INTRODUCTION AND BRIEF DESCRIPTION
This section exempts social clubs from being considered a common gaming house as long as they do not take bets or fees without a license.
SECTION WORDING
197(2) A place is not a common gaming house within the meaning of paragraph (a) or subparagraph (b)(ii) or (iii) of the definition "common gaming house" in subsection (1) while it is occupied and used by an incorporated genuine social club or branch thereof, if (a) the whole or any portion of the bets on or proceeds from games played therein is not directly or indirectly paid to the keeper thereof; and (b) no fee is charged to persons for the right or privilege of participating in the games played therein other than under the authority of and in accordance with the terms of a licence issued by the Attorney General of the province in which the place is situated or by such other person or authority in the province as may be specified by the Attorney General thereof.
EXPLANATION
Section 197(2) of the Criminal Code of Canada provides an exception to the definition of a common gaming house. It states that a place occupied and used by an incorporated social club or its branch will not be categorized as a common gaming house if certain conditions are met. The first condition is that the keeper of the club or its branch must not receive any direct or indirect payment from bets or proceeds from games played in the establishment. The second condition is that no fee should be charged to individuals who wish to participate in the games played in the establishment, except under the authority of a license issued by the Attorney General of the province where the establishment is situated or by another authorized person or authority in the province. The provision is aimed at preventing the operation of unlicensed and illegal gambling establishments while promoting legitimate social clubs. It seeks to protect individuals and communities from the negative impacts of unregulated gambling practices such as addiction, financial ruin, and organized crime. To attain this objective, it sets stringent conditions and requirements for social clubs seeking to operate gaming establishments. These requirements ensure that the social clubs operate for genuine social purposes while adhering to the applicable laws and regulations governing gambling activities in Canada. Overall, section 197(2) of the Criminal Code of Canada promotes responsible gambling practices and protects the welfare of Canadians.
COMMENTARY
Section 197(2) of the Criminal Code of Canada allows for certain social clubs to operate gaming within their premises without fear of legal repercussions. However, this is subject to a number of conditions that must be met in order to qualify for this exemption. Firstly, the place in question must be occupied by a genuine social club or branch thereof, which must be incorporated. It must not be operated by an individual or any other type of organization. The first condition of this exemption is that none of the bets or proceeds from games played within the premises can be paid to the keeper. This is intended to prevent individuals from profiting off of this type of gaming. Instead, all money paid into the games must be distributed directly to the winners. This ensures that the games are being played for the enjoyment of the participants rather than as a means of generating profit. This is in line with the definition of gaming, which includes the concept of games being played for money or other types of reward. The second condition of this exemption is that no fee can be charged to individuals for the privilege of participating in the games played within the premises. This clause is intended to ensure that participants are not being financially burdened for the sake of participating in gaming activities. Instead, the games must be freely available to all who wish to participate. However, there is a caveat to this second condition; it is only applicable to gaming activities that are carried out under the authority of and in accordance with the terms of a licence issued by the Attorney General of the province in which the place is situated. This licence must be obtained in order to legally operate gaming activities within the premises. This ensures that the gaming activities taking place within the premises are subject to oversight and regulation, which helps to prevent abuse or exploitation of the gaming participants. Additionally, the Attorney General has the ability to delegate the ability to issue licences to other authorities, in order to ensure their consistent distribution and adherence to standards. The use of this power helps to ensure that gaming activities are held to the same standards across the province. In summary, Section 197(2) of the Criminal Code of Canada creates an exemption for certain social clubs to operate gaming activities within their premises, subject to a number of important conditions. These include the prohibition of payments to the keeper, the absence of fees for participants, and adherence to regulation by obtaining licences. By having these measures in place, the law helps to ensure that gaming activities are conducted fairly and without any undue financial burden placed on participating individuals.
STRATEGY
Section 197(2) of the Criminal Code of Canada provides a potential loophole for those who wish to engage in gambling activities within the confines of a social club or branch. However, there are strategic considerations that must be taken into account before pursuing this option. Firstly, it must be noted that the requirements outlined in the section are quite strict. The social club or branch must be genuinely incorporated and non-profit, with no funds from the gambling activities funneled directly or indirectly to the keeper thereof. Additionally, there cannot be any fees charged for participating in the games, except those authorized by the provincial Attorney General. As such, one strategy might be to carefully structure the financial arrangements of the social club or branch in order to comply with these requirements. It may be necessary to create a separate entity to act as keeper" of the funds, or to establish a clear system of accounting to demonstrate that all funds generated through gambling activities are being used for charitable or non-profit purposes. Another strategy might be to work closely with the relevant provincial Attorney General's office to ensure that all necessary licenses and permissions are obtained. This could involve engaging legal counsel and other experts to navigate the complex regulatory environment in which gambling activities operate. It is also important to consider the potential risks associated with engaging in gambling activities, even within the confines of a social club or branch. There is always a possibility that law enforcement authorities may view such activities as illegal and take action to shut them down. This could result in criminal charges for those involved, as well as civil penalties and reputational harm. Ultimately, those considering the use of Section 197(2) of the Criminal Code of Canada must carefully weigh the potential benefits and risks associated with such activities. While it may be possible to establish a lawful and legitimate gambling operation within a social club or branch, this will require careful planning, attention to detail, and a willingness to comply with all relevant regulations and requirements.