The regulator of online sports betting in Ontario has had enough of the “grey” market.
On Tuesday, the Alcohol and Gaming Commission of Ontario (AGCO) announced a new standard for internet gambling that will come into effect on October 31 and takes aim at unauthorized operators in the province.
In short, the “transition period” offered to unregulated operators is coming to an end. By Halloween, online sportsbooks that are taking bets in Ontario without meeting all the necessary criteria must stop doing so — or the operator of that site or app may find itself in the bad books of provincial regulators.
“This new standard establishes that operators and gaming-related suppliers that are currently active in the unregulated market in Ontario (or have agreements and arrangements with those in the unregulated market in Ontario) must end their activities in the unregulated market to avoid jeopardizing their eligibility for registration,” the AGCO warned. “This requirement extends to applicants for registration in Ontario’s igaming scheme.”
Also coming into force on October 31 will be a new iGaming standard regarding “live dealer” casino games, which have real people dealing out the cards or spinning the roulette wheel.
The AGCO says it has noticed the “growing popularity” of live-dealer games and determined it needs to tweak its rules to address any risks that may arise due to the use of physical gaming equipment and actual humans.
Get with the program
However, the main thrust of the AGCO's update has to do with the province's "grey" market for online gambling. Setting an expiry date for the transition period out of that market could cause some online sportsbooks to shutter their digital doors in Canada's most populous province.
This is partly because Ontario has long had operators that may be regulated and licensed outside the province taking bets from residents without provincial approval. The provincial government had said Ontarians were spending almost $1 billion a year on online gambling and that an estimated 70% was happening on “unregulated, grey market” websites.
To tackle this issue, Ontario decided to open a regulated market for iGaming that would invite private-sector operators of online sportsbooks and casinos to subject themselves to provincial oversight.
Ontario’s new iGaming market went live in April and now includes more than 20 legal sportsbooks, in addition to casino and poker websites. Previously, the sole authorized provider of iGaming in Ontario had been the government-owned Ontario Lottery and Gaming Corp.
Trust the process
The AGCO said it set up a process for operators and suppliers that were live in Ontario’s unregulated market to transition into the regulated one without much disruption to customers.
As part of that process, the regulator began accepting applications for iGaming registration in September 2021, with that registration one of two key steps for operators looking to launch in the new market. The other step is signing an operating agreement with iGaming Ontario, a government agency.
“Since market launch on April 4, the AGCO has provided a reasonable amount of time for these operators and gaming-related suppliers to join the regulated market in a business-like and seamless fashion,” the regulator said on Tuesday. “A significant number of igaming operators and gaming related suppliers have registered with the AGCO, entered into an agreement with iGO and are complying with Ontario's regulatory framework.”
No more grey area
Yet, some operators are still taking bets in Ontario without all the necessary approvals. Some of those operators have even received their AGCO registration but have yet to launch in the regulated market, irking others that are already live within that framework.
The AGCO has now declared enough is enough, and, after consulting with the gaming industry, will bring its new iGaming standard into force on October 31.
“As with any instance of non-compliance, the AGCO will take appropriate regulatory action against any registrant that does not meet this Standard (once it comes into force),” the regulator warned. “For those registered operators that have yet to transition from the unregulated market to the regulated market once the Standard comes into force, the registrant will be required to end its unregulated operations within Ontario pending the registrant’s entry into the regulated market.”