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what you need to know
- On April 4, 2022, the Ontario iGaming market opened to private gaming operators who have entered into an operating agreement with iGaming Ontario and registered with the Alcohol and Gaming Commission of Ontario (AGCO).
- On the same day, BLG co-hosted a launch celebration with the Canadian Gaming Association.
- Ontario was the first province to operate a private online betting market and there are predictions that this could become one of the largest gaming markets in North America.
- As of April 12, 2022, 13 different iGaming operators representing 21 different gaming sites have entered into an Operating Agreement with iGaming Ontario and registered with AGCO. The launch of the new market has resulted in a number of important partnerships between these iGaming operators and major professional sports teams and leagues.
- On March 16, 2022, AGCO announced additional advertising and marketing guidelines for Internet Gaming Operators (iGaming Operators).
- In the coming months, the dialogue with the supervisory authorities on the implementation of an “open liquidity” model will continue.
Celebrating the launch of Ontario’s new iGaming Marketplace
On April 4, 2022, BLG and the Canadian Gaming Association hosted a formal reception commemorating the launch of the new iGaming Marketplace at BLG’s Toronto offices. The reception brought together a variety of key industry stakeholders including registered iGaming operators and suppliers, key regulators and government leaders. The reception included keynote addresses from Martha Otton, Executive Director of iGaming Ontario and Paul Burns, President and CEO of the Canadian Gaming Association.
Summary of iGaming Operators
As of April 12, 2022, 13 different iGaming operators representing 21 different gaming sites have entered into an Operating Agreement with iGaming Ontario and registered with AGCO. Based on previous AGCO announcements, there are at least 17 potential iGaming operators in the registration queue who may soon be able to offer their products to Ontario residents as well.
The launch of the new market has resulted in a host of new partnerships between registered iGaming operators and professional sports organisations, highlighted amongst others by:
The brisk pace of these partnership announcements indicates a highly competitive market where customer acquisition and retention will be top priorities for all iGaming operators, whether their brand is well known to Ontario players or brand new.
AGCO’s advertising and marketing consultancy
On March 16, 2022, AGCO announced advertising and marketing guidelines for Internet Gaming Operators (iGaming Operators) to ensure that expectations of appropriate behavior are clear. The timing of the announcement indicated that AGCO’s intention to ensure public confidence in the new iGaming market was created at the time of launch and possibly indicated some concern on the part of AGCO about the proposed promotional and marketing plans of potential registered operator.
With that in mind, below are the key takeaways from the AGCO Guidelines on Advertising and Marketing Requirements that all iGaming Operators should pay particular attention to:
- advertising partnerships. Responsible advertising partnerships are permitted, however, neither iGaming Operators nor any other company may provide gaming devices or gaming equipment (e.g. tablets) to play in order to access an iGaming Site in a physical building.
- Affiliates and Other Third Parties. It is the sole responsibility of iGaming operators to ensure compliance with advertising standards. It is also the responsibility of iGaming operators to ensure that any third parties they contract with, including “marketing affiliates”, also comply with advertising standards. In addition, all “Marketing Affiliates” may not also promote gambling sites operating in Ontario without AGCO registration.
- Incentives, Bonuses and Credits (IBCs).
- No public advertising of IBCs. Public advertising of IBCs is strictly prohibited, including targeted advertising and algorithm-based advertising.
- Advertising on the game site. IBCs can be viewed once players decide to visit an iGaming operator’s gaming site or app.
- Direct Message Advertising. IBCs may also be provided on the gambling site through direct marketing to individuals who have previously consented to receive them. AGCO has clarified that such consent may only be obtained from players when visiting one of the gaming sites of a registered iGaming operator – player consents obtained elsewhere (e.g. third party websites or consents obtained prior to launch) do not meet this requirement .
- View the terms of eligible inducement advertising. All IBC offers must disclose all material terms and conditions and restrictions upon initial presentation of the offer so that the player has the necessary information before deciding whether to accept the offer. This requirement is particularly important for newly registered iGaming operators, many of whom are actively offering IBCs to players as a means of customer acquisition and retention.
- Free means free. Offers may not be labeled “free” or “risk-free” where the player must actually risk their own money or suffer a loss in order to qualify.
- True advertising and informed play.
- No offers where players have to suffer significant losses. All offers must be truthful and not misleading. Offers must not communicate products or promotions that are not achievable without significant loss.
- Offers must not encourage excessive gaming. Game design features, including IBC actions, are designed to help prevent extended, sustained, and impulsive play and facilitate low-risk play. IBCs that require excessive play (e.g. significant play requirements) do not meet this requirement.
- Responsible Gaming Message. All promotional and marketing materials must include a Responsible Gaming message.
While AGCO’s additional guidance is helpful in clarifying advertising and marketing expectations, all registered and prospective iGaming operators should seek independent legal counsel to fully understand their responsibilities under the full suite of regulatory requirements.
Next steps: address liquidity
One of the key open issues to be addressed for Ontario’s new iGaming market is liquidity. “Liquidity” refers to the ability to engage a critical mass of players in a game, contributing to potential prize pools and game experience. An “open liquidity” model would allow Ontario players to play against players from countries outside of Ontario. Conversely, a “closed liquidity” model allows only Ontario players to play against other Ontario players.
iGaming Ontario has clarified that only “closed liquidity” models are currently allowed, so games with liquidity pools may not be offered outside of Ontario. This “closed liquidity” approach has resulted in major daily fantasy companies, including DraftKings and FanDuel, stopping offering free or paid daily fantasy sports competitions to Ontario residents post-launch.
While there are unresolved legal issues related to international liquidity in Ontario, AGCO and iGaming Ontario remain committed to increasing consumer choice and embracing the sites that served Ontario residents well before the launch of the new iGaming marketplace offer gambling. It is likely that over the coming months there will be an ongoing dialogue between regulators and operators about the implementation of an “open liquidity” model in the future.
snack
The launch of Ontario’s new iGaming marketplace and the federal government’s legalization of single event sports betting in 2021 promises to make 2022 one of the most dynamic years for Canadian gaming in recent history. As potential operators and suppliers seek to capitalize on the opportunities presented, we encourage them to seek legal advice to assist them in maneuvering through this rapidly evolving regulatory space.
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