Page 1 September 24, 2024 Via Email: TRCM@SEN.PARL.GC.CA The House of Commons Standing Senate Committee on Transport and Communications 131 Queen St., 6th Floor Ottawa ON K1A 0A6 Bill S-269: The National Framework on Advertising for Sports Betting Act Alcohol and Gaming Commission of Ontario- Submission to the Standing Committee on Transport and Communications Dear Committee Members, As the Standing Senate Committee on Transport and Communications considers Bill S-269, and the proposal to create a national framework on sports betting advertising that may introduce additional federal requirements for internet gaming (igaming) operators, the Alcohol and Gaming Commission of Ontario ( AGCO) is pleased to provide information about Ontario’s igaming regulatory framework and existing measures in place to: • restrict igaming advertising and marketing in the province; • promote responsible gambling and address high-risk gambling; and • protect the public, particularly youth and other potentially vulnerable groups from gambling related harms.

Mandate The AGCO is an Ontario provincial regulatory agency reporting to the Ministry of the Attorney General (MAG). The AGCO is responsible for regulating the province’s alcohol, gaming, horse racing and cannabis retail sectors in accordance with the principles of honesty and integrity, and in the public interest. In so doing, the AGCO administers the Liquor Licence and Control Act, 2019, the Gaming Control Act, 1992 (GCA), the Horse Racing Licence Act, 2015 and the Cannabis Licence Act, 2018 . The AGCO also administers the charity lottery licensing Order-in-Council 208/2024.

Page 2 Background When the Government of Ontario launched the regulated, open, igaming market on April 4, 2022, it had several important goals . Consumer protection, with a particular focus on youth and other potentially vulnerable groups , was a key objective . As the igaming regulator for Ontario, the AGCO designed a regulatory framework to address this important goal. The AGCO remains committed to taking necessary steps to maintain a safe, sustainable, and successful igaming market for the province.

IGaming Advertising and Marketing The AGCO acknowledges the role that advertising and marketing plays in creating and sustaining a healthy, regulated igaming market in Ontario that provides players with choice and protection. It is also recognized that the establishment of a legal igaming market created an opportunity for registered igaming operators to advertise and market their products in public forums to attract new customers and make them aware of their offerings.

Permitting public advertising by registered igaming operators can help to ensure those who choose to gamble online do so on regulated sites with player safeguards in place, rather than on unregulated sites. A recent study for the International Betting Integrity Association (IBIA) and its partners, estimated that the percentage of gamblers playing on regulated sites in Canada (excluding Ontario) is as low as 11% .1 A recent Ipsos survey found that 86.4% of respondents who have gambled online in Ontario over the past three months did so on regulated sites .

In contrast, prior to the launch of the regulated igaming market, an estimated 70% of online gambling occurred on unregulated sites.2 While this represents a significant change in player activity, it also highlights that a notable portion of Ontario’s igaming participants continue to wager on unregulated sites. The AGCO remains focused on ensuring that advertisements do not target vulnerable populations including high-risk players and underage individuals.

Ontario’s iGaming Regulatory Framework The Registrar’s Standards for Internet Gaming Under the GCA, the AGCO’s Registrar is authorized to establish standards to regulate Ontario’s gaming sector. The AGCO has established a comprehensive, standards -based regulatory framework for igaming operators and gaming-related suppliers (“Registrants”).

The objective of a standards-based regulatory model is to shift the focus from requiring Registrants to comply with a specific set of rules or processes, which tend to be prescriptive in nature, towards the broader regulatory outcomes or objectives they are expected to achieve. These regulatory outcomes are reflected in the Registrar’s Standards for Internet Gaming (the “Standards”).

This approach offers greater flexibility for regulated entities to make decisions that best suit their business needs while meeting the regulatory outcomes. 1 International Betting Integrity Association Study: The Availability of Sports Betting Products: An Economic and Integrity Analysis, 2024. 2 Ipsos Study: Ontario iGaming Market Channelization, 2024.

Page 3 The Standards are designed to protect players, with a particular focus on underage, high-risk and other potentially vulnerable groups. As well, t he Standards are intended to address the full spectrum of player health , ranging from prevention, player education and awareness, early intervention, and support. Advertising and Marketing Standards The Standards apply to all igaming Registrants in Ontario and apply to advertising and marketing that appears in Ontario.

AGCO’s advertising and marketing standards require Registrants to, at a minimum: • not target underage and high-risk players in any way; • not misrepresent products and promotions, and ensure players are not being misled; and • ensure that all advertisements are factual – for example, nothing is advertised as free, or risk-free unless it is actually so. Also, Ontario is one of the only jurisdictions in the world to prohibit broad public advertising of bonuses and other gambling inducements.

The AGCO requires that inducements, bonuses and credits are only advertised on an operator’s website, and through direct messaging to consumers after receiving active player consent. Furthermore, operators are required to ensure that all material conditions and limitations of an offer are disclosed at first presentation.

This requirement was included to address the risk that the proliferation of advertising that offers promotions and bonuses encourages riskier betting, increases betting expenditure and the frequency of betting, and elicits attention, excitement and the desire to bet amongst vulnerable individuals, including those experiencing problem gambling. Recent Updates to Advertising and Marketing Standard 2.03 Several requirements in the Standards pertain to marketing and advertising , with a particular focus on protecting minors.

This includes, for example, prohibiting operators from using advertising materials that: • are based on themes, or use language intended to appeal primarily to minors; • appear on billboards or other outdoor displays that are directly adjacent to schools or other primarily youth-oriented locations; or • use individuals who are, or appear to be, minors to promote gambling. Following the first year of Ontario’s open, regulated igaming market, the AGCO identified advertising and marketing that use s athletes and celebrities with an appeal to minors , as a potential harm to those under the legal gaming age.

To address this risk, standard 2.03 was modified to include additional requirements, including to restrict the use of individuals who would likely be expected to appeal to minors and restrict the use of athletes in advertising and marketing in Ontario, except for the exclusive purpose of advocating for responsible gambling practices . These amendments to the Standards took effect on February 28, 2024.

Page 4 The AGCO published a guidance document to provide additional clarity regarding the intent of the new requirements and to support successful implementation and ongoing compliance. In engaging with a wide range of stakeholders on the development and implementation of the amended standard regarding advertising and marketing, the AGCO was encouraged by a broad commitment to the shared objective of safeguarding the health and wellbeing of Ontario’s youth.

Responsible Gambling Standards In addition to robust advertising and marketing standards, the Standards include responsible gambling requirements in place to help protect players.

These responsible gambling standards were developed based on current research, international best practices, and insights from Ontario’s responsible gambling community and promote responsible gambling by: • Ensuring that a culture of responsible gambling is embedded into the fabric of every organization (e.g., igaming operators must implement and follow policies and procedures that will identify, prevent and minimize the risks of harm from gaming to players.

These policies and procedures must be reviewed and evaluated regularly and all staff must be trained on them at the time of employment and at regular intervals after); • Ensuring that responsible gambling information, resources and supports are readily available and easily accessible for players; • Requiring a mechanism to monitor player risk profiles, and to provide immediate and ongoing assistance for all players who may be experiencing harm; • Requiring players have an ability to take breaks in their play, to self -exclude, and to set limits – both financial and time based; and • Requiring games be designed to help prevent extended, continuous, and impulsive play and facilitate low risk gambling behaviours.

Other Public Protection Standards The AGCO has additional standards in place to protect Ontarians more broadly, including: • Prohibiting access to underage, self -excluded and restricted individuals, including requiring that gambling take place within Ontario; • Ensuring gaming in Ontario is conducted with honesty and integrity (e.g., there are practices in place to deter, prevent and detect collusion and cheating); • Ensuring that players have sufficient information to make informed decisions prior to gaming (e.g., providing information to players which does not mislead players or misrepresent games); • Upholding public safety by ensuring customer information and funds are safeguarded; and • Protecting the public interest and public safety by mitigating the risk of unlawful and criminal activity (i.e., money laundering, fraud, theft, etc.).

Page 5 Compliance The AGCO takes a compliance -focused approach to regulation, and our goal is to work proactively with Registrants to help t hem meet regulatory obligations and support compliance. While the AGCO does not pre -approve advertisements or act as a review panel, the AGCO remains committed to working together with Registrants to foster a shared understanding of all standards and the standards-based approach.

Where compliance concerns are identified, the AGCO aims to bring Registrants back into compliance through the use of progressive sanctions, including warnings, suspensions, monetary penalties, and in the most serious of cases, revocat ions. The AGCO has served $518,000 in monetary penalties for infractions of the Standards pertaining to advertising and responsible gambling. Most igaming compliance functions are delivered by AGCO’s Technology, Regulation and iGaming Compliance Branch.

This team engages with Registrants to ensure they understand their obligations and responsibilities under the GCA and Standards, collects information and intelligence about each Registrant, develops and executes Registrant-specific compliance plans, including conducting audits, gaming site inspections, and information and records requests and reviews. The team also undertakes information and data analysis to understand sector-wide trend development, sets broad sector-wide compliance priorities, and reviews and refines compliance programs.

Conclusion Thank you for the opportunity to share information about Ontario’s igaming restrictions on advertising and marketing, as well as the broader regulatory framework in place to promote responsible gambling and public protection , with the Standing Senate Committee on Transport and Communications. We hope this information proves useful in your consideration of Bill S-269. Sincerely, Karin Schnarr Chief Executive Officer and Registrar c: Dave Forestell, AGCO Chair of the Board