Ontario Regulators Preparing For Second Wave Of Less Experienced Applicants

June 14, 2022
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While regulators in Ontario have said the launch of the first wave of online operators was relatively successful from a licensing perspective, many in the next wave of operators will come with a higher risk profile.

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While regulators in Ontario have said the launch of the first wave of online operators was relatively successful from a licensing perspective, many in the next wave of operators will come with a higher risk profile.

The Alcohol and Gaming Commission of Ontario (AGCO) said during last week’s Canadian Gaming Summit that the agency has received more than 150 applications for an online gambling registration, with almost an equal split between operators and suppliers.

Of that group, 26 operators and 46 suppliers are now registered with the AGCO, although operators must also execute a commercial contract with the AGCO's iGaming Ontario (IGO) subsidiary before they can go live.

Speaking at the Canadian Gaming Summit, AGCO officials said that the early applicants were those that are more familiar with the registration or licensing process.

“The operators that came to market early on, they were very well prepared, they’re very well established, many of them had a really strong compliance background in other regulated jurisdictions,” said Jay Welbourn, senior director of technology regulation and compliance for the AGCO.

Tom Mungham, CEO of the AGCO, said that the regulator has about 40 applications that are currently in process, and that group comes with a different risk profile than the first batch.

“They may not be sophisticated organizations, they come from jurisdictions where they may have little or no responsible gaming or anti-money laundering provisions, so we’re working our way through the file,” Mungham said.

Welbourn cautioned new registrants to be mindful of the rules of the road of the regulated market.

“It's really important that those operators who are coming to Ontario do recognize the responsibility that coming into a heavily regulated market brings,” Welbourn added. “Although our program is very business friendly, it's business friendly if you understand the expectations.

“If you don't understand the expectations, you can get to a certain point where things take you by surprise, you may have skimmed over a standard database or skim over a compliance requirement or a licensing requirement,” he continued. “And it's going to come and bite you in the end.”

To avoid that, Welbourn recommended working with companies that have experience in regulated markets.

“It's really important if you are coming and you have less experience that you find really, really good partners and you invest in compliance at an early stage so you're going to be successful,” he said.

Another burning question for those interested in the Ontario online market is how the market is actually performing.

More than two months after the regulated market launch on April 4, iGaming Ontario has yet to release any type of revenue data.

The delay was the result of Ontario’s provincial election earlier this month, and although executive director Martha Otton did not specify a date for when data would be released, she said she intends for the IGO to be transparent.

“I intend for us to be transparent with not only the industry but broader with decision-makers, with the public in what the Ontario market looks like,” Otton said. “And so I'm hopeful that in the near future, we'll be able to release data around what it is you're seeing in the market, how large it is, which is always a bit of a mystery, right?

“When you enter into a market that has not been regulated, what's the size? What's the response? What are the products? So, not only that continuing engagement with regulators and operators, but also transparency and reporting in how the industry in Ontario is, what it is exactly, the size and shape of it.

“I think we can probably build on that,” Otton said.

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