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- FEATURE: Ontario Online Gambling
Late Friday afternoon, Ontario released its Internet Gaming Go-Live Compliance Guide.
Thee guide establishes the minimum requirements for online gambling operators and gaming-related suppliers (GRSs) looking to operate in Ontario after Apr. 4. These standards are an update to the compliance guidance issued in June last year. They incorporate some of the feedback the Alcohol and Gaming Commission of Ontario (AGCO) received on that initial guidance.
The guide is geared towards those on the industry side of things. Nonetheless, there are a few key takeaways that are important for the public to be aware of. We’ll get into the details in a moment, but in a nutshell these are:
Anyone seeking to participate in the newly regulated Ontario online gambling market would do well to consult the guide. The target audience, however, is operators and GRSs. AGCO has divided the guide into five sections:
In addition to these five substantive sections, the guide also includes three appendices. The first two serve as shortcuts for other types of applicants, to whom only some of the requirements apply. They break down the compliance requirements by type of applicant, detailing which of the Registrar’s Standards are going to be commonly applicable to them.
The final appendix merely provides a copy of AGCO’s ITL certification policy.
In the first section of the guide, the AGCO describes the Registrar’s Standards as risk-based and outcome-focused.
By “risk-based,” AGCO means that operators can mitigate the risks within their sphere of control by achieving the regulatory objectives outlined in the standards. As for “outcome-focused,” that means that AGCO provides guidelines for what final results operators must achieve, but does not prescribe what path they must follow to get that result.
AGCO expects that all operators and GRSs will be in compliance with the Gaming Control Act of 1992 before launching.
The guide’s first section also sets out several guideposts for operators and GRSs. Amongst the expectations is that operators have an ongoing responsibility to ensure compliance with the standards and provide the AGCO with information relevant to the operator’s risk profile.
The guide sets out the AGCO’s priorities with regards to regulation of the new market.
The guide identifies six different priorities:
The guide provides operators with reference to each of the specific Registrar’s Standards relating to each of the priorities.
One of the guides most significant provisions is that it details that AGCO:
“…will be monitoring registrant compliance with the requirement that a) they cease unregulated market operations in Ontario and b) terminate any association they may have with any other company that operates an unregulated scheme in Ontario.”
This statement is likely a warning to those companies that operate under multiple brands. A company hoping to register for regulated operation with one brand while continuing to treat Ontario as a gray market with another would could find all its brands blacklisted.
The requirement to “terminate any association” could include operator-supplier relationships. From the sounds of things, a white label supplier could not provide games or technology to registered operators if it is also doing so for ones AGCO has deemed illegal. That could prove crucial, as essentially all operators rely on third party technology to function.
In regards to advertising and marketing, the guide notes that AGCO is not initially imposing any regulatory limits on the volume of advertising. There will also be no restrictions on the channels, or timing of advertising and marketing at first.
However, the agency notes that they will be monitoring the industry and will be quick to add restrictions as necessary.
The guide also specifies that operators are only allowed to operate through electronic channels. Providing players with physical equipment to access online products will be considered by the agency to be a form of land-based gaming. Therefore, private sector companies cannot supply players with tablets to access an online gambling product, or allow them to gamble through kiosks or the like.
Any land-based gaming will remain within the control of the Ontario Lottery and Gaming Corporation (OLG). This is a separate entity from iGaming Ontario and could set its own rules for kiosks. However, these would presumably have to connect to OLG’s own brands, such as Pro-Line in the case of sports betting kiosks.
AGCO will require the CEO and Chief Compliance Officer of each Registrant to sign a letter detailing that all technology is compliant with Ontario’s standards. They must further attest that it has all been tested by an ITL or otherwise approved by the Registrar.
Additionally, all operators are responsible for designing and implementing a Control Activity Matrix (CAM). The purpose of CAMs is to detail what controls the operator has in place and they must receive an independent audit before submission to AGCO. GRSs are subject to a somewhat different version of this requirement, and some GRSs may be exempt entirely if their responsibilities don’t include any critical gaming systems.
The final section of the guide specifies what information operators and GRSs must report to the AGCO. There are three categories of information that they must report on an ongoing basis:
The guide sets out that registrants must fully understand the incident reporting before going live.
If you’re reading this and not planning on serving the Ontario market yourself, it might be easy to get lost in the details. To reiterate, there are a few aspects of the regulations that will create a noticeable impact for the end user.
Foremost among these is that AGCO appears intent on making it difficult for multi-brand companies to keep one foot in the gray market after April 4. It doesn’t look as if anyone will be able to have it both ways.
The second big revelation is AGCO’s wait-and-see approach to advertising and marketing regulations. If the situation in the US is any indication, Canadians can expect to find themselves awash in a sea of advertising and promotions.
Finally, there is the hardware issue. Ontarians shouldn’t expect to step into Rogers Centre and be able to place bets at a PointsBet or DraftKings kiosk. That said, the door remains open for lottery-operated Pro-Line kiosks.