iGaming Ontario In Hot Water With Operators After Levying Unexpected Fees

Written By Matthew Lomon on March 13, 2023
iGaming Ontario hits operators with unexpected fees

iGaming Ontario is feeling the heat after notifying operators of online casinos in Ontario of additional, unexpected fees. Tensions arose over an iGO communication stating operators were liable for due diligence fees from the entity’s financial institution.

Gaming News Canada, which broke the story, found that iGO informed operators of the impending charges on Feb. 21.

The memo describes the sudden bank fees as:

“The due diligence processes [the bank] conducts before operators can begin to make deposits to iGO bank accounts. A large number of operators entering an iGaming market that is newly regulated has meant that iGO’s bank has conducted a high volume of due diligence activities.”

An iGO spokesperson told GNC, “iGO cannot comment due to the confidential nature of its operating agreement(s) with operators”.

High volume of due diligence activities results in significant fees

Within the notice obtained by GNC, iGO specified charges will only apply to Ontario online sportsbook and casino operators that launched before Dec. 31 2022.

Specifically, chargebacks range from $25,000 to $150,000, depending on iGO determination of individual expected annualized gross gaming revenue.

Much to the chagrin of operators, iGO maintained its position through Section 5.5.2 of the Finance Policy, Chargeback of Fees.

According to Canadian Gaming Association president and CEO Paul Burns, the CGA wrote the iGO on behalf of its members to voice their displeasure.

“The industry needs to understand that there’s cost certainty and regulatory certainty,” Burns wrote.

“This is a highly competitive market. Having surprises and unplanned costs, no matter how big or small, disrupts business plans. None of the operators heard from the banks, and didn’t know due diligence was being done.”

Additionally, Burns said some members of the association contacted iGO directly.

Banks are part of the problem, not the solution

Although iGaming Ontario is at the centre of the dispute, banks play a frustrating role behind the scenes.

Amanda Brewer, the Canadian country manager for Kindred Group, acknowledged this in an email to GNC.

“Despite repeated attempts by the industry – the Canadian Gaming Association, iGaming Ontario, and individual operators – to invite the banks to the table so they could educate themselves on the standards and the stringent AML/KYC regulations that all operators must uphold, they refused, And this is the result.

“An industry created by the province to generate jobs, economic development and revenue was ignored. What signal does this send to future industries that want to do business in Ontario?”

Internet Gaming Operator Application Guide features section outlining additional fees

Presently, the Alcohol and Gaming Commission of Ontario’s operator guide features a disclaimer in Section 3, alerting operators of additional regulatory costs beyond the annual $100,000 per gaming site fee.

In short, the advisory states:

  • Applicants may have to pay the reasonable costs of an investigation prior to processing of their application.
    • Potential costs are levied on an as-required basis, depending on the need for additional investigative activities and the intensity and cost of said activities.
  • The AGCO aims to offset the overall cost of regulating internet gaming.
    • In doing so, each operator should expect additional payments to recover these costs.
      • The specific amount per operator is pending.
      • However, the amount could be significantly greater than the above-mentioned regulatory fee of $100,000 per gaming site along with investigative charges.
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Matthew Lomon

Matthew Lomon has been a contributor at Catena Media’s network of regional sites since July 2022. He first broke into covering the legal North American gambling industry with PlayCanada. Since then, Matthew's reporting has extended to PlayMichigan, PlayPennsylvania, and PlayIllinois. Based out of Toronto, Ontario, Matthew is an avid (bordering on fanatic) sports fan.

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