There are no better individuals to give an assessment of where the Ontario markets sits after launching a little more than one year ago than the people who’ve been at the center of it. That’s clearly what explained a packed Conference Room 1 at the Canadian Gaming Summit last week at the Metro Toronto Convention Centre to hear their panel discussion.
Tom Mungham, chief executive officer of the Alcohol and Gaming Commission on Ontario, the province’s gaming regulator, was there. So was Martha Otton, executive director of iGaming Ontario, a subsidiary of the AGCO, the agency that conducts and manages internet gaming in Ontario. Dave Forestell, board chair of iGaming Ontario, was on the panel, as was Doug Downey, Ontario’s Attorney General.
What have been the best practices and lessons learned for other provinces looking at the Ontario model as they figure out what they want to do to counter the gray market in their respective jurisdictions? Every regulated market in every province and territory in Canada will ultimately be unique to that jurisdiction, likely a hybrid of provincial lottery and private operators, like in Ontario.
Otton and Mungham said all the right things, that Ontario has been “crushing it” over Year 1, a relatively short period of time, cementing itself as a Top 5 jurisdiction in North America in terms of betting volume.
But there’s always a need for proper balance when looking at the market. It hasn’t all been sunshine and peach ice cream. There are 55 registered operators today, 47 that are live, with 70 gaming sites and more than 500 games approved, plus more than $35 billion in total wagers over the first year. Q1 doesn’t end until June 30, so iGaming Ontario doesn’t have that data yet, but Otton told the audience the Q1 GGR numbers will be 3.5 times greater than Q1 in the previous year.
All operators in Ontario need RG check accreditation by the Responsible Gambling Council. Seven have completed that and Otton says the others are “well on track” to meet their two-year timeline for receiving it. Each of the licensed operators needs to spend a percentage of gross gaming revenue on responsible-gambling messaging. A centralized self-exclusion is coming soon, as well, allowing players to self-exclude on all products throughout the province.
There are 28 other applications in the queue for licensing at the AGCO, Mungham said.
“The sector is poised for further and greater growth,” he said. “We thought things might settle down [after the market went live]. It’s been anything but that. There’s still a lot of work to do. We didn’t get everything right out of the gate.”
Said Downey, “I think the first year has gone brilliantly, quite frankly, both from a business and a responsible- gaming perspective. The projections are that 85 percent of the black market came in. That’s phenomenal in one year. It doesn’t even feel like a year. It feels like the industry has been here for a while.”
One of the current challenges brought to the AGCO’s attention revolves around players trying to void their losing bets by self-excluding while the event is in progress. The standard was amended to address that issue quickly, Mungham added.
The sports-integrity issue they ran up against in December was another challenge, with the temporary pausing of betting around the UFC after concerns were expressed about suspicious patterns. First in Ontario, then Alberta, operators were told to stop offering and accepting wagering on the UFC. “Those weren’t easy discussions with operators,” Mungham said.
After an investigation and policy changes implemented by UFC, betting on the sport was reinstated in those markets.
A few advertising infractions over the past 14 months were related to inducements, which the sector responded to “incredibly well.”
The issue of changes to advertising standards revolving around celebrity endorsements is next up. The AGCO is proposing a change to internet gambling Advertising Standards, prohibiting the use of athletes and celebrities in internet-gambling advertising and marketing in Ontario. The objective, AGCO says, is to minimize potential harm to youth and the vulnerable.
Industry stakeholders were invited to register for the AGCO’s engagement portal to share their thoughts and opinions on the proposed changes.
“There has been no shortage of attention and opinion on this issue across Canada, and globally,” said Mungham, adding the AGCO received 38 responses to that consultation, from igaming and land-based operators to the charitable gaming sector and associations in the health sector, like the Canadian Mental Health Association. They also received an additional 10 responses from community groups and municipalities. Opinion has been “widespread.”
Mungham said a decision on advertising standards is just weeks, not months, away.
Regulating, player protection, and a revenue stream to the province, all while offering better entertainment options to players, were the ultimate goals. The channelization rate they predicted for the first year, tackling the illegal market (there was a big gray market in Ontario beforehand, with most of those operators jumping to the regulated market), was certainly not 85 percent, Forestell said.
Going forward, Otton said she wants to learn why that 15 percent or so of the market is still playing on unregulated sites. “What are they getting on the unregulated sites that isn’t offered on the regulated sites or in their products?” she wanted to know.
A big difference-maker, according to Mungham, was prohibiting operators and suppliers from doing business with those that continue to operate in the unregulated marketplace.
“Dozens and dozens of operators have exited the marketplace, because of the pressure applied to the standards on the suppliers,” he said. “If there’s a word of advice to other jurisdictions, reference the strength of that. It had its intended outcome, which was quite strong.”
And with all that comes recognition. The North American Gaming Regulators Association awarded the Excellence in Gaming Regulation Award to the AGCO Wednesday of last week.
