Ontario to order igaming licensees to exit grey market

Prospective Ontarian igaming licensees will be obligated to cease any unregulated market operations in the province, according to new compliance rules laid out by the Alcohol and Gaming Commission of Ontario (AGCO).

In a newly published guide, AGCO has revealed details of how it intends to regulate the Ontario market when the province goes live with igaming operations on April 4, indicating several areas where it will “closely monitor” licensees.

Under these new standards, all unregulated operations must cease immediately, as well as the prospective licensee terminating any association with any other company that operates an “unregulated scheme” in Ontario.

While aimed at ironing out the grey market operators, the clause potentially puts any igaming supplier or operator at risk of being blacklisted if they have a partnership with a business in the unregulated sector.

AGCO has said it will not establish specific regulatory limits or restrictions on advertising and marketing around overall volume, types of channels, or timing.

In a warning shot to the industry however, AGCO suggests it will consider “additional measures” if its monitoring of the market indicates they are warranted.

Igaming operators or other businesses will be barred from providing gaming devices or gaming equipment to players to access an igaming site at a physical location (i.e., a land-based casino) as part of any promotional partnership.

Likewise, under Ontario’s legal framework, igaming operators are only permitted to operate gaming sites that are electronic channels.

The provision of gaming equipment, such as devices to access gaming (e.g., a tablet or a kiosk) creates a land-based gaming site is also not permitted.

AGCO has classified its stance on regulation as operating on a “risk and outcomes-based approach” where operators and suppliers must manage the risks they encounter and prevent certain outcomes from taking place.

The Ontario regulator has said it requires operators to have effective controls in place for the management of risks, outlining six priorities in areas including responsible gambling (RG), integrity, security and the protection of minors.

“Our compliance approach involves working collaboratively with operators and GRSs [suppliers] to maintain or, if necessary, re-establish compliance,” AGCO said.

“Where regulatory expectations are not met, the AGCO may use a full spectrum of compliance responses to achieve those goals, including education, warnings, financial penalties, suspensions, and, in the most serious cases, revocations.

“In cases where severe incidents occur, the AGCO will act proportionately to ensure the public is protected,” the regulator added.