iGO Is Going Solo: Changes Coming to Ontario’s iGaming Industry in 2025

Significant changes are coming to the Province of Ontario’s internet gaming (“iGaming”) industry in early 2025 as iGaming Ontario (“iGO”) will cease to be a subsidiary of the Alcohol and Gaming Commission of Ontario (the “AGCO”). Bill 216, Building Ontario For You Act (Budget Measures), 2024 (“Bill 216”) received royal assent on November 6, 2024 and will dissolve the parent-subsidiary relationship that currently exists between the AGCO and iGO. Bill 216 will establish iGO as a fully independent board-governed agency. This legal update provides a brief description of the changes resulting from Bill 216 and outlines how these changes are anticipated to affect the iGaming industry in Ontario.

What Are the Changes?

Since its inception in July 2021, iGO has been a subsidiary of the AGCO under Regulation 722/21 made under the Alcohol and Gaming Commission of Ontario Act, 2019 (the “Regulation”), and has been instrumental in managing relationships with private iGaming operators. iGO is responsible for conducting and managing iGaming in the Province of Ontario when provided through approved private iGaming operators. The AGCO is the regulator of, among other things, Ontario’s regulated iGaming market and currently also oversees iGO’s iGaming schemes as part of their parent-subsidiary relationship.

Bill 216 revokes the Regulation and enacts the iGaming Ontario Act, 2024 (the “iGO Act”). The iGO Act is not yet in force but is expected to be proclaimed into law in early 2025. Once the iGO Act comes into force, it will continue iGO as a standalone corporation that is not a subsidiary of the AGCO. The iGO board of directors will no longer be overseen by the AGCO board of directors and the AGCO will no longer be responsible for overseeing iGO’s iGaming schemes. The AGCO will, however, maintain its regulatory responsibilities over iGaming in Ontario.

In addition to the changes noted above, Bill 216 will also result in the title of iGO’s chief executive changing from Executive Director to President and Chief Executive Officer.

How Will the Changes Affect Ontario’s iGaming Industry?

It is expected that the dissolution of the parent-subsidiary relationship between the AGCO and iGO will streamline the governance and decision-making processes of iGO. Pursuant to the iGO Act, the current directors of iGO will continue to serve as directors following the adoption of the iGO Act. iGO is currently undergoing a search for its President and Chief Executive Officer.

The dissolution of the parent-subsidiary relationship will also remove a conflict of interest concern that has previously been raised by the Office of the Auditor General of Ontario (the “Auditor General”). The Auditor General has expressed in the past that the existing parent-subsidiary relationship between the AGCO and iGO created the potential for a conflict of interest that could compromise the AGCO’s independence as a regulator. More specifically, with the AGCO maintaining regulatory responsibilities over iGaming in Ontario while also being responsible for overseeing iGO’s iGaming schemes, there was arguably an inherent conflict between iGO’s goal of generating profits for the Province of Ontario and the AGCO’s goal of administering regulatory oversight of the iGaming sector.

Following the implementation of Bill 216, the AGCO’s responsibilities will once again be strictly regulatory in nature and the potential conflict of interest will cease to exist. Private iGaming operators in Ontario will continue to be regulated by the AGCO, while still being required to enter into operating agreements with iGO.

Now almost three years since the introduction of Ontario’s regulated iGaming market in April 2022, it has caught the attention of other Canadian provinces and territories; most recently Alberta, which is considering introducing its own regulated iGaming market inspired by Ontario’s model. We will continue to monitor how the iGaming regulatory landscape develops in Ontario, Alberta and the other Canadian provinces and territories.

If you have any questions regarding the changes discussed above, please contact Michael Rennie at [email protected], Natalie Tershakowec at [email protected] or Marcus Moore at [email protected].

This update is intended as a summary only and should not be regarded or relied upon as advice to any specific client or regarding any specific situation.

If you would like further information regarding the issues discussed in this update or if you wish to discuss any aspect of this commentary, please feel free to contact us.