How will Bill 216 impact the iGaming industry?

Ontario’s iGaming industry is evolving quickly — and the passage of Bill 216 will introduce some significant changes to the sector. Bill 216 passed its third reading on November 6, 2024, and received royal assent on the same day. It revokes Regulation 722/21 and enacts the iGaming Ontario Act 2024 (iGO Act).

The iGO Act is expected to be proclaimed in early 2025. It dissolves the parent-subsidiary relationship between the Alcohol and Gaming Commission of Ontario (AGCO) and iGaming Ontario (iGO), the two regulatory bodies that govern iGaming in the province.

The iGO Act aims to improve consumer protection and support a more competitive landscape for operators in the Ontario-regulated market. It is crucial to understand the amendments introduced in the iGO Act to ensure your business remains compliant and competitive.

Let’s review the current state of the iGaming industry in Ontario and how the changes introduced in Bill 216 will impact your iGaming business. We’ll also discuss how your business can navigate the new licensing requirements, stricter consumer protection measures, and adjustments to taxation and revenue allocation to remain compliant.

What is the current state of the iGaming industry in Ontario?

iGaming operators in Ontario must navigate three layers of compliance to operate in the province. This includes government laws and regulations, the regulations of AGCO, and the regulations of iGO.

iGO was previously a subsidiary of AGCO (per the Alcohol and Gaming Commission of Ontario Act, 2019) and is responsible for conducting and managing the province’s iGaming market. However, the passage of the iGO Act introduces a significant shift in this regulatory landscape to address the concerns of Ontario’s Auditor General about potential conflicts of interest within the province’s regulatory framework. These shifts include:

• Independence: iGO will now operate independently from the AGCO. This will help reduce potential conflicts of interest and streamline operations to support a more transparent iGaming environment.
• Licensing requirements: New criteria will be introduced for both operators and suppliers to support fair play and security.
• Consumer protection measures: New safeguards will be implemented to protect players and encourage healthy gaming habits.
• Taxation and revenue allocation: Adjustments to the tax structures for iGaming operators will ensure gaming revenue contributes to public services and community development.

These changes will have a considerable impact on both iGaming operators and consumers. The amendments will help support future industry growth and development, attract new operators, and encourage increased competition and innovation.

How will these changes impact your iGaming business?

It is crucial for iGaming operators to understand the changes introduced by the iGO Act and take the right steps to comply with the new requirements.

Independence of iGO

The separation of AGCO and iGO aims to eliminate any potential conflicts of interest. The AGCO is responsible for the regulatory oversight of the iGaming industry while iGO has the responsibility of encouraging growth and profitability in the sector.

iGO’s independence enables it to become more adaptable and promote the iGaming sector. However, it also introduces several significant changes from a compliance perspective. iGaming operators are expected to review the changes to compliance requirements and keep ahead of any further changes.

An external advisor can help you understand how these changes may impact your business and what steps you can take to continue to adhere to compliance and regulatory obligations. Additionally, change management may be necessary to ensure new processes and procedures are implemented smoothly within your organization to comply with iGO’s requirements.

New licensing requirements

The new licensing standards will require iGaming operators to perform rigorous background checks and adhere to strict operational guidelines. The implementation of the new licensing criteria for operators and suppliers will help ensure fair play and security.

These new requirements will pose challenges for operators — but will also support a more level playing field. An advisor can provide step-by-step guidance to support you through the iGaming license application process, from preparing your documentation to meet the new licensing requirements to providing ongoing compliance advice.

Stricter consumer protection

The amendments introduce enhanced safeguards for consumers. This includes stricter age verification processes and responsible gaming programs such as self-exclusion options. The iGO Act also aims to increase transparency around in-game odds and payouts and improve dispute resolution for player complaints. This enables players to access a wide range of reliable options and supports a more enjoyable and informed gaming experience.

It is important to review the current consumer protection measures within your business to identify areas that may need to be adjusted to meet the new requirements. An advisor can guide you through this process and implement strong consumer protection measures within your iGaming business.

Taxation

The iGO Act will create a considerable economic impact and increase revenue directed towards public services and community projects. The amendments aim to achieve these impacts through adjustments to tax structures for iGaming operators.

It is crucial to understand how these adjustments might impact your business. A tax advisor can help you understand the changes, develop customized solutions that align with your business goals, ensure you stay compliant, and maximize your tax opportunities.

What are the implications for other provinces?

Alberta is working toward launching a regulated iGaming market in the near future, with a framework similar to the structure in Ontario (albeit with some subtle proposed differences). It remains to be seen how the iGO Act will influence the regulatory model that Alberta implements.

However, the Alberta Gaming, Liquor, and Cannabis Commission (AGLC) will not be responsible for regulating the new iGaming market. This is expected to provide a more streamlined and efficient regulatory environment, attracting commercial operators that may have been previously deterred by the AGLC’s control over the market.

Take the next steps

The passage of the iGO Act 2024 will have a significant impact on the iGaming industry. For more information about how your business can meet the new requirements, contact a member of MNP’s iGaming Services team. We have considerable experience working with iGaming operators and can provide the insights, strategies, and solutions you need to achieve success in a rapidly evolving market.