Bennett Jones LLPAGCO to Conduct and Manage Online Gaming

Among the significant changes proposed in Ontario's pandemic-recovery budget bill (released November 5, 2020) are a suite of revisions to the legislation regulating online gaming/gambling in the province. Notably, these revisions would grant the Alcohol and Gaming Commission of Ontario (AGCO) the authority to conduct and manage online gaming through a subsidiary, in addition to continuing its role as provincial regulator.

To date, the ability to conduct and manage online gaming in the province has been reserved for the Ontario Lottery and Gaming Corporation (OLG), who has made its own attempts to engage the private sector in this space from time to time. The draft legislation does not remove OLG's mandate to conduct online gaming, but merely permits the AGCO to do so alongside OLG. It remains to be seen exactly what the AGCO would do differently from OLG in an attempt to capture some of the unregulated grey-market within a provincially sanctioned legal framework, but the initial press release from the AGCO indicates that the AGCO will be holding consultations with interested stakeholders to form a competitive and safe online gaming model.

Single-Event Sports Wagering in Canada

While the legalization of single-event sports wagering is not within the control of the Ontario provincial government, Ontario's 2020 budget does prompt the federal government to pay heed to the issue. Specifically, the budget remarks that legal single-event sports wagering would support the growth of a competitive online gambling market in the province and, as a popular form of wagering, would also benefit other parts of the gaming sector.

The calls for legalizing single-event sports wagering in Canada are not new. Attempts were made by the federal NDP with bills in 2011 and 2016, but both failed. On November 3, 2020, Conservative MP Kevin Waugh began the debate at second reading on his Private Member’s Bill, the Safe and Regulated Sports Betting Act, with the same goal. Mr. Waugh's bill was previously introduced in February 2020 but was terminated due to the prorogation of Parliament on August 18, 2020.

It remains to be seen how Mr. Waugh's bill will fair in this sitting, but clearly support for the idea is growing. In addition to the focus from the Ontario government, in June 2020 the Commissioners of the NBA, NHL, MLB, MLS and the CFL issued a joint statement supporting an amendment to Canada’s federal laws that would authorize provinces to offer betting on single sporting events. Mr. Waugh points out that current federal laws put Canada at a significant competitive disadvantage with the United States, where 21 states have legalized sports betting, including border states Michigan, New York and Washington. Mr. Waugh says that, at present, 48 states have either legalized single-event betting or have a bill before the state legislature seeking to do so. See What Are the Odds for Single Event Sports Wagering in Canada? regarding some of those legislative efforts south of the border.

What Is Next

With budget deficits hovering around record highs both federally and provincially, the focus on government revenue generation has never been greater. While the idea of generating such revenue through provincially-conducted online gaming is not new, the renewed and simultaneous focus on the issue at both levels of government is, as is the potential entrance of the AGCO into the fray. Interested businesses and prospective service providers should take note and make efforts to participate and engage with the AGCO as soon as possible in order to take advantage of these potential changes.