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How to get a license in Ontario and open a gaming project in the Canadian market

Nikolaj Plugatar
May 23, 2024
13 min
13059

Want to start a new online casino that Canada would welcome? Gambling laws in Canada have seized the attention of the worldwide iGaming community for a reason — the country has plenty to offer. Gambling in Canada can be tricky to understand, especially when regulations differ from province to province, but this article will break down Canadian online gambling regulations and provide an overview of the Canadian online casino market.

Canada has long been one of the world’s biggest gambling markets, and recent changes have only made the country more appealing for iGaming operators.

Since the middle of the twentieth century, gambling legislation has gotten progressively more liberal, and in the past decade, provincial gaming authorities have been opening websites in order to fully embrace the modern age.

Aside from certain authorized providers, provincial governments have monopolies on offering gambling services to Canadian citizens. But of course, the biggest story about the Canadian market in recent years is the province of Ontario’s recent move to regulate private online gambling operations. Keep reading to learn more about the Canadian market.

Gambling is a widely accepted form of entertainment among Canadians, unlike in other countries where it’s culturally taboo. According to an iGaming Ontario report, gaming revenue grew from $540 million in April 2023 to $690 million in March 2024. Martha Otton, the iGaming Ontario Executive Director, comments: “With $63 billion in wagering and $2.4 billion in gaming revenue, the second year of Ontario’s igaming market is more than 70% bigger than the first.”

History and overview of the Canadian gambling market

Though gambling is widely accepted in Canada — on average, six in ten Canadians participate in some form of gambling — organizing it for purposes other than charity was completely illegal until 1970. That year, the Criminal Code transferred the authority to regulate gambling from the federal to the provincial governments, and regulations have grown even more accommodating over time.

The revenues gambling can generate give provincial governments a powerful motivation to make at least some forms of gambling available. Some provinces, seeing the potential of developing the Canadian gambling market, granted Canadian gambling companies concessions to establish land-based casinos and horse tracks on their territory in the 1990s; later on, video lottery terminals were allowed.

The rewards of regulation are readily apparent. For example, the British Columbia Lottery Corporation (BCLC) generated CAD 28 billion for the province B.C. since 1985, including $1.6 billion in the 2022/23. The benefits are measured in more than just dollars; gambling tax revenues are used by provincial governments to support cultural programs and other social initiatives.

However, until recently, only offline establishments were open in the country. When online gambling was legalized in 2009, the Canadian gambling market didn’t provide any licenses for online operators, except state-run online casinos in separate provinces: the first was the British Columbia Lottery Corporation, which opened PlayNow in 2010. Loto-Québec launched espacejeux.com the same year, and Manitoba followed suit in 2013, trying to tap into the estimated CAD 37 million that citizens were spending on offshore sites every year.

Without private domestic options, players who didn’t like the state monopoly’s odds were pushed to use offshore websites’ services, which they did without a hitch — while launching a casino platform in the country was not allowed, the government never went so far as to prosecute players for visiting offshore sites.

In fact, it’s doubtful authorities would even have the power to curtail offshore gambling. In 2016, the government of Quebec passed Bill 74, which would require internet service providers to block users from accessing offshore sites. However, the bill was challenged by the Canadian Wireless Telecommunication Association, and the Superior Court of Quebec ruled the bill unconstitutional, as it overstepped provincial authority regarding both criminal and telecommunications law.

Legislation has grown more and more liberal over time. In 2021, the Canadian government legalized online bets on single games (previously, only parimutuel betting was allowed). Some provinces offer their own online casinos, but have yet to register any foreign companies. On April 4, 2022, the shadows covering online gambling in Canada were dispelled — the province of Ontario legalized iGaming, and since that moment, every gambling company willing to provide services to Canadian players in the province has been legally able to do so.

Canadian players

Since Canadians are used to playing on offshore resources, they are already familiar with the industry and have their own experience and preferences. In that regard, the market is already fairly developed and there’s no need to embark on a player-education campaign.

First of all, Canadians are very familiar with playing online. The government never discouraged them, and plus, the pandemic era demonstrated the convenience of living through our devices — Canadians included. According to the Made in CA report from 2024, there are over 19.3 million active online players in Canada at the moment, 60% of Canadians report they gamble monthly.

Every online casino or sportsbook willing to enter the market should localize its website, and the important thing to remember in this case is that Canada has two official languages: English and French (especially important in French-speaking Quebec).

Another important aspect of localization is payment methods. Besides the classic credit and debit cards, Canadians use electronic wallets (Skrill, PayPal, Neteller etc.), Paysafecard (prepaid debit cards), iDebit, and ISTADebit. Additionally, 18% of Canadians own cryptocurrency; cryptocurrency payment processors and exchanges are considered a legal Money Service Business in Canada.

Players in Canada are spoiled for choice by the competitive international gambling market, which is why it’s so important to make your offer as extensive as possible. Slots, card games, table games, live dealer games, and everything else that is in trend (read: newly released) at the moment.

To understand whether online gambling is legal in Canada we need to clarify that the country is a federation divided into 10 provinces and three territories. At the federal level, the Criminal Code of Canada regulates the industry, which states that gambling is illegal unless local authorities decide differently and manage their own markets. The Canadian Gambling Commission is responsible for overseeing the regulated online casino market and communicating with the government, the public, and the media, but it does not interfere with particular local laws: both online and offline gambling and betting are controlled on the province level.

Alberta

Only charitable and religious organizations are allowed to offer gambling services. There is only one regulated online casino platform in the province, called PlayAlberta.

British Columbia

The Gaming Control Act of 2002 allows land-based operations in the province; however, there is only one legal online casino, PlayNow.

Manitoba

The Liquor and Gaming Authority of Manitoba regulates offline and online gambling operations, but there is only one authorized website, PlayNow. Sport betting is permitted with a CAD 250 daily limit, the only sports betting website is Sport Select.

New Brunswick

The Gaming Control Act allows offering gaming and sport betting services, but there is only one land-based casino and one betting website, Pro-Line.

Newfoundland and Labrador

This province’s laws don’t permit any regulated online or offline gambling operations except sport betting on Pro-Line website with a CAD 250 limit.

Nova Scotia

There are two government-owned casinos and the option to use Pro-Line platform services. No other legal opportunities for operators are available.

Prince Edward Island

The Prince Edward Island Lotteries Commission regulates gambling in the province, and can organize and manage lotteries on its territory. Players can also use a Pro Line sportsbook.

Quebec

Players in Quebec have access to nine land-based casinos, a government-owned online platform, Espacejeux, and the Mise-O-Jeu sportsbook.

Saskatchewan

Online casinos can’t be based in this province. However, locals access the Sports Select sportsbook website.

Yukon, Nunavut, Northwest Territories

There are no online platforms based in these regions, and local players have only one option to play — offshore casinos.

Ontario

Ontario’s online gambling regulation is the most liberal. There are several land-based casinos, and new legislation made it possible to organize online gambling.

The AGCO and iGaming Ontario

Ontario is the only province in Canada that has so far decided to open its market to foreign companies and allow operators to enter the country. Instead of a classic licensing process, the Alcohol and Gambling Commission of Ontario (AGCO) took two years to develop a special system that would make it possible to control and maintain the industry, making it at the same time liberal and competitive.

The AGCO is the regulator for the province of Ontario, and iGaming Ontario (iGO), a subsidiary of the AGCO, is the conducting and managing entity.

To launch an online casino on the Ontario market, operators must register with the AGCO and execute an operating agreement with iGO. The AGCO registers companies and authorizes them to provide gambling services to Ontario citizens. iGaming Ontario in this case signs an agreement with every interested operator and supervises its activity, monitoring and managing the gambling market in the province.

Both B2C and B2B companies can register at the AGCO. To do so, they must have their products and devices certified by an independent laboratory and provide a list of requested documents (such as an application, declaration of business entity, and disclosures of persons connected to the entity), pay fees, and sign an agreement with iGaming Ontario.

B2C operators pay an annual fee of CAD 100,000 ($77,348) for each gambling website, while B2B providers are divided into two categories. Manufacturers of gaming equipment pay CAD 15,000 ($11,602), while suppliers of gaming equipment or services pay CAD 3,000 ($2,320).

How to start an online casino in Canada

The standard online casino launch process includes:

  1. Researching potential target markets and choosing the most suitable one.
  2. Registering a company.
  3. Acquiring a gambling license.
  4. Hiring a team of professionals.
  5. Analysis of the market demand and demography.
  6. Developing or purchasing a gambling platform.
  7. Filling the platform with games and payment methods based on the analysis.
  8. Creating a marketing strategy.

Instead of simply getting a gambling license, as would be required by most regulated jurisdictions, online casinos in Ontario must take seven steps provided by both the AGCO and iGaming Ontario to enter the Ontario gambling market:

iGaming Ontario (iGO) Alcohol and Gaming Commission of Ontario (AGCO)
Sign an NDA Get games and systems certified
Execute a Letter of Agreement with iGO Register with the AGCO
Access iGO's secure data exchange services Implement platform control activities
Submit AML-related documents Participate in Regulatory Submissions and Notifications training
Complete bank Due Diligence and submit financial documentation Set up Online Authorized Accounts for reporting
Receive instruction about systems and data readiness testing Set up access to secure data exchange services
Sign an agreement with iGO Comply with all applicable AGCO technology standards and requirements

This detailed list of requirements is just the beginning of the journey — all of them have to be met by the online gambling business before starting operation, and licensed casinos in Ontario must stay compliant all the way through.

How to stay compliant in the Ontario iGaming market

iGaming Ontario doesn’t require operators to register their companies in Canada. Nor does it provide any requirements regarding the players’ residency status. However it expects operators to follow the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) obligations and prove sources of their funds.

Players’ winnings are not taxed in Canada, and operators have to pay 20% tax annually.

The AGCO and iGaming Ontario strive to maintain a healthy gambling environment and protect players. Operators are obliged to meet regulatory requirements and uphold the principles of the regulators.

These are areas of responsibility of the AGCO:

  • Responsible gambling tools, including self-exclusion.
  • Game integrity and fairness.
  • Anti-money laundering policies and detection and prevention of crime.
  • Preventing access to minors.
  • Protection and security of personal information.

The iGO is responsible for:

  • Financial reporting.
  • Player protection measures on online casino websites.
  • Overseeing the anti-money laundering program.

How is Ontario different from other iGaming markets?

The legal status of online gambling in different markets changes all the time. But while some governments choose to ban or ignore gambling, the most effective regime that Slotegrator has seen in well over a decade on the market is full regulation. Sophisticated laws, a reasonable licensing system, and adequate support for iGaming businesses generate taxes while keeping the black market to a minimum.

Normally, regulations are set by the central government and apply to the whole country, but Canada’s 10 provinces and three territories each have their own legislations. You can see similar structures in India, South Africa, and the United States, for example.

Ontario has developed its own approach to regulating iGaming. Its unique system is based on cooperation between the private gambling sector and the government — authorities don’t issue documents allowing operators to work in the country but sign agreements with them where companies fulfill the conditions and act as private contractors.

Check our gambling regulation map that provides information about betting and online casino laws in almost every country of the world. This tool is a helpful starting point for beginning operators and all those planning to expand into new markets. If you have questions regarding gambling jurisdictions feel free to contact the Slotegrator team and get a free consultation.

Wait, what about Kahnawake?

The Mohawk territory of Kahnawake is a first nations reserve on Canadian territory that isn't subject to Canadian laws. The Kahnawake Gaming Commission was created in 1996 as a regulator and licensing authority for online gambling operators, allowing them to base their servers on Mohawk territory.

Operating online casinos in Canada was illegal until 2021. However, as Kahnawake is technically its own jurisdiction, the KGC was able to issue licenses, set regulations, and offer hosting services unimpeded, despite the fact that these actions were recognized by Canada itself.

How can Slotegrator help?

Every step in the process of launching a gambling business is crucial. For many first-time operators, step one is to feel out the options through a consultation with a business and software solution provider. More experienced operators will dive right in by delegating platform development.

In any case, we recommend following the path of least resistance. The turnkey solution from Slotegrator enables operators to launch an online casino quickly and with minimal effort from the operators’ side — we’ve put over a decade of experience and expertise into this platform. Our white label solution offers both platform software and operation under our business license.

When the platform is ready, we recommend focusing on its content, namely games and payment methods. Such competitive markets as Canada require a serious approach to game selection — casinos need a truly unique offering to stand out from their competition.

And last but not least — entering an active but newly regulated market is easier with the help of someone who knows all the requirements. Contact our lawyers and get a consultation about jurisdictions and licensing.

Frequently asked questions about the Ontario iGaming market
Who regulates online gambling in Canada?

Canada is divided into 10 provinces and three territories, but only Ontario allows foreign operators to start and run an online casino or sportsbook legally. The Ontario online casino market is regulated by the Alcohol and Gambling Commission of Ontario (AGCO), and iGaming Ontario is a managing entity of the jurisdiction.

Is gambling legal in Canada?

Yes gambling is legal and regulated in Canada — however, we recommend you check legislations of every particular province to make sure you comply with the local laws — most provinces permit only land-based operations.

When did gambling become legal in Ontario?

Gambling in Canada was legalized in 2009. However, no licenses for online operators were provided. The only online gambling platforms authorized were state-owned casinos, including PlayNow opened by the British Columbia Lottery Corporation in 2010.

On April 4, 2022, the online gambling market was legalized and opened in Ontario.

Nikolaj Plugatar
Nikolaj Plugatar
Business Development Manager
Nikolaj started at Slotegrator in 2018 as a Sales Manager and became a Business Development Manager in 2022. Nikolaj is passionate about the iGaming industry — he is an expert in gambling markets and modern technologies and trends in development. He shares his knowledge about the most in-demand products and solutions on the market today and steers the gambling community in the direction of growth.

Comments

  • B
    Bingo Nice
    December 3, 2019
    Nice Article. It is very explanatory and informative post, which tracks back every event related to the history of gambling business in Canada. Details related to basic licensing requirements, regulation rules, gambling taxes as well as the state profits from gambling are very enlightening. overall a very factual post. Bingo Nice

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