Executive Summary: Key Legal and Evidentiary Issues

• Classification of the GotSkill? game as a “game of mixed chance and skill” under s. 197(1) of the Criminal Code was central to the dispute.

• The legal impact of the Alcohol and Gaming Commission’s Bulletin prohibiting operation of GotSkill? in licensed establishments was challenged.

• The appellant’s request for a stay pending appeal required assessment of irreparable harm and the balance of convenience.

• Public interest considerations, including protection of minors and vulnerable individuals, weighed heavily in the court’s analysis.

• The history of regulatory tolerance and litigation regarding GotSkill? influenced the court’s view on immediate enforcement.

• The court ultimately found that the balance of convenience and public interest outweighed the appellant’s claims of harm.

Facts of the case

SBG-Skill Based Games Inc. (“SBG”) operates the GotSkill? game, which is installed in approximately 170 to 180 commercial establishments in Ontario, most of which are licensed to serve alcohol. The game involves players purchasing credits to wager on rounds that require hand-eye coordination, with the possibility of winning prizes. The Alcohol and Gaming Commission of Ontario (the “Commission”) issued a Bulletin in April 2023 requiring liquor licensees to ensure that GotSkill? was not operated in their establishments, citing concerns that the game constituted a prohibited “game” under s. 197(1) of the Criminal Code as it involved both skill and a systematic element of chance.

Background and prior litigation

This case is the latest in a series of legal disputes over the classification of GotSkill?. In 2018, a previous version of the game was found by the Ontario Court of Appeal to be a game of mixed chance and skill, making it illegal to operate in licensed establishments. SBG subsequently modified the game to allow players to see potential prizes in future rounds before playing, and submitted this version for review. Despite the modification, the Commission concluded in 2022 that the game still met the definition of a prohibited game. SBG sought judicial review and declaratory relief, but the application judge dismissed the application, finding that the modified game continued to fall within the Criminal Code’s prohibition.

Policy terms and regulatory framework

The case involved interpretation of several legislative and regulatory provisions. Section 197(1) of the Criminal Code defines a “game” to include those with elements of both chance and skill. The Liquor Licence and Control Act, 2019 and its regulations prohibit licensees from allowing such games on their premises, with potential penalties including fines, loss of licence, and criminal prosecution. The Alcohol and Gaming Commission is mandated to act in the public interest, with a focus on honesty, integrity, and social responsibility, particularly in protecting minors and vulnerable individuals from the risks associated with gambling.

The motion for a stay pending appeal

SBG moved for a stay of the application judge’s decision and an order preventing enforcement of the Commission’s Bulletin, arguing that immediate enforcement would cause irreparable harm to its business, employees, and associated third parties. The court applied the standard test for interlocutory relief: (1) whether there was a serious issue to be tried, (2) whether the appellant would suffer irreparable harm if the stay was not granted, and (3) whether the balance of convenience favoured granting the stay.

The court found that while there was a serious issue to be tried and that SBG would suffer some irreparable harm, the balance of convenience and the public interest in enforcing laws designed to protect vulnerable individuals and maintain the integrity of the regulatory system outweighed the appellant’s interests. The court noted that regulatory tolerance of GotSkill? in the past did not undermine the present need for enforcement, especially given the proliferation of similar games and the associated risks.

Ruling and outcome

The Ontario Court of Appeal dismissed SBG’s motion for a stay, finding that the public interest in enforcing gambling and liquor laws, particularly to protect minors and vulnerable individuals, outweighed the potential harm to SBG and its business partners. No costs were ordered, and the court set an expedited timetable for the appeal to minimize potential harm to the appellant and third parties. The successful party in this motion was the Registrar, Alcohol and Gaming Commission of Ontario, and no monetary award was granted as the motion was dismissed and costs were not ordered.