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AGCO sets October 31 2022 deadline for operators & suppliers to enter Ontario & achieve full compliance, or risk being able to serve it 

October 4, 2022

Today, the AGCO released a note to its subscriber email list of interested parties.  In the note, the AGCO explained that it had set a deadline for an end to the transition period for both operators and gaming suppliers to bring themselves into the legal Ontario sports betting & iGaming market fully, and to cut ties with any now illegal operators that serve players in Ontario.  The full AGCO note pertaining to this issue can be found at the bottom of the page, below our analysis of the two key issues as we understand them. 

1) For operators that have been serving Ontario-based players from the "grey market", they need to be licensed and be in full compliance of the rules by October 31 2022, or the operator may be at risk of ever being able to serve Ontario players within the regulated framework going forward.

2) For gaming suppliers, if you are a publisher of games or slots titles for use within the legal Ontario market, you CANNOT be providing games and titles to an operator that is illegally serving Ontario with your games.  Example. You are a big-time slots game publisher and you are a regulated Ontario supplier. You supply your games to Ontario licensed operators - great - that's what is expected.  What is not expected is that you will supply your games to operators based in Antigua or Curacao, that are still serving Ontario players, and offering your game titles to Ontario players, WITHOUT a license from the AGCO or an operating agreement with iGaming Ontario.  In other words, if a gaming supplier wants to serve the legal Ontario iGaming market, they cannot double-dip with operators that are illegally serving the Ontario market.

Our further interpretation of this is that the AGCO only cares about Ontario here.  They do not mean that the given gaming supplier cannot provide Antigua or Curacao operators with games.  What the AGCO wants is for those Ontario licensed gaming suppliers to MANDATE that their games as supplied to Antigua & Curacao operators (for example) CANNOT be played by their Ontario-based players.  The game publisher can still supply the operators in these jurisdictions, but the supplier must prohibit their games' use there by the non-licensed operator's Ontario-based players. (Note that this is our interpretation of this rule.  If this rule actually affects you, contact the AGCO as per the links in the note below.)


Why this is news without much consequence

While the deadline eventually had to be set by the AGCO, know that the sentiment as found within the note was communicated to the market long ago, and most of the significant operators and suppliers had already taken action to be in compliance. For example, the more reputable gaming operators that have not sought an AGCO license, but had been in the Ontario "grey market" from jurisdictions like Malta, Gibraltar and the Isle of Man, have already moved to bar Ontario players from their platforms. Some have left the Canadian market altogether for the time being.  This was always going to be the case for the brands that look to be regulated where ever they can be if their markets of interest allow it.

Then you have another group of operators - those that are typically never interested in being locally regulated and taxed. These are operators that tend to be found in Antigua, Curacao or Central America, and will likely not be interested in becoming legal Ontario betting sites.

So for these two groups of operators, the deadline means just about nothing.  The first group is already in compliance, either they are officially in, or out of the Ontario market.  The second group never had interest in being in compliance, and is happy to move from being a so-called "grey market" operator, to being a "black market" or "illegal" operator once the October 31 2022 deadline comes into force.

The same concept applies for suppliers, the sentiment and directive has been apparent now for months.  The deadline just ensures urgency.  The heft of those big name, now legal Ontario online casinos will be putting pressure on their suppliers to make sure that unlicensed operators are not able to offer Ontario-licensed games to Ontario-based players.  Who has more sway with a big gaming supplier, the mammoth brands that are now iGO live, or the now "illegal" Caribbean and Central American-based operators?  We would argue the former group, by some margin.

The news is not without any consequence.  If any operators are still "on the fence" about whether or not they should apply to be in the Ontario market in the future, they know they have a date to keep in mind.  The reality is that this line in the sand was drawn long ago, and the vast majority of operators already knew what they needed to do, and chose their side of the fence.  Applications to serve Ontario's legal iGaming market have been open for over a year now.  How many operators are sitting on the fence?  We would argue few to nil at this point, hence why we view the news of the deadline as being without much consequence.


The AGCO deadline note:


1) New Standard that Ends Transition Period for Unregulated iGaming Operators and Gaming-related Suppliers

A key objective of the AGCO has been to move igaming operators and gaming-related suppliers into Ontario’s regulated market as quickly and as seamlessly as possible. To support this objective, the AGCO established a process for existing operators and gaming-related suppliers in the unregulated market to move into the regulated market without causing significant interruption to their Ontario customer base.
The AGCO has been accepting applications for registration since September 2021, in advance of market launch on April 4, 2022. At the time, operators and gaming-related suppliers in the unregulated market were informed that if applications were not submitted by market launch and the company continued operations in Ontario’s unregulated market, they would risk not having their application approved.
In order to operate legally in Ontario as of April 4, igaming operators must meet two requirements. First, they must secure a registration by the AGCO, and second, they must execute an Operating Agreement with iGaming Ontario (iGO). By meeting these requirements, operators will be held to the high standards set out under Ontario’s igaming regulatory framework. Since market launch on April 4, the AGCO has provided a reasonable amount of time for these operators and gaming-related suppliers to join the regulated market in a business-like and seamless fashion. A significant number of igaming operators and gaming related suppliers have registered with the AGCO, entered into an agreement with iGO and are complying with Ontario's regulatory framework.
This new standard establishes that operators and gaming-related suppliers that are currently active in the unregulated market in Ontario (or have agreements and arrangements with those in the unregulated market in Ontario) must end their activities in the unregulated market to avoid jeopardizing their eligibility for registration. This requirement extends to applicants for registration in Ontario’s igaming scheme.
Effective date
In order to provide affected operators and gaming-related suppliers with sufficient time to comply with this new Standard, Standard 1.22 will come into force on October 31, 2022.
Relevance to registered igaming operators and gaming-related suppliers
•    Registrants are expected to know, understand, and comply with all applicable regulatory requirements, including this standard upon its effective date (October 31, 2022).
•    As with any instance of non-compliance, the AGCO will take appropriate regulatory action against any registrant that does not meet this Standard (once it comes into force).
•    For those registered operators that have yet to transition from the unregulated market to the regulated market once the Standard comes into force, the registrant will be required to end its unregulated operations within Ontario pending the registrant’s entry into the regulated market.
•    The AGCO will continue to work closely with registered operators and gaming-related suppliers to help them understand their compliance obligations. 
•    Please always keep your records up to date with the most current version of the Registrar’s Standards. To ensure you have the most recent version, check the “Last Updated” date on the first page of The Standards (Updated on October 31st).

Relevance to igaming applicants 
•    Applicants must ensure they comply with this Standard once it comes into force. This will require that applicants end their unregulated operations within Ontario if they have not yet acquired their AGCO registration by the time the Standard comes into force.
•    Applicants that are non-compliant with this Standard, once it comes into force, risk having their application for registration refused.
•    The AGCO is providing a reasonable notice period to support further transitioning to the regulated market, including making their customers/players aware of potential blackout periods due to pending registration.
•    Read this post for more information and support on the registration process.
Here is the new Standard 1.22 in full:
Operators and gaming-related suppliers must cease all unregulated activities if, to carry out those same activities in iGaming Ontario’s regulated online lottery scheme, it would require registration under the GCA. 
Operators and gaming-related suppliers shall not enter into any agreements or arrangements with any unregistered person who is providing the operator or gaming-related supplier with any goods or services if, to provide those goods and services in iGaming Ontario’s regulated online lottery scheme, it would require registration under the GCA.

Note: For greater certainty, and without limiting the generality of any other Standard, this Standard applies to and governs applicants.

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