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What Was the Rationale Behind Ontario’s Online Gaming Regulation?

Guest Post | Jun 9, 2022

Toronto skyline - What Was the Rationale Behind Ontario's Online Gaming Regulation?

On April 4, 2022, online gaming officially launched across Ontario. It was a monumental decision for Canada's most populous province and a major endorsement of the growing liberalization of online gaming activity across North America.

Players heard rumblings of the passage of imminent legislation ahead of time, but nothing could have prepared Canadians for the massive reception to fully regulated online gaming activity. At inception, 16 iGaming operators were up and running. They were all registered by the AGCO (Alcohol and Gaming Commission of Ontario).

Ontario boasts a population of around 14 million people, a chunk of whom are legal-age players. In 2022 alone, the Canadian province is expected to generate some $800 million in GGY (gross gambling revenues). A wide range of betting activities is readily available to players, including sports betting, lottery-style games, and casino games like Blackjack, Baccarat, Roulette, and slots.

What Type of Gaming Technology Is Being Used?

iGaming platforms are powered by various technologies provided by different software providers. These multi-vendor platforms bring the latest games to the fore, combining stylish audio-visual elements and immersive gameplay. Las Vegas-style realism and uninterrupted streaming capabilities are standard.

Thanks to HTML 5, players can run games directly off their browser – no download needed. In addition, the gaming technology is all mobile optimized. This means that players can power up their handheld devices and instantly navigate to the online casino’s URL. Certain features may be unavailable, but functionality is assured on the smaller screen sizes of mobile devices.

Various iGaming operators feature native applications where players can download the casino app on site instead of the Google Play Store for Android or the App Store for iOS. However, nowadays, it's rare for global operators to provide apps since mobile optimized gaming content is the norm.

Certain online casino games including online baccarat are available in a standard iGaming format or in a live casino version. In addition, the liberalization of online gaming activity means that previously elusive games such as baccarat (baccarat was the exclusive domain of royalty and nobility in France and Italy) are now available to casino players.

The liberalization of online gaming activity in Canada also has a domino effect on the United States. More and more states and territories are choosing to regulate iGaming rather than restrict it.

What are the Projections for Ontario's iGaming Industry?

When the government of Ontario passed Bill C-218 in 2021, industry analysts rapidly went to work predicting the potential of the iGaming market in Ontario. Various models anticipated rapid growth in the short term, followed by slow and steady growth in the years to come. For 2022, the figure is $795 million in revenue, with forecasts of $1.5 billion by 2026.

See:  Fintech and the Gaming Industry

Given the huge potential of iGaming in Ontario, it already ranks among North America's most lucrative markets. However, the tax-friendly nature of the province is another feather in its cap. At 20%, the annual tax rate ranks among the world's lowest. In addition, Ontario is perhaps the most forward-leaning market in North America; the regulatory authorities do not require European-based operators to cease operations elsewhere in Canada when operating regulated casino activities in Ontario.

Canada focuses much of its regulatory efforts on player safety and security. The AGCO has crafted a complex set of regulatory requirements that operators must adhere to when entering the market. Besides AML and KYC protocols, operators must comply with the Proceeds of Crime and Terrorist Financing Act. All of this is regulated by FINTRAC (Financial Transactions and Reports Analysis Centre)


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