On September 13, 2021, the Alcohol and Gaming Commission of Ontario (AGCO) opened its application portal for prospective operators and gaming-related suppliers interested in participating in Ontario’s coming igaming market. The AGCO has also recently released application guides for both interested operators and gaming-related suppliers, which means that with the opening of the application portal, those interested in participating in Ontario’s igaming market now have everything they need to start preparing and filing their applications for registration.
As discussed in our recent bulletin, “Ontario iGaming: Who will be Eligible?” Ontario’s new igaming market is expected to go live as soon as the end of this year, and will allow for successfully registered third-party operators and gaming-related suppliers in the internet gaming space to operate within Ontario in an open, regulated and competitive market.
The igaming market will be regulated by the AGCO in its capacity as the principal gaming regulator in the province of Ontario. All gaming offerings will be conducted and managed by iGaming Ontario, a newly formed crown corporation that will enter into a commercial agreement with all successfully registered igaming operators. iGaming Ontario will not conduct and manage online gaming offerings provided through the Ontario Lottery and Gaming Corporation’s (OLG) existing website, which will continue to be provided by OLG.
THE REGISTRATION PROCESS
All interested operators and gaming-related suppliers will be required to be registered under the Gaming Control Act, 1992 (Ontario) by the AGCO prior to being able to participate in Ontario’s igaming market. The registration process for both operators and gaming-related suppliers will require interested parties to submit a completed application that includes, as applicable, both entity-level disclosure (i.e., information and supporting documentation regarding operating entities) and personal disclosure (i.e., information and supporting documentation regarding certain key individuals).
In order to assist interested parties in navigating the registration and associated application requirements, the AGCO has released both an igaming operator application guide and an igaming supplier application guide. The application guides provide helpful information and guidance on key questions interested applicants may have. The highlights are below:
Who needs to register?
Operators: Registration is required for operators that “operate” a gaming site. In general, the AGCO indicates this means having ongoing responsibility for the gaming site as a whole, including key decision-making activities, responsibility for compliance matters for the gaming site and authority to retain suppliers in relation to the gaming site. The AGCO guide recognizes that the online space is home to many different operational models and the AGCO will assist prospective operators with ensuring that registration as an operator (as opposed to a gaming-related supplier) is right for them.
Gaming-Related Suppliers: registration requirements for gaming-related suppliers are similar to those of the existing land-based regime in Ontario and focus, generally speaking, on whether a prospective supplier’s goods or services are connected to, or directly relate to, the playing of a lottery scheme or the operation of a gaming site. The AGCO provides some general examples of suppliers that may be required to hold a registration as a gaming-related supplier:
Suppliers that manufacture, develop, provide and/or run games and game systems
Customer electronic wallet providers
Sports integrity monitoring organizations
The AGCO also indicates that suppliers that would fall into the existing registration category of non-gaming-related suppliers will not need to register to be part of the igaming market.
How many registrations are needed?
Operators: Registration is required for each distinct gaming site. Whether a prospective operator with multiple proposed offerings/websites is operating a single gaming site or multiple gaming sites will come down to a few key questions:
Are there uniform account credentials? Where a patron is required to use different login credentials to access certain games or websites is indicative of multiple gaming sites.
Do patrons have a common e-wallet across all websites? The ability for patrons to manage a single digital account across different websites may be indicative of a single gaming site.
Is there common branding? Distinct branding across different websites rather than a common branding approach may be indicative of multiple gaming sites.
Who is operating? Where a single operator operates multiple websites may be indicative of a single gaming site.
Gaming-related suppliers: the AGCO guide notes that registration as a gaming-related supplier in the igaming context will allow suppliers to provide gaming-related good and services in the land-based gaming market as well. Where suppliers currently hold a gaming-related supplier registration, and wish to provide goods and services relating to igaming, the AGCO has provided contact information for those suppliers to discuss any additional requirements that may be needed prior to operating in the igaming space.
Operators: operators are required to pay an annual regulatory fee of C$100,000 per gaming site. Operators will have the ability to select a one or two-year option with the fees being adjusted accordingly. The registration fees are due and payable at the time operators submit their applications. In addition to the registration fee, prospective operators may also be required to pay investigatory costs in connection with the processing of their applications and the AGCO guide indicates that additional regulatory costs may be levied.
Gaming-related suppliers: gaming-related suppliers fees are split between manufacturers of gaming equipment and all other categories of gaming-related suppliers. Manufacturers will be required to pay C$15,000 annually and suppliers of gaming-related equipment and services will be required to pay C$3,000 annually. Like operators, prospective gaming-related suppliers may select a one or two-year term with the fees being adjusted accordingly.
ADDITIONAL REQUIREMENTS FOR OPERATORS
Prospective operators are also required to submit a compliance gap analysis against the AGCO Registrar’s Standards for Internet Gaming (the Internet Gaming Standards) showing that prospective operators have done a fulsome analysis and review of their current or proposed controls, processes, technologies and related items or matters to ensure compliance with the Internet Gaming Standards.
Operators will also be required to submit an independently audited assessment of the processes and controls they will have in place to ensure compliance with the Internet Gaming Standards (a control activity matrix). The AGCO application guide notes that more information about the control activity matrix will be forthcoming and indicates that operators will be notified during the review of their application whether they will be required to submit a completed control activity matrix prior to launching in the Ontario igaming market or within three months of launch.
For further information, please contact:
Bryson Stokes 416-863-2179
John Tuzyk 416-863-2918
Mike Maodus 416-863-4193
Alex MacMillan 416-863-5844
or any other member of our Gaming group.
Blakes and Blakes Business Class communications are intended for informational purposes only and do not constitute legal advice or an opinion on any issue. We would be pleased to provide additional details or advice about specific situations if desired.
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