Is British Columbia’s Liberal MLA Jordan Strudy sleeping with the enemy? That’s what government officials would like to know after a media outlet revealed documents showing the BC politician bought stock in Amaya, an unregulated Canadian online casino firm that competes with PlayNow, the provincially run internet gambling website of British Columbia Lottery Corp (BCLC).
Amaya is the parent company of PokerStars, the world’s leading online poker website, which also operates the popular PokerStars Casino. PokerStars is not regulated anywhere in Canada, and while its internet poker site does not accept players from Canada, the PokerStars Casino does.
That puts the brand in direct competition with BCLC’s own Canadian online casino, PlayNow.com.
Public Documents Unveiled Media
The information was first revealed Tuesday by Business in Vancouver (BIV), who was able to obtain public disclosure documents that they say confirm Sturdy “invested in a grey market online gambling company that competes with a B.C. Crown corporation.”
The evidence is based on a “material change to 2015 public disclosure documents filed by Jordan Sturdy,” which indicate that, on December 18, 2015, the BC politician purchased an undisclosed amount of shares in Amaya, Inc.
Sturdy, who serves as Parliamentary Secretary to Environment Minister Mary Polak, has come under heavy fire since the media report surfaced, but has declined to make any comment on the situation to date.
Not Illegal, But Poor Judgment x2
His purchase of stock in an unregulated Canadian online casino company doesn’t constitute any sort of crime, but does indicate “poor judgment”, according to some critics.
BCLC spokesperson and NDP MLA David Eby told BIV, “If nothing else, it reflects poor judgment on the part of a parliamentary secretary to be involved with a grey market gambling company in this way. I don’t understand why he would think it would be appropriate to profit from grey market activities in B.C., but that’s the personal judgment I guess he has made.”
Sturdy’s decision to buy into Amaya stock has, thus far, shown poor judgment in other areas, as well. Not only has it drawn the ire of his political colleagues, the investment hasn’t turned a profit either.
Shares in Amaya (TSE:AYA) were trading at C$19.10 on December 18, 2015, when Sturdy made his purchase, and suffered a plummeting decline that began the following week. That was when a Kentucky judge ruled against Amaya, ordering them to pay US$870m in damages for the five year stint (2006-2011) in which PokerStars continued to accept players from Kentucky (post-UIGEA 2006). Within a month, the stock hit an all-time low of C$13.91.
AYA has rebounded since then, but is still below purchase value for Sturdy at C$18.32 (at time of writing).
BCLC Still Struggling To Eliminate Competition
The timing of this discovery is rather interesting. Just last month, news surfaced that British Columbia’s Gaming Policy Enforcement Branch (GPEB) had delivered veritable cease and desist letters to the CEOs of 19 online gambling operators licensed in offshore locations.
The letters advised those companies that their acceptance of Canadian players was a violation of the Criminal Code of Canada, and that only the BCLC has the right to conduct, manage and operate gambling activities within the province.
However, there aren’t many who share in BC’s interpretation of the law. Most legal experts agree that a more accurate definition of the Criminal Code prohibits online gambling operators from accepting Canadian players, only if the operators itself has a physical presence in Canada.
By that definition, the law doesn’t apply to Canadian online casino operators who are located offshore. Interestingly enough, Amaya’s headquarters are based in Montreal, Quebec, meaning that company may not be eligible for the same exemption as offshore operators.