From Provinces to First Nations: Bill S-241 and the Reallocation of On-Reserve Gaming Authority What is Bill S-241 and what would it change? Bill S-241 is a private member’s bill currently before the Senate that would amend the Criminal Code and the Indian Act. If enacted, it would reallocate “conduct and manage” authority for on-reserve “lottery schemes” (a legal term of art that essentially means commercial gambling activities) from provinces to First Nations, subject to defined statutory conditions. Why does this matter? This matters because Bill S-241 would shift who controls and benefits from on‑reserve gambling activities: instead of provinces being the default “conduct and manage” authority under the existing Criminal Code framework, First Nations could assume exclusive authority on their respective reserves (by notice to the federal government and relevant provincial governments), including licensing and regulation. Presumably, this would allow First Nations to conduct ad manage on-reserve lottery schemes (including casino-style gaming) under a First Nation led regulatory framework. Does Bill S-241 expand the types of gaming permissible in Canada? Not directly. Bill S-241 does not change the Criminal Code categories of lawful gaming. The Criminal Code sets the outer limits of what games may be offered, while provinces have typically determined which specific games are offered in practice (within those limits). If Bill S-241 is enacted, First Nations exercising “conduct and manage” authority could make comparable choices for permissible on‑reserve gaming activities, potentially including new offerings that are culturally relevant to the First Nation. How would a First Nation assume authority to directly regulate and operate gambling activities on-reserve? To assume conduct and manage authority, a First Nation must comply with a mandatory notice process. Written notice must be provided to the federal government and to each province in which the reserve is located, specifying the date on which the First Nation will begin exercising conduct and manage authority. How does Bill S-241 apply to online or hybrid gaming models? The bill requires that lottery schemes be conducted “from or within” a reserve but does not define a single test for applying that requirement in the online context. While computer-based schemes are expressly included, what qualifies as being conducted and managed “from or within” a reserve remains unsettled and will depend on regulatory and judicial interpretation. How will provinces react to the bill? Provinces have historically acted as the central gatekeepers of gaming and rely on gaming revenues as a significant source of public funding. Bill S-241 would allow First Nations to displace provincial authority for on-reserve gambling activities and could potentially reduce gaming revenues for provinces, potentially prompting political, legislative, or regulatory resistance. Bill S-241, An Act to amend the Criminal Code and the Indian Act,[1] is currently before the Senate. If enacted, it would materially alter Canada’s gaming framework by reallocating on-reserve authority over gambling activities from provinces to First Nations. The bill would allow a First Nation, by notice, to assume exclusive “conduct and manage” authority for “lottery schemes” (i.e. gaming activities) operated from or within its reserve, displacing provincial authority under section 207 of the Criminal Code[2] in that territory. The bill does not create a standalone First Nations gaming code or expand the substantive scope of lawful gaming. Instead, it broadens the set of public authorities that may exercise “conduct and manage” powers under the existing Criminal Code framework on a territorial basis. Provinces retain that authority generally within their borders, but First Nations could assume it for gaming activities conducted from or within their reserves, subject to the notice mechanism and other statutory conditions. New changes to the Criminal Code Exclusive First Nation authority and licensing Bill S-241 would amend section 207 of the Criminal Code to shift conduct and manage authority for on-reserve lottery schemes from provinces to First Nations. The governing body of a First Nation could conduct and manage such schemes from or within its reserve, either alone or jointly with other First Nations, and could license other persons or entities to do so, including charitable and religious organizations and fairs and exhibitions. At the same time, the bill would leave key elements of the existing framework intact. The statutory definition of “lottery scheme” would remain unchanged, continuing to mark the boundary between lawful and unlawful gaming. The framework would also continue to require meaningful public-authority control over any lottery scheme within the relevant territory, with private operators limited to an agency or contractor role. Notice requirement and the deeming rule Exercise of the authority is conditional on compliance with a mandatory notice process. A First Nation that intends to assume “conduct and manage” authority must deliver written notice to the federal government and to each province in which its reserve is located, specifying the effective date. As of that effective date, the reserve (or the specified part of the reserve) is deemed, for the purposes of section 207 of the Criminal Code only, not to form part of the province. Provincial authority to conduct, manage, and license lottery schemes in that area ends, and the First Nation’s authority takes effect. The deeming rule is narrow and targeted: it creates a limited carve-out within section 207 and does not alter provincial boundaries, reallocate constitutional jurisdiction, or displace provincial laws of general application (including taxation, labour, health, and safety). New changes to the Indian Act Bill S-241 would also amend section 81 of the Indian Act[3] to expressly authorize band councils to pass by-laws regulating the operation, conduct, and management of lottery schemes permitted under section 207 of the Criminal Code. This amendment would strengthen the legal footing for Band-led regulatory regimes in communities governed by the Indian Act. In practice, this amendment would enable Bands to design comprehensive gaming governance structures, including licensing/registration systems, regulatory bodies, technical standards, responsible gambling measures, and enforcement mechanisms. The Bill does not prescribe how these regimes must be structured or how gaming revenues must be allocated. Those choices would remain matters of community governance, subject to general federal law. Tensions and potential challenges “From or within the reserve” in online and hybrid models A key source of uncertainty under Bill S-241 arises from the statutory requirement that lottery schemes be conducted “from or within” a First Nation’s reserve, language that is introduced directly through the proposed amendments. This territorial concept is relatively clear for land-based gaming facilities. However, for online or hybrid models, those territorial boundaries become less clear. While the bill confirms that computer-based schemes qualify as lottery schemes, it does not define a single test for when such a scheme is conducted “from” a reserve. Consequently, the practical reach of the Bill in the online context will depend on how this territorial requirement is interpreted and applied by regulators and, ultimately, the courts. Regulators and courts are likely to examine factors such as where operational control and decision-making occur, the location of servers and random number generators, where player contracts are formed, payment processing flows, and player location. However, what will ultimately qualify as being conducted and managed “from or within” a reserve remains unsettled and will be central to the viability of any online or hybrid model. Interaction with existing law The Bill operates within Canada’s long-standing prohibition-and-exception model for gaming under the Criminal Code. Gaming and betting activities will still be prohibited unless they fall squarely within the exceptions set out in section 207. Lottery schemes conducted outside the scope of the amended section 207 framework would therefore continue to constitute criminal offences, whether operated by First Nations directly or by their licensees or registrants. Constitutional arguments under section 35 of the Constitution Act, 1982 asserting an inherent right of Indigenous communities to self-govern gaming within their territories have largely been unsuccessful[4]. Bill S-241 does not resolve those constitutional questions. Instead, it establishes a statutory mechanism that enables First Nations to assume conduct and manage authority within the Criminal Code framework without the need to first establish a constitutionally protected right to do so. Provincial resistance and transition risk Provinces have historically acted as the central gatekeepers of gaming and rely on gaming revenues as a significant source of public funding. Bill S-241 would permit First Nations, through the notice mechanism, to displace provincial conduct and manage authority for on-reserve lottery schemes. That reallocation of may prompt resistance, including legislative submissions during the parliamentary process, proposed amendments to narrow the scope of the bill, and pressure to channel new activity into joint schemes or cross-selling arrangements that preserve provincial involvement and revenue streams. The notice mechanism itself may become a focal point of tension. While the bill requires notice to be given to both the federal government and the affected provinces, it is unclear on its face whether either level of government could delay, condition, or deny the effectiveness of a notice once given. That ambiguity creates legal and practical risk, particularly where provinces seek to assert leverage through political or regulatory means despite the absence of an express statutory veto. Existing provincially authorized gaming operations on reserve would also face transition challenges if a First Nation elects to assume authority. These may include the unwinding or reassignment of existing commercial agreements, the migration of regulatory oversight to First Nation institutions, and careful coordination of timing to align the effective date in the notice with operational and contractual realities. Absent deliberate transition planning, there is a risk of regulatory gaps, service interruption, or dispute over the continuity of authorizations. Some provinces have entered into revenue-sharing partnerships with First Nations. For example, British Columbia shares gaming revenues with all eligible First Nations whether or not a First Nation hosts a gaming facility on its lands. If, pursuant to Bill S-241, a First Nation were to conduct and manage gaming facilities outside the provincial regulatory framework, provinces could reassess the structure and terms of any First Nation–specific revenue-sharing arrangements. Conclusion Bill S-241 introduces a focused but structurally significant change to Canada’s gaming framework by enabling the reallocation of conduct and manage authority for on-reserve lottery schemes from provinces to First Nations. The bill does not expand what gaming is permitted under the Criminal Code. Rather, it shifts where authority over lottery schemes resides and the conditions under which that authority may be exercised. However, if enacted, the effects of Bill S-241 would be market-specific. Outcomes would depend on whether a First Nation elects to give notice, how it establishes regulatory and governance capacity, how online and hybrid models are structured to satisfy the “from or within” requirement, and how provinces respond to a reduced role in on-reserve gaming oversight. If you have questions about this article or Gaming & Betting law, we would love to hear from you. Feel free to reach out to us at 1-800-604-1312 or https://segevllp.com/contact-us/. Get in Touch Disclaimer ***The above blog post is provided for informational purposes only and has not been tailored to your specific circumstances. This blog post does not constitute legal advice or other professional advice and may not be relied upon as such.*** Links: [1] Bill S-241, An Act to amend the Criminal Code and the Indian Act, 1st Sess, 45th Parl, 2025 (first reading 20 November 2025), online: Parliament of Canada <https://www.parl.ca/documentviewer/en/45-1/bill/S-241/first-reading>. [2] Criminal Code, RSC 1985, c C-46, s 207. [3] Indian Act, RSC 1985, c I-5, s 81. [4] For example, R v Pamajewon, [1996] 2 SCR 821.
From Provinces to First Nations: Bill S-241 and the Reallocation of On-Reserve Gaming Authority
What is Bill S-241 and what would it change?
Bill S-241 is a private member’s bill currently before the Senate that would amend the Criminal Code and the Indian Act. If enacted, it would reallocate “conduct and manage” authority for on-reserve “lottery schemes” (a legal term of art that essentially means commercial gambling activities) from provinces to First Nations, subject to defined statutory conditions.
Why does this matter?
This matters because Bill S-241 would shift who controls and benefits from on‑reserve gambling activities: instead of provinces being the default “conduct and manage” authority under the existing Criminal Code framework, First Nations could assume exclusive authority on their respective reserves (by notice to the federal government and relevant provincial governments), including licensing and regulation. Presumably, this would allow First Nations to conduct ad manage on-reserve lottery schemes (including casino-style gaming) under a First Nation led regulatory framework.
Does Bill S-241 expand the types of gaming permissible in Canada?
Not directly. Bill S-241 does not change the Criminal Code categories of lawful gaming. The Criminal Code sets the outer limits of what games may be offered, while provinces have typically determined which specific games are offered in practice (within those limits). If Bill S-241 is enacted, First Nations exercising “conduct and manage” authority could make comparable choices for permissible on‑reserve gaming activities, potentially including new offerings that are culturally relevant to the First Nation.
How would a First Nation assume authority to directly regulate and operate gambling activities on-reserve?
To assume conduct and manage authority, a First Nation must comply with a mandatory notice process. Written notice must be provided to the federal government and to each province in which the reserve is located, specifying the date on which the First Nation will begin exercising conduct and manage authority.
How does Bill S-241 apply to online or hybrid gaming models?
The bill requires that lottery schemes be conducted “from or within” a reserve but does not define a single test for applying that requirement in the online context. While computer-based schemes are expressly included, what qualifies as being conducted and managed “from or within” a reserve remains unsettled and will depend on regulatory and judicial interpretation.
How will provinces react to the bill?
Provinces have historically acted as the central gatekeepers of gaming and rely on gaming revenues as a significant source of public funding. Bill S-241 would allow First Nations to displace provincial authority for on-reserve gambling activities and could potentially reduce gaming revenues for provinces, potentially prompting political, legislative, or regulatory resistance.
Bill S-241, An Act to amend the Criminal Code and the Indian Act,[1] is currently before the Senate. If enacted, it would materially alter Canada’s gaming framework by reallocating on-reserve authority over gambling activities from provinces to First Nations. The bill would allow a First Nation, by notice, to assume exclusive “conduct and manage” authority for “lottery schemes” (i.e. gaming activities) operated from or within its reserve, displacing provincial authority under section 207 of the Criminal Code[2] in that territory.
The bill does not create a standalone First Nations gaming code or expand the substantive scope of lawful gaming. Instead, it broadens the set of public authorities that may exercise “conduct and manage” powers under the existing Criminal Code framework on a territorial basis. Provinces retain that authority generally within their borders, but First Nations could assume it for gaming activities conducted from or within their reserves, subject to the notice mechanism and other statutory conditions.
New changes to the Criminal Code
Exclusive First Nation authority and licensing
Bill S-241 would amend section 207 of the Criminal Code to shift conduct and manage authority for on-reserve lottery schemes from provinces to First Nations. The governing body of a First Nation could conduct and manage such schemes from or within its reserve, either alone or jointly with other First Nations, and could license other persons or entities to do so, including charitable and religious organizations and fairs and exhibitions.
At the same time, the bill would leave key elements of the existing framework intact. The statutory definition of “lottery scheme” would remain unchanged, continuing to mark the boundary between lawful and unlawful gaming. The framework would also continue to require meaningful public-authority control over any lottery scheme within the relevant territory, with private operators limited to an agency or contractor role.
Notice requirement and the deeming rule
Exercise of the authority is conditional on compliance with a mandatory notice process. A First Nation that intends to assume “conduct and manage” authority must deliver written notice to the federal government and to each province in which its reserve is located, specifying the effective date.
As of that effective date, the reserve (or the specified part of the reserve) is deemed, for the purposes of section 207 of the Criminal Code only, not to form part of the province. Provincial authority to conduct, manage, and license lottery schemes in that area ends, and the First Nation’s authority takes effect. The deeming rule is narrow and targeted: it creates a limited carve-out within section 207 and does not alter provincial boundaries, reallocate constitutional jurisdiction, or displace provincial laws of general application (including taxation, labour, health, and safety).
New changes to the Indian Act
Bill S-241 would also amend section 81 of the Indian Act[3] to expressly authorize band councils to pass by-laws regulating the operation, conduct, and management of lottery schemes permitted under section 207 of the Criminal Code. This amendment would strengthen the legal footing for Band-led regulatory regimes in communities governed by the Indian Act.
In practice, this amendment would enable Bands to design comprehensive gaming governance structures, including licensing/registration systems, regulatory bodies, technical standards, responsible gambling measures, and enforcement mechanisms. The Bill does not prescribe how these regimes must be structured or how gaming revenues must be allocated. Those choices would remain matters of community governance, subject to general federal law.
Tensions and potential challenges
“From or within the reserve” in online and hybrid models
A key source of uncertainty under Bill S-241 arises from the statutory requirement that lottery schemes be conducted “from or within” a First Nation’s reserve, language that is introduced directly through the proposed amendments. This territorial concept is relatively clear for land-based gaming facilities. However, for online or hybrid models, those territorial boundaries become less clear. While the bill confirms that computer-based schemes qualify as lottery schemes, it does not define a single test for when such a scheme is conducted “from” a reserve. Consequently, the practical reach of the Bill in the online context will depend on how this territorial requirement is interpreted and applied by regulators and, ultimately, the courts.
Regulators and courts are likely to examine factors such as where operational control and decision-making occur, the location of servers and random number generators, where player contracts are formed, payment processing flows, and player location. However, what will ultimately qualify as being conducted and managed “from or within” a reserve remains unsettled and will be central to the viability of any online or hybrid model.
Interaction with existing law
The Bill operates within Canada’s long-standing prohibition-and-exception model for gaming under the Criminal Code. Gaming and betting activities will still be prohibited unless they fall squarely within the exceptions set out in section 207. Lottery schemes conducted outside the scope of the amended section 207 framework would therefore continue to constitute criminal offences, whether operated by First Nations directly or by their licensees or registrants.
Constitutional arguments under section 35 of the Constitution Act, 1982 asserting an inherent right of Indigenous communities to self-govern gaming within their territories have largely been unsuccessful[4]. Bill S-241 does not resolve those constitutional questions. Instead, it establishes a statutory mechanism that enables First Nations to assume conduct and manage authority within the Criminal Code framework without the need to first establish a constitutionally protected right to do so.
Provincial resistance and transition risk
Provinces have historically acted as the central gatekeepers of gaming and rely on gaming revenues as a significant source of public funding. Bill S-241 would permit First Nations, through the notice mechanism, to displace provincial conduct and manage authority for on-reserve lottery schemes. That reallocation of may prompt resistance, including legislative submissions during the parliamentary process, proposed amendments to narrow the scope of the bill, and pressure to channel new activity into joint schemes or cross-selling arrangements that preserve provincial involvement and revenue streams.
The notice mechanism itself may become a focal point of tension. While the bill requires notice to be given to both the federal government and the affected provinces, it is unclear on its face whether either level of government could delay, condition, or deny the effectiveness of a notice once given. That ambiguity creates legal and practical risk, particularly where provinces seek to assert leverage through political or regulatory means despite the absence of an express statutory veto.
Existing provincially authorized gaming operations on reserve would also face transition challenges if a First Nation elects to assume authority. These may include the unwinding or reassignment of existing commercial agreements, the migration of regulatory oversight to First Nation institutions, and careful coordination of timing to align the effective date in the notice with operational and contractual realities. Absent deliberate transition planning, there is a risk of regulatory gaps, service interruption, or dispute over the continuity of authorizations.
Some provinces have entered into revenue-sharing partnerships with First Nations. For example, British Columbia shares gaming revenues with all eligible First Nations whether or not a First Nation hosts a gaming facility on its lands. If, pursuant to Bill S-241, a First Nation were to conduct and manage gaming facilities outside the provincial regulatory framework, provinces could reassess the structure and terms of any First Nation–specific revenue-sharing arrangements.
Conclusion
Bill S-241 introduces a focused but structurally significant change to Canada’s gaming framework by enabling the reallocation of conduct and manage authority for on-reserve lottery schemes from provinces to First Nations. The bill does not expand what gaming is permitted under the Criminal Code. Rather, it shifts where authority over lottery schemes resides and the conditions under which that authority may be exercised.
However, if enacted, the effects of Bill S-241 would be market-specific. Outcomes would depend on whether a First Nation elects to give notice, how it establishes regulatory and governance capacity, how online and hybrid models are structured to satisfy the “from or within” requirement, and how provinces respond to a reduced role in on-reserve gaming oversight.
If you have questions about this article or Gaming & Betting law, we would love to hear from you. Feel free to reach out to us at 1-800-604-1312 or https://segevllp.com/contact-us/.
Disclaimer
***The above blog post is provided for informational purposes only and has not been tailored to your specific circumstances. This blog post does not constitute legal advice or other professional advice and may not be relied upon as such.***
Links:
[1] Bill S-241, An Act to amend the Criminal Code and the Indian Act, 1st Sess, 45th Parl, 2025 (first reading 20 November 2025), online: Parliament of Canada <https://www.parl.ca/documentviewer/en/45-1/bill/S-241/first-reading>.
[2] Criminal Code, RSC 1985, c C-46, s 207.
[3] Indian Act, RSC 1985, c I-5, s 81.
[4] For example, R v Pamajewon, [1996] 2 SCR 821.
