April 4th will mark one year since Ontario became the first Canadian province to legalize the online market for private gaming operators. Provincial regulators in the form of the Alcohol and Gaming Commission of Ontario and iGaming Ontario are increasingly cracking down on illegal gambling sites. A few days ago, their joint report covering the period from 1st April 2021 to 31st March 2022 was released. What does it say?
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The AGCO’s Annual Report
The latest such report comes just days before Ontario launched its online gambling market. In the new report, the Ontario government agency, which is responsible for the many sports betting sites operating and Ontario online casinos in the province, said additional measures will be taken against illegal operators.
The new market is controlled by an agency - iGaming Ontario (iGO), with which all operators must enter into agreements that take approximately 20% of their revenue in order to operate legally and offer sports betting and casino games to citizens. As a result, this year's report of ACGO also contains the first report of its subsidiary iGO. The data provided by iGO covers the period from July 6th, 2021 (when it was created) to March 31st, 2022, and its chairman promises to help the new Ontario market by stepping up pressure on illegal operators.
“We anticipate more [legal] operators joining the market in 2023, growing the economic benefit and revenue stream for Ontarians”, said the iGO board chair Dave Forestell in the report. “We will also ensure that the investments made by legal operators are protected and valued by taking further efforts to crack down on the illegal market. Illegal operators do not share revenue with the province and are not governed by our strict rules around responsible gambling, anti-money laundering, or player protection”, he added.
The Market of Ontario
Forrestal said that a "significant focus" for iGO will be to combat the illegal market and that in order for the legal market best online casinos to succeed, repressive measures must be taken against violators.
He commented on the establishment of the Ontario market: “It has been a very successful launch, with hundreds of thousands of Ontarians participating in our highly competitive market” and concluded that “However, the work does not stop here, the future is bright for Ontario and by listening to operators and players we will learn, grow, and do our best to serve the interests of Ontarians”.
The board chairman's words indicate that there are still some bad actors in the province who do not follow the rules, but they have not gone unnoticed by iGO and AGCO. Currently, Ontario's regulated market is the only one of its kind in Canada, but it could lose a significant portion of its revenue due to the presence of illegal operators.
What was the situation before the opening of the legal market? April 4th, 2022 is the date that Ontario's online gambling market opened its doors. This allowed many private operators in Canada's most populous province to offer legal sports betting and casino games. Previously, there was effectively only one legal provider of this type of service, and that was the government-owned Ontario Lottery and Gaming Corp.
Currently, over 70 gambling sites operate under Ontario's regulatory framework. IGO data shows that from October 1, 2022 to the end of the year, more than $11.5 billion was wagered on the province's legal sites. This generated $457 million in revenue coming to hundreds of thousands of player accounts.
“That market, in a few short months, has quickly become one of the world’s largest regulated iGaming jurisdictions and is on track to deliver real revenue to the province”, iGO CEO Martha Otton argued in the report. And made a prediction: “We expect these numbers, across the board, to continue to grow”.
What is the success of the market in Ontario? This is largely due to the regulator's approach to dealing with the situation. Initially, the power of the gray market is what pushed the Ontario government to create a regulated iGaming market that would bring in significant revenue and allow it to set the standards and rules.
Operators that were previously part of Ontario's grеy market, meaning they were licensed by another regulatory organization and accepted bets from Ontario residents, become part of Ontario's legal gaming network. This is done by means of registration in the ACGO and conclusion of an operational contract with the IGO, once the conditions have been met.
The agency stated that “iGO worked with government and prospective operators to create market conditions that supported economic development, addressed the unregulated grey market, and captured new provincial revenues”. The transition process set by regulators has allowed grey operators to remain in business in Ontario until they meet all regulatory requirements to officially join the legal market.
The End of the Grey Sector
Even though only the official websites of affiliates are not forbidden to write about online casino bonus offers and promotions, Ontario is considered the least restricted Canadian province when it comes to gambling due to the abundance of land-based operators and for several months now of online casinos as well.
For example, in Manitoba gambling is allowed but the situation with the online casinos is a little strange. The gambling companies that are set up in Canada cannot offer online gambling services, but Canadians can play at them as they are not registered in the province.
On 31 October 2022, AGCO and iGO introduced strict new rules that require all non-compliant operators to cease all unregulated activities, regardless of whether they are applying to enter the regulated market. Failure to comply with the requirement may result in the impossibility of allowing the relevant company to enter the regulated market.
The agency told the media website Covers that: "iGO will continue to onboard operators that drive players to the regulated market. (...) iGO promotes the benefits and protections to players via online and social media efforts to encourage them to only play on regulated sites and avoid unregulated offerings. iGO also continues its work with the AGCO, media outlets and industry associations to support a media and supplier environment that only works with regulated operators. iGO will have more to say about further efforts to combat the illegal market in future".
The first fiscal year of iGO ends in the red not because there are no reported revenues, but because they are invested in the various departments of the regulatory body such as "Information Technology/Infrastructure Services" and "General Operating, Administration & Other", as well as for employee salaries. In the report of the agency, it is noted that “The regulated iGaming market launched on April 4, 2022, and accordingly, there were no revenues generated in the 2021-22 fiscal year. (...) “As a result, the Corporation ended the year with a net deficit from operations of $8.7 million”. Nonetheless, the reported revenue data show that for the period 2022 – 2023, this will not be the case.
Single-event sports betting became legal in 2021 after Bill C-218 was passed, however, sports betting sites in Canada cannot offer parlay betting and horse racing as they are still universally prohibited at this time. If you want to play play free slots or free roulette games to test them before putting real money on the line, this can be done on the affiliates’ official websites.
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