Subject: TURMEL: Robin Hood Gaming House Crown Factum

From: [email-masked] (John Turmel)
Date: 18 Sep 1996 11:29:40 GMT

Appeal No. C18691
Gen. Div. No. 9570 
                     COURT OF APPEAL FOR ONTARIO
Between:
                        HER MAJESTY THE QUEEN 
                                                           Respondent
                                -and-
 
                            JOHN C. TURMEL
                                                           Appellant
 
                         RESPONDENT'S FACTUM
 
PART I: OVERVIEW OF RESPONDENT'S POSITION
 
1.   The Respondent respectfully submits that the doctrines of res 
judicata or issue estoppel do not apply in this case. The earlier 
decisions by the Provincial Division relied on by the Appellant do 
not cover the interpretation of s. 197(a). Even if the decisions were 
applicable, their conclusions on matters of statutory interpretation 
are not binding either on other provincial judges or on the Court 
of Appeal. 
 
2.   With respect to the merits of the appeal and the reading the 
Appellant gives to s.197(a), it is submitted that Judge Wright's interpretation 
-- that phrase "kept for gain" encompasses gains drawn directly from 
gambling -- is the only reasonable one. This is particularly true 
given the size of the revenues drawn from the casinos which were run 
as a business enterprise by the Appellant.
 
3.   The Respondent also submits that the suspended sentence the Appellant 
received was generous in the circumstances and should not be perturbed. 
While the Appellant was very open about the offence he was committing, 
he nevertheless broke the law and has a record for similar gaming 
crimes.  
 
                    RESPONDENTS STATEMENT OF FACTS
 
4.    The Respondent substantially agrees with the Appellant's facts 
but draws this Honorable Court's attention to the following additional 
facts: 
 
A. Nature and extent of the business
 
5.   During the perior covered in the information, the Appellant maintained 
gaming houses at two Ottawa locations, first on Baxter Rd., and then 
on St. Laurent Blve. Both were styled by the Appellant as "Casino 
Turmel." 
 
6.   The scale of the gambling conducted at these locations was such 
that it necessitated the participation of employees to act as dealers, 
cashiers and runners. At the St. Laurent operation, which the undercover 
officer who testified described as "a full fledged casino," 18 to 
20 uniformed employees were observed at work, serving an estimated 
75 to 100 customers. At the Baxter location, the officer saw seven 
Blackjack tables, five of which were observed in operation at one 
time. The Appellant himself claimed to have 100 employees and monthly 
wages costs of $175,000 in January of 1993. 
 
7.   Additional  expenditures were made on advertising in print and 
by mail; on free bus transportation of patrons from Montreal; on the 
provision of free food and drink; and on video surveillance equipment. 
In an 18-day perior covered by a police audit, over $26,000 was spent 
on promotions and $5,800 on free food. The rent at the Baxter site 
was $500 a week and at St. Laurent $2,500.  
 
8.   The overall revenues made by the Appellant in the operation of 
his casinos were impressive. In October 1992, the  Appellant stated 
that his net revenue from the Baxter operations was $20,000 to $30,000 
a month. For January, 1993, the Appellant claimed gross revenues from 
his Ottawa casinos of $600,000. He made between $350,000 and $450,000 
a year from gambling. 
 
9.   In his statement to police, the Appellant's former general manager 
described the bonuses he received as a percentage "of the casino profits." 
He conservatively estimated yearly profits of Casino Turmel at $1,000,000. 
A forensic audit over an 18-day period confirmed that weekly earnings 
after salary expenses were close to $25,000. 
 
B. Blackjack rules and limited role of players as  "bank"
 
10.  The Appellant's rules for blackjack provided that the role of 
the "bank" would be rotated to the players. Expert evidence was led 
that the "edge" associated with being the bank stems from the fact 
that hands that go "bust" (over 21) are forfeited to the bank and 
that the bank always goes last. While the player does have certain 
options not available to the bank, such as insurance and doubling 
down, the party holding the bank still has a theoretical edge of .88 
percent -- assuming players are using the optimum strategy. In practice, 
given the varied level of skill amongst the players, the "drop"in 
favour of the house is industry-average as 15 percent. Only if each 
player can by the bank half the time is this edge shared equally between 
the house and the players. 
 
11.  The undercover evidence was that the bank did not rotate from 
the house to the players in equal manner. It did so only in a restricted 
manner that did not confer on the customers the full advantages that 
go along with being the bank. 
 
i) The player could only be the bank against one player, the house 
itself, and not against a number of other players. This deprived the 
player of an advantage normally associated with being the bank. While 
being allowed to bank against several players at once does not affect 
the bank's edge on each hand, it does permit it to benefit from that 
edge over a greater number of hands. 
 
ii) The rules in place did not provide for players equal time as the 
bank, but only obliged the player to be the bank once in the evening. 

iii) The rules in question were only loosely enforced and the undercover 
officer who took the stand only infrequently observed a customer playing 
the bank. 
 
12.  Given the volume of gambling at issue in this case, the edge 
which was in substance retained by the house created a substantial 
revenue forthe Appellant. From the observations of the undercover 
officer, between $1,500 and $24,000 in hour was being wagered at the 
Appellant's Blackjack tables during the operation of his casinos.
 
13.  Indeed, the Appellant's general manager stated: 
     "The casino makes its money from the Blackjack tables. It's what 
pays the bills. If you take out the Blackjack tables you wouldn't 
make money. If you don't make money, the casino wouldn't be there. 
 
     As  one employee answered police:
     Q: Do you think Casino Turmel makes money?
     A: Of course he's making money. He pays our salary.
 
C. Appellant's contacts with police
 
14. While the Appellant met with police to discuss his operations 
shortly after the investigation into his activities began, the police 
advised him that they did not condone those activities, would monitor 
them and would charge him if he broke the law. The leases the Appellant 
entered into included a clause that they would be terminated if the 
casinos were closed down because of gaming. 
 
D. Reasons for judgement
 
15.  Judge Wright's reasons relating to the Appellant's plea of autrefois 
acquit and submissions on res judicata and issue estoppel are set 
out at length in the Appellant's factum. 
 
16.  With respect to the substantive issue on this appeal,whether 
or not the Appellant's casinos were keptfor gain, Judge Wright made 
the following findings of fact:
 
i) numerous bank accounts "with substantial balances" relating to 
the casinos were controlled by the Appellant.
 
ii) the premises involved "were operated as a professional organized 
playing venue."
 
iii) "The Crown brought evidence of profits over a particular eighteeen 
day period which were substantial:
     In fairness to Mr. Turmel, it may be completely unrepresentative 
of his success. Mr. Turmel responded however that "if the purpose 
was to show that I made money, I admit that I made money." 
 
iv) "I would conclude that this was a business, a commercial activity  on 
a large scale. There was no evidence of any indirect gain or income 
whatsoever, only from the business of gambling directly.
     There is no other reason for the places to have been kept other 
than to produce income. I conclude that gambling income does come 
within the meaning of s.197(a) and there will be a finding of guilty."
 
17. The Appellant had argued that s.197(a) prohibited only indirect 
gains from gambling, such as revenues from drinks or parking. The 
trial judge disagreed. He rested his legal conclusion that "kept for 
gain" included direct gains from the gambling itself on the three 
arguments:
 
i) a plain reading of the word "gain" in the section to include winnings 
from the gambling;
 
ii) the absurdity ofrestricting s197(a) only to indirect gains; if 
this were the case then the gaming provisions of the Criminal Code 
would only criminalize the sale of drinks at casinos and leave untouched 
the core gambling business of the casinos;
 
iii) the distinction between indirect and direct gains is not a significant 
one with respect to the commercial operation of gaming houses that 
Parliament was attempting to prohibit. 
 
18.  At sentence, the learned judge imposed a suspended sentence and 
three years probation.The conditions were a victim surcharge of $2,500, 
200 hours of community service and not to gamble in unlicensed premises 
[varied on appeal to a prohibition on illegal gambling]. In passing 
sentence, Judge  Wright considered as aggravating factors:
 
i) the Appellant's related criminal record;
ii) his recent four month jail sentence for gambling;
iii) the $150,000in proceeds he made off his casinos;
iv) the evils associated with unregulated gambling; 
v) the need  for general deterrence.
 
19.  In mitigation, the following evidence was considered:
 
i) the cooperative attitude of the Appellant at trial;
ii) his substantial volunteer and commmunity work;
iii)the fact this was a test case as evidenced by the Appellant's 
advance notice to police concerning his casinos;
iv) the Appellant's pledge not to set up further casinos;
v) the Appellant is not a dishonest or violent individual.
 
                               PART II
 
                    RESPONSE TO APPELLANT'S ISSUES
 
A. Autrefois acquit, res judicata and issue estoppel
 
20. The grounds of the appeal raising autrefois acquit, res judicata 
and issue estoppel based  on two earlier Provincial Division cases 
(Booth and Turmel & Turmel) are without merit:
 
21.  As Judge Wright ruled, while the posted rules of play for blackjack 
have remained the same across the cases cited, the locations and times 
are different. The evidence led by the prosecution was also different. 
In the Booth case, it is apparent from the Court's review of the evidence 
that the case essentially concerned whether the Appellant's blackjack 
rules avoided  the prohibited rules enumerated in s.197(b). That same 
limited evidence was also the basis for the 1989 Turmel & Turmel decision. 

22.  There is no mention in the Booth case of the type of accounting 
or undercover evidence found here. This evidence to show under s.197(a) 
that the Appellant kept his gaming house for gain by operating it 
as a commercial enterprise. Furthermore,there was no evidence of the 
unequal sharing of the role  of the bank as was presentedin this case. 
It is submitted that all of this evidence, which forms the backbone 
of the current conviction, is new and has not been previously dealt 
with in Ontario. 
 
23.  Even if the earlier cases cited had dealt with s.197(a), it is 
submitted that any statutory interpretation given to that subsection 
would not be binding on this  Honourable Court. It is therefore submitted 
that it is in the interests of justice that this Court examine and 
decide authoritatively upon the Appellant's underlying argument that 
winnings directly from gambling are not gains under s.197(a).
 
B. Gains directly from gambling
 
24.  The Appellant has admitted to all of the elements of the offence 
leaving only to be determined whether his casinos were "kept for gain."
 
25.  The correct approach to statutory interpretation is to look first 
at the plain meaning of the words.Under this approach,  the hundreds 
of thousands of dollars earned by the Appellant can only be considered 
"gains." They arose directly from a business-like casinoin which the 
Appellant's numerous  employees substantially retained for him the 
gambling edge accruing to the "bank." 
 
26. Even if the word "gain" is  held not to be plainly applicable 
to the casino's profits, a purposive interpretation of the legislation 
would point to the inclusion of such profits. By restricting s.197(a) 
to indirect gains only, the gaming provisions of the Code would be 
read down to mere prohibitions on casinos charging drinks or parking. 
This could be contrary to the clear objective of the provision which 
is to restrict commercial gambling itself.
 
27.  Given the convergence of both the plain and the purposive readings 
of the term "gain," it is submitted that the profits from gambling 
at the Appellant's casinos were properly considered as gain by the 
learned trial judge. There is no reason to add a word to the phrase 
"kept for gain" so it reads "kept for indirect gain." Indeed, if indirect 
gains are covered by s.197(a) then "a fortiori" so should direct gains. 

28.  The Respondent recognizes that the jurisprudence on s.197(a) 
to date has focused on the indirect gains that gaming houses draw 
from the sale of peripheral items such as drinks. This is because 
gaming houses are generally clandestine operations and it is easier 
to prove gain from the over-the-counter transactions like drink sales 
than it is to show the secreted profits from the gambling itself. 
Furthermore,the simplified evidentiary rules contained in 197(b) mean 
that s.197(a) is involved less frequently. Subsection (a) necessitates 
the kind of thorough undercover and accounting investigation conducted 
in this case in order to prove direct gain. 

29. For these reasons, the learned trial judge in convicting the Appellant 
correctly set out and applied the "business purpose" test for s. 197(a) 
and noted the Appellant profited from the enterprise. Both approaches 
flow from the Supreme Court of Canada's  own interpretation of s. 
197(a). [Rockert & DiPietro]
 
30.  Given the Appellant's criminal record for similar offences and 
the sheer size of his operations, it is submitted that the suspended 
sentenceand three years probation imposed are quite lenient. The accused 
was given the benefit of having acted  so as to bring about a test 
case and the benefit of a favourable pre-sentence report.IN the end, 
however, it must be remembered that he did commit, over a prolonged 
period of time, a deliberate criminal act that benefited him personally 
on a large scale. Some form of sanction more severe than the discharge 
suggested is required. It is submitted that the probationary terms 
imposed were the minimum fit sentence that could be passed. 
 
                               PART III
 
31.  There are no additional issues. 
 
                               PART IV
 
32. It is respectully requested that the appeal as to conviction and 
sentence be dismissed. 
 
Dated at Toronto this 14th day of May, 1996.
 
Of Counsel for the Respondent:
 
Trevor Shaw,
10th floor - 720 Bay St.,
Toronto, ON, M5G 2K1,
Fax: 416-326-4656.
 
--
John C. "The Engineer" Turmel, Leader, Abolitionist Party of Canada
111-1505 Baseline Rd. Ottawa K2C 3L4 Canada, Tel/Fax:613-723-2739
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