ONTARIO ONE YEAR ON
banned UFC betting, drafted a press release, and moved on. By taking steps to work with the UFC to ensure that the UFC meets standards for reinstatement, the AGCO demonstrated a strong commitment to player protection and betting integrity. Terminating Association with Companies Operating in the Unregulated Market A primary objective of the AGCO is to minimize the unregulated Ontario market. By allowing unregistered operators and suppliers to have a transition period, Ontario was able to capture a significant portion of the unregulated Ontario market. However, in one situation, the AGCO attempted to regulate the global activities of its registrants, which led to operator and supplier pushback. One interesting provision of the previous Guide was the requirement that all applicants “must terminate any association they may have with another company that operates in the unregulated market in Ontario once they are issued a registration from the AGCO”. Operators and suppliers would have to review their global associations and ensure they were not associating with an unregistered person providing services to the Ontario market. Registered operators and suppliers discovering these associations would either have to convince the unregistered person to cease offering services in Ontario or terminate the agreement between the registrant and the unregistered person. An operator or supplier making its game or platform unavailable to the unregistered market was insufficient to meet this requirement. This was a challenging ask, both practically (for example, a games provider identifying the parties involved where an aggregator, through its relationship with a games provider, provides the game as part of a game suite to other operators), and commercially (operators have to choose between the AGCO’s request in Ontario and breaking contractual relationships). Further complicating the situation for registrants was that this “requirement” was in the Guide, but not set out in the
Standards. When the Standards were updated in October 2022 to establish the grey market transition period ending on October 31, 2022, the AGCO could have also added a new standard relating to registrants terminating associations with companies operating in the unregistered market. Instead, the new standard focused on the services provided by and relationships of registrants as it related to the services provided by the registrant in Ontario. The AGCO updated the Guide in October 2022 and replaced the reference to “terminating associations with companies operating in the unregistered Ontario market” with the new Standard (Standard 1.22) that ended the grey market transition period. Mohawk Council of Kahnawà:ke Sues iGaming Ontario and the Ontario Attorney General Ontario’s iGaming framework is based on a creative interpretation of the phrase “conduct and manage” in s. 207 of the Canadian Criminal Code (the “Code”). 8 In the Code, all gaming “on or through a computer” must be conducted and managed by a provincial government. As fellow Canadian and IMGL member Ron Segev writes: There are a number of indicators that are generally accepted as being relevant to the determination of whether or not the government has conduct and management of the gaming activity. Those indicators include examining which entity 1. Is responsible for strategic decision-making; 2. Owns the physical infrastructure and intellectual property required to carry on business; 3. Maintains operational control; 4. Controls game selection and rules of play 5. Has control over funds; and 6. Retains a significant portion of the profits. 9 To comply with its “conduct and manage” obligations under the Code, a new government entity, iGO, was set up to “conduct and manage” gaming. iGO has control of player data, player
8 R.S.C. 1985, c C-46.]. 9 Ron Segev, Ontario: is the province’s hands-off approach illegal, iGB, August 18, 2021. Available at https://igamingbusiness.com/legal-compli- ance/licensing/ontario-provincial-oversight-illegal/.
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IMGL MAGAZINE | APRIL 2023
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