Ontario Continues Push for Private iGaming Market

New Ontario online casinos could enter regulated market in 2021-22.

New Ontario Online Casinos could enter Regulated Market in 2021-22The Canadian government has viewed online gambling with skepticism for more than two decades. It has allowed its provinces to their own operate iGaming markets, but with some strict guidelines to follow. Each province that wants to participate must develop its own regulations, and host agencies to enforce them. They must only operate within their own border. More importantly, they must be operated by the province, resulting in a monopoly-style, one-and-done product for eligible citizens.

It’s been this way for nearly two decades, beginning with BC’s launch of PlayNow in 2004. Since then, almost every province has hopped on the iGaming bandwagon, making online lotteries, casinos, and/or poker rooms available to adult residents. Throughout it all, only one province, Ontario, has resisted the ban on privatization, favoring a competitive market. Now, it looks like they just might get it.

New Ontario Online Casinos in Regulated Market?

The province has been pushing heavily for a competitive iGaming market since the spring. Action toward that goal came to fruition in mid-July, with the release of the Registrar’s Standards for Internet Gaming, detailing the regulatory framework for iGaming in Ontario.

Then, on August 18, the Alcohol and Gaming Commission of Ontario (AGCO) released an Internet Gaming Operator Application Guide. That document contains information detailing how internet gaming operators can apply for registration in Ontario.

This is not an actual application, mind you, but rather a guide to inform interested operators of Ontario’s intent to offer such applications in the coming weeks. According to the guide, operators will need to sign an agreement with AGCO’s “Conduct and Manage” subsidiary, iGaming Ontario.

Will Ontario’s Plan Actually Work? Maybe…

The provincial government seems to be under the impression that it can privatize its iGaming market without breaching Canadian law. So long as each operation is ‘conducted and managed’, at least in part, by a provincial agency, (such as the AGCO subsidiary, iGaming Ontario), they believe it’s perfectly acceptable. And why not? This is precisely how land-based gaming operations got around the same laws a few years back.

For decades, most gaming properties in Canada were run directly by their respective province. In recent years, however, provinces have begun doling out managerial licenses to private companies. And while those companies are in charge of day to day operations, the AGCO and Ontario Lottery and Gaming (OLG) are still in charge.

Who Would Be Eligible for Ontario iGaming Regulation

The way things look now, pretty much any online casino operator would be legible to apply. Ontario is making it clear that it holds no grudges against ‘grey market’ operators; the offshore companies that have been accepting Canadian players for years, without local authorization. Of course, authorization was never really required to begin with. But if Ontario privatization plan succeeds, it may become a requirement from here on out.

According to the operator’s guide:

The AGCO has developed a regulatory framework to ensure honesty
and integrity for igaming in Ontario and to protect Ontario consumers
while, at the same time, facilitating a business-like transition from
unregulated to regulated igaming scheme that is fair for registrants.
As part of this transition, the AGCO is committed to taking strong
action to address any remaining unregulated Ontario market activity
in partnership with law enforcement.” 

Long story short, any grey market operator that ceases accepting Ontario residents prior to applying for registration will be eligible for approval. Those who continue to accept Ontarians after the province launches its private market will be label black market operators, and will no longer not be eligible for a license.

There’s a number of operators who are already expected to apply for a license once the registration process opens. First is Torstar Corp, owner of the Toronto Star newspaper, which previously announced intentions to develop a “made-in-Ontario online casino and sportsbook”. Mohegan Gaming and Entertainment is another, having proclaims in June its desire to spread into Ontario following the launch of its iGaming wing, Mohegan Digital.

Further speculation calls for interest from major US companies like BetMGM and DraftKings. PartyCasino, owned by Entain (which also happens to owns half of BetMGM), has already begun appearing in Canadian television ads. Furthermore, Bet99, Jackpot City and Spin Casino have been advertising their free-to-play, dot-net websites for a while now.

What About Online Poker in Ontario?

Since the OLG launched its self-titled PlayOLG website in January 2015, online lotteries and casino games have been the only gambling options on the menu. Just last week, single-event and in-play betting options were added to the Pro-Line sports lottery; Pro-Line+ they call it. In all these years, Ontario has avoided launching any form of online poker. But that’s likely to change.

A Ring-fenced internet poker market with no competition has little chance of profitable success. Opening the market to competition – and potentially allowing players to compete with others from different markets – could create a vast community for online poker in Ontario. Canada is home to a plethora of poker pros, and Ontario is the nation’s most populous province; home to the most populous city of Toronto.

How Long Until Ontario Welcomes New Online Casinos?

It’s impossible to say when any new Ontario online casinos could actually begin accepting players. Before the end of 2021 is possible. The AGCO has expressed its hope to launch a private market as early as December. Realistically, it could be closer to Spring or even Summer 2022.

Let’s remember, the operator’s application guide is the only document currently available. The AGCO still hasn’t released its application guide for suppliers yet, and isn’t even accepting operator applications at this time. According to the guide, AGCO will begin accepting license application “in the coming weeks”.

Assuming Ontario’s plan moves forward without a hitch, here’s what we do know. The operator’s licensing fee will be $100,000 per year. There should be no tax payments, since the operators are contracting directly with OLG. Instead, each operator will enter into a revenue sharing agreement, negotiating percentages on a case-by-case basis.

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