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More than three years after the launch of Ontario’s competitive online gambling market, provincial leaders are looking to the next phase of the market’s maturity, including increased black-market enforcement efforts and a government review of the industry.
The most recent study commissioned by the Alcohol and Gaming Commission of Ontario (AGCO), which regulates gambling, and iGaming Ontario, which conducts and manages online gaming by contracting with private operators, found that just under 84 percent of Ontario players utilize regulated sites.
Converting that remaining 16 percent remains a top priority for government leaders and gaming regulators as the market continues to progress.
When the province began licensing private operators in 2022, it allowed existing companies that were already operating in Ontario as grey-market operators to transition into the legal market without halting their operations, provided they did so within what ultimately became about a six-month grace period following the launch.
“That has been very successful, but the market's matured enough now that people have had an opportunity, and if they're not going to go through the door, it's time that they stop playing in our market,” said Doug Downey, Ontario’s attorney general.
“I think IGO, AGCO and the responsible gaming people all understand that that's really important, so I think you'll see a little bit more aggressive approach in that space,” Downey said.
“I know some moves have been made to have ISPs and [internet] hosts shut down some, I'm not going to name names, but to say stop facilitating this, or we're going to have to go down the road of consequences, and I think that's acceptable. It's only fair to those who are playing by the rules.”
Dave Forestell, chairman of AGCO's board of directors, said while enforcement efforts and punitive action is one way to convert players to regulated platforms, the more effective way is through expansion of the legal market, noting the province’s efforts to secure a court ruling that would allow for the pooling of liquidity for games such as daily fantasy sports and poker.
“What we’re trying to do is look both sides of the ledger, both what we can do to go after people who have made a conscious decision to operate illegally; not grey, illegally. And then, you know, look at places where we don't enable the ability to participate in the legal market,” he said.
On the enforcement front, Forestall noted that while AGCO does not have an explicit enforcement mandate, there are steps that the regulator can take to hamper black-market operations.
"Ultimately, this is a business, and so a business requires new customers and the ability to advertise, so what we've tried to do is cull together banks, payment processors and others to let them know, we publish a list of legal operators, so if you're providing banking services, payment services to somebody not on this list, you are facilitating an illegal operator in Ontario," he said.
Those notifications have also extended to broadcast entities in an effort to limit advertising of unregulated sites.
“We reached out to 13 broadcasters to say, you know, when you're accepting an ad from Bodog, that's an illegal operator in this province, they're not licensed here,” Forestell said.
“And a number of them have said they will not accept ads from these illegal operators anymore, so we're going to keep at it, because I think we just believe it's really important that for a licensed market to function efficiently and fairly, you need to make sure that those people who have chosen to operate in the market legally are well treated by government.
“Part of our ability, or our duty, is to make sure that we are squeezing that illegal marketplace down to the smallest possible size by going after their ability to generate revenue.”
The online gaming market has also shifted in the province in recent months as iGaming Ontario, originally established as a subsidiary of the AGO, was branched out on its own as an independent agency and brought under the jurisdiction of the Ontario Ministry of Culture, Tourism and Gaming.
Stan Cho, Ontario's gaming minister, said that the move was made to bring iGO more in line with the government-run Ontario Lottery and Gaming Corporation, which operates its own online gaming platform in addition to lottery and land-based gaming operations in the province.
“The gaming environment is evolving both on the land-based side and on the iGaming side, and we want those two agencies to be close enough to each other, not a merger, but close enough to each other to have certain synergies and elimination of red tape that makes sense between them,” he said.
Cho announced at last month's Canadian Gaming Summit in Toronto that the Ontario government would conduct a wider review of the gaming sector.
“The review will assess opportunities to enhance efficiency and reduce red tape across both online and land-based markets,” he said. “The ultimate goal is to ensure the whole gaming sector delivers strong economic outputs for Ontarians, and I want to be clear, this review and the changes made are not going to be a bunch of politicians sitting in a room thinking what's best for the industry.
“We are going to listen to the experts. We are going to listen to what affects you as the operators,” Cho said. “We're going to listen to the pros, and I want to make that very clear from the beginning.”
Regulators and operators have frequently touted AGCO's “outcomes-based” approach as a positive quality of the gaming market in the province, allowing operators to work toward achieving policy goals in different ways rather than burdening them with specific requirements .
“There is a perfect example of being over prescriptive,” Cho said. “I think government needs to be very careful in that so as we move forward, and this gaming review is an example of that, we need to make sure that we are consulting with the sector professionals, but also that we are not being overly prescriptive, and making sure that we are looking out for the best interest of growth in that responsible way.”
