Halloween Trick: Gray Market Ontario Online Gambling Operators Lose Treat of Grace Period

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Like shriveled jack-o’-lanterns, news that Halloween is the deadline for Ontario online gambling operators to fully comply with the law may feel a little old.

Fully regulated operators expected penalties to “come into force” against gray market operators and suppliers months ago.

Instead, the regulatory body overseeing the Ontario online gambling market that launched on April 4 issued a “new standard” on Tuesday. It says, “operators and gaming-related suppliers must cease all unregulated activities” on Oct. 31.

The Alcohol and Gaming Commission of Ontario (AGCO) announcement reads:

This new standard establishes that operators and gaming-related suppliers that are currently active in the unregulated market in Ontario (or have agreements and arrangements with those in the unregulated market in Ontario) must end their activities in the unregulated market to avoid jeopardizing their eligibility for registration. This requirement extends to applicants for registration in Ontario’s igaming scheme.

After all, AGCO points out, it opened operator and supplier registration more than a year ago. While they also had to secure operating agreements with iGaming Ontario (iGO), it was “a reasonable amount of time for these operators and gaming-related suppliers to join the regulated market in a business-like and seamless fashion.”

Speaking of a reasonable amount of time, AGCO says the Tuesday announcement gives gray market operators enough time to notify their customers that there may be “blackout periods.” Those may happen on Oct. 31, if AGCO shuts the operator down. Then the operator could return to business after completing registration.

What Does ‘Come Into Force’ Mean, AGCO?

What’s the “or else” for unrepentant gray market operators? AGCO says non-compliant gray market operators will have to “end” unregulated operations and may be required to register under the Gaming Control Act (GCA). 

AGCO says on Tuesday:

Operators and gaming-related suppliers must cease all unregulated activities if, [sic] to carry out those same activities in iGaming Ontario’s regulated online lottery scheme, it would require registration under the GCA.

Operators and gaming-related suppliers shall not enter into any agreements or arrangements with any unregistered person who is providing the operator or gaming-related supplier with any goods or services if, to provide those goods and services in iGaming Ontario’s regulated online lottery scheme, it would require registration under the GCA.

Putting the Halloween deadline announcement in terms of trick-or-treating:

  • AGCO says GCA registration for unabashed gray market operators and suppliers is a penalty because, “Under the Gaming Control Act, 1992 (GCA) the Registrar is authorized to establish risk-based standards to regulate Ontario’s gaming sector.”
  • Regulated Ontario online gambling operators and suppliers have the treat of a “standards-based approach.”

Legal Ontario Online Gambling Operators Are Penalized

So far, regulated operators have been the ones AGCO targets for penalties. From BetMGM to PointsBet, AGCO’s issued fines against legal Ontario online gambling operators for “advertising and inducement infractions.”

Despite AGCO calling the standards-based approach more lenient, operators think Ontario’s marketing and advertising rules are somewhat restrictive.

So it’ll be interesting to see if the Oct. 31 deadline involves concrete action, like AGCO’s May 3 notice of a monetary penalty against BetMGM for $48,000.

New Live Dealer Standards

Evolution and Playtech operate live dealer studios in Ontario. Ontario online casino operators contract with the companies for their gamblers to bet on table games, roulette, and more.

Representatives of both companies didn’t immediately return Bonus.com‘s request for comment today on AGCO’s new standards for live dealer suppliers.

AGCO says on Tuesday:

The AGCO has determined that amendments to the Registrar’s Standards are necessary to address the potential risk related to the use of physical gaming equipment (including, among others, roulette wheels and playing cards) and the risk related to the use of live presenters. These amendments will come into force as of October 31st, 2022, with the exception of an update to standard 4.08. The updated standard 4.08 will come into force six months from now on April 4, 2023, in order to give enough time for operators and gaming-related suppliers to get their equipment certified.

The announcement says AGCO needs to ensure the “integrity, safety, and security” of the live dealer operations. It repeatedly mentions restricting who has access to the supplies.

By next year, the regulator plans to be in charge of approving equipment with electronic components, whether on its own or via “an independent testing laboratory registered by the Registrar.” This new standard pertains to: “All igaming games, random number generators and components of igaming systems that accept, process, determine outcome of, display, and log details about player bets, including any subsequent modifications.”

About the Author

Heather Fletcher

Heather Fletcher is the lead writer at Bonus, concentrating on online casino coverage. She had her first published byline at age 10, but didn't get paid for her writing until she got her first newspaper job. Fletcher's newspaper career started at Suburban News Publications in Ohio and eventually took her to The New York Times, where she's still a contract freelance reporter for the National Desk. She covers breaking news from Philadelphia, as needed. In March 2021, Fletcher began writing about online casino gambling as the lead writer for Online Poker Report.

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