Image Source – https://unsplash.com/photos/white-and-black-soccer-ball-on-black-sand-JP0qiWQzjrg

In April 2022, the Canadian province of Ontario made a very big step to establish the iGaming market in the country. It was done this way to enable the online gaming providers to get their licenses from AGCO, which was a major progress forward in Canada since the country had a very twisted gambling history. Canadians engage in gambling under keen regulation and more importantly under provincial control in the country. It observed that to open a casino in Canada attention must be paid to the difference in local laws across the provinces. As for casinos, it is necessary to mention that although the provinces do not run casinos by themselves, they give permissions to private individuals through registration to manage gambling. Nevertheless, the existing Canadian gambling industries have a severe challenge from global Internet service providers in the gambling market, outside the scope of Canadian laws. Nevertheless, there have been improvements in the annual Canadian policies in this perspective as, for instance, the ban on single-game bets was lifted in 2021. This article explores the Canadian provincial legislations including the Ontario software-based gaming project, providing a guide to the registration of online gaming sites in Canada together with compliance with the governing laws.

The Criminal Code

In the eyes of the Criminal Code of Canada, it is unlawful to offer services related to gambling unless they are run or managed by a province. Thus, it is essential for organizations who want to venture in the Canadian market to ensure that they respect local laws and regulations.

Regulations that apply at the local level?

In Canada, every province has its own rules and authorities which oversee gambling agencies and activities as well as the measures on how one can open and register with them in a specific province. In different provinces of the country of Canada alone, different regulatory bodies govern on gambling. In Alberta, the regulation of gambling activities is under the Alberta Gaming, Liquor, and Cannabis Commission whereby only the charitable and religious organizations are allowed to offer services as provided in the Gaming, Liquor, and Cannabis Act. British Columbia’s operations are run by the Gaming Policy and Enforcement Branch under the Gaming Control Act of 2002 similar to Alberta, although they have a website called PlayNow. The Government of Manitoba appoints the Manitoba Liquor and Lotteries Corporation responsible for regulating the service providers, their conformity to the acts. Nova Scotia’s Gaming Control Branch deals with registrations according to the province’s Gaming Control Act of 2008 while Newfoundland and Labrador’s Consumer Affairs Division deals with particular gaming activities. According to the Alcohol, Gaming, Fuel, and Tobacco Division of Nova Scotia, all registrations fall under the Gaming Control Act of 1994-1995. In the case of Ontario, the provincial government uses the Ontario Lottery and Gaming Corporation to oversee this complex region’s gambling industry. Gambling on Casinos and other forms of the internet is controlled by the Lotteries Commission in the province of Prince Edward Island. In turn, the controlling of gambling establishments is assigned to the Regie des alcools, des courses et des jeux and the Quebec Lottery Corporation. The Saskatchewan jurisdictions for gambling are technically regulated under the Saskatchewan Liquor and Gaming Authority. Finally, the three remaining Canadian regions, Yukon, Nunavut, and Northwest Territories, do not have a developed gambling platform, so citizens can gamble on international sites without restrictions.

Ontario’s iGaming market

It was in November 2020 when Ontario introduced a pioneering measure to regulate GAP or iGaming, further putting it under the umbrella of the Alcohol and Gambling Commission of Ontario (AGCO). The application for firms under iGaming Ontario started in Fall 2021 which led to the market opening in April 2022. This innovative move means that the iGaming Ontario is open for a third party to provide online gambling services upon registering with the AGCO as well as signing various partnerships with the aforementioned regulator. With this development, the industry is now liberalized and official to other players outside the province, but the province controls the operations through iGaming Ontario as a way of regulating the industry.

Whom does this impact?

Gaming firms that wish to be involved in providing online gambling services to the people residing in Ontario when iGaming is introduced are supposed to register with the AGCO. However, it is important to note that there is certain differentiation regarding the approaches to the registration processes that are laid down for the gaming operators and the gaming related suppliers. According to the insiders identified under the AGCO regulation, any entity conducting business within Ontario and in the process operating a gaming website comes under the definition of a gaming operator. While the definition of ‘operating a gaming website’ is rather vague, there are activities that point to the fact that an entity continues to exercise recurrent duties overarching the major decisions of the organization. In the same AGCO, it is defined that a “gaming-related supplier” refers to an organization that engages in the manufacturing, supply, installation, testing, maintenance, repair or consulting services for gaming equipment and advises on lotteries or gaming sites.

What is the registration process?

Indeed, in order to register with the AGCO, one first has to submit a certificate from the Independent Testing Laboratory on the serviceability of the gaming devices. Afterward, they are required to make an account on AGCO.

Documents

When applying to become gambling operators, there are tangible documents that must be submitted. Some of the documents required are the Operator Application, Registrar’s Standards Gap Analysis Report, Personal Disclosure for staff members, Entity Disclosure, regulatory and investigation fees, and any other document that the staff deem requirement. Meanwhile, suppliers that offer gambling services have to submit Supplier Application; Personal Disclosure for everyone working for them; Entity Disclosure, if relevant; regulatory charges; documents needed for registration as a supplier.

Ontario’s iGaming arrangement

However, there are two more essential conditions companies have to fulfill: register on the website of the AGCO and sign an agreement with iGaming Ontario. The mentioned process also has several steps: the first one is drawing up a Non-disclosure agreement between the client iGaming and the cooperating party; the second step is signing a Letter of agreement; the third step is creating and configuring the access the iGaming’s Secure Data and Information Communication Channels; the fourth step is Fulfilling the iGaming’s Anti-Money Laundering Information Submissions; the fifth step is delivering Financial Information

Fees

In order to maintain a gaming site, the gaming operators are duty-bound to pay an annual license fee of CA $100000 and each and every site requires a separate licensing. On the other hand, suppliers of goods and services directly associated with gaming activities are charged according to their classifications, which attract either CA $3,000 or CA $15,000.

What are the compliance guidelines to follow?

As part of the registration, firms are required to produce paperwork detailing the firm’s strategy to mitigate and prevent unlawful business practices such as money laundering, terrorism financing, and fraud. To avoid misuse of their gaming platforms, firms will need to implement measures that would include use of the AML solutions, including the KYC and CDD processes. To adhere to the legal requirements, there should be collection of particular customer information upon creation of an account such as a name, date of birth, address, identification to be used when logging into the account and contact details. Further information may be required due to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the regulations that completed it. Correction of this data is critical, facilitated by ID card scans, and possibly, the liveness check, performed to establish players’ ability to play in a certain age bracket. Companies are also required to pay attention to details such as players’ activities, their transaction history and the results of the games as well as follow the financial laws. They should also be able to check customers against sanction lists and the Politically Exposed Persons or PEP registers. If any of these suspicions is observed an immediate action shall be taken whereby the matter must be reported to the AGCO Registrar included in the commission.

The latest advancements

Thus, the process of liberalization in the sphere of gambling in Canada is progressing rapidly. The latest example of this development can be observed in Ontario that launched the iGaming initiative which provides for the simplified market entry for third parties. Moreover, the enactment of C-218 early this year eradicated the ban on single event sports betting and as a result, provinces such as British Columbia and Ontario started to incorporate the means on their online packages. In the case of Canadian gambling, it is paramount to note that the provincial changes are dynamic; hence, it is helpful to keep track of them as they occur. The effective KYC solution is gaining even greater significance in this setting, as it allows operators to rapidly adjust to the regulation changes across the provinces and gain the competitive advantage.