LOTTERY LAW
suffered, or undertaken by the other.” 17 On this view, the participants’ provision of personal information and petition signatures could easily qualify as a benefit or interest – especially in the political context of America PAC’s campaign. More abstractly, Canadian courts have sometimes described promises unsupported by consideration as “gratuitous” or “voluntary.” Few would describe the participants’ personal information and signatures as either: one individual in Texas has even sued on the basis that she would not have signed had she known that the selection was not random. 18 Taken together, these facts strongly suggest the presence of valuable consideration. All in all, the giveaway likely avoids liability under s. 206(1)(f), principally because the elements of prize and chance are absent. While the presence of consideration is very likely, the absence of the other two elements takes the giveaway outside the scope of the provision. Does the Giveaway Offend any Other Provision under s. 206(1)? As noted above, s. 206(1) must be considered holistically. Even if a scheme does not fall under s. 206(1)(f) for being an illegal lottery, liability may still arise under other provisions within the subsection. Several of these provisions target conduct ancillary to illegal gaming, such as conducting or advertising any such scheme. Do any of these provisions apply to the giveaway? Surprisingly again, probably not. S. 206(1)(a) through (c) address conduct ancillary to schemes involving the “advancing, lending, giving, selling or otherwise disposing of any property by any mode of chance whatever.” As discussed earlier, the use of an STQ in similar contexts is sufficient to disqualify a process from being considered a “mode of chance,” implying that the standard excludes scenarios where chance is not the only factor in play. On that basis, the giveaway’s selection process – being subjective
and discretionary – likely falls outside the scope of these provisions. S. 201(1)(d), while not repeating the phrase “mode of chance,” refers to property “so proposed to be advanced, lent, given, sold or disposed of,” suggesting that it should be read in continuity with the preceding provisions. If so, the same reasoning would apply, and the giveaway would be excluded. S. 201(1)(e) targets schemes where participants contribute toward a common prize pool – again, not applicable here. S. 201(1)(g) through (j) enumerate specific games such as three-card monte and punch board, which are irrelevant in this context. Conclusion The analysis above leads us to the somewhat surprising result that America PAC’s giveaway likely does not constitute an illegal lottery under either U.S. or Canadian law. This is due primarily to the absence of the element of chance, which undermines the definition of a lottery in both jurisdictions. Even under Canada’s broader s. 206(1) – which captures not only lotteries but also related promotional conduct – the giveaway appears to fall outside the scope of liability. That said, this outcome should not be mistaken for a green light. The line between legitimate promotional activity and illegal lotteries remains fact-specific and, in some areas, underdeveloped. More importantly, attempting to sidestep liability by revealing ex post facto that winners were handpicked is a questionable strategy. It invites legal challenge, as seen in the Texas lawsuit, and leaves operators vulnerable to claims of deception or bad faith. Further, it probably violates the disclosure requirements concerning promotional contests under the Canadian Competition Act or similar U.S. laws, which are beyond the scope of this article.
MARK BALESTRA US Special Counsel, Segev LLP For more information contact m.balestra@segevllp.com +1 604 629 5400
17 Garden v. McGregor , 1945 CarswellOnt 286, [1945] O.W.N. 691 18 McAferty v. Musk , 1:24-cv-01346, (W.D. Tex. Nov 05, 2024) ECF No. 1
IMGL MAGAZINE | SEPTEMBER 2025
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