Bill S-241 And First Nations Gaming: Reallocating "Conduct And Manage" Authority On-reserve

As of December 12, 2025, Bill S-241, An Act to amend the Criminal Code and the Indian Act, is at second reading in the Senate. It is not in force and may change or stall. This note explains the "conduct and manage" authority the bill would create for lottery schemes from or within reserves, and the key decisions it would place with First Nations if enacted.

Executive summary

Bill S-241 would allow a First Nation to assume "conduct and manage" authority for lottery schemes "from or within" its reserve by giving written notice to Canada and the affected province or provinces. On the effective date in the notice, the reserve area is deemed, for Criminal Code purposes only, to be outside the province. The province's "conduct and manage" and licensing authority under section 207 would cease in that area.

First Nations could then operate and license on-reserve schemes under their own laws or Band by-laws, within existing Criminal Code limits. Online models would require careful nexus structuring to show the scheme is "from or within" the reserve. Provincial laws of general application would likely continue to apply via section 88 of the Indian Act, subject to conflict. Key decisions include whether to give notice, how to design governance and regulation, the scale and location of projects, how to work with provinces and other Nations, and how to transition existing provincially authorised operations on-reserve.

What new authority would a Band have?

Section 207 of the Criminal Code is the main framework for who may run lottery schemes. Provinces hold the core legal authority and act as gatekeepers. Private operators appear only because provincial governments or their gaming agencies authorise and control their participation. "Conduct and manage" requires the public body to retain real decision‑making control over the scheme, rather than merely licensing or supervising a private operator.

Bill S‑241 would keep this framework but reallocate control of lottery schemes on-reserve from provinces to First Nations. The governing body of a First Nation (for Indian Act Bands, Chief and Council), or an authority it establishes, could conduct and manage lottery schemes "from or within" its reserve alone or jointly with other First Nations. The authority would flow from laws or Band by‑laws operating inside a revised section 207, rather than from a provincial licence.

A First Nation could also license others to operate lottery schemes on‑reserve within the existing Criminal Code categories, including charitable or religious organisations using proceeds for those purposes, fair and exhibition boards and their concession operators, and operators of public places of amusement. The current limits on prize size and cost per chance would remain.

The definition of "lottery scheme" would still cover computer‑based gaming, slot machines and dice games. The bill would not create a separate First Nations gaming code. It would change who may rely on the existing Federal exception and, within the carved‑out area, replace provincial conduct and manage powers with First Nation authority.

The notice requirement and deeming rule

The bill's most significant feature is a notice and deeming mechanism. If a First Nation wants to use the new authority, its governing body would send written notice to the Federal government and to each province where it has a reserve. The notice would identify the date on which the First Nation will begin exercising its authority to conduct and manage lottery schemes from or within the reserve, or a defined part of it. It is unclear whether the provincial or Federal government could delay or deny the notification.

On that date, the area in the notice is deemed, for Criminal Code purposes only, to be outside the province. The province's power under section 207 to conduct, manage and license lotteries from or within that area would end and the First Nation's power would begin, within Federal limits. The deeming rule is confined to the Criminal Code framework and does not redraw boundaries for provincial tax, health or other laws. It creates a targeted carve‑out inside the lottery scheme provisions.

Existing provincially authorised commercial arrangements on-reserve may require transition planning. That may involve contract assignment or termination, regulatory approvals under the First Nation's laws, and an orderly cutover date aligned with the notice. For an on-reserve casino or other lottery scheme, the public authority behind the operation would shift from provincial control to First Nation authority.

Giving notice would be a strategic decision rather than a formality. It would deliberately move gaming jurisdiction on-reserve away from the province and into First Nation institutions.

Indian Act by‑laws and First Nation‑led regulation

Bill S‑241 would amend the Indian Act to confirm a clear by‑law power for the "operation, conduct and management" of lottery schemes permitted from or within the reserve. This would give solid legal footing to a Band‑led regulatory regime for communities that remain Indian Act Bands. Councils could create a gaming commission, separate regulatory and operational functions, set licensing rules and technical standards, adopt responsible gaming measures and build transparency requirements that reflect community values.

Effective regimes tend to separate regulator and operator, manage conflicts of interest, set standards for licensees and vendors with ongoing disclosure duties, and require clear revenue governance with audits and public reporting of distributions. Technical standards, game integrity and cybersecurity requirements can align with recognised certification and incident reporting frameworks. Responsible gambling measures, such as self‑exclusion, limits, player interaction protocols and advertising standards, are central for both land‑based and online operations.

Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, larger casino‑style operations must implement risk assessments, know‑your‑client processes, reporting of suspicious and large cash transactions, training and independent testing.

The bill would not dictate how net revenues must be used. Each Band would decide how gaming revenues support community priorities, subject to general Federal law and any agreements in place.

"From or within the reserve" on the ground and online

Territorial language becomes complex online. For land‑based facilities the analysis is more straightforward. A scheme conducted and managed in a physical venue on-reserve, under First Nation authority, will generally be considered "from or within" the reserve.

Online and hybrid models raise harder questions. Courts and regulators may look at where decisions are made and "mind and management" sits, where servers and random number generators are located, where contracts with players are formed, where payment processing occurs and where players are situated. Player geolocation, age verification and geo‑fencing are practical gating items.

Bill S‑241 confirms that computer‑based schemes qualify as lottery schemes, but it does not settle a single test for whether a scheme is "from" a reserve. Pending guidance, conservative structuring would align multiple nexus points to the reserve and restrict player access through geo‑fencing. Any remote or cross‑border model would need careful structuring and close attention to future case law and provincial regulatory positions.

How this interacts with existing law

The Federal criminal law power frames the prohibition and exception model in the Criminal Code. Provinces exercise authority via the section 207 exceptions. Section 91(24) of the Constitution Act, 1867 (Indians, and Lands reserved for the Indians) and section 88 of the Indian Act (incorporation of provincial laws of general application) set the baseline for the application of provincial regimes on-reserve, subject to conflict with Federal law or valid Band by‑laws. Section 35 Aboriginal rights arguments concerning self‑government in gaming have been litigated with mixed outcomes. Bill S‑241 would create a statutory pathway regardless of constitutional rights claims.

Case law on "conduct and manage" emphasises that the public body must retain real control over the scheme. That will be central to Band and operator relationships under the bill. The bill would not relax Criminal Code offences outside the section 207 exceptions; unauthorised schemes would remain offences.

Self‑government First Nations and bill's definition of a reserve

An important consideration, only partly dealt with in Bill S-241's definitions, is that many modern treaty and self government First Nations are not governed by the Indian Act. Some no longer have Indian Act reserves and instead hold treaty or settlement lands under self government or land claims agreements. Others have a mix of Indian Act reserves and other land interests.

Bill S-241 is drafted around "First Nations" and "reserves" as those terms are defined in the bill. "First Nation" means either a band or an Indigenous group that is a party to a self government agreement implemented by an Act of Parliament, and for such a self government First Nation "reserve" means land that is subject to that agreement.As drafted, the deeming rule and the new Criminal Code authority apply only to lottery schemes "from or within" a reserve or part of a First Nation's reserve, and the by‑law amendment applies only to Bands under the Indian Act.

For a self government First Nation whose treaty or settlement lands are "land that is subject to" a self government agreement implemented by an Act of Parliament, those lands are treated as its "reserve" for the purposes of section 207 as amended. That First Nation could use the notice mechanism to reallocate conduct and manage authority on those lands, within the limits of the bill.

Indigenous governments whose lands do not meet the bill's definition of reserve (because there is no self government agreement implemented by an Act of Parliament, or because particular lands are not "subject to" such an agreement) would remain within the general section 207 framework and any applicable provincial regimes, unless Parliament later extends similar tools beyond the bill's definition of reserve.

For a self-governing Nation that still has one or more Indian Act reserves and also holds land that is subject to its self-government agreement, Bill S-241 could be used for any part of that combined "reserve" footprint. The new authority and deeming rule would attach only to the portions of that footprint described in the notice. Other land interests that are not "reserve" under the bill would fall outside that carve out and would continue to rely on other sources of authority.

Self‑government communities usually have their own constitutions or laws rather than Band by‑laws under the Indian Act, so the Indian Act amendment in Bill S‑241 would not apply to them. Their power to regulate gaming would flow from their self‑government arrangements and their own laws, together with any new Criminal Code authority they can access.

Working with provinces and other First Nations

The bill would expand existing tools for joint and cross‑boundary gaming. Provinces and First Nations could agree to sell each other's products. First Nation and provincial licensees could operate schemes that span more than one province and more than one reserve, with consent from the original authorising body. Computer‑based charity raffles, already common in several provinces, could be authorised under the First Nation's jurisdiction where proceeds support charitable or religious purposes.

Cooperation agreements could allocate revenue shares, marketing roles, mutual recognition of approvals and platform access. These are political and commercial choices rather than legal requirements under the bill. Transition issues for existing provincially licensed operations on-reserve include notice timing, asset ownership, personnel transfer, data portability and supplier arrangements.

Federal anti‑money laundering and anti‑terrorist financing rules would continue to apply to larger casino‑style operations. Provincial laws of general application, such as labour standards, building safety and public health rules, would likely still apply on-reserve through section 88 of the Indian Act unless they conflict with the Criminal Code or valid Band by‑laws.

Location, markets and uneven benefits

The authority created by Bill S‑241 would apply equally to all First Nations. The economic benefits would not. Gaming depends on population, access and convenience. First Nations with reserves near major urban centres, travel corridors or tourism markets, or First Nations able to add reserve land in those locations, would have stronger economic opportunities. Location shapes the scale of any gaming project, visitor flows and the viability of larger operations.

First Nations with small or remote reserves may still assert jurisdiction, regulate gaming in line with their laws and values, or build online and charity‑based models. These can support local jobs and community projects. Large commercial revenues are more likely to cluster around First Nations with strategic locations. Bill S‑241 would not change the underlying geography. It would provide jurisdictional tools that sit on top of existing differences.

Why provincial pushback is likely

Bill S‑241 would challenge long‑standing provincial control. Provinces act as the core gatekeepers for gaming, even where private operators are visible. Gaming revenue is a major provincial income stream and, in several provinces, a key funding source for public programmes. A Federal bill that allows First Nations to remove part of that controlled space from the provincial system, even if limited to on‑reserve activity, cuts directly into that model.

Possible provincial responses include legislative submissions, proposed amendments to narrow scope, negotiating conditions for joint schemes and cross‑selling, or recalibrating provincial policies that intersect with on‑reserve operations. For First Nations, the risk is assuming the bill will pass unchanged or that provinces will welcome it. What matters is to understand what is at stake if it does move, and to plan on the basis that provincial governments will seek to protect their existing roles and revenues.

Practical decisions and preparation

If Bill S‑241 advances, the real decisions will involve whether to give notice, how much gaming a community wants, what regulatory and governance model fits the First Nation's laws and values, how gaming revenues support social and economic priorities, how location shapes the opportunity, and how to address provincial interests that are used to controlling the space. For self government First Nations, a threshold question is whether their lands qualify as "reserve" under Bill S-241's definitions, and for Indigenous governments whose lands do not, whether additional legislative change is needed.

Practical preparation can occur in parallel with legislative monitoring. That may include drafting a model gaming by‑law, scoping a commission mandate, mapping anti‑money laundering and responsible gambling frameworks, and identifying commercial options across land‑based, charity and online models.

For now, the practical step is to watch how seriously Parliament takes the bill. Bands and self-government First Nations that have already considered their position on jurisdiction, governance, community impact, location and provincial resistance will be in a stronger place if the choice becomes real.

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