Vision

A world-class regulator that is innovative, proactive, and socially responsible.

Mandate

To regulate in accordance with the principles of honesty and integrity, and in the public interest.

Mission

The AGCO commits to conducting business in a manner that will:

• develop, implement, and enforce fair policies and procedures;
• establish a framework of critical regulatory controls in the public interest that are sensitive to the economic viability of the alcohol, gaming, horse racing, and cannabis industries;
• be client focused in the way we respond to and manage client and stakeholder needs;
• educate clients and stakeholders and develop partnerships;
• create a supportive work environment that respects and values the contributions of AGCO staff and provides them with opportunities for growth and professional achievement.

Governing Legislation

Alcohol, Cannabis and Gaming Regulation and Public Protection Act, 1996, Regulations (141/01; 469/18)

Cannabis Licence Act, 2018 (CLA), Regulation 468/18

Gaming Control Act, 1992 (GCA), Regulation (78/12)

Liquor Licence Act (LLA), Regulations (58/00; 718/90; 719/90; 720/90; 70/09; 783/94; 389/91)

Wine Content and Labelling Act, 2000, Regulation (659/00)

Liquor Control Act (LCA), Section 3(1)b, e, f, g and 3(2)a Ontario Regulation 232/16

Horse Racing Licence Act, 2015 (HRLA), Regulation 61/16

Order-in-Council 208/2024

With the evolving views of society and to better reflect the maturity of the industries it regulates, the AGCO continues to refine its role in the promotion of social responsibility in the alcohol, gaming, horse racing, and cannabis sectors.

A focus on responsible gambling is a key factor in the public’s confidence in the gaming industry. The changing views of the liquor industry place a greater emphasis on responsible use and enjoyment. Public interest in the wellbeing of racehorses spotlights our ongoing commitment to the integrity and safety of horse racing. With the legalization of cannabis, the AGCO works to ensure that the retail sale of cannabis in Ontario is carried out with honesty, integrity, and in the public interest.

Social responsibility is an integral part of the AGCO as an organization and as a regulator. In 2018, the AGCO began work to formalize its vision for Corporate Social Responsibility (CSR) to further embed it into the cultural fabric of the agency and to ensure CSR considerations are taken into account in regulatory and operational decisions. CSR encapsulates a range of initiatives at the AGCO that focus on supporting people, both internally and externally, reducing environmental impacts, and leading by example. In the end, CSR helps provide the AGCO and its employees a sense of purpose and motivation, and ultimately drives them to become Better, Faster, Smarter.

The AGCO places a priority on digital and enhanced communications to inform and engage with audiences, based on its Digital by Default approach. Over this past year, under the spotlight of significant interest in the regulation of recreational cannabis, the AGCO had a unique opportunity to reinforce its communications commitment of sustaining the agency’s reputation by expanding its website content, amplifying its social media presence, proactively engaging with media and taking a direct communication approach with licensees.  

The AGCO’s organizational structure is based on functional responsibilities and consists of six divisions, each led by a member of the Executive Committee that reports directly to the Chief Executive Officer and Registrar.

The Investigation and Enforcement Bureau (IEB) functions as an Ontario Provincial Police (OPP) Bureau assigned to the AGCO, and is headed by a Chief Superintendent of the OPP. The IEB is responsible for regulatory and criminal investigations, as well as sharing its expertise and information with external law enforcement and other regulatory and industry stakeholder agencies.

FIGURE 1 – Organizational Structure of the AGCO

Organizational Structure of the AGCO

• Chair and Board of the AGCO                ■    Horse Racing Appeal Panel
  • Chief Executive Officer and Registrar
• Communications and Corporate Affairs Division
  • ​Communications
  • Corporate Affairs and Governance
  • Corporate Secretariat
  • HRAP Secretariat
  • Service Strategy and Experience
• Corporate Services Division
  • Finance and Administration
  • Human Resources
  • Information Technology
  • Risk Management, Internal Audit and Information Security
  • AGCO Next
• Investigation and Enforcement Bureau
  • ​Investigations
  • Intelligence and Investigative Support
• Legal Services Division
  • ​Litigation Services
  • Corporate Services
  • Advisory Services and Legal Drafting
• Operations Division
  • ​Compliance Services
    • ​Audit and Financial Investigations
    • Regulatory Compliance
  • Licensing and Registration
    • ​Regulatory Assurance
    • Technical and Laboratory Services
• Strategy and Policy Division
  • ​Change Management
  • Policy and Planning
  • Project Management Office
  • Strategic Engagement
  • Regulatory Intelligence and Innovation

The AGCO is guided by a Strategic Plan that positions the agency to be an effective and modern regulator through an increasingly complex operating environment. Serving as a compass, the plan helps the AGCO to strategically navigate the challenges and opportunities that exist within the liquor, gaming, horse racing, and cannabis retail sectors.

The Strategic Plan focuses on three strategic goals: Modern Regulator, Service Excellence, and People First. Characterized by a set of key commitments that drive AGCO’s culture and inform decision-making, these goals align with, and support the achievement of, government objectives to:

• enhance accountability and efficiency in the delivery of public services;
• use evidence-based decision making and policy development;
• reduce the administrative burden on businesses; and
• increase consumer choice.

Strategic Plan

Vision: A world class regulator that is innovative, proactive, and socially responsive.

Mandate: To regulate in accordance with the principles of honesty, integrity, and in the public interest.

During 2019–2020, the AGCO made significant progress towards achieving its strategic goals, with all divisions contributing to efforts to keep the agency moving forward, as a Modern Regulator, providing Service Excellence to all stakeholders, and striving to be an organization that puts People First. Here are some of the highlights.

The AGCO is responsible for regulating Ontario’s privately run cannabis retail stores under the Cannabis Licence Act, 2018 and Regulation 468/18.

Under Ontario’s regulatory model, the AGCO:

• licenses eligible retail store operators and managers;
• authorizes cannabis retail stores;
• regulates and enforces the appropriate sale of recreational cannabis in privately-run stores in Ontario.

In 2019–2020, the AGCO continued its work to support the Government of Ontario in the regulation of legal, recreational cannabis.

On April 1, 2019, 10 AGCO-licensed cannabis retail stores opened for business in support of the government’s objective to provide for the safe, responsible, and lawful sale of recreational cannabis.

In August 2019, the AGCO held a second lottery draw in support of the government’s plans for the allocation of 42 additional retail store authorizations (RSA), for which it received more than 5,000 expressions of interest. In addition, it established a separate first come, first served process for 26 stores to be allocated on First Nations reserves. The AGCO’s eligibility assessment process for these applicants, including a full due diligence review of to ensure they meet legislative and regulatory requirements, continued through the fiscal year.

In December 2019, the Government of Ontario announced its move towards an open market for private cannabis retail in Ontario. In response, the AGCO modified the application process for cannabis retail licensing and on January 6, 2020, began accepting online Retail Operator Licence (ROL) applications from all interested applicants. It received 884 submissions. On March 2, 2020, the AGCO began accepting online RSA applications from eligible applicants. It received 563 submissions. By March 31, 2020, the AGCO had issued 398 ROLs and 54 RSAs.

In May 2019, consistent with the Government of Ontario’s April 2019 Budget objectives, the AGCO introduced several initiatives to reduce burden, modernize the regulatory framework for liquor, and improve choice and convenience for consumers of beverage alcohol, including:

• extending the hours for sale and service of beverage alcohol at licensed establishments (such as bars, restaurants, and golf courses), for manufacturers (wineries, breweries, cideries, and distilleries) with a By the Glass Licence, as well as Special Occasion Permit (SOP) events;
• removing prescribed quantities of liquor to be served to consumers under the By the Glass licence to enhance the tourist experience at manufacturing sites;
• amending the Liquor Advertising Guidelines to permit Happy Hour advertising in licensed establishments to allow licensees to advertise their promotions;
• eliminating prescribed SOP partition and food requirements, to provide permit holders with more flexibility while still meeting social responsibility objectives;
• creating a new Tailgate SOP, allowing businesses and persons 19 years of age or older to sell or serve alcohol to attendees and allowing them to bring their own alcohol to an event in connection with, and in proximity to, professional, semi-professional and postsecondary sporting events in Ontario.

In October 2019, the AGCO reduced burden on wineries by increasing the permitted amount of time they had to return unsold product from Farmers’ Markets to their on-site retail store, from 24 to 72 hours.

In December 2019, the AGCO extended the hours of sale and service of beverage alcohol at select Ontario airports to 24 hours a day, seven days a week.

In support of the government’s Fall Economic Statement, the AGCO worked to expand the alcohol sales in grocery stores program, in collaboration with the LCBO. By March 31, 2020, it had issued 448 grocery store authorizations, of which 157 were authorized to sell beer and wine and 291 were authorized to sell beer and cider.

The AGCO also conducted an ongoing review of program reports and analysis of program data and continued to collaborate with the OPP and regional and municipal police on the Last Drink Program, which allows the AGCO and police services to share information and educate owners of licensed establishments on the dangers of impaired driving.

The government has emphasized the need for Ontario to be Open for Business and instituted a government-wide red-tape and burden–reduction initiative to support economic growth and foster enhanced interaction between government and business.

The AGCO has a long history of working to support Open for Business principles by continually searching for ways to reduce administrative burdens for businesses and by deploying regulatory approaches to support responsible economic development. The shift towards a more risk- and outcome-based regulatory framework in the gaming sector, for example, is intended to allow Operators and businesses more flexibility to adapt to marketplace changes and ultimately to increase their competitiveness without compromising the AGCO’s regulatory work.

In 2018–2019, the AGCO designed and implemented a similar approach for the retail sale of cannabis in Ontario, assuring effectiveness but avoiding unnecessarily burdensome regulatory oversight from the outset. The AGCO also continues to build strategic partnerships and share information with other government ministries and agencies to strengthen collaborative and streamlined approaches. This includes effective relationships with the Ministry of the Attorney General (MAG), Ministry of Finance, OCS, OLG, and LCBO.

The concept of reducing red tape and burden has been a driver for many of the regulatory and internal reforms implemented at the AGCO over the last 15 years. In 2019–2020, the AGCO worked collaboratively with the Government of Ontario on multiple phases of liquor regulatory reforms that have simplified the rules and reduced unnecessary burden on liquor licensees and permit holders, including bars, restaurants, stadiums, special occasion hosts, and manufacturers. In 2019–2020, the AGCO also introduced changes to the rules that govern horse racing to support the industry’s sustainability and reduce the administrative burden for participants.

In March 2012, the OLG initiated a plan to modernize lottery and gaming in Ontario, which included three key priorities:

• becoming more customer-focused;
• securing qualified service providers for the day-to-day operation of lottery and gaming; and
• renewing OLG’s role in the conduct, management and oversight of lottery and gaming.

The AGCO also embarked on a path to modernize its approach to regulation, which complemented the OLG’s plan. The AGCO has been taking a modern and progressive approach to regulation, based on risk, the achievement of outcomes, and providing a degree of business flexibility and efficiencies for the lottery and gaming industries. These efforts support and align with key government objectives for enhanced efficiency in the delivery of public services and reducing regulatory burden and increasing consumer choice. In addition, the AGCO’s outcomes-based approach to regulation has resulted in significant cost avoidance annually for the AGCO, as well as cost savings, cost avoidance, or additional revenue for Casino Operators.

The AGCO continued to support the Open Government initiative, which aims to create a more open and transparent government by sharing data and information, and consulting with the people of Ontario.

In accordance with the Open Data Directive, the AGCO posted on its website an inventory of datasets under its custody and control. The inventory identifies whether a dataset is currently open, in the process of being opened, or exempt from being released as open data due to legal, security, privacy, confidentiality, or commercially sensitive reasons. New datasets were added to the inventory in 2019. The AGCO will continue to make priority datasets available to the public on its website under an open-by-default approach.

The Accessibility for Ontarians with Disabilities Act, 2005 (AODA) was created with the goal of developing standards that would improve accessibility for people with disabilities across the province. The AGCO has developed accessibility standards in the areas of customer service, employment, information and communications, transportation, and the physical environment.

The AODA requires all provincial agencies to provide updates to their Accessibility Plan and Policies on an annual basis. The AGCO is committed to meeting the needs of persons with disabilities in a timely manner by preventing and removing barriers to accessibility and meeting accessibility requirements under the AODA. The AGCO has implemented the requirements outlined in the plan and participated in various activities to inform its plan and policies, including the review and update of its practices in the areas of training, information and communication, and employment.

The AGCO is committed to ensuring that its public website meets or exceeds the accessibility standards required under the AODA. This includes producing all content in an accessible HTML format, which can be more easily read by assistive technologies such as screen readers. A site-wide accessibility audit was recently performed to identify any remaining deficiencies. Remediation efforts are on track for completion by the statutory deadline of January 1, 2021.

All AGCO employees are trained on the requirements of Ontario’s accessibility laws, including the Integrated Accessibility Standards Regulation (IASR) and the Ontario Human Rights Code as it pertains to persons with disabilities. This accessibility training has been built into the employee orientation process to ensure that all new AGCO employees, as well as Board of Directors and members and HRAP members, have a good and appropriate understanding of accessibility to perform their duties and provide services to the AGCO’s diverse stakeholders.

The AGCO maintains a commitment to meeting all requirements under the AODA and the IASR and continues to refine its accessibility plan with a focus on ensuring its policies and practices remain accessible and meet the needs of all stakeholders, including persons with disabilities.

In 2018–2019, development began on an external funding program that would allow stakeholders to access a portion of funds from the AGCO’s Orders of Monetary Penalties (OMP) account for Education, Training and Awareness (ETA) initiatives they have designed and developed. In 2019–2020, the ETA Fund was launched allowing industry associations, social responsibility groups and others similarly active and that have the capacity to deliver programming in the sectors the AGCO regulates to develop programs strategically aligned with the AGCO’s mandate.

For the 2019–2020 fiscal year, the total amount of funds the AGCO made available through the ETA Fund was just over $225,000. The following three projects were ultimately selected to receive funding:

A.Serving Responsibly Campaign by MADD Canada

Funded Amount: $100,000

Status: Complete
MADD developed a public service announcement aimed at thanking servers and licensees for keeping our communities safe by refusing to sell alcohol to intoxicated customers in compliance with the law and demonstrating what can happen when servers do not uphold the law.

B.Preventing Intoxicated Gambling Among Young Adults by Responsible Gambling Council (RGC)

Funded Amount: $81,400
Status: In progress
RGC is developing a series of evidence-informed social media messages about refraining from gambling while intoxicated by alcohol and/or cannabis, targeting young adults in Ontario, with a focus on Kenora, North Bay, Ottawa, and Peterborough.

C.South Eastern Ontario Peer Crowd Alcohol Campaign by Kingston, Frontenac, Lennox and Addington (KFLA) Public Health Unit

Funded Amount: $45,000
Status: In progress
KFLA is developing a young adult social marketing campaign aimed at reducing the harms of binge drinking. The campaign will target the young adult peer crowd, at greatest risk of alcohol harm.

Given the success of this first year of the ETA Fund, the AGCO is working to launch an additional round of funding for the 2020–2021 fiscal year.

The Investigation and Enforcement Bureau (IEB) is composed of OPP Officers and is fully integrated as a bureau within the AGCO. The OPP bureau works with AGCO operations to streamline, standardize, and improve investigative responses. The IEB comprises the Investigations Branch and the Intelligence and Investigative Support Branch. These branches provide investigative expertise and share information with external law enforcement and regulatory and industry stakeholder agencies to ensure integrity and public safety within AGCO regulated industries.

IEB Investigation Branch

Occurrences

TABLE 2 – Number of IEB Investigations

Gaming Enforcement Branch

Gaming Investigation Units

TABLE 3 – Occurrences at Casinos and Slot Machine Facilities

Eligibility Investigations Unit (EIU)

TABLE 4 – Eligibility Investigations

Service Strategy and Experience

The AGCO’s Service Strategy and Experience Branch was established in March 2019, bringing together the AGCO’s Contact Centre department, and Complaints and Inquiries Oversight function. Its enterprise-wide mandate is to deliver on the AGCO’s Service Excellence strategic objective by working with partners across the organization to ensure that:

• a strong service culture is developed and embedded;
• customer needs are the organizing principle around which policy development, service design and delivery are planned and executed;
• AGCO service channels function optimally and meet customer expectations; and
• the customer experience is monitored, measured, and managed.

iAGCO and Service Improvements

To create a more streamlined and digital experience for AGCO applicants and registrants, the AGCO continued its phased approach to its iAGCO online services:

• Phase 1: May 29, 2017, for SOP applications and liquor manufacturers’ licensing;
• Phase 2: January 29, 2018, for all liquor licences, and online submission of complaints and inquiries;
• Phase 3: November 19, 2018, for lottery and gaming licences and January 14, 2019, for cannabis licenses; and
• Phase 4(A): March 02, 2020, for horse racing licences.

The AGCO’s Digital by Default mindset continued to drive the agency’s modern regulatory approach with the rollout of iAGCO online services for horse racing licensees. These sector participants join liquor, lottery and gaming, and cannabis licensees in the adoption of online services.

As of March 2020, the online submission rate for liquor applicants was 94%, and 90% of gaming applications were processed online. Low-risk applicants now have quicker application turnaround times resulting from auto-issuance and auto-renewals of licences, where appropriate.

In 2019-20, the online submission rate for liquor applicants was 94%. In addition, 87% of gaming application were submitted online. Low risk applicants now have quicker application turnaround timelines resulting from auto-issuance and auto-renewals of licences, where appropriate.

In 2019-20, 93% of SOPs and 38% of liquor licence renewals were deemed low risk and issued automatically and the auto renewal rate for Gaming registrations was at 62%.

iAGCO improves the customer experience by allowing those who do business with the AGCO to apply for and manage their licences, registrations, and permits online, anytime from anywhere, through the iAGCO online portal.

iAGCO has resulted in a variety of efficiencies, including:

• a simplified renewal process with the option to select longer renewal periods, resulting in reduced administrative burden for licensees and registrants;
• elimination of the requirement for licensees and registrants to obtain and carry AGCO-printed photo identification cards;
• a streamlined application process for low-risk applicants; and
• a reduction in the number of documents and level of detail required.

TABLE 5 – iAGCO and Service Improvements

The submission of regulatory notifications (reporting of incidents or events of regulatory interest), liquor licence objections, cannabis public submissions, general inquiries, and complaints through iAGCO continues to increase.

Here is what customers have to say about iAGCO:

• “Great online experience. Very convenient to be able to do this during non-business hours from my own home. well done!”
• “Application was easy to follow, simple to execute, seamless approval process.”
• “Online service is far superior to the old paper form renewals. Thank you for making the process quick and easy.”

TABLE 6 – Contact Centre and Customer Service Support

The AGCO is committed to supporting its customers, the public and stakeholders through effective customer service support across a variety of channels.

*Web Chat volumes are from September 2019 to March 2020.

Customer Satisfaction, Performance and Continuous Improvement

In 2019–2020, AGCO’s Customer Satisfaction Surveys were enhanced to improve consistency in how customer service insights are gathered across the AGCO’s common service channels (iAGCO, website, and voice) to measure and improve the AGCO Service Experience.

Enhancements included:

• the introduction of questions aligned to the drivers of customer satisfaction;
• the development of a common method of asking service questions; and
• the adoption of a common five-point Likert scale to improve the compare-and-contrast service levels across service channels.

During the fiscal year, the Contact Centre answered 87% of customer calls within five minutes or less, exceeding its 80% service level target. AGCO customer surveys indicated a customer satisfaction rating of 84% for those who called the Contact Centre.

The AGCO continued its commitment to improving the customer experience with the launch of call-monitoring technology to monitor and improve the quality of customer calls and Web Chat interactions. Quality monitoring ensures that performance standards are adhered to and procedural compliance is met.

Eighty-one percent of AGCO customers were satisfied with their experience using the iAGCO portal, with cannabis and SOP applicants reporting the highest satisfaction levels. The AGCO website continues to be a primary source of information for AGCO customers.

Complaints and Inquiries

The AGCO’s Complaints & Inquiries Handling Policy continues to focus on complaints analysis, continuous improvement, and evidence-based decision making. Through regular performance monitoring, the AGCO’s average turnaround for addressing complaints about regulated entity compliance and licensing and registration, is holding steady at approximately 40 days.

New Service Channel: Web Chat for SOPs and Cannabis

In September 2019, the AGCO launched a new channel of communication to support and further enhance the customer service experience. Web Chat offers customers a direct, web-based digital line to the Contact Centre Monday through Friday, from 8:30 a.m. to 5:00 p.m. This popular service, currently available to Special Occasion Permit and cannabis customers, is scheduled to expand to other lines of business.

Strategic Engagement

Stakeholder engagement is a key element in the delivery of AGCO priority initiatives and decision-making. The AGCO shares information with, consults, and educates stakeholders to ensure overall understanding of regulatory requirements and improve regulatory outcomes and compliance. Engagement supports the AGCO’s risk-based and compliance focused regulatory approach, and the commitment to being customer-centred and responsive.

In 2019–2020, stakeholder engagement, education, and training activities included the hosting of webinars and national/international delegations, consultations, and industry stakeholder information sessions, as well as participation in industry-focused forums, conferences, and working groups.

A key engagement event was the second AGCO Stakeholder Summit in November 2019, which helped to build and solidify external stakeholder community relationships. With the theme, Design Thinking: How the AGCO is Updating its Modern Regulatory Toolkit, the Summit featured a keynote speaker on digital disruption, and profiled AGCO activities to inform regulatory decisions through data use, improve compliance collaboratively through education, training and awareness, and create its Better, Faster, Smarter service strategy and burden reduction. The event was attended by over 100 key external stakeholders from across all the industries the AGCO regulates, as well as government partners and public health and social responsibility groups.

To support Ontario’s burgeoning cannabis industry the AGCO continued to engage with stakeholders that had already received a retail store authorization as well as individuals and companies interested in obtaining a cannabis retail store authorization. The 2019/2020 fiscal year saw the AGCO engaging in a more concerted manner, and on a more regular basis, with First Nations that were interested in hosting a provincially-regulated cannabis retail store. Specifically, in July 2019 the AGCO held an information session for First Nations and responded to over fifty unique questions and concerns regarding AGCO’s regulatory framework for cannabis retail. Throughout the duration of the year, the AGCO continued to meet with First Nation leaders on an individualized basis and was invited to participate in a First Nation cannabis retailing workshop.

The AGCO, in partnership with the Ministry of the Attorney General, met with a variety of international delegations with representation from New Zealand, the Netherlands, New Jersey, and New York to discuss cannabis legalization and Ontario’s regulatory approach to cannabis retailing.

The AGCO also continued its engagement with horse racing industry stakeholders as part of the AGCO’s ongoing review of the Rules of Racing. This included the following initiatives:

• An extensive consultation was conducted, including 10 interviews with jurisdictions around the world and approximately 300 responses to its Ontario industry-wide survey, on the adjudication of in-race interference. Input will be supplemented through ongoing engagement prior to the implementation of any future changes to how interference is adjudicated in Ontario.
• In consultation with industry representatives, the AGCO designed and implemented incremental changes to urging rules in the province, which will continue to be assessed and adjusted over future racing seasons.
• Following extensive consultation in 2018-2019, the AGCO implemented a Concussion Protocol Pilot at thoroughbred racetracks for the duration of the 2019 racing season that included interactive education sessions with more than 125 attendees. Following an evaluation of the pilot involving input from many participants, the protocol will be expanded to include more participants in the province.

In addition to targeted industry outreach, the AGCO continued to engage in a focused and coordinated manner with municipalities on its regulatory frameworks for liquor, cannabis, and charitable gaming.

In May 2019, the AGCO hosted the final webinar in a four-part municipal webinar series focused on liquor regulation in Ontario. More than 200 municipal registrants attended, with a participant satisfaction rate of 100%.

In June 2019, the AGCO hosted an event in partnership with the City of Ottawa for liquor licensees and industry/neighbourhood associations. The meeting strengthened awareness of the AGCO’s role in liquor regulation and municipal responsibilities in bylaw enforcement, while building better channels of communication and relationship development between local residents and liquor licensees.

The AGCO remains committed to meaningful engagement to understand the various stakeholder perspectives and inform policies and programs across all its regulated sectors, as well as to building and maintaining strong and valued partnerships and alliances to improve regulatory outcomes.

Compliance Services

Compliance Services (CS) is responsible for conducting regulatory inspections, audits, and financial investigations across all lines of business regulated by the AGCO. Throughout 2019–2020, CS continued with the implementation of an integrated compliance function. CS has achieved the objective of having all Compliance Officials (COs) trained to deliver compliance services across multiple sectors by having all COs providing oversight in at least two sectors.

Audit and Financial Investigations Branch

1. Casinos and Slot Machine Facilities

In 2019–2020, the casino sector continued to transition to a private sector–operated model under OLG’s modernization strategy. It also fully transitioned to a standards-based regulatory approach, under which the AGCO establishes clear industry objectives and standards. Regulated entities then determine the most efficient and effective way to meet them. The AGCO assesses compliance by obtaining assurance that objectives and standards are being met.

This approach benefits the AGCO and Operators by providing more operational flexibility while strengthening regulatory outcomes in a way that does not unnecessarily burden those the AGCO regulates. It also allows the AGCO to proactively manage the evolving nature of its regulated industries and provide flexibility to be able to assume new regulatory responsibilities.

When conducting an audit at a casino facility, the AGCO assesses site compliance with the requirements under the Gaming Control Act (GCA), the Registrar’s Standards for Gaming, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, 2001, and related regulations. The AGCO proactively helps regulated entities to comply with regulatory requirements using an approach based on education, collaboration, and deterrence.

During 2019–2020, the AGCO carried out nine risk-based audits/review.

2. Internet Gaming (iGaming)

As part of its regulatory assurance activities, the AGCO conducts audits, compliance monitoring and reviews, technical monitoring of the iGaming platform, and investigations of suspicious behaviour within the province’s PlayOLG.ca gaming platform. The AGCO applies a risk-based approach to its activities, including its eligibility assessment and registration process, technical assessment and approval of updates to the OLG iGaming solution and new games, and the application of regulatory assurance activities to assess compliance with the Registrar’s Standards for Gaming.

During 2019–2020, the AGCO carried out one risk-based audit.

3. Charitable Gaming (cGaming)

As part of the ongoing multi-year initiative to revitalize and modernize charitable bingo in the province, the OLG and the charitable gaming Operators signed an amended agreement in 2019. The amended agreement provides Operators with increased flexibility in their overall conduct of the business and management of their operations while undertaking a number of new accountabilities. Operators are now accountable for their compliance with the Registrar’s Standards for Gaming.

In 2019–2020, the AGCO worked collaboratively with Operators in support of compliance with the Registrar’s Standards for Gaming. The AGCO carried out education sessions with all Operators of the 33 cGaming centres in the province during the Fall of 2019.

4. Other Charitable Gaming

In addition to cGaming centres managed and operated by licensed Service Providers/Operators in partnership with charities, traditional paper-based bingo events conducted and managed by licensed charitable organizations continue to operate in Ontario. Charitable gaming revenues, including those that come from traditional bingos, are an important source of funding for a large number of not-for-profit organizations.

The AGCO continued to support the charitable gaming industry by supporting fundraising opportunities for charities and providing suppliers with opportunities for business growth through modernization initiatives. These included the bingo revenue model, introduction of eRaffles using a Random Number Generator, online 50/50 draws, changes to the break open ticket regulatory framework, the launch of Catch the Ace lotteries, as well as the AGCO’s work with the Charitable Gaming Strategic Working Group and Mega Raffle Working Group. While the role of provincial and municipal licensing authorities remains in place, this model provides for flexibility in how charitable games are licensed, managed, and conducted.

5. OLG Lotteries

The AGCO conducts audits and reviews of the OLG’s lottery management functions, processes, and systems. Applying a risk-based approach, the AGCO completed one technology-related audit of a lottery system and continued to monitor the implementation of the OLG’s lottery modernization. The OLG continued to modernize key components of its lottery and iGaming business, including a new OLG Player Platform, replacement of lottery terminals, an enhanced sports betting solution, a new web and app presence, as well as new games.

During 2019–2020, the AGCO monitored ongoing changes to the OLG’s lottery platform, assessed related risks, educated new Gaming-Related Suppliers on AGCO’s regulatory requirements and expectations, and assessed technology-related readiness.

6. Horse Racing

The AGCO conducts audits and reviews of Ontario racetracks to assess the effectiveness of governance structures and processes, the integrity of funds management, compliance with racetrack licences and with the Rules of Racing. AGCO Audit also collaborates closely with the OLG in areas of shared interest, such as governance and integrity of purse account management.

In 2019–2020, the AGCO carried out one follow-up audit of an Ontario racetrack.

7. Alcohol – Wineries and Liquor

The AGCO is responsible for administering the Liquor Licence Act (LLA) and specific sections of the Liquor Control Act (LCA). AGCO’s regulatory responsibilities include the licensing and regulation of the sale and service of beverage alcohol in liquor-licensed establishments (e.g. bars and restaurants) and manufacturers.

In 2019–2020, the AGCO applied a variety of tools and regulatory assurance activities to this sector, including five financial reviews in support of inspections conducted by AGCO Compliance Officials of licensed liquor establishments that were not compliant with terms and conditions of their licence and provisions of the LLA/LCA.

As part of an existing MOU with the AGCO, the LCBO conducts regular compliance audits of licensed wine manufacturers on behalf of the AGCO. During 2019–2020, a total of 213 audits of wine manufacturers was completed. In addition, the AGCO completed financial/compliance reviews of three licensed wine boutiques.

8. Cannabis

Following the federal legalization of cannabis for recreational use, the Ontario government announced in August 2018 a private retail model in which businesses can apply for licences in order to sell cannabis. In addition, the Ontario government mandated the AGCO as the regulator of this line of business.

Private retail stores were permitted to sell cannabis beginning on April 1, 2019, with the goal to further eliminate the illegal market and provide economic development opportunities for businesses in Ontario. The AGCO fulfills its responsibility for licensing retailers and authorizing stores by conducting eligibility assessments and enforcing legislation and the Registrar’s Standards using a number of tools, including inspections, assessment of point-of-sale and inventory tracking systems, education, and other regulatory assurance activities. The AGCO focuses on the safe, responsible, and lawful sale of cannabis, consistent with government legislation.

In 2019–2020, the AGCO worked with the OCS and industry partners to amend the Registrar’s Standards for Cannabis Retail Stores for “Click & Collect” eCommerce sales of cannabis products.

9. Financial Due Diligence and Investigations

The Branch’s Financial Investigations Unit (FIU) conducts financial due diligence reviews to assess the ability of an entity applying for a licence or registration to conduct its business in accordance with the principles of honesty, integrity, and financial responsibility. FIU reports are used to support the eligibility assessment process and licensing and registration decisions made by the Licensing and Registration Branch.

In 2019–2020, the FIU provided forensic expertise to support investigations by the AGCO/OPP’s Investigations and Enforcement Bureau of suspected thefts or misuse of charitable lottery funds. The FIU completed 14 financial investigations.

Compliance Services Inspections

In 2019–2020, CS continued the vision of focusing on achieving the outcomes that support compliance in the most effective and efficient manner. This has meant focusing compliance resources where they have the greatest impact. Through these efforts, Compliance Officials have placed a greater emphasis on the areas that present the most significant risks. With efforts being focused on compliance outcomes, COs invest significant efforts into providing increased consultation and education with licensees and Operators.

Strategic Partnerships

CS recognizes the benefits of collaborative working relationships with police services and other regulatory bodies. Throughout 2019–2020, CS continued to seek out new strategic partnerships and collaborative approaches to promote compliance among all sectors regulated by the AGCO. 

In this fiscal year, CS increased its collaboration with municipal partners, including expanding a project to enable efficient referral of compliance information to the City of Toronto and continuing its collaboration with the City of Ottawa. CS continued to strengthen its network of municipal partnerships through increased joint projects and information-sharing initiatives.

CS has renewed its efforts to leverage technology to deliver education and awareness seminars to police officers servicing the remote areas of Ontario. During 2019, CS staff delivered a series of virtual education seminars to OPP Officers in Sioux Lookout. The success of this pilot will pave the way for development of education programs that police officers can participate in regardless of where they are located.

TABLE 7 – Compliance Services Inspections – Cannabis

TABLE 8 – Compliance Services Inspections – Raffles

In addition to commercial gaming inspections (see note following Charitable Gaming – cGaming, page 35), the AGCO continued to conduct inspections at sites that fall under O.Reg 207(1)(b) of the Criminal Code. These sites are conducted and managed by the OLG.

AGCO COs also provide education and outreach to the charitable gaming sector to ensure continued compliance. In 2019–2020, COs conducted 93 charitable gaming inspections and found 12 violations.

Alcohol

Licensing

The Liquor Licence Act and its Regulations provide the Registrar with the authority for regulating and licensing liquor sales licences, ferment-on-premise facility licences, liquor delivery service licences, manufacturer’s licences, and manufacturer’s representative licences.

The AGCO is also responsible for overseeing the administration of SOPs, which are required for occasional private events (such as weddings and receptions) or public events (such as community festivals), where beverage alcohol will be served and/or sold to the public.

TABLE 9 – Total Number of Liquor Licences and Special Occasion Permits

VQA Wine Sales at Farmers’ Markets

As of March 31, 2020, there were 161 wineries selling their fruit wine, honey wine, maple wine, or VQA wine at 218 Ontario Farmers’ Markets.

TABLE 10 – Compliance Services Inspections – Alcohol

TABLE 11 – Notices of Proposal and Orders of Monetary Penalty (Alcohol)

If the Registrar proposes to refuse, revoke, or suspend a licence, the Registrar must serve a Notice of Proposal (NOP) on the applicant/licensee outlining the reasons for the proposed action. Applicants/licensees who dispute a NOP may appeal the proposal to the Licence Appeal Tribunal (LAT).

Gaming

OLG Lotteries

TABLE 12 – Compliance Services Inspections – Gaming

Gaming Registrations

Gaming registrations must be obtained by individuals or businesses wishing to:

• provide goods or services to charitable or religious organizations to assist with the conduct and management of their licensed lottery event, or any business that manufactures bingo paper or break open tickets;
• sell lottery products on behalf of OLG, or provide goods or services to OLG related to lottery products;
• provide goods or services to, or work for a casino, slot machine facility, or charitable Gaming (cGaming) site.

In reviewing applications, an eligibility assessment is carried out by the Registrar concerning the character, integrity, financial responsibility, and competence of those persons or businesses and their suitability for registration.

TABLE 13 – Total Number of Gaming and Lottery Registrations

Charitable Gaming Licences

The AGCO administers the charitable lottery licensing program in Ontario. This includes lottery events conducted and managed by charitable or religious organizations (such as bingo, raffles, and the sale of break open tickets). The AGCO also issues registrations to individuals or businesses that wish to provide goods or services to the charitable gaming sector, and carries out inspection and compliance assurance activities to ensure that charitable gaming licensees and registrants are operating in accordance with the law and in the public interest.

The issuance of charitable lottery licences continues to be a responsibility shared between the AGCO and local municipalities. The AGCO licenses raffle prizes over $50,000 and bingo prize boards over $5,500. Municipalities have the authority to issue licences with prize boards less than these amounts.

TABLE 14 – Lottery Licences Issued

Electronic Gaming Equipment and System Approvals

Technical and Laboratory Services Branch

Ontario’s public confidence in gaming is largely based upon the integrity and fairness of the games and gaming systems in play. The Technical and Laboratory Services Branch ensures the technical integrity of gaming technology by testing and providing approvals of games and related gaming systems.

This technology is used throughout the province in all gaming sectors regulated by the AGCO, including casino gaming, charitable/raffle gaming, lotteries, and iGaming.

Gaming Laboratory

The AGCO Gaming Laboratory (Gaming Lab) is composed of a team of highly qualified and experienced experts in an in-house lab that is equipped with the same gaming systems used at gaming sites in Ontario.

The Gaming Lab is accredited to the international standard ISO 17025:2017 for testing laboratories, considered the international benchmark for excellence in testing laboratories. This achievement sets the AGCO apart as the only known gaming regulator with an in-house accredited gaming lab. This accreditation provides annual third-party assurance of the ongoing quality of the testing performed by the Gaming Lab.

The Gaming Lab released revised risk-based and outcomes-based minimum technical standards in July 2019 that dramatically reduced the regulatory burden for casino gaming-related suppliers while ensuring the integrity of electronic gaming machines is maintained. The new standards provide Gaming-Related Suppliers with increased flexibility in designing and implementing new gaming technology. Additionally, as part of this change, the AGCO implemented a new process whereby low-risk gaming equipment can be pre-approved without having to undergo testing by the Gaming Lab.

In 2019–2020, the Gaming Lab received feedback through its anonymous survey of Gaming-Related Suppliers who provide gaming technology for the Ontario marketplace, with 94% of respondents indicating good to excellent ratings for overall customer service provided by the AGCO Gaming Lab, including approval turnaround times and supporting the introduction of new technology.

TABLE 15 – Gaming Laboratory

Note: The average turnaround time for approval in 2019–2020 was 19 days, which is industry leading according to Gaming-Related Suppliers and matches the turnaround time from 2018–2019.
The goal is to maintain or further improve the turnaround time in the upcoming fiscal year.

Horse Racing Licensing

In 2019–2020, the AGCO continued its efforts to implement a regulatory framework that supports a modern, efficient, and consumer-focused racing industry. AGCO Licensing Agents work at racetracks and at the AGCO’s Head Office in Toronto. The AGCO licenses participants in the horse racing industry, such as jockeys, trainers, drivers, veterinarians, stables and partnerships, racetracks associations, and teletheatres.

TABLE 16 – Horse Racing Licensing

Ontario Racetracks

Thoroughbred

• Fort Erie Race Track, Fort Erie
• Woodbine Racetrack, Toronto

Standardbred

• Clinton Raceway, Clinton
• Dresden Raceway, Dresden
• Flamboro Downs, Dundas
• Georgian Downs, Innisfil
• Grand River Raceway, Elora
• Hanover Raceway, Hanover
• Hiawatha Horse Park, Sarnia
• Kawartha Downs, Fraserville
• Lakeshore Racing, Leamington
• Woodbine Mohawk Park, Campbellville
• Rideau Carleton Raceway, Ottawa
• The Raceway at Western Fair, London
• Woodbine Racetrack, Toronto

Quarter Horse

• Ajax Downs, Ajax

Racing Inspections

In 2019–2020, the AGCO continued to conduct its horse racing–related inspection and investigation activities.

TABLE 17 – Compliance Services Inspections – Racing

Rulings

Rulings are written decisions by AGCO Judges and Stewards that relate to violations of the Rules of Racing, 2018. The decisions can be appealed to the Horse Racing Appeal Panel, an independent and impartial adjudicative body – see page 48 of this Annual Report.

TABLE 18 – Rulings by Racing Officials

Notices

TABLE 19 – Number of Notices of Proposed Order or Immediate Suspension

The Licence Appeal Tribunal (LAT) is independent of the AGCO and is an adjudicative tribunal that is part of Safety, Licensing Appeals and Standards Tribunals Ontario. LAT is responsible for adjudicating appeals regarding decisions on licensing and registration matters made by different regulators. If a person who receives a Notice of Proposal (NOP) or Notice of Proposed Order (NOPO) about a liquor, gaming, horse racing, or cannabis licensing matter and wishes to request a hearing, it will be held before LAT. Those liquor, gaming, or cannabis licensees who are assessed an Order of Monetary Penalty by the Registrar can appeal the Order to LAT. Horse racing licensees can appeal the Order to the HRAP.

LAT hearings are related to:

• the Registrar’s refusal to licence or register under the Liquor Licence Act (LLA), Gaming Control Act 1992 (GCA), Horse Racing Licence Act 2015 (HRLA) and Cannabis Licence Act 2018 (CLA);
• other proposed actions by the Registrar under the LLA, GCA, HRLA and CLA;
• public interest hearings to determine if issuance of a liquor licence or changes to liquor licensed premises is in the public interest; and
• conducting appeals of orders of monetary penalty assessed by the Registrar.

The following settlements were reached without a LAT hearing:

TABLE 20 – Alcohol-Related Settlements without a Hearing

*These settlements are negotiated by the AGCO’s Legal Services Division, based on instructions from the Registrar.

TABLE 21 – Alcohol-Related Public Meeting Conference Calls

If the AGCO receives a written objection to the issuance of a liquor sales licence, a decision is made to either set up a public meeting at the AGCO or issue an NOP to review the licence application, which can be appealed to the LAT. A public meeting is an alternative dispute resolution process and is an informal meeting between the liquor licence applicant, the objectors, and a Deputy Registrar of the AGCO. This meeting may be arranged as a telephone conference call.

TABLE 22 – Gaming-Related Settlements without a Hearing

*These settlements are negotiated by the AGCO’s Legal Services Division, based on instructions from the Registrar.

HRAP members are appointed by the AGCO Board of Directors based on experience and qualifications and through a competitive, merit-based process. There is broad representation from the various sectors of the industry on the Panel, with various members possessing a background or experience in law, veterinary medicine and pharmacology, governance, and administrative justice.

In January 2020, five members (including the Vice-Chair) were renewed for a further term. These re-appointments by the AGCO Board of Directors signal the importance of ensuring the continuity of the Panel and retaining members who have the requisite skills and experience to effectively adjudicate racing appeals and to help manage the tribunal going forward.

This report marks the end of four years in operation for the HRAP. The focus of the Panel continues to be to ensure a fair and accessible adjudicative process for all participants and ensuring that it has procedural rules in place to support an efficient and responsive appeal process.

In 2019–2020, the Panel undertook a comprehensive review of its Rules of Procedure as part of its ongoing commitment to continually enhance and improve its appeal process. This review included a targeted consultation with key stakeholders and parties who have extensive experience appearing before the Panel. This is the first time the Panel formally consulted on its Rules of Procedure, and the stakeholder response was strong and constructive. Several procedural changes were ultimately approved by the Panel, with implementation of the changes targeted to be introduced at the start of the 2020–2021 race season.

The number of appeals filed with the Panel increased from the previous year, in large part due to a greater number of urging appeals, which came about following the implementation of new urging rules by the AGCO in May 2019. Concurrently, medication and drug–related appeals continued to fall following rule and procedural changes introduced by the AGCO beginning in 2018.

Novel and interesting matters continued to be raised before the Panel over the past year, including a case where the Panel’s jurisdiction was at issue. In April, the HRAP received an appeal from the Ontario Harness Horse Association (OHHA) with respect to directions issued by the Registrar concerning the distribution of certain marketing funds. The Panel ultimately concluded that the directions of the Registrar fell outside the ambit of the Rules of Racing and therefore were not appealable to the HRAP; however, OHHA has since sought judicial review of the Panel’s decision. A decision by the Divisional Court has not yet been made.

Appeals

Motions

Hearings