After Ontario’s gambling regulator revoked the lottery seller registrations of several retailers in the Greater Toronto Area that were found to be offering electronic gambling machines it said were unapproved, the provider of the machines has contested the regulator’s stance.
In a notice dated July 17, the Alcohol and Gaming Commission of Ontario (AGCO) alleged that multiple convenience stores in the GTA had been offering unauthorized electronic gaming under the Prime Slot brand.
Similar cases in the U.S. have been contested with regulators arguing that the machines are games of chance, which equate to gambling, while in some cases the operators or vendors argue that they are games of skill.
“Over the past decade, unregulated gaming machines have increasingly proliferated across North America,” said the AGCO. “While they largely rely on chance like traditional slot machines, manufacturers have claimed they are games of skill and have installed terminals in convenience stores and other locations where gaming machines would otherwise be prohibited.”
“Unapproved gambling machines have no business being in convenience stores or other locations, particularly those that are available to children and youth,” said AGCO CEO and Registrar Dr. Karin Schnarr. The AGCO said it will continue to take every action within its authority to protect the public against the risks posed by unregulated machines, particularly in locations easily accessible to children and youth.
AGCO regulations require anyone selling lottery products on behalf of the Ontario Lottery and Gaming Corporation (OLG) to apply for a licence from the regulator. However, the Gaming Control Act allows the AGCO registrar to suspend or revoke a supplier registration for any reason that would disentitle the registrant to registration, such as “if there are reasonable grounds to believe that the applicant will not act as a supplier in accordance with law, or with integrity, honesty, or in the public interest.”
Prime ‘categorically reject’ characterization, hint at legal action
In a statement provided to Canadian Gaming Business on July 21, the CEO of Prime Skill Games disputed the AGCO’s characterization of the company’s machines and suggested that the company could pursue legal action against the regulator.
“The information published overlooks the fundamental legal difference between skill-based and chance-based machines,” wrote Matt Zamrozniak.
“Let me be perfectly clear: Our machines are not gambling devices,” added Zamrozniak. “They are entirely skill-based, fully compliant with the law, and built on the fundamental idea that players are in control. The outcome of every session is determined solely by the player’s ability, not by random chance.
“We categorically reject any suggestion that our products fall under the definition of unregulated gambling. Such statements are inaccurate, misleading and fail to recognize the critical distinction between games of skill and games of chance.”
Asked for comment on Prime Skill Games’ statement, the AGCO told CGB that its position is clear: “Unapproved electronic gambling machines like Prime Slot machines have no business being in convenience stores or other licensed locations, particularly those that are available to children and youth.”
The AGCO noted that registrants “who believe that such machines should not be regulated consistently with slot machines and other gambling machines” can appeal the regulator’s decision to the independent adjudicative Licence Appeal Tribunal.
Prime Skill Games told CGB that it intends to prove the legality of its machines and the integrity of its operations “through every available means, whether through legal documentation, expert analysis or, if necessary, before the courts.”
Ontario regulator warns casinos that ‘free play’ must mean free play
Meanwhile, in a separate notice, the AGCO warned all licensed land-based casinos and charitable gaming operators in Ontario that they must be careful when using the term “free play” in any promotions or advertising.
Offers advertised as “free play” must not require players to risk or spend their own money to access any bonus, inducement or credit described as “free.”
“If you promote something as ‘free,’ it must genuinely be free,” wrote the commission.
