46 Operators Have Stopped Taking Grey Market Bets From Ontarians

Written By Dave Briggs on November 28, 2022 - Last Updated on December 1, 2022
Ontario's regulator reports 28 of the live online gaming operators have come over from the grey market and a further 18 are transitioning.

Forty-six Ontario online casino and sportsbook operators have left the non-legal grey trade to join the province’s burgeoning legal and regulated market.

That’s the word from the Alcohol and Gaming Commission of Ontario in a statement made last week to PlayCanada.

“We can confirm that a total of 28 of the 36 operators currently live in Ontario’s regulated iGaming market were previously active in the province’s unregulated market, said the statement from the AGCO communications team. “Each of these operators have fully exited the unregulated market as a condition of entry.

“The AGCO can also confirm that a total of 18 additional operators have exited Ontario’s unregulated market over the past few weeks.”

The AGCO said the 18 grey-market operators that have ceased taking bets from Ontarians did so as a direct response to the regulator issuing Standard 1.22. The standard requires them to stop operations in the province while “working through AGCO and iGaming Ontario requirements to enter Ontario’s regulated market.”

Ontario was in a unique position with grey market operators

That there were at least 46 grey-market operators taking bets from Ontario citizens prior to the online market opening on April 4 shows the depth of the problem. And, the number of operators taking money from Ontarians was purportedly much higher than that.

AGCO CEO Tom Mungham said the regulator set up accounts with in excess of 200 unregulated market sites in order to test which ones continued to do business.

Moving so many seasoned grey-market operators to the white market has presented a unique challenge for the AGCO and iGO. But it was core to their mission to protect gaming consumers and keep those gaming dollars in Ontario. The AGCO said a key objective from the start, “has been to move iGaming operators and suppliers into Ontario’s regulated market as quickly and as seamlessly as possible.”

In June, Mungham said the AGCO would “draw a line in the sand, to make the market regulated and unregulated, legal and illegal.” Later, the AGCO gave grey-market operators until Oct. 31 to cease operating while making the transition.

Long grace period not always popular with legal operators

Giving those operators essentially a seven-month grace period to end their non-legal operations was a unique approach.

But it is one that has not been popular with operators that entered the legal market on or around April 4 and watched the grey market gaming sites continue to take bets in the unregulated space. It was particularly frustrating for those operators that chose not to ever take bets from Ontarians in the grey market and, instead, waited to enter the market legally.

Still, it’s hard to argue with the numbers. And moving 46 operators out of the grey market is a significant score for the AGCO.

Bottom line: It’s terrific news for Ontarians.

What happens now to those still operating in the grey market?

But what happens now to those grey-market sites that continue to flaunt Ontario’s rules?

The AGCO statement said it will “take appropriate regulatory action when dealing with non-compliance, including enforcement measures where appropriate… The AGCO will also continue working with government, law enforcement, and international regulators to address residual unregulated market activity in Ontario.

“In addition to these activities, the AGCO continues to engage registered suppliers to ensure they are meeting their obligation to end all commercial relationships with respect to residual unregulated sites in Ontario. We note that significant progress has been achieved by registered suppliers in removing their games and other technology from unregulated sites to date.”

There is a lot of money at stake.

Ontario casino and sportsbook revenue at $430 million

Through the first two quarters of operating — a period that ended Sept. 30 — Ontario sportsbooks and online casinos surpassed $10 billion in total wagers. And gaming revenue reached nearly $430 million.

The market also showed huge growth from Q1 (April through June 30) to Q2 (July through September). Total online gaming revenue was up 65% in Ontario from $162 million in Q1 to $267 million in Q2.

Additionally, total handle grew by 48% from $4.076 billion in Q1 (April through June) to $6.04 billion. The numbers do not include figures from the Ontario Lottery and Gaming Corp.’s online operations. Nor do they include promotional wagers (bonuses).

The number of active player accounts grew 28% from 492,000 in Q1 to 628,000 in Q2.  Active player accounts are defined by iGO as: accounts with cash and/or promotional wagering activity and do not represent unique players as individuals may have accounts with multiple operators.

Finally, the average monthly spend per active player account was up 26%. It went from $113 from April through June to $142 from July through September.

Though, some perspective is needed.

Ontario still far off comparable jurisdictions

While Ontario online gaming figures have greatly improved, they still are less than one-third as high as comparable US jurisdictions.

Ontario ranks a distant fourth on when compared to the six US jurisdictions that offer both online casinos and sportsbooks. This despite Ontario having the highest population (approx. 15 million) of any of the jurisdictions and the highest number of legal gaming operators.

Here’s how the jurisdictions ranked in revenue from April-September:

  1. New Jersey: $1.2 billion
  2. Pennsylvania: $1 billion
  3. Michigan: $951 million
  4. Ontario: $321 million (USD)
  5. Connecticut: $200 million
  6. West Virginia: $76 million
  7. Delaware: $12 million

Combining both quarters, Ontario’s revenue was:

  • 73% less than the revenue in New Jersey, which was nearly four times higher
  • 70% less than the revenue in Pennsylvania, which was more than three times higher
  • 66% less than the revenue in Michigan, which was nearly three times higher
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Dave Briggs

Dave Briggs is a managing editor and writer for Catena Media. His expertise is covering the gambling industry in Canada with emphasis on the casino, sports betting and horse racing sectors. He is currently reporting on the gaming industries in Canada and Michigan.

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