Officials from Ontario’s gaming regulator sought to make it clear Tuesday (June 7) that operators should stop testing the boundaries of the province’s advertising restrictions.
During a presentation on the first day of the Canadian Gaming Summit in Toronto, representatives from the Alcohol and Gaming Commission of Ontario (AGCO) said that, on the whole, the online gaming industry has a high rate of compliance in the two months since market launch on April 4.
But the regulator acknowledged that its advertising restrictions, which include a prohibition on public advertisements that contain any inducements for players, have generated a lot of discussion from operators and other stakeholders, such as affiliate marketers, as well as some potentially outside-the-lines attempts to circumvent the restrictions.
“It has its roots in responsible gambling, and although it's a very simple standard, in principle, it's been interpreted differently across the industry,” said Jay Welbourn, senior manager of technology regulation and compliance for AGCO.
“We're regularly surprised by some of the advertisements and the practices that we're seeing come forward, and some of them are pushing the envelope, and frankly, are not compliant.”
Welbourn said that after discussions with operators and stakeholders, there was “likely a misunderstanding of the true objective or goal of the standard,” which the AGCO sought to clarify on Tuesday.
The rules prohibit any inducements, bonuses or credits from being advertised in public channels, such as television advertising, billboards and social media.
“It's been observed in other gaming jurisdictions that without such regulatory restrictions, the advertising space is often saturated with signup bonuses and offers as operators compete for the attention of new players,” said Katie Cunningham, regulatory compliance manager for AGCO.
“And again, we know this is important, acquiring new players is the name of the game, especially when the market launches,” Cunningham said.
“But there's research that has found that these specific types of ads are connected with an increase in potential harm for vulnerable members of the public. As such, these standards are created as a means of reducing this potential harm, and in Ontario, you should not be seeing these types of ads.”
“It's meant to be a very broad prohibition with a very narrow exception for those who've chosen to visit the gaming site, or those who have signed up and consented to receive very specific advertising of the inducements,” Welbourn added.
In addition to advertisements, Welbourn highlighted content and articles about gaming sites, while sportscasters, influencers, and other brand ambassadors equally cannot mention inducements in content.
“For anyone who hasn't visited your site, they should have no expectation or indication or awareness that any inducements exist,” he added. “That's the goal.”
Welbourn also sought to clarify what constitutes an inducement, which he said includes but is not limited to deposit or welcome bonuses, odds boosts, free spins, as well as material items like branded apparel or other prizes like free trips if some action was required to receive the prize.
“The difference between an inducement and something we would consider a brand awareness campaign is what the individual needs to do to receive the offer or what the conditions are,” he said.
“If there's any exchange required of the individual in order to receive the offer, then the offer’s an inducement.”
Those exchanges would include requiring a player to register on an online gaming site, provide contact information, visit the site, or some sort of social media engagement, such as retweeting or liking a post.
“In simple terms, if an offer has value, and it requires an exchange from the individual, then it cannot be publicly advertised,” Welbourn said.
Welbourn said the AGCO recognizes the challenge the regulation provides to the industry to rethink its customer engagement strategies, but many operators have navigated the shift, and officials have been impressed by the content that has resulted from the change of approach.
“Permitted advertising tends to focus on the brand you've worked so hard to create, and also the gaming products that you're offering,” Welbourn told the conference's full room of interested delegates.
“But for those of you who are still trying to find sneaky ways to induce the players [and] work around the standard, we hope it's clear enough that this won't fly.
“We hope you'll take this information back to your teams to find effective and compliant ways of advertising in Ontario,” he continued. “We'll continue following up with those who we've noticed have been pushing the envelope, and we'll work with them using our available tools to bring them into compliance.”
The AGCO issued fines to BetMGM and PointsBet last month for violations of the advertising rules, and Cunningham said that “some operators” received warning emails from the regulator’s compliance team regarding the advertising standards and requesting the operator provide a remediation plan.
“When the market launched, we had open and honest discussions with operators where we observed noncompliance with these advertising standards,” she said. “For most situations, education always comes first.
“But if that doesn't work, or for the more egregious violations, we move across that compliance continuum to ensure adherence to the rules.”
Jared Beber, CEO of Bet99, which is operating in the province as an unregulated operator pending approval for its application for registration, said that he believes that the rules will lead to stronger retention than in other jurisdictions where bonuses are so key to customer acquisition.
“Acquisition is, of course, at the core, but retention is arguably more important. We need to be taking proactive steps to achieve that retention, by being able to lead on why we're different and tell that story,” Beber said.
“We believe that this is going to lead to stronger retention, and people are going to build a deeper affinity for these brands that isn't just a bonus base, which, you know, we have seen a lot of other markets be the case.”
“I think it's an opportunity to build trust with the customer base,” added Marissa Caldwell, an associate with the Toronto-based McCarthy Tétrault firm.
“Yes, it's going to be more difficult to get them in the door, but you're getting them in the door without an instantaneous reward, and you're getting a chance to show what your site does, how it's different, and how it's a long-term partnership for them, as opposed to it's the best bonus this week,” Caldwell said.
“So I think operators who've been able to look at that as an opportunity … it's definitely a shift, it's a mindset shift, but they've been successful, and it's kind of become a bigger picture priority for them.”