Comments by the regulator of online sports betting in Ontario suggest that numerous operators are taking the watchdog's warnings about exiting the province’s unregulated market very seriously.
Operators and suppliers had until Halloween to stop offering Ontarians online sports betting sites and casinos that were not authorized by provincial authorities, or the companies would risk being blocked from the province’s regulated market forever.
The Alcohol and Gaming Commission of Ontario (AGCO) imposed that standard starting Monday, and the regulator told Covers on Wednesday that a total of 17 operators exited Ontario’s unregulated market over the past two days “in direct response” to the new rule.
If you take action, they'll take action
Those operators are iGaming companies that are still working their way through the requirements to launch in Ontario’s competitive market for legal sports betting, online casino gambling, and poker. One of them is BetRegal, which told Covers on Tuesday that it stopped accepting wagers from provincial players as it moves through the licensing process.
Operators that someday want to join Ontario’s regulated market face a big risk now if they decide to take bets from the province’s players without regulator approval. Bookmakers that have plans to remain unregulated forever in Ontario and still keep taking bets may want to start looking over their shoulders as well.
“As always, the AGCO will take appropriate regulatory action when dealing with non-compliance, including enforcement measures where appropriate,” the regulator's communications team told Covers in an email. “The AGCO will also continue working with government, law enforcement, and international regulators to address residual unregulated market activity in Ontario.”
A crackdown long in the making
The new standard taking effect marks the end of the “transition period” in Ontario, during which operators could take bets from Ontarians while they worked toward receipt of an iGaming registration from the AGCO and the signing of a commercial contract with iGaming Ontario, a government agency. The registration and the operator agreement are the two key steps for companies that want to launch in the province’s regulated iGaming market, which went live in April.
Ontario’s government decided to develop an iGaming market for private-sector operators in the first place as a way to put a dent in the prevalent “grey market” wagering going on in the province.
Ontarians were for years gambling hundreds of millions of dollars annually on websites that were regulated and licensed abroad or outside the province, but not by the province itself. Pulling operators and players into a provincially regulated channel was seen as a way to offer more consumer protection and create a new stream of revenue for the Ontario government.
“The AGCO established a process for existing operators and suppliers in the unregulated market to move into the regulated market without causing significant interruption to their Ontario customer base,” the regulator said on Wednesday. “With the application process for registration opening in September 2021 and the market going live in April 2022, operators and gaming-related suppliers have had a reasonable amount of time to join Ontario’s regulated market in a seamless fashion.”
No betting high on their supply
The AGCO added that there are now 36 operators live in Ontario’s regulated market and that 28 of them were previously active in the province’s unregulated market. All of those operators had to fully exit the unregulated market as a condition of their ticket to enter the province’s regulated market.
Still, the slow pace with which some operators received their registrations, inked their contracts, and then finally launched in Ontario’s iGaming market irked some of the earlier entrants into the framework. While some bookmakers were abiding by the province’s rules as they took bets, others were still taking bets from Ontarians after only having applied for or received an AGCO registration, and were not officially a part of the regulated market.
The AGCO ultimately decided it was time to put a hard deadline on the province’s “transition period,” and selected October 31 for the new standard to come into force. And, since the announcement of the standard on October 3, the AGCO says its employees have been working in tandem with registrants and applicants that were active in the unregulated market to understand what was coming down the pike.
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— iGaming Ontario (@iGamingOntario) October 28, 2022
Congrats! ???? Pala Interactive Canada, Inc, Pinny (Ontario) Limited, Pret Play Limited & Apollo Entertainment Ltd have all joined the Ontario market as legal and regulated Operators.
Their brands include: pic.twitter.com/UKznfL4eke
Several operators have launched in Ontario's unique regulatory framework since the AGCO's warning, including Bet99 and Pinnacle.
As of Wednesday, there were 35 operators live in Ontario's regulated iGaming market, which remains the only one of its kind in Canada. Of those, more than 25 are offering or intend to offer online sports betting to Ontarians.
“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,” the AGCO said in its email to Covers. “We note that significant progress has been achieved by registered suppliers in removing their games and other technology from unregulated sites to date.”
