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2022-08-18
5 min read

Everything You Need to Know about Canada’s Gambling Regulations: From Sports Betting to iGaming Ontario

Learn about recent developments in Canada’s gambling regulations and how to legally operate your online business.

In April 2022, a new internet gaming market, iGaming, began operating in Ontario, Canada. It enables online gaming providers to get licensed by the Alcohol and Gaming Commission to provide their services in the province. This is a big step for Canada’s historically complex and strict gambling industry.

Gambling is illegal in Canada unless otherwise regulated by a province. Therefore, commercial gaming and betting can be allowed only if it’s conducted or managed by provincial authorities. So, to open a casino in Canada, it’s necessary to comply with the local laws, which differ from province to province. 

Since provincial legal authorities do not establish casinos themselves, they instead issue registrations to private companies to operate gambling platforms and provide gambling-related services. To do so, provinces have established separate gambling authorities that register and regulate gambling providers.

The situation for companies operating in Canada gets even more challenging due to competition with online gambling providers settled outside of Canada. Foreign companies that provide gambling services to people in Canada can’t be subjected to Canadian regulations and, therefore, don’t have to be registered with local authorities. 

This combination of obstacles creates harsh conditions for the registration and profitable operation of gambling companies in Canada. Yet, over the last several years, the country has lifted some of its regulations and simplified certain registration procedures. For example, Canada’s government finally lifted the ban on offering bets on single games in 2021. 

In this article, we provide an overview of the main regulations of each of Canada’s provinces, and explain Ontario’s recent iGaming initiative in detail. You’ll learn how to register your online gaming website in Canada and comply with related laws. 

The Criminal Code

The Criminal Code of Canada states that providing gambling services is illegal unless it is managed or conducted by a province. Therefore, local regulations and authorities are especially important for companies who wish to launch in Canada.

What are the local regulations?

Despite having many similarities, Canada’s provincial regulators and regulations (e.g., who’s allowed to operate, how to register, etc.) differ from one another. 

Below, you’ll find links to legislation explaining exactly which companies may be registered in each particular province to provide gambling activities. Also, each link provides instructions on how to get registered and the penalties for failing to comply.

Here’s the complete list of regulators for each province:

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Ontario’s iGaming market

In November 2020, the government of Ontario announced its plan to create iGaming, a gaming market regulated by the Alcohol and Gambling Commission of Ontario (AGCO).iGaming Ontario began registering companies in Fall 2021, and the market launch took place in April 2022. 

The introduction of iGaming Ontario allows third parties to provide online gambling services by registering with the AGCO and entering into an agreement with iGaming Ontario. This new system has significant consequences for the gambling industry, as it finally opens the market for outsiders. Still, Ontario can’t allow all third parties to act independently. Therefore, iGaming Ontario performs a monitoring function. 

Who is affected?

 With the launch of iGaming, companies seeking to launch a gambling website for Ontario citizens must register at the AGCO. There are several differences in the registration process for gaming operators and gaming-related suppliers. 

According to AGCO, any entity operating a gaming website within Ontario falls under the category of gaming operators. There is no clear definition “operating a gaming website”, but there are activities that represent an entity as one operating such a website (e.g., having an ongoing responsibility for key decision-making activities).

The AGCO defines “gaming-related supplier” as an entity that “manufactures, provides, installs, tests, maintains or repairs gaming equipment or who provides consulting or similar services directly related to the playing of a lottery scheme or the operation of a gaming site.”

How to register

Before registering with the AGCO, companies need to get a certificate from the Independent Testing Laboratory regarding the serviceability of their gaming devices. After that, they need to create an account with AGCO

Documents

Gambling operators need to submit the following documents:

  • Operator Application;
  • Registrar’s Standards Gap Analysis;
  • Personal Disclosure for individuals working in the company;
  • Entity Disclosure;
  • Regulatory fee;
  • Any requested investigation fee;
  • Supporting documents (as applicable).

The complete set of documents required for the operator application, as well as the list of individuals falling under personal disclosure, can be found here here.

Gambling-related suppliers need to submit the following documents:

  • Supplier Application;
  • Personal Disclosure for individuals working in the company;
  • Entity Disclosure (if applicable);
  • Regulatory fee;
  • Supporting documents (as applicable).

The complete set of documents required for the operator application, as well as the list of individuals falling under personal disclosure, can be found here.

iGaming Ontario agreement

Besides registering with the AGCO, companies need to sign an agreement with iGaming Ontario. This procedure consists of several steps:

  • Execute a Non-Disclosure Agreement (NDA) with iGaming;
  • Execute a letter of agreement with iGaming;
  • Set up and configure access to iGaming’s Secure Data and Information Communication Channels;
  • Complete iGaming’s Anti-Money Laundering (AML) Information Submissions;
  • Complete iGaming’s Financial Information Submissions;
  • Participate in Operator Systems & Data Readiness Cycle with iGaming;
  • Execute the Operating Agreement with iGaming.

Both the agreement and registration process can take place simultaneously. A full explanation of each step can be found on the iGaming Ontario website.

Fees

Gaming operators have to pay an annual fee of CA $100,000 (approximately $77,760) to maintain a gaming website. Each gaming website should be registered separately. 

Gaming-related suppliers have to pay CA $3,000 (approximately $2,330) or CA $15,000 (approximately $11,660) depending on their category. 

How to stay compliant

During the registration process, companies have to provide documentation explaining their strategy for confronting illegal activities, such as money laundering, terrorism financing, fraud, etc. To ensure that customers won’t abuse their gaming websites, companies need to implement Anti-Money Laundering (AML) solutions, including Know Your Customer (KYC) and Customer Due Diligence (CDD) measures. Accordingly complies should collect at least the following information from a customer during the registration process: 

  • Name;
  • Date of birth;
  • Address;
  • Method of identification for subsequent log ins, such as user name;
  • Player contact information;

Other information may be required by the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the regulations under it.

The above information must then be verified to ensure its authenticity. This is done by collecting government issued documents. Additional procedures such as a liveness check can also take place. One of the main goals of such processes is to ensure that players are old enough to use gaming websites. 

Companies have to keep track of player activity, such as:

  • Deposit and withdrawal history, and current balance;
  • Method and source of funds used for transactions;
  • Date and time of previous login;
  • Gaming event and transaction history (game session outcomes and game transactions) including, in sport and event betting, the date and time of past and current bets, and the date and time at which past bets were settled, and information about current bets;
  • Total amount of money wagered for session and/or period of time;
  • Total amount of money won or lost for a session and/or period of time;
  • Account balance at start and end of session.

In addition, companies should monitor whether their customers are on any sanctions or Politically Exposed Persons (PEP) lists. 

In case suspicious customer activity is detected, companies should take action immediately and report the suspicious activity to the AGCO’s Registrar. 

Recent developments 

Canada is gradually becoming more open to the gambling industry. Ontario’s recent iGaming initiative is a clear example, as it promises to simplify market entry for third parties. In addition, Canada passed Bill C-218 in 2021, which lifted restrictions on single-event sports betting. As a result, both British Columbia and Ontario announced that they will include such betting options on their online platforms. 

As Canada’s gambling regulations continue to evolve, it’s important for companies to follow changes in each province. Therefore, it’s important to employ a strong KYC solution. This will enable operators to react quickly to regulatory developments across provinces, giving them an upper hand over the competition. 

If you want to learn about the gaming industry and its regulations in Europe, check our complete guide on the topic.

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