Tuesday, July 3, 2012

AGCO Reaffirms its Commitment to Risk-Based Registration, and Introduces its New Standards and Requirements System

By Michael D. Lipton, Q.C. and Kevin J. Weber

Last month the Alcohol and Gaming Commission of Ontario (“AGCO”) released a statement clarifying the nature of its new standards of gaming registration based upon the “Risk-Based Registration” concept. While these standards have been in force since September 11, 2011, the AGCO has notably reaffirmed its commitment to them by issuing a helpful restatement of these principles in June 2012, as many new companies are considering roles in the Ontario gaming industry as land-based casino operators and online gaming operators.

Risk-Based Registration is designed to refocus the regulator’s decision-making process to ensure that its resources are allocated in a manner that targets applicants who represent a higher level of risk to the integrity of gaming and the public interest generally. The AGCO states that this approach “reflects a general evolution in best practice thinking about effective regulation and supports a broader transition underway in the gaming sector toward a less prescriptive and more standards-based regulatory approach.”

New applicants for registration as casino operators or gaming suppliers in Ontario can expect to be subjected to an in-depth due diligence investigation. Where an applicant is familiar to Ontario regulators, either because they are renewing registrations or are applying for a registration in a new category after many years of being registered in Ontario in a different gaming capacity, they will likely undergo a more streamlined review.

All applications for registration will be evaluated according to a comprehensive set of risk criteria to determine whether additional disclosure and/or investigation is required. Those applicants identified as “lower risk” may be approved for registration without the need for additional information or personal interviews by AGCO investigators. As noted, a longstanding record of compliance with the law is a factor that will be considered in determining whether an applicant will be deemed “lower risk.”

A further refinement to the Ontario gaming regulatory regime has just come into force on June 1, 2012. Effective on that date, amendments to the Gaming Control Act, 1992 grant authority to the Registrar of the AGCO to establish standards and requirements related to gaming products and the operation of gaming sites (e.g. casinos, bingo halls, etc.). These standards and requirements will apply not only to registered gaming suppliers and casino operators, but also to the Ontario Lottery and Gaming Corporation (the government-owned corporation that conducts and manages all non-charitable gaming in Ontario) (“OLG”). The need to comply with these standards and requirements is tempered by an allowance for flexibility in how such compliance is achieved.

To learn more, read the full article in the latest edition of Gaming Legal News.