Canada: Changes To Gaming Registration Requirements In Ontario

On June 1, 2012, changes to the regulations under the Gaming Control Act, 1992 (the Act) came into force which significantly alter gaming registration requirements in Ontario. The amendments are intended to support the Ontario government's initiative to modernize gaming and enhance flexibility for gaming operations in the province. This bulletin provides an overview of the major changes to the gaming registration framework.

Streamlining of Gaming Sectors and Registration Classes

Ontario Regulation 78/12 (the Regulation) has been introduced to cover all gaming sectors for which the Alcohol and Gaming Commission of Ontario (the AGCO) is responsible, including commercial gaming, charitable gaming and lotteries operated by the Ontario Lottery and Gaming Corporation (OLG). The Regulation also covers new Internet and electronic charitable gaming products that are currently being developed by OLG. As of June 1, 2012, a single registration now applies to the supply of goods and services in all gaming sectors. Under the previous framework, a separate registration was required for each gaming sector. In addition, the previous 24 classes of gaming registration have been streamlined into seven categories: (i) operators of gaming sites; (ii) gaming-related suppliers; (iii) non-gaming-related suppliers; (iv) gaming assistants with supervisory/decision-making authority (category 1 assistants); (v) gaming assistants with operational responsibility (category 2 assistants); (vi) sellers of lottery and break open tickets; and (vii) trade unions.

Although a single registration will now permit a supplier to provide goods and/or services to multiple gaming sectors, the supplier must still indicate on its application form to the AGCO (i) the type of goods and/or services to be supplied; and (ii) the gaming sectors to be supplied. For those suppliers registered under the previous regulations, no action is required in order to maintain the registration. Each registered supplier is automatically deemed to be registered under one of the new registration classes as of June 1, and will be provided with the appropriate application form for renewal when the registration is approaching its expiry date.

Exemptions for Non-Gaming-Related Suppliers

There have also been significant changes to exemption requirements for non-gaming-related suppliers. Such suppliers are defined under the Act as those that provide goods or services that relate to the construction, furnishing, repair, maintenance or business of a gaming site or related business, but that in the opinion of the Registrar of Alcohol and Gaming (the Registrar), are not directly related to the playing of a lottery scheme or the operation of the gaming site.

The Regulation now states that a business will be exempt from the requirement to register as a non-gaming-related supplier if:

(i) the value of the goods or services supplied to OLG and/or other gaming operators in a 12-month period beginning April 1 and ending March 31 of the following year will be less than C$750,000; and

(ii) OLG has carried out a due diligence investigation of the business that satisfies the Registrar that the business would meet the standards and requirements that would apply if the business were required to be registered under the Act.

There is no longer any requirement for a supplier that is under the C$750,000 threshold to submit an application for registration or exemption to the AGCO, nor must a yearly fee be paid. Suppliers currently holding a certificate of exemption will continue to be deemed exempt. As under the previous regulation governing the registration of non-gaming-related suppliers (Ontario Regulation 385/99), a business may also be exempt from registration requirements if it is regulated by the federal or Ontario government and the applicable regulating body has carried out its own due diligence investigation of the business that is satisfactory to the Registrar.

The Regulation explicitly states that a supplier that is exempt from registration is still responsible for the conduct of every person employed by the supplier in the performance of that person's duties. If an employee requires access to sensitive areas of a gaming site, the employee must submit an access request through the AGCO's Audit and Compliance Branch. Exempt suppliers are also still required to comply with any standards or requirements that are established by the Registrar. Any business failing to do so may be subject to an administrative action such as the imposition of a monetary penalty.

It is important to note that if the amount of business a non-gaming-related supplier does with OLG and/or other gaming operators in Ontario grows to C$750,000 in any 12-month period ending March 31, the supplier will need to register with the AGCO. Suppliers that are currently exempt should therefore keep a close eye on the revenues being generated by the business. The C$750,000 threshold takes into account the cumulative value of all non-gaming-related goods and services sold to OLG and gaming site operators across Ontario, exclusive of taxes.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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