Instead of partnering with commercial or tribal casinos, in Canada, iGaming operators will partner directly with the provincial lottery

Operating Agreements, Not Gaming Licenses For Ontario iGaming: What’s The Difference?

It’s only logical that the private online casino market will be different in Ontario than what we’re seeing in the US. After all, it’s a different country, with different laws.

One important distinction about iGaming regulation in Canada‘s most populous province is that operators will need to enter into commercial agreements with the province. US online casinos generally obtain gambling licenses for each state they operate in, typically in partnership with a land-based casino.

However in Ontario, the iGaming legal framework that’s governed by the country’s criminal code spells out different guidelines. The Ontario Ministry of Finance said as much in February in its Discussion Paper: A Model For Internet Gaming In Ontario.

The paper notes that as of now, the Ontario Lottery and Gaming Corporation (OLG) has a monopoly on online casino games.

However, that will change very soon.

To that end, the province created iGaming Ontario in July. That subsidiary agency of the Alcohol and Gaming Commission of Ontario (AGCO) and AGCO will oversee the private iGaming marketplace that was slated to launch this month, but will more than likely debut early next year.

Why Ontario iGaming operators will have commercial agreements

Ontario’s online casino operators will have operator agreements instead of licenses. This is because they won’t be doing business autonomously, or in partnership with other private companies.

The discussion paper’s preliminary outline for “a model for Internet gaming in Ontario” says:

“The Criminal Code expressly prohibits the provision of gambling in Canada, with some limited exceptions. One of those exceptions, in section 207(1)(a), is for lottery schemes that are ‘conducted and managed’ by provincial governments.”

So, the government – represented here by iGaming Ontario – will be “conducting and managing” gaming, while the private companies will be operating the end product on that organization’s behalf. This is the same model you’ll see with many Canadian retail casinos, though in those cases it’s OLG “conducting and managing.” For instance, OLG is the actual owner of Caesars Windsor, but it contracts with Caesars casino to operate it. The Ontario iGaming market will simply extend this scheme to the online space.

Now that Ontario’s created its iGaming framework, the discussion paper says, “The OLG will continue to conduct and manage lottery schemes, including its own online gaming operations, while the AGCO’s subsidiary will be responsible for the conduct and management of all other iGaming.”

Online casino supervised by AGCO and iGaming Ontario

In the meantime, online gambling operators are navigating this framework unique to Ontario online gambling. The interested companies are following policies AGCO illustrated in its August release of its Internet Gaming Operator Application Guide.

On Friday, Lindsay Rennie – brand and communications manager for iGaming Ontario – also gave Online Poker Report a quick checklist for prospective online casino operators.

She says:

  • “Operators are not being issued licenses for Ontario, they are being registered by the AGCO.”
  • “AGCO is the regulator, iGaming Ontario is the conduct and manage entity.”
  • “Successful operators will enter into an Operating Agreement with iGaming Ontario to be able to participate in the regulated iGaming market.”

Gambling companies want Ontario operator agreements

Ontario’s operating agreements aren’t gaming licenses in the traditional sense. In practical terms, however, they accomplish much the same goal as an “Ontario gaming license.”

So would-be operators who are Googling “how to get a gaming license in Ontario” may want to switch their searches to “Ontario operator agreements.”

Meanwhile, it appears as though would-be operators are happy to navigate the operator agreement frameworks. Many popular US online casino operators are setting up shop in Canada to get ready for the pending Ontario iGaming marketplace.

One of the reasons for that glee became clear on Dec. 1. In a description for a session that took place that day at SBC Summit North America, conference organizers described the 15 million-resident province as “the most open gaming market in North America.”

Indeed, online casino operators may be entering a lucrative market in this province. For comparison, a previously untapped market – single-event sports betting that launched legally in August throughout Canada – had been netting offshore operators more than $500 million a year from Ontarians alone, according to the Canadian Gaming Association (CGA).

- Heather Fletcher is the lead writer with OnlinePokerReport. She's a career journalist, with bylines in The New York Times, Adweek and other publications. Reach her at [email protected]
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