The Launch of Ontario’s Regulated iGaming Market

Online Gaming

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WHAT YOU NEED TO KNOW ABOUT ONTARIO’S REGULATED iGAMING MARKET

Earlier this Spring, a fundamental shift occurred in Canada’s approach to iGaming regulation as the Ontario provincial government launched Canada’s first regulated iGaming and sports betting market. 

Until now, the only legal iGaming services in Canada were operated by the provincial governments through sites like the BC government’s www.playnow.com. Such provincially-operated iGaming offerings have been criticized by players for offering a more limited experience than that available on private iGaming sites.

In practice, many Canadians are able to access a far wider range of iGaming service through “grey market” operators – websites owned and operated by parties based outside of Canada that operate outside the scope of Canadian criminal law but are nonetheless accessible by Canadians. By some estimates up to 70% of the approximately $1 billion spent on iGaming services in Ontario every year before the regulated market went into effect went to these “grey market” operators.

By launching a regulated market, the Ontario government is for the first time allowing these “grey-market” operators to operate in Ontario in a regulated setting. This will have the effect of increasing the choice of legal iGaming services available to Ontarians, allowing the Ontario government more control over such services in order to better protect players, as well as allowing the Ontario government access to a previously untapped revenue source by collecting a share of the revenue obtained by such third-party “grey market” operators.

While no concrete plans have been announced yet, it is expected that in the next few years other provinces will follow suit and open their own regulated iGaming markets.

The Application Process

In order to register for Ontario’s regulated market parties are required to submit various disclosures including constituting documents, entity and personal disclosures for directors and officers, financial statements, criminal background checks, gaming site diagrams, and other supporting documents. iGaming operators are required to pay an annual non-refundable $100,000 registration fee, while suppliers of iGaming services (who do not operate customer-facing sites) are required to pay an annual $15,000 fee. The application process can be expected to take anywhere from two to four months. The Ontario government has also released an Operator Application Guide and Supplier Application Guide to assist interested entities with their application process.

Operators who wish to apply under Ontario’s iGaming regime will also need to enter into a commercial agreement with the Ontario government, which sets out each parties’ responsibilities in respect to the operation of their iGaming offering. Both operators and suppliers are also required to comply with various policies and standards, including the Registrar’s Standards for Internet Gaming. The Standards provide guidelines respecting themes such as responsible gambling, prohibiting access to designated groups, player account management, game integrity, protecting public safety, and minimizing unlawful activity.

It is also notable that since the regulated market has launched on April 4, 2022, the Ontario government has warned that parties that have not applied for registration risk having any future registration applications denied if they continue to operate in Ontario’s unregulated market or continue to associate with entities that do so.

Need to Apply?

For more information about the application process or to obtain support in completing your application, please do not hesitate to contact Segev LLP via email (mailto: [email protected])

Disclaimer

***The above blog post is provided for informational purposes only and has not been tailored to your specific circumstances. This blog post does not constitute legal advice or other professional advice and may not be relied upon as such.**