Internet at www.xe.com at 1600 Coordinated Universal Time (UTC) on the day before the day on which the post time of the first race of the racing card is scheduled.

10 Subsection 65(1) of the Regulations is replaced by the following:

65 (1) At the end of each period of operation of its pari-mutuel system, the association shall add together any overages occurring in races held during that period of operation and the resulting sum shall then be added to a future pool.

11 Subsections 77(2) and (2.1) of the Regulations are replaced by the following:

(2) Subject to subsection (2.1), an association that is authorized under subsection 76(2) may open a telephone betting account for the following persons:

• (a) a person who resides in a province in which the association operates a race-course;
• (b) a person who resides in a province in which the association does not operate a race-course and for which there is no Commission;
• (c) a person who resides in a province in which the association does not operate a race-course and for which there is a Commission if
  • (i) races are not conducted in that province, or
  • (ii) the association is authorized by the Commission to open the account; and
• (d) a person who resides outside Canada.

(2.1) If a Commission has established intra-provincial boundaries for the purposes of limiting telephone account betting and races are conducted in that province, an association shall not open a telephone betting account for any person who resides within those boundaries unless the association

• (a) obtains an authorization from the Commission for that purpose; and
• (b) provides the Executive Director with evidence of that authorization.
  

12 Subsection 84.5(4) of the Regulations is replaced by the following:

(4) If an account holder, or the person acting on their behalf, requests a withdrawal from the holder's account, the association shall give effect to the request within 48 hours.

13 Paragraph 84.6(2)(b) of the French version of the Regulations is replaced by the following:

• b) porté au compte du détenteur par un moyen qui permet de confirmer la transaction en tout temps;

14 (1) Subsection 85(1) of the Regulations is replaced by the following:

85 (1) An association that proposes to conduct theatre betting shall apply in writing to the Executive Director for a theatre licence for each betting theatre that the association proposes to operate.

(2) Paragraph 85(2)(a) of the Regulations is repealed.

(3) Subsection 85(3) of the Regulations is replaced by the following:

(3) If an association has complied with subsections (1) and (2) and has been issued a permit, the Executive Director shall issue a theatre licence to that association for the period of the proposed betting.

15 (1) Paragraphs 90(1)(b) and (c) of the Regulations are replaced by the following:

• (b) provide the Executive Director with evidence of a signed agreement between the association and another association for the conduct of inter-track betting or separate pool betting, as the case may be; and
• (c) apply each year in writing to the Executive Director for authorization to conduct the inter-track or separate pool betting and include in the application the following information regarding the conduct of the betting by the associations referred to in paragraph (b):
  • (i) the types of bets that are proposed to be offered,
  • (ii) the legal percentages that are to be deducted from each pool that is proposed to be offered by each association, and
  • (iii) the method of calculation that is proposed to be used by the associations for each combined pool.

(2) Paragraphs 90(2)(b) and (c) of the Regulations are replaced by the following:

• (b) apply each year in writing to the Executive Director for authorization to conduct the inter-track betting and include in the application
  • (i) the name and address of the organization conducting the foreign betting and of the governing body that regulates that betting,
  • (ii) the types of bets that are proposed to be offered,
  • (iii) the legal percentages that are to be deducted from each pool that is proposed to be offered by the association,
  • (iv) the percentage that is to be deducted from each pool that is proposed to be offered by the organization, and
  • (v) the method of calculation that is proposed to be used by the association and the organization for each combined pool; and
• (c) provide the Executive Director with evidence of a signed agreement between the association and the organization conducting the foreign betting.

(3) Paragraph 90(4)(c) of the Regulations is replaced by the following:

• (c) the association has complied with paragraphs 90(1)(b) and (c) or (2)(b) and (c), as the case may be.

16 Section 92 of the Regulations is repealed.

17 (1) Paragraphs 94(1)(b) and (c) of the Regulations are replaced by the following:

• (b) apply each year in writing to the Executive Director for authorization to conduct the foreign race inter-track betting or foreign race separate pool betting and include in the application
  • (i) the name and address of the race-course at which the foreign racing is scheduled to be held,
  • (ii) the name and address of the organization holding the foreign racing and, in the case of foreign race inter-track betting, the organization conducting the foreign betting,
  • (iii) the name and address of the governing body that regulates the foreign racing and, in the case of foreign race inter-track betting, the governing body that regulates the foreign betting,
  • (iv) the types of bets that are proposed to be offered,
  • (v) the legal percentages that are to be deducted from each pool that is proposed to be offered by the association,
  • (vi) the percentage that is to be deducted from each pool that is proposed to be offered by the organization holding the foreign-hosted betting pools, and
  • (vii) in the case of foreign race inter-track betting, a description of how the betting pools are proposed to be operated as combined pools and the applicable rules for each type of bet that is proposed to be offered by the association;
• (c) provide the Executive Director with evidence of a signed agreement, between the association and the organization conducting the pari-mutuel betting on foreign racing, concerning the conduct of foreign race inter-track betting or foreign race separate pool betting, as the case may be; and

(2) Paragraphs 94(2)(b) and (c) of the Regulations are replaced by the following:

• (b) apply each year in writing to the Executive Director for authorization to conduct the foreign race inter-track betting and include in the application
  • (i) the name and address of the organization conducting the foreign betting and of the governing body that regulates that betting,
  • (ii) the types of bets that are proposed to be offered,
  • (iii) the legal percentages that are to be deducted from each pool that is proposed to be offered by the association,
  • (iv) the percentage that is to be deducted from each pool that is proposed to be offered by the organization, and
  • (v) the method of calculation that is proposed to be used by the association and the organization for each combined pool; and
• (c) provide the Executive Director with evidence of a signed agreement between the association and the organization conducting the foreign betting.

18 Paragraph 95(c) of the Regulations is replaced by the following:

• (c) the association has complied with paragraphs 94(1)(b) to (d) or (2)(b) and (c), as the case may be.

19 Subsection 102(4) of the Regulations is replaced by the following:

(4) After receiving the written notification, the Executive Director shall, in writing, inform the association of the effective date of the revised percentage.

(5) The association shall not deduct and retain its revised percentage before the effective date.

20 (1) Paragraphs 103(1)(g) to (i) of the Regulations are replaced by the following:

• (g) the amount of the legal percentages;

(2) Paragraph 103(1)(k) of the Regulations is replaced by the following:

• (k) the total of the amounts referred to in paragraphs (e) to (g) and (j).

(3) Subsection 103(2) of the Regulations is replaced by the following:

(2) An association shall not permit a change to be made to the information referred to in subsection (1) unless the change is authorized in writing by an officer.

21 The portion of paragraph 107(b) of the Regulations before subparagraph (i) is replaced by the following:

• (b) subject to section 112, the bets made on a horse that is scratched, if the horse

22 Section 110 of the Regulations is repealed.

23 Subsections 113(2) and (3) of the Regulations are replaced by the following:

(2) An association shall not offset an overpayment by an underpayment unless those payments arise from the same cause.

24 Subsection 115(2) of the Regulations is replaced by the following:

(2) Subsection (1) does not apply if the winning bet results from a refund in accordance with sections 106 to 109.

25 Section 117 of the Regulations is replaced by the following:

117 An association shall immediately pay the pay-out price to the holder of a winning ticket when the ticket is surrendered at a location identified by the association.

26 Paragraph 150(2)(a) of the French version of the Regulations is replaced by the following:

• a) elle limite l'accès à l'enclos :
  • (i) aux personnes qui exercent ces activités,
  • (ii) au fonctionnaire désigné, aux représentants de la commission et aux dirigeants de l'association agissant à titre officiel,
  • (iii) au propriétaire ou à l'entraîneur du cheval choisi pour faire l'objet d'un prélèvement en application du paragraphe 161(1),
  • (iv) aux personnes autorisées par l'inspecteur des prélèvements,
  • (v) aux chevaux choisis pour faire l'objet d'un prélèvement;

27 Paragraph 170(b) of the Regulations is replaced by the following:

• (b) immediately after the race, if the horse has been chosen to undergo a test, with an official sample of blood collected in accordance with section 162.

28 Section 2 of the Schedule to the Regulations is amended by adding the following in alphabetical order:

2	Drug	Quantitative Limit
	Cobalt (Cobalt)	100 ng/mL in urine 25ng/mL in blood

Coming into Force

29 These Regulations come into force on the day on which they are registered.

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