Ever since Ontario legalized online casinos back in 2022, it has served as proof that legalizing online gambling can be beneficial for both governments and their residents.
Ever since Ontario legalized online casinos back in 2022, it has served as proof that legalizing online gambling can be beneficial for both governments and their residents. After all, with its gross gaming revenue (GGR) accounting for at least 60% of Canada’s annual GGR, there is no denying that this province’s decision is paying off. And as more of its residents sign up on the best online casinos in Ontario, the GGR is set to keep increasing. But does this fast growth owe solely to the new laws? We look at how Ontario’s online gambling laws differ from those in other provinces and how this has contributed to its increased tax revenues.
The federal Criminal Code in Canada allows provinces and territories to determine the gambling activities that they will allow within their regions. As such, it is quite possible for a province to come up with laws that may not necessarily apply to other provinces, as is the case with Ontario, which deviates from other regions. How so?
In all other states, only the provincial government has the right to offer online gambling services to the residents. Under this model, the provincial lottery corporation not only comes up with the gambling laws, but it also operates the gambling sites. As you can imagine, this gives rise to conflicting interests as one body is in charge of managing revenue while also accounting for public interests. What’s more, any other entity that tries to provide gambling services operates outside the law, and this can have negative legal ramifications. While this worked in the past, it has been ineffective for a long time as residents now tend to reach out to offshore unregulated sites in search of better odds, more games, and other features that the government sites do not typically offer.
Ontario, on realizing just how complex this problem was and how hard it was to monitor offshore sites, decided to take a different approach. While it was required to comply with the Criminal Code, which requires the province to be in charge of gambling, it created a new model that allowed the state to manage the market while also handing over power to external casino operators who would be in charge of their sites. How so? It used a two-step process. First, the operators would be required to meet the registration requirements set out by the Alcohol and Gaming Commission of Ontario (AGCO). Then, they would sign an operating agreement with iGaming Ontario (iGO), where iGO would be in charge of the market as a whole. This two-step process ensured that there were no conflicting interests. The AGCO catered to public safety while the iGO focused on the financial aspects, including market growth and revenue collection. Moreover, it ensured that the sites met the following checks:
In so doing, Ontario opened its doors to over 50 private casino operators. This move gave its residents access to multiple innovative sites that offered them several perks, including:
The introduction of several operators also increased the market competition, which ensured that players would always have high-quality experiences, which would, in turn, lead to increased gross gaming revenues, which translate to higher tax collections. Everybody wins under this new model.
In the other Canadian provinces, there are no set rules when it comes to gambling adverts. In fact, the provincial entities are known to run ads to promote their incentives, albeit with a responsible gaming focus. Additionally, there are no set rules that govern whether offshore sites can advertise their services to residents. So, marketing remains a bit of a grey area that is open to interpretation, which can have negative effects on the vulnerable population. After all, problem gamblers, children, and people who are not aware of the risks of gambling are easily persuaded to place wagers, even if the outcomes may not be favorable. And where there are no checks in place, some sites can run ads geared at exploiting these vulnerabilities by using aggressive tactics, making false promises, or offering financial alternatives.
Ontario understands this risk quite well and has thus come up with strict marketing requirements. Not only are sites not allowed to launch marketing campaigns that target the vulnerable population, but they also have to adhere to the following:
These limits ensure that while casino sites can market their products and services, the ads are objective and promote responsible gambling.
With provincial gambling entities, the games are certified internally or through external auditors who are under contract, which ensures they are fair. However, there are no measures to verify the game fairness in the offshore unregulated sites that offer their services to residents in these provinces, which poses a problem. How so? Without oversight, players have no way of knowing if the odds and payouts shown in the games are real or have been tweaked.
Ontario requires all the casino sites to undergo rigorous testing. Their games are subject to audits by AGCO-approved independent testing labs, which check if the game software matches what the site shows. This way, players can use the site with the assurance that the games have not been altered in a way that would put them at a disadvantage.
The Criminal Code states that operating an unlicensed site is illegal. However, players in other provinces routinely access these sites and do not face any legal penalties for doing so. At the same time, these offshore sites do not face penalties for providing their services, which makes this a grey area. But with Ontario, the government has been clear that any unlicensed site found offering casino services to its residents will be breaking the law and will be subject to costly penalties. While this has not eliminated unregulated sites, this move has dramatically reduced the number of offshore sites willing to take on this risk. What’s more, with more Ontario residents choosing to play on licensed sites, the demand for sites that fall in the grey area has reduced.
