A new regulation under the Alcohol, Cannabis and Gaming Regulation and Public Protection Act, 1996 to establish the iGaming lottery subsidiary of the AGCO and amendments to O. Reg 78/12 under the Gaming Control Act, 1992 to exempt certain suppliers and gaming assistants from having to be registered under the Act for iGaming
Regulation - LGIC
Bill or Act:
Alcohol, Cannabis and Gaming Regulation and Public Protection Act and Gaming Control Act
Summary of Decision:
These regulations were approved on June 29, 2021 and filed on July 6, 2021.
Analysis of Regulatory Impact:
New Regulation under the ACGRPPA to Establish the Lottery Subsidiary
iGaming operators and suppliers are not expected to incur costs as a result of the new regulation under ACGRPPA. The regulation will establish a subsidiary of the AGCO to conduct and manage the iGaming framework, once that framework is established.
The regulation would be a significant milestone in the government's plan to regulate the iGaming market in Ontario. It is anticipated that establishing a new iGaming market for the province will foster a collaborative and regulated relationship with private sector operators, create conditions that protect the public interest, and enable Ontario to capture new revenue in the future and generate returns for the Province. Providing a regulated, competitive iGaming offering will provide increased consumer protections and responsible gambling measures.
Amendments to O. Reg 78/12 under the GCA
There would be no administrative costs for registrants as a result of the amendments to O. Reg 78/21 under the GCA. Exempting NGRSs and gaming assistants from registration under the Act for iGaming would enable Ontario to meet key program objectives for the launch of a competitive, regulated iGaming market.
Summary of Proposal:
New Regulation under the Alcohol, Cannabis and Gaming Regulation and Public Protection Act, 1996 to Establish the Lottery Subsidiary
The 2019 Ontario Budget stated an intention to establish a competitive market for online legal gambling that will reflect consumer choice while protecting consumers who play on these websites. The 2020 Budget stated that a dedicated subsidiary of the AGCO would be established as the conduct and manage entity to manage the commercial relationship between the province and private iGaming operators.
The Ministry of the Attorney General (MAG) is proposing a new regulation under the Alcohol, Cannabis and Gaming Regulation and Public Protection Act, 1996 (ACGRPPA) to establish a lottery subsidiary of the AGCO responsible for the conduct and management of online lottery schemes for the province's new iGaming framework.
The new regulation under the ACGRPPA addresses the following main elements for the new lottery subsidiary:
1. Establishment of the lottery subsidiary;
2. The governance structure for the lottery subsidiary (including the board structure and appointments process) to clearly separate the subsidiary's conduct and manage function from the AGCO's regulatory function;
3. Prescribes online lottery schemes that the lottery subsidiary may conduct and manage; and
4. Directs oversight of and distributes iGaming revenues in a manner similar to the OLG's revenue distribution model.
The Registrar's role as regulator will remain unaltered and kept separate from the subsidiary's conduct and management function. The AGCO would continue to be responsible for regulatory oversight for all gaming activities in Ontario, including iGaming operators and suppliers as well as over the new subsidiary.
Amendments to O. Reg 78/12 under the Gaming Control Act, 1992
MAG is also proposing amendments to O. Reg 78/12 under the Gaming Control Act, 1992 (GCA) to exempt non-gaming related suppliers (NGRS) and gaming assistants from requiring registration under the Act for lottery schemes conducted and managed by the lottery subsidiary and for OLG's online gaming channel.
The category of NGRS captures common low risk land-based goods and services (e.g., construction, repair, furnishings and maintenance) and does not explicitly contemplate goods and services that are virtual in nature.
In the competitive online market, critical gaming related functions such as facilitating game play, monitoring, site access and asset management are handled by software, not people. Gaming assistants for iGaming services have less influence over the integrity of the game given that they do not facilitate game play, handle cash, cash equivalents or other sensitive aspects of the transaction.
Exempting NGRSs and gaming assistants from registration for iGaming would enable Ontario to meet key program objectives for the launch of the competitive regulated iGaming market.
Ministry of the Attorney General
Corporate Policy Unit
720 Bay Street, 3rd Floor
Toronto, ON M7A 2S9
July 6, 2021