Ontario’s Alcohol and Gaming Commission Delivers Update On New Online Gambling Model

Posted By Robyn McNeil on June 11, 2021 - Last Updated on June 21, 2021

Day one of the Canadian Gaming Association’s (CGA) Canadian Gaming Summit wrapped with an update on Ontario’s proposed iGaming model.

In their closing keynote, Tom Munghan and Martha Otton of AGCO detailed plans to open the sector to competition. Other highlights included background on AGCO and the subsidiary proposed to conduct and manage iGaming, and a loose timeline.  Legal online casinos in Ontario would be a part of this plan.

Munghan, CEO and Registrar, kicked things off with a review of the current state of Ontario’s iGaming market. He was quick to note only about 20 percent of online gambling in the province happens through OLG.ca. With as much as $1billion lost to unregulated markets yearly, the interest in capturing some of that 80 percent is strong.

Highlighting risks for Ontarians who gamble without the protections regulation offers, Munghan also spoke to issues of compliance and revenue.

“Operator compliance with anti-money laundering rules and regulations and system security cannot be verified,” he said.  

“These sites also do not contribute any money to the Ontario government, which translates to lost revenue for government priorities, like health care, education, social programs, and even post-pandemic recovery. The very reasons for which gaming was introduced in the province, more than two decades ago.”

Otton, iGaming Ontario Project’s Executive Director, explained the commercial agreements required to operate.

“The Criminal Code of Canada expressly prohibits gambling with certain exceptions, such as where gambling is conducted and managed by the province,” said Otton. “That necessitates a higher level of involvement by the province than a tax and license scheme for participation. Instead, interested operators will be required to register with the AGCO and enter into a commercial agreement with the gaming subsidiary.”

How it started

Plans to end the Ontario Lotto and Gaming (OLG) corporation’s monopoly on iGaming first appeared in the Ford Administration’s 2019 budget. 2020’s budget built on that earlier message with a commitment to introduce legislation to establish an open market.

Should the legislation pass, AGCO would be responsible for conducting and managing online gambling and regulating the iGaming market. The subsidiary (yet to be established) will manage relationships between government and private operators, leaving the Registrar’s role unchanged.

In early March, the government released a discussion paper offering preliminary thoughts on key aspects of Ontario’s iGaming model. They also announced they would be seeking feedback to help inform the development of the market. 

March 30th, AGCO launched their iGaming engagement portal, welcoming stakeholder input into draft Registrar’s Standards for Internet Gaming. For the next several months, they will continue to engage around critical components of the emerging model. 

In the meantime, and as of April 23, Independent Testing Labs (ITLs) can register as Gaming Related Suppliers (GRS). The move will allow ITLs to service operators and suppliers as they prepare to enter the market. Under Ontario’s new model, registered ITLs will test and certify games and other technologies. Other applications, including those for operators and suppliers, should open later this year.

How it’s going

AGCO’s update failed to provide any significant announcements or surprises for those who have been paying attention. It did, however, offer valuable tidbits for what watchers can expect for the remainder of 2021.

Until June 14, AGCO is seeking input on proposed eligibility requirements and processes for organizations, individuals, and technology. According to Munghan, the opportunity to engage around compliance should kick off later in June. Future engagements for commercial agreements, systems and data, and service engagements will roll out over the next weeks and months.

“Key elements of the draft commercial contract will be available to interested operators in the coming weeks,” said Otton. “Operators who wish to be part of the first group into the market at its launch will sign their contracts with the subsidiary in the fall.”

Notably, after engagements close, the feedback loop will remain. Answers around earlier input is coming, says Munghan. An update to the draft standards should come mid-to-late summer, with eligibility findings following as summer ends. 

Late summer or early should see registration for operators open, but the exact timeline depends on solidifying those draft standards and eligibility requirements. But, if all goes as planned, there’s a high likelihood the new market will launch by the end of this year.

Munghan also pointed out the work to develop the new sector is an all-hands-on-deck effort. 

“This is an Ontario-wide initiative, not just one that Martha and I are the face of,” he said. ‘There are many people that are participating in this and the decisions. We work collaboratively across government.”

Readying for single-event bets

With Bill C-218 quickly making its way through the Senate, the full-scale of Ontario’s market overhaul is somewhat unknown. The bill, which would amend the Criminal Code to allow for single-event sports betting, is slated for debate next week.

When asked by Amanda Brewer, Senior Advisor to CGA, about the odds of the bill passing third reading, Otton was hopeful.

“I’ve got both my fingers crossed, Amanda. Let’s say 90 percent.”

Munghan, speaking as the Registrar, was slightly more subdued.

“I don’t know if the Registrar should be talking about odds,” he laughed. “But I would say I give it a very, very high chance.”

On whether AGCO is ready to meet the challenge of including single-event wagering in the market launch Munghan offered reassurance. 

Martha and I are already working on this, and if it is successful, we can’t afford not to,” he said. “We’ll be having some significant conversations in the government. About our readiness to be able to deliver this as part of this initiative as well. So again, all hands on deck with this other piece of new business that may be coming.”

As the update wrapped, Otton reassured listeners, “this is not the end of the conversation.” 

Munghan followed with thanks to all who have participated.

“Thank you to everybody out there for your engagement with us. For your constructive input. And for working with us as we work through this process here in consultation and drive towards decision making. So, very much appreciated,” he said. “It’s been a tremendous initiative so far.”

 

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Robyn McNeil

Robyn McNeil is a Nova Scotia-based writer and editor. She lives in Halifax with an awesome teen, a mischievous cat, and a penchant for good stories, strong tea, cheeseburgers, yoga, graveyards, hammocks, gardening, games, herb, and hoppy beer.

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