To take advantage of the strong demand for online games of chance, Loto-Quebec offers its Live Casino using dealers outside Quebec provided by a firm operating in a tax haven.
In 2019, Loto-Québec signed a contract with the Swedish company Evolution, aimed at improving its online gaming service. Players can play blackjack, poker, roulette or even baccarat in real time on the crown corporation’s site, and it is a person who deals the cards or throws the ball.
This online casino offering is currently being promoted in the crown corporation’s ads, while its other casinos are closed.
“It is a product appreciated by customers. Moreover, in order to adjust to demand, we have increased the offer of live casinos, ”said Renaud Dugas, spokesperson for Loto-Québec.
Malta and the Paradise Papers
However, Le Journal has learned that the supplier of Loto-Québec, although officially Swedish, declares the majority of its income in Malta, a European country with favorable taxation.
The effective tax rate for this company was only 4.8% in 2019, according to the 2019 annual report. It is moreover with a Maltese subsidiary of this company, called Evolution Malta Limited, that Loto -Québec does business directly, confirmed Mr. Dugas.
Malta appears in four separate lists of tax havens cited by the Quebec Ministry of Finance in a brief submitted in 2015 to the Public Finance Committee on tax havens.
The country was embarrassed when journalist Daphne Caruana Galizia was murdered there in 2017 while investigating a corruption case at the highest levels of state.
The Tax Justice Network ranked Malta in 2020 among the most opaque jurisdictions on the planet.
That’s not all, as Evolution’s big boss, Martin Olof Carlesund, himself appears in The Paradise Papers, a vast leak of confidential data updated by the International Consortium of Investigative Journalists (ICIJ). Carlesund is listed as a director of several companies in Malta, according to ICIJ data.
Evolution employs approximately 162 people in Canada. It is in Georgia and Latvia, two former Soviet republics, that 5440 of the approximately 7000 Evolution employees work.
The indifferent union
The Canadian Union of Public Employees (CUPE), which is responsible for the croupiers at Loto-Quebec, was not upset last week by the fact that Loto-Quebec was calling on workers outside the organization. Currently, more than 4,000 employees have been temporarily dismissed due to the closure of gaming establishments.
“We do not have the facilities to do it,” stressed the Newspaper Jean-Pierre Proulx, union advisor to CUPE.
“It’s a two-edged knife. We do not really intend to push for online casino with a croupier like that, ”he adds, preferring to bet on physical establishments and not on the web in order to limit job losses in the long term. if the product is gaining popularity. “For us electronic tables is something that is not good for us,” he says.
Loto-Quebec says it has chosen to do business with an external supplier “in order to reduce costs and be able to improve the games offer by sharing tables”. Management says it has not identified a Quebec company offering this type of product.
Loto-Québec is not the only Canadian Crown corporation to do business with Evolution for its online casino services. Crown corporations in British Columbia and Ontario have also contracted it.
Asked about its steps before choosing this supplier, Loto-Québec replied that this company was the subject of an investigation by the Sûreté du Québec and that it received authorization from the Autorité des marchés publics.
“In addition, the regulator in British Columbia, the Gaming Policy and Enforcement Branch (GPEB), has also investigated this supplier, with positive results,” said Mr. Dugas, ensuring that all revenues from Quebec players returned to the Crown corporation.
Loto-Quebec ensures that data relating to customer accounts “remain hosted in Quebec in Loto-Quebec data centers”. Evolution did not respond to questions from Newspaper.
–With the collaboration of Andrea Valeria
EVOLUTION IN A FEW FIGURES
Profits in 2019
- 149.7 million euros (CA $ 231 million)
Tax rate in 2019
Proportion of employees outside of Canada
Source: company financial report