section 206(8)

INTRODUCTION AND BRIEF DESCRIPTION

This section exempts the division and recallable drawing of property and securities from criminal charges.

SECTION WORDING

206(8) This section does not apply to (a) the division by lot or chance of any property by joint tenants or tenants in common, or persons having joint interests in any such property; or (c) bonds, debentures, debenture stock or other securities recallable by drawing of lots and redeemable with interest and providing for payment of premiums on redemption or otherwise.

EXPLANATION

Section 206(8) of the Criminal Code of Canada provides two specific exemptions to the laws related to lotteries and games of chance. The first exemption applies to the division of property that is co-owned by joint tenants, tenants in common, or persons who have joint interests in the property. The section explicitly states that this exemption applies to the division of property by lot or chance. This means that individuals who co-own property can use a system of randomly assigning shares or lots to each owner without violating provincial or federal laws related to gambling or lotteries. The second exemption under Section 206(8)(c) applies to specific types of securities that are recallable by drawing lots and redeemable with interest. It also must provide for the payment of premiums on redemption or otherwise. Such securities are similar to bonds or debentures that individuals purchase with the knowledge that they might be redeemed through a random drawing process. This exemption means that securities that provide an element of chance or randomness will not be prosecuted or penalized under the Criminal Code of Canada as long specific criteria are met. In conclusion, Section 206(8)carves out specific exemptions to the rules and regulations regarding lotteries and gambling in Canada. It aims to allow co-owners of property an opportunity to use a lottery system to divide their assets without technically breaking the law. Additionally, it allows specific types of securities to be drawn in a random manner for redemption without being prosecutable under the Criminal Code of Canada.

COMMENTARY

Section 206(8) of the Criminal Code of Canada provides exemptions to certain activities that may appear to be categorized as gambling under the law. This section grants immunity to activities that involve the division of property by chance amongst individuals who have an established joint ownership, such as tenants in common, and joint tenants. Additionally, it exempts lotteries from this legislation, which are associated with securities recallable by drawing of lots and the redeemable provision of interest and other payments. This legislation reflects a rational approach to Canadian gambling laws, which uphold activities that promote social interest and ignore those that generate harms to players and society at large. This section of the Criminal Code provides an excellent insight into the regulatory principles and policy goals that govern Canadian gambling laws. The first exemption in Section 206(8) of the Criminal Code of Canada applies to the division of property by chance amongst tenants in common. This exemption is based on the principle that this activity is not a game of chance, as the ownership of said property rests on the individuals involved, and there is no possibility of winning or losing. Joint tenancy is a situation in which two or more individuals have an equal share in property, and if one of them dies, the share is passed to the surviving tenant. This exemption also applies to the division of property by chance amongst joint tenants. Therefore, the lotteries that are organized by joint tenants or tenants in common would not be considered unlawful under the Criminal Code of Canada. The second exemption applies to securities recallable by drawing of lots, which involve a variety of different financial instruments, such as bonds, debentures, and debenture stock. These securities have features that make them different from traditional forms of gambling, primarily because they are not games of chance. Such securities are designed to lend money to the issuing company, and in return, the company pays interest. Securities recallable by drawing of lots are generally used by companies, and they do possess the characteristics of betting. The exemption of debenture stock and other securities that recall by drawing of lots not only assures the legality of this form of investment but also, protects the investor against the risk of incurring a criminal or civil charge for participating in a game of chance. However, as noted by the Criminal Code of Canada, these securities come with provisions for the payment of premiums on redemption, which are essentially a form of interest. This inclusion highlights the principles behind the law's operation, which aim to ensure that gambling is not a means for exploiting vulnerable players and society at large. In conclusion, Section 206 of the Criminal Code of Canada provides legislative exemptions for certain activities that may appear to be games of chance but are not associated with the harms of gambling. These exemptions are based on well-established regulatory principles that prioritize the best interests of players and society over purely commercial or entertainment purposes. The core feature of this section lies in its ability to differentiate between legitimate and illegitimate activities, which is crucial for preserving the dignity and ethical values of Canadian society.

STRATEGY

Section 206(8) of the Criminal Code of Canada provides important exemptions to the prohibition of lotteries and gambling activities. Businesses that operate lotteries, draws, raffles, or similar activities need to carefully consider these exempted activities to ensure they do not face criminal liability. One of the key strategic considerations when dealing with this section is to understand the scope of the exemptions. For example, the exemption for joint tenants or tenants in common only applies where they divide property by lot or chance. If there is any other consideration involved, such as a payment or transfer of money, then the exemption may not apply. Similarly, the exemption for securities only applies where they are redeemable with interest and provide for payment of premiums on redemption or otherwise. If the securities do not meet these requirements, then the exemption does not apply. Another key consideration is how to structure the exempted activities to ensure they meet the requirements of the exemptions. For example, businesses that want to hold a draw for customers may need to structure the draw as redeemable securities to fall under the exemption. Alternatively, they may need to offer the chance to participate in the draw as a bonus or reward for purchasing other products or services, rather than charging a fee to enter the draw. A third strategic consideration is how to market and promote the exempted activities. Businesses need to be careful not to create the impression that they are offering illegal lotteries or gambling activities. This means ensuring that all marketing materials clearly explain how the exempted activity falls under one of the exemptions in the Criminal Code of Canada. Businesses may also want to consult with legal counsel to ensure their marketing materials are compliant with all applicable laws and regulations. Finally, businesses need to ensure they comply with all other relevant laws and regulations, such as those related to taxation, consumer protection, and privacy. This may require obtaining permits or licenses, disclosing information to participants, or establishing policies and procedures to safeguard personal information. In terms of strategies that could be employed, businesses may want to consider partnering with legal counsel or other experts to help navigate the complexities of the Criminal Code and related laws. They may also want to conduct risk assessments to identify potential areas of non-compliance and develop plans to address them. Additionally, businesses may want to educate their employees on the relevant laws and regulations to ensure they understand their obligations and can help identify any potential problems. Overall, companies need to carefully consider the exemptions provided under Section 206(8) of the Criminal Code of Canada when engaging in any kind of lottery or gambling activity. Understanding the scope of the exemptions, structuring the activity to comply with the requirements, and ensuring compliance with all other applicable laws and regulations are all critical factors in minimizing the risk of criminal liability.