Modern Regulator

Key commitments

• Serve the public interest through effective and innovative approaches to regulation in the alcohol, gaming, cannabis and horse racing sectors.
• Make evidence-based decisions to regulate in the public interest.
• Strengthen our organizational foundation to support the agency’s expanding priorities and business strategies.

Performance measure

The AGCO provides user-based services and information through multiple windows and service channels anytime and anywhere.

• Outcome metric: % of users using digital options to transact with the AGCO meets or exceeds target of 85%.

Table 29—Digital First

Projects

Being a Modern Regulator remains a key commitment and shapes how the AGCO regulates and works with its stakeholders. The AGCO is committed to leveraging evidence and effective stakeholder engagement as part of the development and implementation of its regulatory direction. The following corporate projects are based on the AGCO’s commitment to the Modern Regulator strategic goal.

igaming Framework

The upcoming launch of Ontario’s igaming market on April 4, 2022, is a major milestone.

The AGCO developed a regulatory model for this new, competitive market that protects consumers and provides them with choice, reduces red tape and supports legal market growth and provincial returns.

This model reflects the AGCO’s regulatory objectives for igaming while meeting the unique requirements of the igaming open market. It was informed by a series of engagements with industry stakeholders on the Registrar’s Standards for Internet Gaming (Standards) and the eligibility and compliance approaches for igaming. Following the federal government’s legalization of single-event sports betting, the AGCO also undertook stakeholder engagement on the regulatory standards for sports and event betting, which apply to all sports, esports, novelty and betting exchange.

Through the igaming regulatory model, the AGCO undertook several strategic shifts in its operational compliance and eligibility activities to ensure market participants act in accordance with the law, with honesty and integrity, and in the public interest.

The updated risk-based registration model emphasizes applicant ability to meet the Standards and previous experience of applicants, including history in leading jurisdictions. Compliance activities focus on ensuring regulatory objectives are met through innovative, targeted approaches. This includes setting compliance expectations for entry into the market through game and critical system testing and confirmations of full system compliance with the Standards, as well as setting and monitoring priority compliance areas, with targeted monitoring and interventions where appropriate.

The AGCO provided smooth service delivery to igaming customers, including:

• publishing guides on its website to assist prospective igaming Operators and Gaming- Related Suppliers with the registration process (for example, the Internet Gaming Operator Application Guide) and to help them understand compliance requirements when participating in Ontario’s regulated market (for example, the Internet Gaming Go-Live Compliance Guide)
• collaborating with iGaming Ontario on the development and coordination of a robust onboarding process to ensure igaming Operators have met all requirements to enter the market
• implementing a robust customer service model for handling both regulatory and iGO matters, including responding to complaints and inquiries
• making enhancements to the AGCO internet gaming portal, including the creation of a new player support section to provide players with information about the new igaming model and additional resources.

The AGCO also implemented system changes to support the launch of the new igaming market. This included updates to the iAGCO online portal to include igaming applications, processes for complaints and inquiries and ongoing monitoring and managing of compliance activities through regulatory intelligence data.

Auditor General of Ontario: AGCO Value for Money Audit Report

In December 2020, the Auditor General of Ontario released a Value for Money (VFM) Audit Report of the AGCO. The report contained 26 recommendations and proposed 62 action items, along with management responses from the AGCO and the Ministry of the Attorney General; 56 of the action items were assigned to the AGCO for response.

The implementation of the Auditor General of Ontario’s recommendations is one of the AGCO’s five corporate priorities. The AGCO established a dedicated VFM Audit Action Plan Project Team with project leads overseeing working groups to address each recommendation and related action items.

Throughout 2021, the AGCO provided regular quarterly updates to Ontario Internal Audit. The AGCO provided an update outlining the completed and outstanding undertakings for each recommendation to the Standing Committee on Public Accounts in April 2021.

As a result of the recommendations, the AGCO has improved and strengthened regulatory processes within its operations and introduced new functionality into iAGCO. Recommendations have been implemented through robust government partnerships that support the AGCO’s regulatory mandates.

The AGCO remains committed to its action plan and recognizes the value of the Auditor General of Ontario’s recommendations to enhance its effectiveness as a modern regulator. This remains a corporate priority for fiscal year 2022–2023.

Liquor modernization

The Liquor Licence and Control Act, 2019 (LLCA) came into effect on November 29, 2021, marking a major milestone for liquor regulation in Ontario. The new liquor framework under the LLCA enables the AGCO to modernize the way it regulates the sale, service and delivery of liquor and allows for a more flexible approach.

The new liquor framework is designed to reduce burden, facilitate better monitoring and compliance and reflect the changing liquor landscape for the benefit of Ontarians. It includes the introduction of a new liquor licence and permit structure and the transfer of the regulatory authority for some activities from the Liquor Control Board of Ontario (LCBO) to the AGCO.

The Registrar’s Interim Standards and Requirements for Liquor (Interim Standards) came into effect under the LLCA and primarily maintain and consolidate many of the previous requirements. Over the coming years, the AGCO will build on this work to develop a comprehensive outcomes-based regulatory model, consistent with our overall strategic approach for other regulated sectors.

Enhanced social responsibility measures were also introduced with the creation of a new re- certification requirement for licensees relating to the responsible sale, service and delivery training (such as Smart Serve). The AGCO adopted this industry best practice in recognition of the significant modernization of Ontario’s liquor sector and the need for continued commitment to social responsibility and public protection in the liquor sector.

Under the LLCA, several new permissible activities for licence holders took effect, including:

• all licensed grocery stores may offer beer, wine and cider (as applicable) online for curbside pick-up at the store, as permitted under their licence;
• licensed grocery stores are permitted to display non-liquor products, excluding energy drinks and products that promote immoderate consumption, within the contiguous aisles where liquor products (that is, beer, cider, wine) are displayed;
• Liquor Sales Licence holders are permitted to infuse liquor to create drinks or change the flavour of liquor through practices such as barrel aging, as long as the customer is informed;
• a new temporary extension endorsement allows manufacturers with a retail store at their production site to sell liquor products at industry promotional events, in addition to farmers’ markets;
• the removal of alcohol by volume (ABV) limits that wine and brew pubs were previously subject to (previously, wine pubs could not sell wine with greater than 14% ABV and brew pubs could not sell beer with greater than 6.5% ABV);
• ferment on premise facilities are permitted to combine multiple customers’ ingredients, allowing innovative practices such as barrel aging;
• manufacturers are permitted to deliver the liquor products of other licensed manufacturers that have an on-site retail store (a new delivery endorsement enables this activity).