Multiple sources tell the Alcohol and Gaming Commission of Ontario is preparing to forbid licensed sports betting companies from doing business with unlicensed entities, and that black-market operators have been warned to get licensed or shutter.
The expected salvo would represent the latest in the AGCO’s struggle not only to move former gray-market wagering operators into legal territory, but also to clearly and consistently communicate with operators.
Since the AGCO and iGaming Ontario launched legal platforms in April, former gray-market operators that did get licensed appear to be dominating the legal market while others from that sector continue to offer wagering illegally — and without penalty at present. While black-market operators have been able to offer wagering with no fines or penalties since April, the AGCO has come down hard on licensed operators that have violated the agency’s stringent promotional advertising rules.
In fact, rather than warn operators or offer up examples in advance of what constitutes a violation, the AGCO has chosen instead to fine violators and, in at least one case, cut off a company it does not regulate for doing business with a company deemed in violation. The AGCO has fined at least four platforms, and it continues to grapple with how to interpret Ontario’s opaque advertising restrictions. Those who were fined could well be only the tip of the iceberg in terms of promotional advertising violations.
Last month, when sent the AGCO questions surrounding the advertising rules, the agency declined in an email response to answer them. The AGCO explained it would not respond to specific questions from Better Collective for the foreseeable future, because of the company’s new commercial partnership with Boston Globe Media, which the AGCO contends is in violation of its promotional advertising standards.
The Better Collective-Boston Globe Media (BGM) deal was made on Aug. 23, and the email reply was received by Better Collective from the regulator on Aug. 30. The email points to , , and , saying the three have a “contractual relationship” with Boston Globe Media, which in turn is working with “non-compliant” operators, though the email does not identify said operators or which BGM properties are in question. Better Collective properties were immediately cut off from editorial access to the AGCO, according to the email, without a warning or being given a grace period to rectify issues before being cut off.
The email from the regulator to reads in part:
Until then, while we'll be pleased to point you to relevant information that is publicly available on our website, we'll not be in a position to support your editorial content with additional information or perspectives.
had initially inquired why the AGCO implemented policies restricting advertising of bonuses and inducements. The regulator did offer a vague explanation in its reply.
“The Standards were put in place to protect Ontarians. They include clear restrictions on the advertising of inducements, bonuses or credits, except when they are on an operator's site, or through direct advertising and marketing issued after receiving active player consent (Standard 2.05),” the Aug. 30 email stated.
Operators already fined by the AGCO
Although the regulator says it provided “clear restrictions on the advertising of inducements, bonuses, or credits,” those “clear restrictions” have clearly been misinterpreted by new operators in the market.
Since the April 4 launch of Ontario’s regulated iGaming market, four operators — BetMGM, DraftKings, PointsBet, and Unibet — have been fined a combined $226,000 (CAD) by the AGCO' for various violations of its advertising Standards.
AGCO issues $100,000 in monetary penalties to Draft Kings Canada for alleged advertising and inducement infractions: https://t.co/opAh2bt09o
— AGCO (@Ont_AGCO) June 30, 2022
The Standards in question are 2.04 and 2.05 in the advertising guidelines:
Standard 2.04 requires that all operator marketing, advertising, and promotions must be truthful and not mislead players or misrepresent products, including any implication that chances of winning increase the more one spends.
Standard 2.05 states that advertising and marketing materials that communicate gambling inducements, bonuses, and credits are prohibited, except on an operator's gaming site and through direct advertising and marketing after receiving active player consent.
interprets that to mean that an operator may advertise its promotional offers on its own website and via emails, social media, or other means sent directly to a customer who has given his/her permission for those ads to be sent, but not on billboards, social media, television, or other outlets. However, what constitutes advertising an inducement, bonus or credit does not appear to be well defined. Companies are permitted to advertise their services in general, but are not to include promotional offers, which seems to be where issues have cropped up.
“Given the AGCO's refusal to provide specific guidance on what ‘inducements’ means, operators had no choice but to try to interpret to the best of their abilities,” one industry source told “The amount of operators being fined for advertising material that contained inducements in the first six weeks after the market opened suggests the AGCO should have provided specific words and phrases for operators to avoid. Had they done so, compliance would have been higher and operators wouldn't be trying to second-guess the standard through trial and error.”
The regulator did conduct a 90-minute webinar in March prior to launch in an attempt to clarify its advertising standards to prospective operators. Many operators have said the lines of communication were excellent with Ontario’s regulators leading up to the launch of the new market. The AGCO doesn’t want to take responsibility in advance, however, for deeming which promotional ads are acceptable and which are not.
“Our job isn't to find loopholes and to close the loopholes – our job is to communicate intent and objectives and for the industry to act in a compliant way,” Jay Welbourn, senior manager, technology and compliance at the AGCO, said during the webinar. “It's not our objective at all to become an approval body for all the advertisements.”
Of course, if the regulator is not the approval body for advertising restrictions, then who is? Confusion has filled the vacuum of uncertainty with individual operators interpreting and managing the Standards around launch time.
In U.S. states, regulators often require operators to submit ads — promotional and otherwise — for approval. Most states have a designated time frame in which the operator must submit promotional ads, and some, including Kansas and West Virginia, require explicit approval for new and revamped ads and promotions.
In Ontario, the AGCO has, in effect, declined to act as an approval body while at the same time has asserted its ability to issue violations.
Over the last few months, the AGCO has tasked suppliers with determining if the operators they are working with are in compliance, and then it has told those suppliers that they should suspend relationships with violators.
“The proposed Standard will create an obligation for operators and suppliers to cease any direct unregulated activities in Ontario, and to end any agreements or arrangements with third parties who are carrying out activities in the unregulated market,” an AGCO letter to licensees reads. “The implementation of this proposed Standard may require some applicants to shutter their gaming sites in Ontario until they have satisfied the requirements of both the AGCO and iGaming Ontario.”
Acquiring customers more difficult for some
The strict advertising restrictions have forced many operators to take a different marketing approach in Ontario when compared to many U.S. jurisdictions where the open advertising of lucrative sign-up and bonus offers is an effective and well-used customer acquisition tool.