Summer was in full swing when Minister Dale Nally stepped up at the Canadian Gaming Summit in June to announce Alberta’s plans to follow Ontario’s regulatory model. Now, some months later, we are on the other side – and a winter of hard work lies ahead.
Looking further back, Ontario’s gaming market was opened over two years ago and has since experienced astronomical success in terms of numbers. It was only a matter of time before another of Canada’s provincial regions decided to follow suit – but why Alberta? And why now?
Taking the leap
The simple answer would be because the time is right. Alberta has boots on the ground already when it comes to land-based casinos, with six First Nation-operated sites in the province. It has an established – albeit small – online gaming infrastructure with PlayAlberta being owned and operated by Alberta Gaming, Liquor and Cannabis (AGLC). Alberta’s population is both smaller and marginally younger than Ontario’s, and averages more disposable income. Currently, customers in the region can place online bets with PlayAlberta and PlayAlberta alone, allowing the Government to gauge its population’s appetite for iGaming. Moreover, unregulated gambling is rife and accounts for the remaining 55% market share that PlayAlberta doesn’t hold, which leads us to the ‘why now’ of the matter.
After seeing Ontario take the leap into regulation, it would appear Albertan officials view now as the time to try and capture their grey market. They may have done so even earlier had the Covid-19 pandemic not stifled the development of the unfurling regulated gambling landscape across Canada, as Ontario was initially discussing regulation plans in 2019. What’s more, despite only currently capturing around 45% of the potential market, PlayAlberta has received around CA$5bn (US$3.62bn) in bets since its launch in October 2020 – with iGaming revenue also growing by hundreds of millions of dollars year-over-year. Although no timeline has been announced or set out by the Minister – the passing of bill 16 to regulate iGaming would allow private online gaming operators to join the provincial market as of 2025. There’s still a lot to navigate on the road to regulation – and plenty of pitfalls Minister Nally will want to avoid once they get there.
Alberta vs Ontario
Nobody will have a clearer understanding of how different Alberta is culturally to Ontario than, of course, Albertans and Ontarians themselves. Yet, Alberta’s market is confirmed to be following the Ontario model all the same. Considering the outstanding numbers Ontario has been putting forth for the past two years, following their model with a number of tweaks tailored for the Albertan landscape seems like the safest path to meet the demands of local market habits. However, culture aside, Alberta has a number of different legislations in place that are sparking concerns in communities across the province.
A prevalent pressure point at present lies within the exceedingly high casino tax faced by land-based casino operators in Alberta. The province’s unique gambling laws allow local charities to ‘conduct and manage’ (in other words – operate) casino events, raffle tickets and bingo fundraisers as a source of monetary donations. Therefore, charities are often heavily reliant on privately owned casinos in the province to raise funds. In fact, according to local news sources, around CA$255m was generated for charities by Albertan casinos in 2022/23. However, those same sources detail that tax rates for land-based casinos in Alberta can rise to as high as 83%. Conversely, tax rates for online gaming companies in Ontario are currently 20%. Consequently, if Alberta follows this section of the Ontario model, casino owners in the province are in an extremely unfavourable position – and that’s putting it lightly.
Whenever the market does open, it is unanimously expected that operators will flock to the province. With the staggering continuous growth of iGaming globally, and much of the North American market already seeing online casino options surpassing land-based/retail in terms of revenue, such a large imbalance in tax rates could leave retail casinos and the charities they support dead in the water.
This is a fact Minister Nally will no doubt be aware of and looking to change, especially as it could affect First Nation operators in the province, but as of yet there has been no indication of any developments.
The Minister has already shown that he is not averse to straying from Ontario’s model. Straight out of the gate, the decision was taken that the conduct & management and regulation of Alberta’s market would be done within the Ministry – rather than opting for a provincial regulator such as the Alcohol and Gaming Commission Ontario (AGCO).
Ensuring functionality
The onus for player protection, then, also falls on the ministry. Ontario is currently celebrating a huge win for responsible gaming in Canada following its development of a centralised self-exclusion list by IC370 and IXUP in partnership with iGaming Ontario. Breaking new ground and expanding this self-exclusion list across jurisdictions and into Alberta would be an industry first – however, it is more likely that Alberta may explore developing its own provincial list first.
Ontario has done a lot of things right, and that fact is reflected clearly in its vibrant, blossoming and diverse developing market. Nevertheless, there have been a number of pitfalls uncovered by its provincial cousin that Alberta will want to avoid. Late communications with First Nations is one that the Ministry has already managed to avoid, perhaps because of the prior issues it caused in Ontario. If Alberta wants to make its market easier for operators to enter and operate in once they arrive, it will certainly want to ensure that it at least has lower waiting times than Ontario – as well as a lower cost of compliance. Currently in Ontario a plethora of audits are required for registration, costing operators both time and money. This process is then followed by the negotiation of an agreement with iGaming Ontario.
More money, more problems
As the only fully regulated online gaming and retail casino market in Canada at present, Ontario is on the frontline of combatting any and all gambling issues Canada faces.
However, an issue ongoing for the past 10 years in the nation is the amount of money that gets laundered through its casinos. The problem surfaced in British Columbia, with the emergence of the Vancouver Model of money laundering – which involves exchanging ‘dirty’ money for casino chips, only to re-exchange them with ‘clean’ notes from the casino.
A lack of regulatory oversight allowed the issue to proliferate across the whole country. In 2018, it was estimated that around CA$7bn was laundered in British Columbia and the problem had spread as far as the yet-to-be regulated province of Ontario. Safeguards were brought into place by the Federal Government in cohesion with the Canadian Gaming Association. However, in January 2024, the AGCO was forced to issue a $70,000 fine to Fallsview Casino Resort in Niagara Falls Ontario, for failing to enact appropriate anti-money laundering measures with regard to a ‘high-risk’ player at the site. The player was allowed to present $80,000 in cash to the casino from a reusable grocery bag, with surveillance showing that the previously identified ‘high-risk’ player then left with casino chips without playing a single hand.
This story highlights that, while the issue is controlled, it still yields a presence within the nation’s only regulated market. Further, despite stemming from the British Columbian city of Vancouver, Alberta was the region that saw the highest figures laundered by province at the height of the scandal – seeing an estimated $10bn laundered in 2015.
It is worth underlining that much of the money laundered in Canada is done so through means unrelated to casino gambling – with the real estate market being another prevalent problem area for the activity. Nonetheless, Alberta will need to remain diligent in this area to stay on top of the issue once the market takes on a new shape post-iGaming regulation.
Once Alberta’s online gaming market opens, Canada’s regulated gambling market will become multi-jurisdictional, which sparks an intriguing discourse around the national market’s developing identity perhaps separating fvrom that of the US.
Only time will tell.
The field of play is wide open – and the Wild Rose Country is next up to bat.