Ontario’s Conservative government is moving forward with open the door for an online casino, and potentially a competitive online Canadian sports betting market.
A recent report by the Ontario Office of the Auditor General raised some issues however about policy deficiencies in the Alcohol and Gaming Commission of Ontario (AGCO). This could limit plans for gaming expansion.
The AGCO oversees the alcohol, gaming, horseracing and private cannabis retail sectors in Ontario and oversees about 78,500 licensees across the four sectors that generate significant revenue.
The AGCO also serves as the regulator and the Ontario Lottery and Gaming Commission (OLGC) serves as the manager and operator.
Concerns are generated
The Auditor General has outlined its concerns and has mandated more transparency. A major issue appears to be horse racing.
They are not rotating compliance officials and horse-racing judges such that their independence and judgment might be compromised by long-term relationships with licensees.
Then comes money laundering, a problem that looms large. Increased suspicious transactions are raising a red flag and criminal charges could be pending. Certain casino patrons are wagering vast sums from an unknown source.
Unregulated online gambling is next by no means a minor concern. In fact, in 2015, the AGCO reported more than 2,200 unregulated gaming websites operated by more than 700 different companies.
This vast unregulated industry must be curbed per officials. The report offers some actions such as blocking payments and a public awareness campaign. A best practices policy is not yet in place.
AGCO and iGaming a conflict of interest
A conflict of interest between the AGCO and iGaming regulation had been suggested. The government had approved a plan to establish a subsidiary corporation of the AGCO to conduct and manage internet gaming.
But according to the audit, these functions are still separated. The Auditor General noted that “It would be prudent for these functions for online gaming to be done by different entities, not a subsidiary of the regulator.”
AGCO on the defensive
I response, the entity has responded favorably to the report and many of the recommendations identified by the auditor and is moving forward to incorporate the suggestions.
The AGCO also maintains that anti-money laundering and weeding out illegal activity at casinos remains a top priority. In fact, it will work with law enforcement towards eliminating gaps and reporting blind spots that allow for suspicious transactions to slip through the cracks.
It is not immediately clear what impact this report will have on Canadian gaming. But the report does highlights some regulatory deficiencies needing rectification before the launch of a full-scale competitive online market in Ontario.
Any such online market must protect consumers. The audit recommend more aggressive steps by the AGCO to deter Ontarians from flocking to unregulated gambling sites. One way would be to offer a comprehensive regulated alternative.