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A key Alberta government minister says legislation governing the province’s private online gaming model is planned to be introduced next spring, pumping the brakes on industry rumblings of an aggressive timeline that would include a 2024 launch.
In an interview with Vixio GamblingCompliance at the Global Gaming Expo in Las Vegas, Dale Nally, Minister of Service Alberta and Red Tape Reduction, whose mandate includes overseeing the province’s gaming operations, discussed the province’s new timeline for rolling out a private online gaming model similar to that of the province of Ontario.
“We heard in the beginning that we can't roll this out fast enough, and once we started moving down this path, we heard, well, wait a minute, you’ve got to slow down to speed up,” Nally said. “And we heard loud and clear that operators wanted to be consulted, they didn’t want us to build something and then tell them what it was going to look like."
“They wanted to have some say in this, so that’s the work we’re doing now,” he continued.
Nally spoke with Vixio shortly after participating in multiple roundtable discussions with prospective Alberta stakeholders Wednesday morning in Las Vegas to gain valuable feedback.
“One of the questions I’ve been asking them is, what does the timeline look like for you, and operators have been telling us during this conference that they would like to see 2025 [it] would be a great timeframe, and they’d like to have four to six months notice on that.”
“And so I think those are things we would like to accommodate,” he added. “We’re going to put the legislation in the spring, and I think you’re going to see it ramp up after.”
Nally has maintained throughout the process that the province intends to borrow heavily from the Ontario model in crafting its structure.
“I can't tell you exactly what the final product is going to look like, because we're still building it, but I can say that we know that it will very much emulate the Ontario experience,” Nally said.
One concept that had some steam earlier in the process was a white-label licensing regime that would permit operators who are already active in Ontario to be granted access to the Alberta market quickly.
Nally acknowledged that such a concept had been on the table.
“It was something that we looked at,” Nally said. “We looked at everything. We knew that we wanted an open and free market, and in terms of how we got there, we were open to everything.
“I think that’s the right approach, I think you need to look at every avenue and every angle,” he continued. “And so we explored that, the government made the decision that we want to put in enabling legislation that will allow us to move forward with an iGaming market, but yeah, we’ve looked at many scenarios.”
“I'm comfortable in saying, we've always said it's going to very much emulate Ontario, just because they've done such a good job in this,” Nally continued. “We don't need to reinvent the wheel. If there are some learnings from Ontario, then we'll absolutely take those and improve on it, but we will certainly have an environment that is very similar to Ontario's.”
One area where Nally indicated that they are likely to take a similar path is the question of how to transition existing grey market operators currently doing business in the province, and transitioning them into the regulated space.
Ontario granted a roughly six-month transition period where operators could continue to operate while their iGaming Ontario applications were pending, and could freely transition into the regulated space without being forced to halt their operations for any length of time.
“We have heard loud and clear that that that was one of the things that companies liked about Ontario, and that's what they would like to see in Alberta, so we're we are certainly taking that away to make sure that what we can offer will meet those needs,” he said. “We want to make it easy to come to our market, not difficult.”
“We want to keep it as low cost of an entry into our market as possible, and so that is absolutely front of mind.”
Another question that has been raised by both prospective operators as well as current Alberta gaming stakeholders is how the province will resolve the issue of setting a tax rate and balancing a desire to convert more operators into the regulated space, while not significantly undercutting existing land-based operators.
iGaming Ontario’s operating agreements feature about a 20 percent tax on online operators, but Alberta land-based operators can pay up to 83 percent of revenues to the government.
Nally acknowledged the challenge but added that the province is looking to regulate online gambling that is already taking place.
“It’s a great question, and it’s one we want to get right, but to be clear, we’re not bringing online gambling to Alberta,” he said. “It’s already there, so I would suggest that online gambling has already begun to cannibalize land-based casinos because it’s there.”
“Recognizing it’s already there, we have a fiduciary responsibility to have a regulatory environment that puts players' safety first, and keeps Albertans as safe as possible, and that’s what we’re doing”
One key piece of Nally’s fact-finding work, which has included trips to both G2E and the ICE 2024 conference in London earlier this year to meet with stakeholders, has also included consultations with 46 of Alberta’s First Nations tribes.
“We have discovered that making First Nations partners in prosperity and working with them is inherently better for them, for us, for everybody, so that's why we spent the summer engaging,” he said.
“We heard that there are some First Nations that would like to have a role, and whether that's them partnering with an operator, whether that's them forming a consortium and doing their own, that remains to be seen,” Nally added.
“We've heard from other First Nations that they want to have more of a passive role in the iGaming market, no different than how they might benefit from the revenues from the land-based market,” he continued. “So, I can't tell you definitively what that will look like, but we've heard loud and clear that there could be a few different scenarios.”
Ultimately, Nally said, the process he and his staff have embarked on has produced at least one valuable lesson.
"For me, one of the learnings has been how important it is to manage expectations,” he said. “Revenue expectation, of course, is one important angle, because there is this erroneous perception that it's so easy to make money on online gambling because it all happens online, it's cloud-based, and companies are going to be printing money out of thin air."
“In fact, that's not the reality,” he continued. “The reality is that they have significant investments that have to be made, whether it's in advertising or other infrastructure, bricks and mortar, to support all this, and so having to manage people's expectations in terms of where the revenue is actually going to be versus where they think it's going to be, where they want it to be, so that was certainly a big one.”
