Ontario Gaming Officials Set Halloween Deadline for Gray Market Apps

Posted on: October 5, 2022, 10:11h. 

Last updated on: October 6, 2022, 11:45h.

Gray market online gaming operators still taking wagers in Ontario have been given notice. They must transition to the new regulated market by the end of the month or shut down operations.

The Big Nickel attraction in Sudbury, Ontario. The Alcohol and Gaming Commission of Ontario announced this week that unregulated gray market iGaming operators in the province have until the end of the month to join Ontario’s regulated market or stop taking bets in the province. (Image: Renata/Adobe Stock Images)

That was the announcement the Alcohol and Gaming Commission of Ontario (AGCO) made earlier this week. It’s one that’s been anticipated since regulated iGaming, online poker, and online sports betting apps started launching in the Canadian province six months ago.

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,” the commission said in a statement. “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 new rule also applies to online gaming suppliers and vendors. If they wish to work with licensed operators, they also must stop working with any unregulated operator still working in the province by October 31.

In recent weeks, some sportsbooks with a long-time presence in Ontario’s gray market have made the shift. That includes Pinnacle, which made the transition last month.

As of Wednesday, 55 online gaming sites are approved to operate in Ontario. That includes 28 online casinos, 22 sports betting apps, and five online poker sites.

Grays Still Big in Ontario

While Ontario has a population larger than most states that allow online gaming, its first quarter of regulated operations seemed low to many in the gaming industry. Bettors wagered CAD$4.08 billion (USD$3 billion) from the start date of April 4 to June 30, and the 18 operators active at that time collected CAD$162 million (US$119.3 million). Those figures were lower than in several US states with smaller populations, such as New Jersey and Pennsylvania.

Part of that is likely attributed to the Ontario presence at the time of the gray operators, and the players who continued to wager there rather than through regulated apps. Provincial officials have also implemented some stringent regulations against advertising promotions, such as sign-up bonuses and free bets, which could have hampered revenue.

Those figures also did not include wagers placed on the Ontario Lottery’s sports betting app.

New Live-Dealer Rules Announced

AGCO also announced new rules regarding live-dealer online casino games, which the commission said have become popular with bettors. Those rules focus on maintaining the integrity of the equipment and the games.

The new rules call for all gaming systems and supplies to be handled, installed, and stored in a fashion that guarantees their security and proper operation. In addition, access to supplies for live-dealer games must be limited to individuals with “a business need.” Privileges must be independently reviewed periodically, and all activity associated with handling the supplies must be logged.

Lastly, live-dealer operators must have protocols in place to keep dealers from affecting the outcome of a game.

Those rules will take effect on October 31.

Another new rule calls for all online casino games, random number generators, and system components that “accept, process, determine outcome of, display, and log details about player bets” to be approved by the commission’s registrar or certified by a gaming lab approved by the registrar. That rule will take effect on April 4, 2023 to give operators time to get their equipment inspected.