CHARLOTTETOWN, P.E.I. - New documents in the ongoing e-gaming lawsuit reveal that, despite being engaged in an exclusive agreement with Capital Markets Technology Inc. (CMT), provincial officials met regularly with the CEO of a competing financial services company.
The documents were part of a 1,000-page submission filed by CMT earlier this month. CMT – a key player involved in the province’s ill-fated attempt to establishing an online gambling hub – is currently suing the P.E.I. government, as well as 14 other defendants, for $50 million in connection with the initiative.
Between 2010 and 2013, the province attempted to establish the Island as a regulatory centre for online gambling in Canada.
Between July 6, 2012, and Oct. 10, 2012, CMT and Innovation P.E.I. entered into a memorandum of understanding (MOU) to explore establishing a financial transaction platform, which would have been used by the province. The MOU included an agreement that both the province and CMT deal exclusively with one another on the development of the platform.
Despite this exclusivity clause, emails included in CMT’s court filings show that provincial officials organized meetings during the summer and fall of 2012 with representatives of another financial services company, Newcourt Capital, also known as Newco.
One email, sent on Aug. 1, 2012, from Chris LeClair, a former chief of staff of then-premier Robert Ghiz, to then-finance minister Wes Sheridan suggested meeting with Keith Laslop, CEO of Newcourt Capital. Laslop also had a background in a London-based interactive gaming developer.
“I am doing a bit of work for Keith Laslop,” LeClair wrote in the email. “He is still interested in opening up a payments processing company in partnership with a credit union. He wants to process offshore Canadian play – no need for setting up a regulatory regime. Would you meet with he and I on P.E.I.?”
“The 21st in the afternoon would work Chris,” Sheridan said in a reply email.
Another email exchange, dated Aug. 28, 2012, shows LeClair set up a meeting between Laslop and Allan Campbell, the chief of staff to Ghiz at the time. A separate email sent on the same day by LeClair to Cheryl Paynter, then-CEO of Innovation P.E.I., shows that Paynter attended the subsequent meeting. Paynter had signed the initial MOU with CMT.
On Sept. 6, 2012, Laslop wrote an email to Paynter with a letter, addressed to Sheridan, outlining the company’s proposal.
“Newco proposes to initiate and settle electronic payments/transactions in the online gaming industry, initially where the player is located in Canada, and the gaming company is located outside Canada,” Laslop wrote.
At various points in the submission, CMT alleges that staff at Innovation P.E.I. and other provincial officials deliberately broke the conditions of the MOU.
CMT also suggests that a securities investigation undertaken by Steven Dowling, then with the Department of Justice and Public Safety, was undertaken maliciously.
“Based on information and belief, Dowling was instructed to use the securities investigation to destroy the Financial Services Platform and the Loyalty Card Program to advance the Newcourt/Laslop program,” the filing prepared for CMT states.
According to an auditor general’s report on the e-gaming saga, the province had pursued a tourism loyalty card program and had contacted CMT about the program starting in May 2011.
The securities investigation began on Sept. 6, 2012, and concluded in June 2013 after CMT signed a settlement agreement with the superintendent of securities. The settlement involved $15,000 in fines, paid by CMT, for illegal distribution of securities.
In its statement of defence, lawyers representing the province claim the MOU stated that neither CMT nor Innovation P.E.I. would be liable to the other for economic loss resulting from a violation of the agreement.
An earlier lawsuit filed against the province was struck down in 2016 by Justice Gordon Campbell.
None of CMT’s current allegations have been proven in court.
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