The Alcohol and Gaming Commission of Ontario (AGCO) is set to end the grace period for operators to get licensed on October 31. Companies that want to make the switch will find it hard to operate legally, and they may face long delays as punishment.
Pinnacle—whose marketing motto is “Winners Welcome,” is now preparing to operate within the system. It is emailing old customers that its licenses will be good on October 26, and is instructing them on how to find its new website. Pinnacle is still illegal in all U.S. jurisdictions.
The operator is also voiding all previous bets still in its old system—while welcoming the bets to be placed under the new system.
It wrote: “Regarding your pending Futures bets with a settlement date of October 26, 2022, or later, they will be canceled and your stakes on these bets will be refunded.” It added, “However, for those bets that are canceled, if the markets are no longer available on the new site, and the result of the bet has not yet been determined, we can re-offer those bets to you (except Multiples bets).”
AGCO has acted to make that process as seamless and painless as possible for customers, with the idea being that it should be easy for the province to welcome back all the bettors who have played in the offshore websites illegally for years. Bringing those players home—and collecting taxes on their wagers—was a major goal when the Canadian parliament legalized sports betting last year.
Pinnacle CEO Paris Smith said in a release last month: “Ontario’s sports fans and bettors deserve the best betting opportunities, and we’re excited to now service them with just that with the recent approval of our registration from the AGCO.” Smith added, “There’s a robust and fair regulatory regime in place, along with a knowledgeable sports and betting audience, and we’re excited to be able to take our ‘Winners Welcome’ mantra to the market and take Ontarian betting to the next level.”
Pinnacle joins other bookmakers who were recently licensed in the province: Betway, Bet365 and Sports Interaction. Others expected to soon begin operating legitimately in Ontario are BetRegal and Bet 99.
This Halloween deadline—scary in and of itself—has impelled more gray market operators to sign up to be legitimate players in the market, which went live on April 4. Before that date the gray market in Ontario was estimated to be worth about $14 billion.
October 4 AGCO announced that October 31 would be the last day for the transition period for unregulated operators. In its statement AGCO said, “A key objective of the AGCO has been to move iGaming operators and gaming-related suppliers into Ontario’s regulated market as quickly and as seamlessly as possible.”
The release continued, “Since market launch on April 4, the AGCO has provided a reasonable amount of time for these operators and gaming-related suppliers to join the regulated market in a business-like and seamless fashion.”
The actual action AGCO took was to update the Registrar’s Standards for iGaming to include the last day of October.
AGCO added “As with any instance of non-compliance, the AGCO will take appropriate regulatory action against any registrant that does not meet this Standard (once it comes into force).” The commission added, “For those registered operators that have yet to transition from the unregulated market to the regulated market once the Standard comes into force, the registrant will be required to end its unregulated operations within Ontario pending the registrant’s entry into the regulated market.”
Paul Burns, president and chief executive officer of Canadian Gaming Association, said the requirement for operators moving from the gray market to the regulated market are not onerous. He said, “Gray market operators have been given over a year to submit applications for registration and transition into the Ontario regulated market, we feel the transition period has been very generous, but it is time for it to come to an end.”
The Association estimates that the sports betting handle in Canada was $15 billion in 2020, with 3 percent being legal. During this year’s Q2, online operators took CAD $4.1 billion in wagers.
It is challenging for U.S. sportsbook market dominators DraftKings and FanDuel to penetrate the Ontario market and achieve anything like their market share in the U.S. The handle during that same period was CAD $162 million.
The reality of revenues has not lived up to expectations. But it is also true that the numbers don’t include the gray marketeers still moving from the gray market to the legal market.
