Helping Professionals

Overview

The following should be treated not as a comprehensive authority on the legal aspects of problem gambling, but as a general guide to a number of possible legal consequences that a problem gambler should be made aware of. If a true legal issue does arise, it is recommended that a lawyer be consulted. This brief summary should not be used as a substitute.

The legal issues arising out of problem gambling will rarely resolve themselves into concrete answers. Every situation will turn on its own unique set of facts. An attempt has been made to canvass the major legal areas that seem the most relevant and practical, and they are summarized in a general fashion. The results have been set out in question-and-answer form under various headings and sub-headings for easier accessibility. As well, an example is provided for most questions to better illustrate the issues.

Financial Considerations/General individual considerations 

To satisfy a debt, what is a creditor legally entitled to take from the gambler in debt, and for how long?

A creditor, upon successful application to Court, is allowed to take, or “garnish,” 20% of the debtor’s net wages for a period of six years at a time. Pension benefits, social welfare benefits and RRSPs are generally immune from garnishment.

Example: Bob runs up a debt of $10,000 at a casino. He currently lacks the ability to pay the debt, but makes $500 a week at his job. Upon application for garnishment, the casino may be entitled to take $100 a week for up to six years until the $10,000 debt is repaid.

The following are some assets that are exempt from seizure to satisfy a debt:

Can a person with a gambling debt declare personal bankruptcy? What happens when bankruptcy is declared? How does a person go about doing it? What debts are not erased by bankruptcy?

Anyone can declare bankruptcy provided he or she owes at least $100 and is unable to meet debts as he or she is due to be paid. Once bankruptcy is successfully declared, all actions against the bankrupt person must come to an end. In effect, the bankrupt person is allowed a “fresh start.”

If a person is successfully declared bankrupt, the court is entitled to take assets such as real estate, automobiles, lottery winnings and inheritances received during the time of bankruptcy. The bankrupt is allowed to keep a personal exemption amount.

Certain debts are maintained even during the bankruptcy. These include fines imposed by courts, money owing for stolen items, alimony and maintenance payments and student loans.

Can a gambling loan contract in another jurisdiction be enforced in Ontario?

There are various agreements that Canada has made with the United States to enable the enforcement of certain laws regardless of the whereabouts of the perpetrator. However, there are certain general limitations on these agreements, one being that if an act is illegal in the home jurisdiction, even if it was legal in the host jurisdiction, the act will not be enforced in the home jurisdiction. Example: A loan contract was legally made in Nevada under Nevada law. The borrower subsequently moved to Ontario. The lender tried to collect on the debt under an Ontario court. The court refused to enforce the Nevada gambling loan contract in Ontario because the same contract would have been illegal if performed in Ontario. spousal rights, responsibilities and recourses If a couple shares a joint bank account and the gambling spouse incurs debt, to what extent is the non-gambling spouse responsible for the debt? Generally, a creditor is entitled to take only 50% from joint bank accounts.

Example: If a gambling spouse runs up a debt of $1,000, but there is only $500 in the joint account, the creditor may only take $250 from that account.

However, if the non-gambling spouse can prove that more than 50% of the account belongs to him or her, a court may reduce the amount that the creditor is entitled to accordingly. The converse applies if it can be shown that the gambling spouse owns more than 50% of the account.

What happens if a non-gambling spouse’s credit card is taken by a gambling spouse without permission?

The non-gambling spouse has a responsibility to make reasonable efforts to prevent any misuse of his or her credit cards. This simply means that the non-gambling spouse just has to be careful.

Example: Giving a pin number to a gambling spouse is a strong indication of negligent action.

The credit card company itself has absolutely no obligation to monitor monthly statements for spending habits or to withhold credit.

Parental rights, responsibilities and recourses

Are parents responsible for the debts of their children who are minors (under 18)?

In general, parents are only responsible for the needs of their minor children as it applies to necessary support. Parents are obligated to provide life necessities and a stable environment. However, it is unlikely this obligation can be extended to include the debts of their children.

On the other hand, parents are obligated to maintain a child’s physical and mental health. Thus, if a child is diagnosed with a mental health problem, such as problem gambling, a parent will be required to provide for means of treatment.

Example: A 16-year-old child is diagnosed with a gambling disorder. While his parents are not responsible for any debts incurred by the child while gambling, they are responsible for seeking and obtaining treatment for his problem.

Example: A 19-year-old is diagnosed with a gambling disorder. Unless there are special circumstances (such as mental incompetence), his parents have absolutely no obligation toward the child whatsoever.

Conversely, are adult children responsible for the debts of their parents?

Similar to a parent’s obligation to ensure that a child receives necessary support, an adult child also has a corresponding obligation to an elderly parent. Again, it is unlikely that this obligation would be extended to require that the former will be responsible for the latter’s debts.

Custody and child support

Would a gambling addiction be a factor in determining custodial issues between estranged parents?

In custodial disputes between divorced or separated parents, courts have held that any resolution must have the best interests of the children in mind. Accordingly, if one of the parties has a gambling addiction, it will be a factor only to the extent that it affects the well-being of the child or children.

When a custodial arrangement has been implemented, courts have shown a reluctance to disturb the arrangement, as it is believed that frequent changes in living environment are not healthy for children. Thus, a gambling addiction subsequently discovered by one spouse with regard to the other spouse would have to have a serious deleterious effect on the children for the court to impose a change in custodial arrangement. The effect of the gambling activity on the children must be direct.

Example: After divorce proceedings, it was determined that the father receive custody of the two children, ages 8 and 9. The mother subsequently discovered that the father had developed an addiction to video lottery terminals. As a result, she brought an action asking the court to transfer custodial rights of the children to her. The court held that since the girls were doing well in school, were well looked after, being fed properly and living under a stable environment, the order would not be granted. However, the court did ask the father to undergo treatment for his condition.

Can the gambling away of substantial amounts of money change a spouse’s obligation to provide child support payments?

Absolutely not. Courts have continuously held that financial mismanagement and insolvency are not sufficient excuses for failing to pay maintenance. Specifically, gambling is considered a deliberate act, and courts are loath to allow a child to suffer for a parent’s deliberate act.

Criminal Considerations/Illegalities

What is the length of prison term that the federal government can give for a conviction from gambling activity?

Depending on the severity of the violation and the number of previous offences, the punishment receivable from a gambling offence can range anywhere from one day to two years imprisonment.

Example: John is convicted for the first time of being a participant in an illegal gambling operation. Because it is his first offence, and also because of his minor role in the crime, the judge sentences him to a day in jail. The following year, John is convicted again, but this time for running the illegal operation. The judge will likely be less lenient and give a much longer sentence.

What kinds of gambling activities are considered illegal and may lead to prison terms?

All illegal acts punishable by a prison term are set out in a statute called The Criminal Code. The Code lists certain elements that each crime must consist of, and defines important terms to assist judges in determining whether or not a certain potentially illegal activity fits the description. If the activity in question does not fulfill all the elements of the crime as set out in The Criminal Code, then the activity cannot be considered illegal. Thus, a prison term cannot be given.

Example: One element of a particular crime is that it must take occur in a “public place,” defined as: “any place to which the public have access as of right or by invitation, express or implied.” If the alleged crime took place in an area where the public does not have access, then this element is not satisfied, and therefore there can be no crime.

What are some of the types of the more common crimes that can be committed related to gambling?

1. Keeping a Gaming or Betting House
This section is meant to catch those who provide a place for gaming or betting activities. The definition is very broad, as it includes any form of “enabling, encouraging or assisting persons” to bet.

• It is not necessary for bets to be actually placed for there to be an offence.
• The accused must have intentionally created the place of betting.
• Everyone present in the alleged gaming house is liable to an offence, not only the owner of the gaming house.

Example: Every Sunday afternoon, John allows his basement to be used as a betting station for football games for his friends. It is possible that John, or anyone else present in John’s basement during the betting activities, could be liable to an offence.

2. Betting, Pool-Selling or Bookmaking
This broad area is meant to catch all forms of organized betting and the activities associated with it. The Criminal Code lists a number of examples. Accordingly, a person may commit a gambling offence if he or she:

• Allows any place to be used for recording or registering bets
• Provides, buys, or sells any device for the purpose of recording or registering bets
• Is in possession of any money derived from these means
• Records or registers bets or sell a pool
• Sends, transmits, delivers or receives any message intended to assist in betting or bookmaking.

3. Lotteries and Games of Chance
A “lottery” is considered any scheme or operation that involves the disposal of property by lots, cards, tickets or any mode of change in which a person becomes entitled to a larger sum of money by virtue of others contributing. “Games of Chance” are games where skill is not required in gaining money or other prizes. They include three-card monte, dice games, punch boards, coin tables and wheels of fortune. Pyramid schemes or chain letters are also caught under the section.

What if the gambling activity doesn’t fall within the exact words of The Criminal Code? How easily can an alleged illegal act be allowed based on a “technicality”?

There may be activities that fall outside the strict definition of a criminal offence, that is, they are “on the borderline.” A judge may feel that it would simply not be “right” for the offender to go free. As a result, there are often open-ended provisions meant to catch those situations that seemingly fall just outside the scope of the illegal acts as defined by The Criminal Code. Accordingly, it is extremely difficult for an offender to go free based on a “technicality.”

Example: For the offences of Betting, Pool-Selling and Bookmaking, there are a number of items that are specifically set out as particular offences. In addition there is also an item that says, “aids or assists in any manner in anything that is an offence under this section.” This is meant to catch any activity that would have otherwise escaped The Criminal Code altogether.

It seems as though The Criminal Code is so strict that it wouldn’t allow any forms of gambling-related activity whatsoever. But why are some gambling activities permitted? What are they?

The reason it is legal to allow certain betting activities to occur is that The Criminal Code also sets out a number of exceptions to offences as mentioned above.

One important exception is government regulation. Obviously, if the government regulates a particular activity, the activity is legal. Usually, a government-regulated gambling activity will have a prominently displayed permit somewhere on the premises.

Example: This is the reason why horse races, lotteries, casinos and certain social clubs are permitted to operate despite otherwise being illegal under The Criminal Code.

Another important exception is that of private bets. Individuals who make private bets are protected as long as they are not engaged in the business of betting. There is no limit to the size of the group involved in the betting as long as it is not run as a business. However, no one individual can profit from organizing the scheme.

Example: An office football pool of even a hundred individuals is permitted. However, if there is a fee or rake-off for the organizer, the pool will no longer be legal and all participants may be liable for an offence.