February 28, 1923

LIB

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

Of course, all this is out of order, but as there seems to be perfect agreement between the hon. minister and the right hon. leader of the Opposition we will regard the incident as closed.

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RACE-TRACK BETTING MOTION BY MR. GOOD TO AMEND THE CRIMINAL CODE

IND

William Charles Good

Independent Progressive

Mr. W. C. GOOD (Brant) moved:

That, in the opinion of the House, it is expedient that subsection two of section two hundred and thirty-five of the Criminal Code be repealed, and that it be enacted that the provisions of subsection one of said section, and of sections two hundred and twenty-seven and two hundred and twenty-eight of the said code shall not extend to any person by reason of his becoming custodian or depository of any money, property, or valuable thing staked for the purpose or become the property of the winner of any lawful race, sport, game or exercise or to a private bet between not more than ten individuals who are not engaged in any way in a business of betting.

He said: Mr. Speaker, it is perhaps unfortunate that the resolution should have been worded as it is, but I am not responsible for that. It was put in the hands of the Parliamentary Counsel last year and I did not like to question the propriety of his wording. The only change which has been made in the resolution this year is that which has been necessitated by the amendment made to the criminal code dealing with this matter at the last session. However, in spite of the fact that the wording is rather technical and perhaps unintelligible to the lay reader, the meaning and effect of the proposed amendment is very simple. It is not to make horseracing illegal, as is sometimes said; it is not to make illegal the betting on horse-racing, as may be alleged; but it is to make illegal the business of betting on race-tracks-commercialized betting. It is to remove the exemption which now exists in favour of racing associations, as against all others who are forbidden under the criminal code to keep betting houses. Perhaps I may make the purport of the resolution a little plainer by quoting from an order in council that was passed on the 7th of June, 1917, and published in the Canada Gazette of July 7 of that year.

Whereas it is deemed advisable, in view of the conditions created by the present war and the desirability of encouraging in every way possible thrift and economy among the people of Canada and of taking steps to prevent as far as possible extravagant and unnecessary expenditure, that the exception in favour of horseracing-

May I remark that although the language is a little bit vague and indecisive, the meaning is plain.

-that the exception in favour of horse racing in section two hundred and thirty-five of the criminal code

respecting betting, pool selling and book-making should be rescinded during the continuance of the present war and immediately thereafter;

And whereas it has been made to appear tty very strong representations that this opinion is shared in by a great body of the population of Canada;

Now, therefore, His Excellency the Governor General by and with the advice of the King's Privy Council for Canada, and under and by virtue of the provisions of the War Measures Act, 1914, is pleased to make the following regulations and the same are hereby made and enacted accordingly:-

1. Subsection 2 of section 235 of the criminal code, chapter 146 of the Revised Statutes of Canada, 1906, as enacted by chapter 19 of the statutes of 1912, is amended by striking out all the words after the words "business of betting" in the eighth line thereof.

The effect of striking out those words was to remove the exemption, to strike out the saving clause which operates in favour of a certain type of keeper of betting houses. It goes on:

2. This regulation shall come into force on the first day of August, 1917, and the amendment herebj' made continue in force only during the present war in Europe, and for six months after the conclusion of the said war.

I may have occasion later on to show something of the operation of this order in council.

I do not propose to deal with the ethics of gambling. The seconder of the resolution, the hon. member for Lisgar (Mr. Brown) will, I understand, deal with that part of the subject so far as it has relation to this resolution. But I may be permitted to remark that the evils of gambling are only partly amenable to legislative control; it is not practicable to legislate against gambling of all kinds. But I think it is practicable and desirable to legislate against the commercialized business of gambling, against those who make it a business to prey upon the weaknesses and the vices of their fellow-men. This, I think, is generally admitted, and the admission has been given expression to in our criminal code in a great body of legislation. I had proposed to submit to the House in some detail the various acts or sections of acts dealing with this matter, and to trace the changes which have taken place between 1892 and the present time in relation to the law against gambling, but I think perhaps the House would prefer that I should give just a brief summary of these changes. I have all the legislation here, and if necessary may refer to it later. But perhaps it may be sufficient just for the moment to give a summary of the legislation dealing with this question from the year 1906, when the last Revised Statutes of Canada were issued, up to the present. The following, therefore, is a condensed summary of the changes in the Canadian law respecting race-track gambling between 1906 and the present time.

Race-track Betthiq

Commencing then with the Revised Statutes of 1906, chapter 146, section 235, subsection 1, made it an indictable offence punishable by one year's imprisonment and a fine not exceeding one thousand dollars:

(a) To use or knowingly allow premises to be used for betting.

(b) To keep, exhibit, employ or knowingly allow to be employed thereon any betting device.

(c) To become a stake holder, or

(d) To record or register a bet on an election, race or contest.

But by subsection 2 these provisions were not to apply to bets between individuals or to those made on a race course of any incorporated racing association during a race meet.

There was an amendment in 1910 which reenacted subsection 1 of the foregoing section, and added to the list of offences therein contained by making it an offence:

(a) To engage in pool-selling, or book-making or the business of betting, or to make an agreement for the purchase or sale of betting privileges or of information intended to assist in betting.

(b) To advertise, print, publish, exhibit, post up, sell or supply, etc., or offer to sell or supply such information.

(c) To advertise, print, publish, exhibit, or post up any offer, invitation, or inducement to bet.

(d) To sell, transmit, deliver, or receive any message relating to book-making, pool'*selling or betting.

(e) To aid or assist in the foregoing.

But the application of subsection 1 was further limited by adding to subsection 2 the provision that subsection 1 should not apply to book-making, pool-selling, betting or wagering upon such race course provided that such race meetings are not continued for longer than seven days or occur oftener than twice a year on such race course.

There was a further amendment in the year 1912 which re-enacted the foregoing subsection 2, as amended, but limited the racing associations to those incorporated before March 20, 1912, and to any incorporated after that date by act of parliament or the legislature of any province, and also for the first time permitted racing associations to sell information or privileges to assist in or enable the conducting of book-making, pool-selling, or betting, etc., during the actual progress of a race meeting.

After the Rutherford Commission, which was appointed in 1919, reported, there was another amendment to this section in 1920, re-enacting the foregoing subsection, as amended, but limiting the non-applicability of subsection 1 to bets made on a race course through the agency of the pari-mutuel system, limiting the percentage which could be retained by a racing association out of the amount of any money paid or stake deposited with such association and of which it became the depository under the pari-mutuel system,

and providing that the type of pari-mutuel machine should be approved by the Minister of Agriculture, and that he must be satisfied that a proper proportion of the gate receipts and of the percentage retained as above was given in purses for the horses racing.

There was a further slight amendment last year. A very minor change was effected by the insertion of these words:

Bets between not more than ten individuals.

This enlarged the number of individuals who might be considered to bet, as it were, privately. There was also a more specific exemption of all race-track gambling from the operation of the law.

Now, having given this summary I desire to call special attention to one or two incidents, which throw light upon the changes which I have referred to. The law as it was stated in the 1906 statutes seemed to be unsatisfactory,

I think largely on account of the fact that it was rather vague as it applied to race-track gambling. May I quote the last two or three lines of subsection 2 of section 235:

Or to bets between individuals or made on the course of an incorporated association during the actual progress of a race meeting.

Now, I understand that that was not specific enough to give instructions to anybody, and that a good deal of dissatisfaction arose in connection with the law. At all events in 1910 a measure called the Miller Bill was introduced into this House, which occasioned a tremendous amount of discussion during that session. The bill was referred to a select committee which reported in its favour. That report was considered in Committee of the Whole House and was debated for two days. There seemed to be no prospect of coming to any conclusion, or of the debate terminating, and finally Sir Wilfred Laurier, who was leader of the government at that time, sug gested that the two parties who were con testing, or the two sides or factions if you like, might get together and see if they could agree on some kind of a compromise. That was done. During the following week, after this two days' debate the two sides got together and reached a compromise which was embodied in the legislation of 1910. Perhaps I may be permitted again to sum up the effect of that amendment in 1910. It was a genera! stiffening of the law against the business of betting, but a giving of greater latitude to the betting on race tracks, and that showed the position of the two sides to the controversy. There was evidently a desire' to stiffen the general law; but those who were opposed to making it apply drastically to race-track gambling had their way. Accord-

Race hack Bettin'/

ingly the exemptions in favour of that were made more specific and perhaps a little wider than they had been under the previous act.

May I refer again, just in passing, to the amendment of 1912 which further relaxed the restrictions on race-track gambling by allowing racing associations to sell information and privileges to engage in book-making, pool-selling, etc., on race-tracks. Now, conditions as they are defined by the amendment of 1912 continued until the summer of 1917 when, as I have already mentioned, the government by order in council under the War Measures Act, put a stop to these exemptions in connection with race-track gambling for the duration of the war. On the 1st January, 1920, this order in council was annulled, but prior to that annulment the so-called Rutherford Commission was appointed. I have here a certified copy of the report of the committee of the Privy Council dated 23rd August, 1919, appointing Mr. J. G. Rutherford a commissioner, under the Inquiries Act, to make certain inquiries. May I quote the scope of the inquiry as defined in this order in council. Mr. Rutherford was asked to inquire into and concerning :

(1) Thu number, character and methods of operation of race-tracks in each district or locality;

(2) The amounts of capital invested in the several jockey clubs and race tracks in each district;

(3) The respective periods of time and the seasons, during which race meets have been or are customarily held in each year in each locality;

(4) The general effects of such race meets and betting upon the community or any particular class or classes of the community;

(5) The methods, devices and operations in connection with betting at the race meets and at other places; and the extent to which and the methods by which betting is cairied on legally, or illegally, in each locality;

(0) The effects of racing upon the production of improved breeds of horses and thoroughbred stock;

Then comes the omnibus clause, No. 7, which reads:

(7) Generally all matters, directly or indirectly, connected with, or relating to conditions surrounding race meets and betting in connection therewith:

I have seen the evidence and reports of this commission downstairs in this building. It is a very massive body of evidence.

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LIB
IND

William Charles Good

Independent Progressive

Mr. GOOD:

I certainly have not read all of it. It would take more time than I have at my disposal to read all of that report. Following upon the report of the Rutherford Commission we have the amendment of 1920, to which I have referred. That amendment, as has already been stated, made certain restrictions upon the methods of gambling on race-courses, but did not make it illegal to

keep a betting house, as defined under the law in connection with the race meets. I desire to call attention to one section of the amendment of 1920 which I think is significant. Sub-paragraph 3 of subsection 2 reads: Nor shall the provisions of said sections apply to race meetings at which there are trotting or pacing races exclusively, where pool betting or wagering is permitted by an association incorporated as provided by subsection 2 of this section on such race-course during the actual progress of the race meeting conducted by this association.

Now this, it will be evident, legalizes bookmaking in its worst form on the small country pacing and trotting tracks. In the amendment enacted last year a clause was added to clear up, I presume, any ambiguity about the applicability of the law, and reads:

Nothing in this act shall apply to such operations on any race-course as are authorized by section 6 of chapter 43-

That is the 1920 amendment to which I refer-

-of the statutes of 1020.

That, I presume, is to make very clear that all these operations on race-tracks were to be completely exempt from the general law against the keeping of betting houses.

Now, Mr. Speaker, I propose to submit to the House next some little statement of what has happened to the racing associations and to the public in connection with this business, as these various amendments and changes have been made in the law May I quote, in the first place, the number of prosecutions for keeping illegal betting houses in Toronto form 1916 to 1920. In 1916 there were 26 convictions and in 1917 there were fifteen convictions. Let hon. members recall that it was on the 1st August, 1917, that the order in council came into operation. In 1918 there were fourteen convictions and in 1919 there were five convictions. At the end of 1919 the order in council was annulled and complete liberty was given again to the keeping of betting houses on race-tracks, and hon. members will note that immediately the restraint was taken off the effect upon the convictions for keeping illegal betting houses was that in

1920 the convictions numbered 26 and in

1921 they numbered 55. So that there was an immediate and very large increase in the number of convictions for keeping illegal betting houses in Toronto after the restriction was removed.

I wish to submit next some data concerning the profits made by racing associations out of this business, because I think that here is perhaps the key to or the crux of the whole question. If we properly appreciate the extraordinarily good opportunities for making

Race-track betting

money that, have existed in connection with this business, I think we shall see what forces have operated to retain these special privileges in favour of racing associations. I am quoting now an address given by the Hon. W. E. Raney, Attorney General for Ontario, in June, 1921. He said: .

At the Hamilton Jockey Club the investment was $4,000.

I may say that all this information was elicited during the Rutherford investigation. He continues:

On this original investment the club paid $378,3UU in cash dividends between 1910 and 1917, and its capital investment in 1917, according to the figures prepared by the club itself for the Commissioner of Taxation, and reported to Dr. Rutherford, was $688,229. In other words, the $4,000, under the fertilizing influence of the amendment to the betting house secuuu of the criminal code of 1910, grew to a total sum, principal and interest, of $1,066,529-an average profit of more than 3,000 per cent per annum tor the members of parliament and their relatives and the professional sporting housemen who held shares '[DOT]i this club. The returns to the treasury of Ontario for 1920 show that the rake-off of this club last yeai was $447,927, which was more than twice the rake-off for any previous year, and more than seven times the rake-off in 1910.

I might add that in one meeting held in 1917 the balance of receipts over disbursements was $125,383.40, and that profits of $48,500 were distributed from that one meet.

Now, coming to the Woodbine track at Toronto I have also obtained from the same document the following data: '

Dr. Rutherford's report which deals with the situation between the enactment of the amendment of 1910 and the passing of the order in council in 1917, shows that on an investment of $10,000 the members of the Ontario Jockey Club drew cash and stock dividends from their betting house business of $710,000, and the stock dividends were and are worth more than cash. This was an average of more than $100,000 profit a year or more than 1,000 per cent per annum on their investment. And of this vast sum nothing went to the thoroughbred. It all went into the pockets of the gentlemen shareholders. It is interesting to note the progression of rake-off at this track as disclosed by the evidence before Dr. Rutherford. Here are the figures:

1910, Book-making

$ 58,9321911, Pari-mutuel

101,1891912, "

85,0321913, "

105,6151914, "

112,8341915, "

123,2511916, "

177,0871917, (for the half season before the orderin council came to effect)

105,764

Then Mr. Raney goes on to comment on this as follows:

But if the betting house profits of the Ontario Jockey Club down to 1917 were amazing, what shall be said of those of 1920 as disclosed by reports filed with the Treasurer of Ontario? The rake-off for that year was $561,506 as compared with the previous high-water mark of $177,087 in 1916, and as compared with $58,932 in 1910-in other words, an increase in rake-off of al-IMr. Good.]

most tenfold in ten years. In addition there were gate receipts last year of $212,555, making a total revenue from these two sources of $774,061 out of which purses were paid amounting to $202,282.

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LIB

Samuel William Jacobs

Liberal

Mv. JACOBS:

Has the hon. gentleman before him the figures of the profits made on certain lands which this company sold at an advance?

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IND

William Charles Good

Independent Progressive

Mr. GOOD:

I have no record of that at all.

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LIB

Samuel William Jacobs

Liberal

Mr. JACOBS:

Is that not mentioned in the Rutherford report?

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IND

William Charles Good

Independent Progressive

Mr. GOOD:

I am not aware that it is. It may be. I wish to submit next very briefly some figures also obtained from the same report, concerning the earnings of the Windsor Jockey Club. This was no doubt established to provide opportunity for the gambling that is prohibited in Michigan. The original capitalization of this concern was $29,500. This was increased in 1912 to $200,000, and in 1916, to $500,000. For one meet in 1917, the balance of receipts over expenditures was $97.742.68. In 1916, for two meets, the rake-otf from pari-mutuel machines was $300,337.35. In 1917, for one meet, the rake-off was $188,714.75. In 1917, a dividend was paid of $100,000. In 1920, there was a rake-off of $848,054, and gate receipts of $255,881.

Let us consider the Fort Erie track. I may remark here that this type of gambling is prohibited in New York state, so that Americans who are addicted to it find a refuge and a rendezvous in Canada.

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LIB

Samuel William Jacobs

Liberal

Mr. JACOBS:

What about the pool rooms in every city in the United States?

Topic:   RACE-TRACK BETTING MOTION BY MR. GOOD TO AMEND THE CRIMINAL CODE
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IND

William Charles Good

Independent Progressive

Mr. GOOD:

Never mind about the pool rooms. We are, I hope, dealing with one thing at a time. The capital of this associa- [DOT] tion was $100,000. The balance of receipts over disbursements in 1917 at one meet was $126,081.12. The rake-off from the parimutuel machines was $162,947.20, and the dividend paid in 1917 was $100,000, equal to the whole capitalization.

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?

Mr POWER:

I was not present at the beginning of my hon. friend's remarks, and purely for information, I should be glad if he can explain what he means by the word "rake-off." He mentions "rake-offs" and

"dividends," and I would like to know really what the distinction is.

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IND

William Charles Good

Independent Progressive

Mr. GOOD:

I presume the hon. member for Quebec South (Mr. Power) knows this pretty well, much better than I do.

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LIB

Charles Gavan Power

Liberal

Mr. POWER:

I do not know about rake-offs.

Race-track Betting

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IND

William Charles Good

Independent Progressive

Mr. GOOD:

I may enlighten my hon. friend by saying that a rake-off is that part which is due to the racing association, the part which they get from the amount wagered, either in the book-making or, as later, in the pari-mutuel machines.

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LIB

Samuel William Jacobs

Liberal

Mr. JACOBS:

It is the 4>art you take off with a rake?

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?

Some hon. MEMBERS:

Oh. oh.

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IND

William Charles Good

Independent Progressive

Mr. GOOD:

This may seem a matter for joking, but there are many to whom this is a very serious question. Personally, I have never wagered any money on anything of that sort, and I do not expect to; but as I hope to submit a little later to the House, others have suffered very severely in this respect.

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CON

James Dew Chaplin

Conservative (1867-1942)

Mr. CHAPLIN:

What name would the hon. member give to the amount of money which the Ontario government gets from this form of betting?

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IND

William Charles Good

Independent Progressive

Mr. GOOD:

I am quite prepared to have the hon. gentleman call it by what name he likes, "rake-off" if he pleases.

I wish to submit next some data regarding the effect on thoroughbred horses. Between 1910 and 1920 the increase in the number of race-tracks in Ontario and Quebec was from seven to seventeen, and during the same period, the number of 'days of racing, or the maximum racing period, increased from 96 to 238. If the claims of those who advocate a continuance of race-track gambling as being necessary to encourage the breeding of thoroughbreds were well founded, one might expect that while this increase in the racing was going on, you would find a corresponding increase in the breeding of thoroughbreds. I have on this point some data which I would like to submit to the House. In 1906, there was a government investigation intp horsebreeding in Ontario, and according to the report there were in the province 78 thoroughbred stallions. From 1913 to 1919, the enrolment of thoroughbred stallions in Ontario was as follows:

Year Number

1913 31

1914 43

1915 46

1916 36

1917 31

1918 25

1919 19

Therefore, one may infer this, I think, that the allegation made on behalf of racetrack gambling as an encouragement to the breeding of thoroughbred horses is baseless. I wish to submit also in this connection some opinions from people who are, I think, qualified to express opinions on the significance or importance of the thoroughbred horse in Canadian agriculture. Let me quote from the Hon. Mr. Drury in a statement made by him prior to his accession to power as premier of Ontario. He was asked as a farmer what his opinion was on this matter, and he replied:

As to my views on the matter I am fully persuaded, from the standpoint of the farming community, that race-track betting is of no help whatever to the horse-breeding industry in this country. The most profitable class of horse to breed, from the farmers' standpoint, is not the thoroughbred, the hunter, or even the army remount, but just the heavy-draught type, and second, the roadster. In the first of these classes, and the most profitable to the farmer, thoroughbred blood has no place whatever, and there is no racing and no betting. In the second, while racing has its place, betting is not necessary to the encouragement of breeders. The roadster, unlikethe thoroughbred, fills a useful place, and is bredfor its use. The winning of a race has its own

reward in the increased value of the animal, and betting is not necessary to its encouragement.

Race-track betting has for its centre the thoroughbred, a type of beast which, as regards its usefulness, under the conditions in this country, has about as much use as the gamecock among fowls. The

horse-breeding industry of this country would be no worse off if the running horse were entirely eliminated.

I have also a letter from Mr. R. E. Gunn. I shall not read it, but it is practically to the same effect.

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February 28, 1923