Ontario Looks to Crack Down on Illegal Gaming Websites

• Industry looks to pivot to enforcement against unregulated sites three years after market launch
• Ontario market still has 16%-17% of residents using unregulated gaming sites

There’s a new focus on enforcement against grey market players in Ontario, listening to comments made this week by industry leaders like Doug Downey, Attorney General of Ontario, and Alcohol and Gaming Commission of Ontario (AGCO) Chair Dave Forestell.

When we launched the market in April of 2022 about 70% of players were in the grey or unregulated market. I don’t use that term anymore. I say now it’s the illegal market.”

In May, the AGCO sent out a missive asking traditional and digital media platforms to stop taking advertising from unregulated online gambling and sports betting sites like Bodog in Ontario. 

Ipsos, commissioned by AGCO and iGaming Ontario (iGO), released a market channelization study for Ontario in April which revealed that 83.7% of Ontarians surveyed who had gambled or wagered real money bets online the previous three months had done so on a regulated site.

Over 83% Market Channelization in 3 Years

So how does the government look at enforcement of illegal operators, further squeezing the remaining 16%-17% of players on those unregulated sites?

The market’s matured enough now that people have had an opportunity [to get licensed], and if they’re not going to go through the door, it’s time that they stop playing in our market,” Downey said.

“I think iGO and the AGCO, and the responsible gaming people all understand that that’s really important,” Downey added. “I think you’ll see a little bit more aggressive approach in that space. I know some who have been made to have ISPs shut down, I’m not going to name names, but to say, stop facilitating this, or we’re going to have to go down the road of consequences. And I think that’s acceptable. It’s only fair to those who have played by the rules.”

Strategic Review of Industry

The province’s gaming industry is about to embark on a strategic review to clear up duplication and regulatory overlap, and to undertake red tape reduction when it comes to iGaming Ontario, AGCO, and the OLG.

As Downey told the audience, the vision when the legal market went live in 2022 was the capture what was happening in the market and bring the unregulated into the regulated so the industry could innovate, grow the iGaming economy, and protect people. Other provinces are now looking at the Ontario model, a market that’s now mature, with 50 licensed operators, 85 live websites, and 2.1 million players.

“What we’re trying to do is look at both sides of the ledger,” said Forestell. “What can we do to go after people who have made a conscious decision to operate illegally and then look at places where we can enable the ability to participate in the legal market.”

Broadcasters No Longer Accepting Ads

Forestell noted that since it’s a regulator and not an enforcement authority, the AGCO must rely on others to crack down on illegal operators.

We don’t have an enforcement mandate, but ultimately, this is a business,” Forestell said. “We’ve called together banks, payment processors and others to let them know, we publish a list of legal operators. So if you’re providing banking services, payment services, to somebody not on this list, you are facilitating an illegal operator in Ontario. We’ll keep at it. Part of our duty is to squeeze that illegal market down to the smallest possible size.”

A “number” of broadcasters are now no longer accepting ads from illegal operators, he added.