Why Ontario is different
Under Canada's Criminal Code, lottery schemes and most forms of gambling are lawful only when they are conducted and managed by a provincial government, or licensed by a province in limited cases. For many years that meant online gambling in Canada was offered legally only through provincial lottery corporations, while offshore sites served Canadian players from abroad.
Ontario changed its approach. Rather than relying solely on its provincial lottery corporation, it created a model in which private operators can offer online casino, sports betting and poker to players in the province, under the conduct and management of a provincial body. The regulated market launched in April 2022. It brought many large international operators into a formal Canadian regime for the first time.
The result is a market with its own rules, its own regulator and its own commercial arrangements. A licence from Malta, the Isle of Man or anywhere else does not authorise an operator to serve Ontario. Operators that want Ontario players have to join the Ontario regime.
iGaming Ontario and the AGCO
Two bodies sit at the centre of the market, and their roles are distinct.
- The Alcohol and Gaming Commission of Ontario (AGCO) is the regulator. It registers operators and suppliers, sets the standards they must meet, and has powers to investigate and enforce. Its standards for internet gaming cover areas such as player protection, advertising, game integrity, AML and technical controls.
- iGaming Ontario conducts and manages online gaming in the province. Private operators enter into operating agreements with iGaming Ontario, and offer their games on its behalf under those agreements. This structure keeps the market within the Criminal Code requirement that gaming be conducted and managed by the province.
In practice, an operator needs both: registration with the AGCO and an operating agreement with iGaming Ontario. Without both, it is not part of the regulated market and should not be accepting Ontario players. Both bodies publish lists of participating operators and registered suppliers, which payment providers use for verification.
What operators commit to
Operators in the Ontario market take on a broad set of obligations. In general terms these include the following.
- Registration of the operating entity with the AGCO, and assessment of the people and companies that own and control it.
- Compliance with the AGCO's standards for internet gaming, including player protection, responsible gambling tools, advertising rules and technical requirements.
- An Ontario-facing brand and website that keeps Ontario players within the regulated offering, separate from any international offering the group runs elsewhere.
- Geolocation controls that confirm players are physically in Ontario when they play.
- AML controls that meet both the AGCO's requirements and Canada's federal AML framework.
- Reporting to iGaming Ontario and the AGCO, and payment of the amounts due under the operating agreement.
The advertising rules deserve particular attention. The AGCO has placed limits on how operators promote bonuses and inducements and on the people and themes that may appear in gambling advertising. Operators, and the affiliates who market for them, need to follow those standards closely, as breaches can lead to regulatory action.
B2B suppliers in the Ontario market
The Ontario regime reaches beyond operators. Businesses that supply gaming-related goods and services to operators, such as platform providers, game studios and other suppliers whose products affect the conduct of games, are expected to register with the AGCO as suppliers. This means a game studio that wants its content offered by Ontario operators needs its own registration.
Marketing affiliates that promote Ontario operators are also subject to AGCO requirements, and operators are expected to work only with affiliates that meet them. The detail of which supplier category applies to which business is set out by the AGCO, and suppliers should confirm their position with the regulator or Ontario counsel.
For a payment provider, supplier registration is a useful check. When an Ontario operator asks to pay a platform fee or a game revenue share, the reviewer can confirm that the supplier appears on the AGCO's list of registered suppliers. Payments from an Ontario operator to an unregistered gaming supplier would raise an obvious question. Our guide to B2B supplier payments covers supplier due diligence more broadly.
International groups with an Ontario entity
Many Ontario operators are part of international groups that also hold licences in Malta, the Isle of Man, Great Britain or elsewhere. Some have set up a dedicated Ontario entity. Others have registered an existing group company. Either way, the Ontario business is usually ring-fenced, with its own brand presentation, player terms, processing relationships and reporting.
That ring-fencing matters for payments. Ontario player funds and revenue should follow the Ontario structure. Settlements from the processors serving Ontario players should arrive in accounts held by the registered Ontario entity, and payments due under the operating agreement should come from that entity.
Once the Ontario entity has received its net revenue, it will pay its share of group costs, such as platform fees, game revenue shares, marketing and shared services. A provider will expect those payments to be supported by intercompany or supplier agreements. It will also want to see that the international side of the group is not serving Ontario players outside the regulated market, since that would undermine the whole structure.
A short written description of the ring-fence is worth preparing. It should explain how Ontario players are directed to the Ontario brand, how the international brands detect and refuse Ontario locations, which processors serve which entity, and how shared costs are allocated between the Ontario entity and the rest of the group. Reviewers often ask for exactly this, and an operator that can send a two-page answer with supporting screenshots and agreements will spend far less time in correspondence than one that has to assemble it from scratch.
Typical business payment flows
The business flows around an Ontario operator are fairly consistent. As a general picture, they look like this.
- Processor settlements in CAD. Player payments are processed by specialist processors, which settle net funds to the operator in CAD after fees and any reserves.
- Payments under the operating agreement. The operator pays amounts due to iGaming Ontario on the agreed schedule.
- Supplier payments. Platform fees, game revenue shares, data feeds and hosting are paid to suppliers, often in EUR, USD or GBP because many suppliers are based outside Canada.
- Affiliate payouts. Affiliates marketing to Ontario players are paid in CAD or another agreed currency.
- Group recharges. Shared services provided by other group companies are recharged and paid under intercompany agreements.
The currency mismatch between CAD revenue and EUR or USD costs is a recurring treasury task. Operators often convert CAD surpluses on a set schedule after local obligations have been met. As an illustrative example, an operator might hold CAD to cover the next operating agreement payment, Canadian payroll and Ontario affiliates, and convert the balance to EUR monthly to settle supplier invoices.
Canadian AML considerations
Canada's federal AML framework is administered by FINTRAC. Casinos, including online casinos conducted and managed by provinces, have reporting obligations under that framework, and businesses that handle money for others, such as money services businesses, have their own obligations.
For an Ontario operator, this means AML controls have to satisfy both the AGCO's standards and the federal requirements that apply to the regulated gaming offering. A payment provider that is itself a reporting entity will apply its own AML programme to the operator's business flows. That includes identifying the customer and its beneficial owners, understanding the purpose of the relationship, screening counterparties, monitoring transactions and reporting where required.
Operators should expect a provider to ask for their AML policy, the name of their compliance officer, and details of how they meet both provincial and federal expectations. A policy that describes Ontario-specific procedures, rather than a generic group document, makes a good impression.
What a payment provider checks
When an Ontario operator applies for business payment services, a provider will normally verify the following points.
- The operating entity appears on the AGCO's registration list and on iGaming Ontario's list of operators.
- The brands and domains named in the application match those published for the operator.
- Processor statements show the Ontario entity as merchant, with CAD settlements consistent with stated volumes.
- Key suppliers that will be paid are registered with the AGCO where registration is required.
- The group's international businesses block Ontario players outside the regulated brand.
- Policies cover Ontario player protection, advertising and AML requirements.
If the operator also serves other markets through other group entities, the provider will look at those separately. Each entity needs to stand on its own licence. Our article on geo-blocking and market licensing explains how groups show that their entities stay within their licensed markets.
The rest of Canada
Ontario was the first province to open this kind of multi-operator market. Other provinces have relied mainly on their own lottery and gaming corporations for online gambling, and some have been considering or developing different approaches. Operators and suppliers interested in other provinces should take advice on the position in each one, as the rules differ and change over time.
For payment providers, the existence of the Ontario market has sharpened attention on Canadian revenue generally. An operator with Canadian players outside Ontario will be asked how it justifies that activity under provincial and federal law. Clear answers, supported by legal advice, are needed before a provider will accept that revenue as part of a business relationship.
General information, not legal advice
This article is a general overview of the Ontario iGaming market and its payments implications. It is not legal advice. Operators and suppliers should confirm their obligations with the AGCO, iGaming Ontario and Ontario counsel.
CCYFX has its head office in Vancouver and provides Foreign exchange, International payments, and Collections and payouts to businesses. It does not handle player deposits or withdrawals. See our International payments page for further background.
