Building the foundationsregulatoryfor Onterio

Dave Phillips, COO at AGCO, took time at SBC Summit North America to reflect on the regulatory framework that kickstarted Canada’s journey towards igaming regulation.

WORDS BY CHARLIE HORNER

The Ontario igaming market is unique. This distinctive nature comes from its regulatory setup; an operator must enter into a commercial agreement with iGaming Ontario as well as receive licensing from AGCO before it can commence operations.

Such a dual framework makes Ontario an unknown territory for many US sportsbooks, where regulators will award licenses based upon the individual state legislation.

The fact that incumbents are not bound by legislation, but instead by standards set and enforced by the AGCO, makes the province stick out like a sore thumb in the North American gaming industry. Phillips spelled out the odd nature of Ontario’s regulations, brought on by its ‘entrenched, mature’ grey market.

He explained: “We designed a regulatory program that has many unique features that are geared toward making Ontario an attractive marketplace to operators that are looking to come in.

“But it includes making sure that our licensing model allows for speed to market for those low-risk operators and suppliers that have a lot of experience.

“It means having regulatory standards where, as opposed to most US jurisdictions that have a fairly limited menu of sports betting markets that can be offered in Ontario, you’ve got betting criteria that allows for a much broader range of markets to be offered.

There are multiple other elements of the design that we included, that were really geared to making sure that Ontario was seen as an attractive jurisdiction for those that want to come in.”

Ensuring that free and fair market competition is vital to the success of a jurisdiction’s igaming and sports betting market. The high-profile, global operators that favorable regulations can attract are desirable for regulators that want to see a thriving market that prioritizes, bluntly, revenues that can subsequently be turned into provincial taxes.

Yet, Phillips was eager to assert that AGCO had put important regulatory tools in place to disassociate the market from any previous misconceptions associated with opening large commercial igaming markets.

Once again, it came back to the term ‘unique’ to describe another key regulatory tool in AGCO’s armoury. The AGCO has a fully integrated detachment of the Ontario Provincial Police that works alongside the civilian regulatory apparatus.

In June, the detachment aided an investigation that discovered over $3m from the illegal sale of cannabis was laundered through casinos in the GTA and Niagara regions. Explaining the impact of having an OPP detachment in its ranks, Phillips remarked: “We also strove to ensure that we have top-notch regulatory standards in place - a very well resourced, licensing and compliance function within the organization.

“When it comes to igaming in areas like matchfixing, money laundering, game integrity, fraud issues, we’ve got the ability to work in an integrated fashion that allows us to have what we think is a best-in-class regulatory model.”

The market’s launch was over six months ago now, leaving many focused on what the future of the Ontario regulatory framework looks like following this period of excitement and reflection. The AGCO will begin to come down harder on the grey market, Phillips noted, setting cut-off dates for those left in the unregulated wilderness ‘as quickly as possible’.

Phillips cited a ‘shift’ in the way that AGCO interacts with those that remain unregulated, explaining: “We’re going to be drawing the line in the sand. We’re going to be setting a cut-off date and we’re going to be having some of those conversations to make sure that we’re channeling as quickly as we possibly can.”

“We’re gonna be watching that very closely to see what potential impact it’s going to have on the