Ontario online gambling market launched, but some insiders and experts have concerns

The Ontario government officially launched its new online gaming marketplace, including online casinos and sports betting sites, starting Monday.

iGaming Ontario (IGO), a subsidiary of the Alcohol and Gaming Commission of Ontario (AGCO), is introducing new standards for gaming operators, according to a January press release.

The new market has local online gaming companies, like Toronto’s Rivalry, celebrating what the future holds.

“So far, we have not been able to legally offer a product, or offer a product at all, in this market,” said Steven Salz, co-founder and CEO of Rivalry. “It’s a new market for us and we have a small home advantage.”

But as online businesses celebrate, some advocates worry about what all of this could mean for land-based casinos in the province. At the same time, gambling addiction experts have expressed some concerns about increased access to gambling.

Online gambling as a concept is not new to Ontario. Industry figures estimate that Ontarians spend about $500 million a year on internet gambling, almost entirely with companies that operate outside the province.

Previously, these external sites were not subject to any regulations. But now private operators will have to register and pay taxes in exchange for legal access to the province.

Steven Salz, right, is the co-founder and CEO of Rivalry, a Toronto-based online gaming company. He is delighted to finally be able to launch his product on the local market. (Yan Théoret/CBC)

In addition to providing Ontario with a new source of revenue, the marketplace aims to protect Ontarians by providing a legal alternative to the existing “grey market” of online gambling options, the province says.

The new measures “will enable more responsible gaming, prevent underage access and ensure compliance with applicable laws, including anti-money laundering rules and regulations,” according to a statement provided by the Attorney General’s office. province.

Ontario is the first province in Canada to implement such a system, and some industry insiders have concerns.

In January, CBC News reported the new market could create a loss of $550 million in annual revenue for the province, for a total of $2.8 billion over the next five years.

That warning came in a report by a gaming industry consultancy firm prepared for Great Canadian Gaming, the company with the largest casino market share in Ontario.

Tax advantage for online operators

Tony Rodio, CEO of Great Canadian Gaming, told CBC News that it’s unfair that iGaming operators are only taxed on 20% of their revenue, compared to 55% for land-based casinos.

“It’s the only state or province in North America where iGaming operators enjoy a tax advantage,” he said.

This will cause visitors to migrate from in-person casinos to online platforms, Rodio said.

On the other hand, Rivalry’s Salz said it believes online gamblers are a separate population from casino visitors.

“People who historically bet overseas weren’t going to walk into a casino whether this settlement came or not,” he said.

Tony Rodio, CEO of Great Canadian Gaming, says online gaming operators have an advantage over traditional casinos in Ontario’s new online gaming market. (Dean Gariepy/CBC)

The lower tax rate for licensed online operators also allows them to remain competitive with offshore operators, who pay no taxes, he said.

According to Rodio, however, regulation and a lower tax rate mean online operators can now spend millions on advertising and marketing to lure customers away from in-person casinos.

He also takes issue with iGaming being operated as an open marketplace, where any business can now enter, even those that operated illegally before registering with AGCO.

The government should have taken more time to meet the operators in person to make sure things were done right, Rodio said.

“We want to participate. We just want it to be on a level playing field,” he said.

Experts worry about problem gambling

Some gambling addiction specialists also expressed concerns about improving access to online gambling.

Chanel Larche, associate researcher at the University of Gibraltar’s Responsible Gambling Center of Excellence, said any increase in accessibility to gambling should be accompanied by an increase in resources aimed at reducing time and effort. money that users spend online.

“There needs to be a more active role in how [operators] choose to disclose or present these services and tools to the player,” Larche said.

FanDuel, an American online gambling site that now extends to Ontario, has worked with Canadian organizations like the Responsible Gaming Council to develop appropriate protocols.

“We will research and invest in partnerships to ensure we have all the tools necessary to help everyone who needs it when they participate with us,” Dale Hooper, general manager of FanDuel Canada, told CBC. News.

The FanDuel application is displayed on a mobile phone. The American online gaming company is now expanding into the Ontario market. (Michael Aitkens/CBC)

Nigel Turner, a gambling addictions expert at the Center for Addiction and Mental Health (CAMH), agreed that online gamblers need to be given more information about problem gambling.

“Each time you increase the availability of an addictive behavior like gambling, alcohol, or drugs, it’s possible that more people will develop problems associated with that addictive behavior,” he said.

Turner also warned that many people have a problem with the game because they don’t fully understand how it works.

“People have a very poor understanding of chance,” he said.

“Winning is possible. But in the long run, the odds of succeeding…are really, really pathetic. And that means it’s not a good investment.”