BetMGM Canada has been hit with a substantial $110,000 fine by the Alcohol and Gaming Commission of Ontario (AGCO) for violating key rules governing internet gaming in the province. The fine stems from incidents where BetMGM used third-party marketing companies to offer cash incentives to new players in exchange for signing up and making a deposit. This violates Ontario’s strict regulations regarding high-risk inducement advertising in online gambling aimed at protecting consumers from potential harm.

Violations and the AGCO’s response:

The AGCO’s investigation revealed that in January 2024, BetMGM representatives attended the National Franchise Show, a major trade event, where they offered $100 in cash to individuals who opened a new account and deposited $15. The practice, identified as an inducement, violates Ontario’s gaming laws, which prohibit offering such incentives in broad public marketing activities. These standards are designed to protect the public from predatory marketing tactics that can contribute to gambling-related harm.

Later in the year, BetMGM’s marketing affiliate, Above the Street, was found to have engaged in similar prohibited inducement activities. In March 2024, Above the Street’s actions led to 377 new player sign-ups, generating $127,180 in commissions. Similarly, another affiliate, Maple Leaf Marketing, used inducements to acquire 94 new players, resulting in approximately $34,000 in commissions. Both of these actions were deemed to violate AGCO’s advertising standards for gambling, which mandate that operators ensure third-party affiliates adhere to the same regulatory requirements as the operators themselves.

Ontario’s gaming laws are among the strictest in the world when it comes to limiting inducements in gambling marketing. The province has banned operators from advertising bonuses, inducements, or credits to the public as part of their general marketing campaigns. These measures were implemented to limit the risks associated with gambling, such as addiction, by ensuring that marketing efforts are responsible and not predatory in nature.

As part of its regulatory framework, the AGCO holds operators accountable for the actions of their third-party suppliers, as seen in the BetMGM case. According to the AGCO, “Operators are responsible for the actions of third parties with whom they contract for the provision of any aspect of the Operator’s business related to gaming in Ontario and must require the third party to conduct themselves in so far as they carry out activities on behalf of the operator as if they were bound by the same laws, regulations, and standards.” This provision emphasizes the importance of maintaining high standards across all aspects of the gaming business, including marketing practices conducted by third-party affiliates.

Additionally, AGCO’s Standard 2.05 prohibits advertising and marketing materials that communicate gambling inducements, bonuses, and credits, except on the operator’s gaming site or through direct marketing channels, and only after receiving active player consent. This ensures that all promotions are targeted and controlled, rather than being part of broad public advertising campaigns that could lead to vulnerable individuals being drawn into gambling.

BetMGM’s response and corrective actions:

In response to the AGCO’s findings, BetMGM Canada acknowledged the violations and took swift action. The company reported that it was made aware of the misconduct by its third-party affiliates in early 2024. Upon discovering the violations, BetMGM initiated an internal investigation and promptly terminated its relationships with the affiliates responsible for the improper marketing tactics.

BetMGM also expressed its commitment to adhering to Ontario’s regulatory standards moving forward. The company stated, “BetMGM has worked closely through these issues with the AGCO, including on remediation measures that were implemented as a result. BetMGM is committed to the protection of our patrons in Ontario, and regrets and apologizes that these issues have occurred.”

Ontario’s approach to regulating online gambling has been widely regarded as a model for other jurisdictions. The province was one of the first to establish such strict rules governing inducement advertising and continues to lead the way in protecting consumers from harmful marketing practices. The AGCO’s strict enforcement of these rules is a testament to its commitment to maintaining a safe and responsible gaming environment for Ontarians.

Ontario’s gaming market, having opened up to legal online sports betting in 2021, has grown significantly since then. However, AGCO’s actions in this case demonstrate the importance of ensuring that all operators, new and established, follow the letter of the law to safeguard consumers from the potential harms of gambling.