iGO under pressure as operators condemn ‘due diligence’ bank charge

Operators could be charged up to $150k

Operators in Ontario have communicated displeasure at the prospect of receiving an invoice from iGaming Ontario (iGO) demanding payment for ‘due diligence’ undertaken by its bank.

As reported by Gaming News Canada, iGO informed operators last month that, if they had launched before Dec. 31, they would be invoiced an amount “ranging from $25,000 -$150,000 based on iGO’s determination of their expected annualized GGR”.

iGO’s Feb. 21 notice explained the bank fees are for “the due diligence processes it conducts before operators can begin to make deposits to iGO bank accounts”.

The notice continued: “A large number of operators entering an iGaming market that is newly regulated has meant that iGO’s bank has conducted a high volume of due diligence activities.”

This has not been received well by operators, however, many of which have taken umbrage with the application of Section 5.5.2 of the Finance Policy, Chargeback of Fees.

“We’ve written [to] iGO on their behalf to express their displeasure,” said Canadian Gaming Association President and CEO Paul Burns.

Some operators have taken a more direct approach and contacted iGO themselves.

“The industry needs to understand that there’s cost certainty and regulatory certainty,” Burns continued.

“This is a highly competitive market. Having surprises and unplanned costs, no matter how big or small, disrupts business plans.

“None of the operators heard from the banks, and didn’t know due diligence was being done.”

In response to an enquiry by GNC, iGO said it “cannot comment due to the confidential nature of its operating agreement(s) with operators”.

Meanwhile, Amanda Brewer, Canadian Country Manager at Kindred Group, was another to express frustration with the banks.

Brewer said: “Despite repeated attempts by the industry – the Canadian Gaming Association, iGaming Ontario, and individual operators – to invite the banks to the table so they could educate themselves on the standards and the stringent AML/KYC regulations that all operators must uphold, they refused, and this is the result.

“An industry created by the province to generate jobs, economic development and revenue was ignored. What signal does this send to future industries that want to do business in Ontario?”

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