Ontario’s Online Gambling Legality Challenged

The case could have huge ramifications for the Ontario market

The Mohawk Council of Kahnawà:ke (MCK) has initiated a legal challenge against Ontario‘s regulatory framework for online gambling, arguing that the current model is illegal. 

This case, due to be heard next week, could have significant implications for Ontario’s unique position in Canada’s online gambling market.

The standoff occurs in a province that has embraced a competitive online gambling market since April 2022. Ontario saw $17.2bn wagered through 72 private websites in just three months last year. The province has leveraged this market to create more than 12,000 full-time equivalent jobs and contribute almost $1.6 billion to the local economy in its first year.

MCK’s factum states that “In April 2022, iGaming Ontario launched its igaming scheme, which purports to allow private third-party operators to offer online gaming to residents of Ontario. The sites offer all forms of online gaming, including casino, poker, and sports wagering. The private operators are registered with the AGCO and retain 80% of the gross profits generated by their sites”

This, they claim, means that iGO is acting more like a regulator than a conductor and manager of gambling, which is contrary to federal law.

iGO insists it controls critical aspects of the iGaming regime. “iGO controls the games, the money, the data, the advertising, and retains ultimate discretion over conduct and management,” reads the agency’s Jan. 19 factum. The agency maintains that its model is in line with the Criminal Code’s provision allowing provinces to conduct and manage gaming “in accordance with any law” enacted by the legislature.

The auditor general of Ontario also voiced concerns prior to the launch about Ontario’s model for internet gambling, suggesting that it passes “a significant amount of business risk and strategic decision-making power to private gaming operators.” 

Despite these warnings, the Ontario government launched its igaming market with private operators like BetMGM, DraftKings, and FanDuel, confident that its design complies with federal law. In December 2023, the office of the auditor general reiterated its concerns, referencing the MCK lawsuit in its contents.

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