June 19, 2023

As I enter my fourth year as Chair of the Board of Directors, I am pleased to present the Alcohol and Gaming Commission of Ontario’s (AGCO) 2022-2023 Annual Report.

This past fiscal year was a particularly meaningful one for the AGCO, given the integral role this agency has played in the launch of Canada’s first open, regulated internet gaming (igaming) market. Like many other jurisdictions, internet gaming in Ontario had, for years, primarily occurred in an unregulated space. Changing that story took the collective efforts of many, from the Government of Ontario to stakeholders across the gaming ecosystem.

The AGCO played a leadership role establishing a regulatory framework that supported the government’s objectives, including providing consumers with increased choice, enhancing player protections, and supporting the growth of a new, legal market. The regulator worked closely with iGaming Ontario to ensure a smooth launch of the market in April 2022.

By most measures, the first year of Ontario’s open, regulated igaming market was a remarkable success. Many jurisdictions around the world have pointed to Ontario’s model as one to learn from and emulate. Indeed, the AGCO was the proud recipient of the International Association of Gaming Regulators’ Regulatory Excellence Award, as well as the North American Gaming Regulators Association’s Excellence in Gaming Regulation Award for its development of Ontario’s igaming regulatory framework.

Beyond gaming, the AGCO continued to support many of the government’s important public policy priorities over the past year. These included the implementation of Ontario’s new legal framework for the sale and service of liquor, the continued support for a safe and robust private cannabis retail market, and ongoing support for Ontario’s horse racing industry as it continued to recover from the effects the pandemic had on the sector.

Through its Strategic Oversight and Governance, and Finance, Audit and Risk-Management committees, the Board of Directors provided the AGCO with the direction and support required for the agency to continue delivering on its effectiveness, transparency, and accountability requirements. This included ongoing oversight of the AGCO’s response to recommendations made by the Auditor General of Ontario in her 2020 audit of the organization. 

The Board continues to be a strong supporter of the agency’s Diversity, Inclusion and Accessibility (DI&A) objectives. We have been pleased to note some of the positive outcomes from this initiative, including the continued implementation of a multi-year DI&A strategy, and the establishment of a new, dedicated office. This new capacity will help the agency ensure equity and inclusion are rooted in the AGCO’s workplace values and sustainably incorporated into its day-to-day operations.

On behalf of the Board, I would like to extend our sincere thanks to all AGCO staff and leaders for their strong commitment to the agency and to the sectors and communities we serve.

Earlier this year, our CEO and Registrar, Tom Mungham, announced that he will be retiring in Autumn 2023, after almost 33 years of dedicated public service. On behalf of the Board of Directors, we thank Tom for his extraordinary commitment to regulatory modernization, to enhancing consumer protection, and to providing high quality services for the sectors we regulate. We wish him all the best in the next chapter of his journey.

I am pleased to share that the Board has initiated the recruitment process to identify the AGCO’s next Registrar and CEO. While that person will have big shoes to fill, I have the utmost confidence that the Board will find a candidate who shares Tom’s dedication to the public interest, to effectiveness, and to modernization in support of Ontarians and the AGCO alike.

Lalit Aggarwal
Chair

May 9, 2023

Over the past several years, significant change and positive transformation have continued to be part of the AGCO’s journey, and the 2022-23 fiscal year was no exception.  

April 4, 2022, marked a historic milestone - Ontario was the first Canadian province to launch an open, regulated internet gaming (igaming) market. Since then, Ontarians have been able to play on world class igaming sites under a safer, fully regulated framework. From most perspectives, the first year of the regulated market was a great success. As of March 31, 2023, 45 operators are live in Ontario and the AGCO has approved over 5,000 certified games for use in the province.  We continue to work alongside the AGCO’s subsidiary, iGaming Ontario (iGO), towards achieving the government’s objectives of providing consumer choice, ensuring player protection, supporting the growth of the legal igaming market and generating provincial revenues for the benefit of Ontarians. In the past year, many jurisdictions have pointed to Ontario’s market launch as a model of success. In October 2022, the AGCO was awarded the International Association of Gaming Regulators’ (IAGR) Regulatory Excellence Award for its work on developing and implementing the regulatory framework for igaming.

Throughout the COVID-19 pandemic, the AGCO committed to providing support to our licensees and registrants as they navigated unprecedented challenges. In 2022-23, the AGCO permanently adopted several measures that had originally been put in place on a temporary basis to ease the burden on individuals and businesses caused by the pandemic. Notable examples include liquor reforms such as takeout and delivery of liquor with food from eligible liquor sales license premises and a new framework for temporary outdoor physical extensions (temporary patios). Charitable gaming reforms were also made such as allowing credit card transactions and decreasing the number of charity representatives required to be present at Bingo Revenue Model halls.  

Our work with the cannabis sector this year included amendments in June 2022 to the Registrars Standards for Cannabis Retail Stores, focusing on the reduction of anti-competitive industry practices.  The AGCO also provided expertise and support on possible amendments to the federal Cannabis Act to the Expert Panel leading the review. 

This past year also saw some important changes for the alcohol sector, starting with a new caterer’s endorsement for licensed manufacturers which came into effect in April. In addition, we implemented a new approval framework for temporary outdoor physical extensions (temporary patios) for liquor sales licensees. This new approval framework came into effect on January 1, 2023.  

Throughout 2022-23, the AGCO continued to work closely with Horse Racing industry experts on equine welfare reforms, several of which are anticipated to take effect in Spring 2023. And the AGCO has worked with the Ontario Lottery and Gaming Corporation and the Province’s casinos to support post pandemic recovery efforts, with a balanced approach to public safety with regulatory burden reduction.  

The AGCO continued to demonstrate its commitment to responding to the findings of the Auditor General of Ontario’s 2020 Value for Money Audit. Since the report’s release, the AGCO has implemented 40% of the Auditor General’s recommended action items in areas such as compliance and inspection activities, regulatory processes and public transparency. Another 21% are underway and remain a priority for the AGCO in the coming year. 

Building on our response to the Value for Money Audit, a Funding Framework Review has been initiated by the AGCO with the Ministry of the Attorney General (MAG) to move towards becoming a more financially self-sufficient regulatory agency. 

In line with the Government of Ontario’s Digital Service focus and commitment towards new digital practices and technologies to deliver simpler, faster, better services to Ontarians, the AGCO prioritized the development of a Digital Strategy to guide and prioritize the agency’s digitalization efforts. 

The AGCO is proud to serve the people of Ontario, and continue implementation of our multi-year Diversity, Inclusion and Accessibility (DI&A) strategy. We are committed to the sustainable integration of DI&A with our operations to enhance organizational effectiveness and uphold our “People First” approach. 

In addition to services we provide externally, our DI&A journey requires equal focus on our internal workforce. This year, AGCO leaders were provided with Intercultural Development Inventory (IDI) training, a comprehensive diversity and inclusion training program providing concrete ways to engage in respectful and positive interactions.   An employee census was launched to develop a baseline for employee demographics, which will enable us to gather, understand and report on measurable results of DI&A efforts. The 2022-23 fiscal year brought positive change and forward movement to the AGCO. We pride ourselves on our consistent and continued efforts to support the sectors we regulate while upholding a steadfast commitment to the safety of Ontarians. 

Tom Mungham
Chief Executive Officer

The AGCO Board of Directors (the Board) is responsible for the overall governance of the AGCO and meets regularly. In exercising its governance functions, the Board sets goals and develops policy and strategic directions for the Commission to fulfill its mandate; this includes working with the Chief Executive Officer and senior management on regulatory and governance activities.

As part of its governance structure, the Board has two standing committees. These committees are the Finance, Audit and Risk Management Committee and the Strategic Oversight and Governance Committee. The committees are accountable to the Board and provide regular updates at board meetings, highlighting key decision points, areas of substantive discussion and recommendations to the Board.

Finance, Audit and Risk Management Committee

The Finance, Audit and Risk Management Committee is responsible for providing oversight on matters related to financial performance. This committee also provides oversight on cybersecurity, internal audit activities, risk management and emergency management, including internal control systems and annual risk management and audit plans.

Strategic Oversight and Governance Committee

The Strategic Oversight and Governance Committee is responsible for ensuring the agency has an effective governance framework and is carrying out its responsibilities and fulfilling its legislative mandate. In particular, this committee is responsible for monitoring and assessing the agency’s performance against key strategies and objectives and providing strategic oversight with respect to the AGCO’s corporate social responsibility program and human resources strategy.

The list below reflects the members of the Board who served during the fiscal year ending March 31, 2023, including their original appointment dates.

Total per diems of all appointees for 2022–23: $122,080.10 

Table 1— Board of Directors and per diems

Vision

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

Mandate

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

Governing Legislation

The AGCO is an arms-length regulatory agency of the provincial government, reporting to the Ministry of the Attorney General (MAG). It was established on February 23, 1998, under the Alcohol, Cannabis and Gaming Regulation and Public Protection Act, 1996 (ACGRPPA). The AGCO continues as a corporation under a new corporate governance statute, the Alcohol and Gaming Commission of Ontario Act, 2019 (AGCO Act).

The AGCO is responsible for the administration of:

• Alcohol and Gaming Commission of Ontario Act, 2019
• Liquor Licence and Control Act, 2019
• Gaming Control Act, 1992
• Order-in-Council 208/2024 (as amended)
• Cannabis Licence Act, 2018
• Horse Racing Licence Act, 2015

AGCO Subsidiary

iGaming Ontario (iGO) was established on July 6, 2021, as a subsidiary corporation of the AGCO. iGO is responsible for conducting and managing igaming through private operators in Ontario. As of April 4, 2022, private igaming operators that have registered with the AGCO and have executed an operating agreement with iGO can legally offer their games to players in Ontario. Companies who successfully enter the Ontario market are required to meet rigorous standards of game and operator integrity, fairness, player protections and social responsibility.

The AGCO’s role as regulator remains the same and is kept separate from iGaming Ontario’s commercial role. The AGCO continues to be responsible for regulatory oversight of all gaming activities in Ontario, including private igaming operators and suppliers as well as iGaming Ontario.

AGCO is responsible for the following activities as the regulator of Ontario’s igaming market:

• Develop regulatory standards (Registrar’s Standards for Internet Gaming).
• Determine eligibility and register igaming operators and gaming-related suppliers to ensure the integrity of sector participants.
• Register independent testing labs (ITLs) that test and certify that igaming technology meets the required Registrar’s Standards for Internet Gaming.
• Monitor igaming operators, suppliers and digital game offerings for compliance with regulatory obligations, including the Registrar’s Standards for Internet Gaming.
• Where compliance concerns are identified, bring operators and suppliers back into compliance through the use of progressive sanctions, including warnings, suspensions, monetary penalties, and in the most serious of cases, revocations.
• Work with igaming operators and suppliers to increase their understanding of regulatory obligations and to improve overall compliance.
• Address regulatory complaints and inquiries, including those related to game integrity and fairness, misuse of private information, responsible gambling violations, and money laundering.

The AGCO’s Annual Report must contain the Annual Report of its subsidiary. As such, the iGO Annual Report is appended below.
 

Corporate Structure

Organizational Structure (Text Version)

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1.  
   1. Chair and Board of the AGCO
   2. Horse Racing Appeal Panel (HRAP)
   3. iGaming Ontario Board
2. Chief Executive Officer and Registrar
   1. Communications and Service Experience Division
      1. Communications
      2. Service Strategy and Experience
   2. Corporate Services Division
      1. Finance and Administration
      2. Human Resources and Organizational Development
      3. Risk Management, Internal Audit
      4. Change Management
      5. Project Management Office
   3. Information & Information Technology Division
      1. Digital Platforms and Cybersecurity
      2. Enterprise Data and Analytics
      3. Business Optimization and Insights
      4. Strategic Planning and Management
   4. Investigation and Enforcement Bureau
      1. Investigations
      2. Intelligence and Investigative Support
   5. Legal Services Division
      1. Litigation Services
      2. Corporate Services
      3. Advisory Services and Legal Drafting
   6. Operations Division
      1. Audit & Financial Investigations
      2. Regulatory Compliance
      3. Technology Regulation and igaming Compliance
      4. Licensing and Registration
      5. Operational Priorities, Planning and Performance
      6. Anti-Money Laundering
   7. Corporate Affairs, Strategic Policy and Planning Division
      1. Srategic Planning and Engagement
      2. Strategic Policy
      3. Corporate Affairs and Governance

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Communications and Service Experience Division

The Communications and Service Experience Division provides strategic communications advice and services, manages media relations and the AGCO’s public reputation and oversees the development of internal and external communication materials and publications. It builds understanding and acceptance of organizational objectives and policy priorities through regular communication with staff and stakeholders.

The Service Strategy and Experience Branch works with partners across the organization to strengthen its service culture and competencies and ensure customer needs are the “organizing principle” around service design and delivery. The branch includes the AGCO’s Contact Centre, which handles over 100,000 customer interactions yearly across a range of channels. It also provides oversight of the agency’s inquiries and complaints handling policy and ensures the customer experience is monitored, measured and managed.

Corporate Services Division

The Corporate Services Division provides advice and guidance on all aspects of the AGCO’s day-to-day administration and client services and plays a strategic role as a proactive facilitator of the agency’s major change initiatives.

The Human Resources and Organizational Development Branch is responsible for supporting the People First strategic goal, including full-cycle human resources operational services, wellness, employee engagement, coaching, management/labour relations, talent management and succession planning, talent data analytics/reporting and internal and external training. The Human Resources and Organizational Development Branch oversees the Diversity, Inclusion and Accessibility (DI&A) framework.

The Finance and Administration Branch provides financial planning and reporting, accounting, payroll, procurement (including oversight of vendor management), facilities management and mail and courier services.

The Risk Management and Internal Audit Branch undertakes internal audits, which provide reasonable assurance that the AGCO’s risk management, governance and internal control processes are operating effectively. The Branch also supports the agency’s Enterprise Risk Management framework and coordinates the Emergency Management Enterprise System, which includes the Business Continuity Plan.

The Project Management Office manages the AGCO’s priority projects. It ensures major projects stay on track, outcomes are aligned to strategic goals and the right resources are in the right place based on corporate needs.

The Change Management Office supports the agency by applying structured processes and tools to lead people through organizational change and helping individuals transition by engaging, adopting and implementing change.

Information and Information Technology Division

The Information and Information Technology Division (I&IT) supports the AGCO to fulfill its regulatory mandate by managing and transforming our data and technology portfolios, implementing innovative solutions and providing services that improve agency performance and our ways of working (operating model). I&IT strives to enable the AGCO to conduct digital business with agility, speed and innovation while continuing to advance I&IT’s multi-year strategic goals.

The Digital Platforms and Cybersecurity Branch is composed of five departments that ensure the delivery and operation of digital services and products. The Enterprise Architecture department creates technology roadmaps and ensures alignment to business strategy. The Cybersecurity department works to minimize the risk and impact of internal, external, deliberate and accidental threats to AGCO digital information assets. The Digital Product Delivery department delivers, maintains and supports digital products through the integration, development, support and testing of both in-house applications and third-party offerings. The Infrastructure and Operations department proactively and strategically works to ensure uptime, performance and recoverability for AGCO digital services and products. The Service Desk is a single point of contact for all end-user computing needs, resolving issues and supporting equipment to ensure productivity.

The Enterprise Data and Analytics Branch matures how the AGCO values data as a strategic asset and maximize its business value. This is accomplished through the innovation and development of modern data products that better use data to inform proactive actions in regulatory policy and operations. In addition, through a Data Governance and Information Management function they build confidence and trust in our data by ensuring it’s well defined, discoverable and of high quality, while maintaining appropriate access and use of data.

The Business Optimization and Insights Branch brings an enterprise-wide business lens to three critical digital services. First, they maximize workforce efficiency and improve work output quality through continuous improvement of processes for AGCO lines of business and shared service functions. Next, through the Digital Product Planning function they guide the growth of the AGCO digital product portfolio, ensuring alignment with strategic business outcomes and I&IT technology architecture. Lastly, they are responsible for building a culture of accountability by continually evaluating the efficiency and efficacy of AGCO programs, projects and core operations through the Performance Measurement program.

New to I&IT this past fiscal year, the Strategic Planning and Management Branch is responsible for championing I&IT’s vision and promoting its business value across the AGCO while working to better to optimize the I&IT portfolio and drive overall delivery excellence. This team is also leading the development of the AGCO Digital Strategy which will set out the vision plan and roadmap for how the AGCO matures its digital business capabilities, manages its digital investments and forecasts the required supporting resources and technology architecture.

Investigation and Enforcement Bureau

The Ontario Provincial Police (OPP) Investigation and Enforcement Bureau (IEB or Bureau) is an OPP Bureau assigned to the AGCO. It employs approximately 164 sworn and civilian members, fully integrated within the AGCO. The Chief Superintendent reports to an OPP Deputy Commissioner as well as the CEO of the AGCO. The Bureau’s branches conduct investigations across all sectors regulated by the AGCO. The Bureau also provides investigative expertise to, and shares information with, other law enforcement agencies and regulatory and industry stakeholder agencies to ensure integrity and public safety within these regulated industries and sectors.

Legal Services Division

The Legal Services Division provides legal advice and services to the AGCO. This includes providing advice on the application of legislation, regulations and standards administered by the AGCO, providing advice and assistance in developing and drafting legislation, contracts and policies strategic direction, as well as providing advice and opinions on corporate issues and initiatives. It also provides legal advice on licensee and registrant eligibility and compliance matters within the regulatory mandate and represents the Registrar at hearings of appeals before the Licence Appeal Tribunal, the Horse Racing Appeal Panel, the Divisional Court and the Court of Appeal.

Operations Division

The Operations Division has a broad mandate covering the AGCO’s daily and strategic operational activities.

The Licensing and Registration Branch (L&R) is responsible for reviewing and processing all application types, including licences, permits, authorizations and registrations, across all the sectors regulated by the AGCO. L&R also works with municipalities and First Nations overseeing the licensing of charitable lottery schemes.

Compliance Services is made up of regional, cross-functional Regulatory Compliance Teams who take a comprehensive, risk-based, outcomes-focused approach to regulatory compliance as well as centralized support for compliance programs and administration. Specifically, Compliance Services is composed of three branches: Regulatory Compliance Branch (RCB), Technology Regulation and iGaming Compliance Branch, and Audit and Financial Investigations Branch.

In March 2023, the Technology Regulation and iGaming Compliance Branch moved into Compliance Services. This change enables greater collaboration and team-based delivery among the AGCO’s compliance services teams as the compliance program continues to evolve, most notably in the gaming line of business. The new structure of Compliance Services is intended to reflect the growing operational interdependency amongst compliance teams given the increasing convergence of the land-based and online gaming compliance models.

RCB includes the Racing Officials (Judges and Stewards), who supervise and officiate horse races conducted at Ontario’s licensed racetracks, as well as Veterinary Services, which oversees the health and welfare of horses during racing. Veterinary Services works with the Official Veterinarians, who are employed by the racetracks but supervised by the AGCO.

The Equine Drug Unit is composed of inspectors from RCB and OPP investigators from IEB, who work together to conduct inspections and investigations into violations related to equine medication control. Their primary focus is to reduce the use and distribution of performance-enhancing drugs within the sport through a combination of inspections and investigative techniques.

The Operational Planning, Priorities, and Performance Branch (OPB) was established in 2022 to ensure that the Operations Division is focused on the highest-priority compliance issues facing the sectors regulated by the AGCO. To deliver on its mandate, the OPB identifies operational priorities on a recurring and formalized basis, coordinates the execution of operational priorities plans while managing large, complex and high-profile regulatory matters, drives divisional efforts to achieve performance goals and evaluates operational effectiveness.

The Anti-Money Laundering Unit (AML) maintains an effective anti–money laundering program designed to mitigate money laundering risks in AGCO regulated sectors. The team implements a risk- and evidence-based approach to AML, including targeted oversight activities to assess transactional accountability and reporting outcomes at gaming sites and risk mitigation, prevention, disruption and deterrence of suspected money laundering activities. The team maintains and fosters strong relationships with AGCO partners and stakeholders, including the Ontario Lottery and Gaming Corporation (OLG), iGaming Ontario (iGO), the OPP and the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).

Corporate Affairs, Strategic Policy and Planning Division

The Corporate Affairs, Strategic Policy and Planning Division provides a variety of strategic functions to support the delivery of the agency’s mandate.

The Corporate Affairs and Governance Branch assists the Board in fulfilling its governance responsibilities, which includes ensuring key corporate accountability measures are completed and monitoring compliance with the Memorandum of Understanding between the government and the AGCO. The branch also serves as the primary liaison with government partners to support government initiatives and conduct issues management and serves as the lead for Freedom of Information Requests received by the AGCO. A dedicated and independent unit within the branch provides administrative support to the Horse Racing Appeal Panel.

The Strategic Policy Branch provides strategic policy leadership to support the delivery of the agency’s regulatory mandate and emerging government, licensee and stakeholder regulatory policy priorities across the liquor, cannabis, gaming and horse racing sectors.  The branch is responsible for the development of Registrar’s standards which are a key component of the overall regulatory framework for each of the sectors that AGCO regulates.

The Strategic Engagement and Planning Branch leads external and internal stakeholder engagement, including management of memoranda of understanding with other regulators, and holds the strategic and corporate planning function for the agency.

Government initiatives, priorities and mandate letter

As a provincial government agency, the AGCO supports and delivers on the Ontario government’s public policy priorities and fiscal objectives. The AGCO continues to ensure its priorities and operations align with government direction and ensure cost-effective, customer-focused service delivery. Government priorities are embedded in our approach, as evidenced in our work on igaming, liquor modernization and the Auditor General of Ontario Report, which stem directly from the Attorney General’s direction in our mandate letter for the 2022–23 fiscal year.
 

Competitiveness, sustainability and expenditure management

The AGCO has initiated a funding framework review with the Ministry of the Attorney General (MAG) to mitigate its ongoing structural deficit and respond to the government’s commitment to program sustainability, and in response to the Auditor General’s recommendations for the AGCO to become a more financially self-sufficient regulatory agency.

This review will identify opportunities to bring greater consistency in legal authorities and processes to recover costs across the sectors AGCO regulates. It will also create stronger alignment between fee revenue and AGCO recoveries by sector with the aim of reducing the AGCO’s annual net allocation from government to the greatest extent possible. Changes to the existing AGCO funding framework will require the support of government and may require legislative changes.  The review findings and recommendations will be made in 2023-24.

In 2022-23, the AGCO made the decision to transition away from its regional offices, which are located across the province, as these respective leases were naturally expiring. The move follows a review in 2020 that looked at how AGCO regional offices are used by staff. It also supports the agency’s hybrid work model and customer service model while still maintaining high-quality services. As of March 31, 2023, the AGCO has closed all regional offices, except for its London, Ontario location. Upon government recommendation, the lease for the London office has been extended for an additional two years to assist staff in the area per MAG and Infrastructure Ontario’s recommendation, which coincides with the Interim Realty Measures put in place by the Ministry of Infrastructure.
 

Transparency and accountability

For fiscal year ended March 31, 2023, the AGCO Chair, CEO and Chief Administrative Officer have attested to government that the AGCO is in substantial compliance with all applicable legislation, regulations, directives, and policies, has maintained an effective system of internal controls; and has established and maintained a system of internal controls that supports the integrity and reliability of the Agency’s financial reports for the year ended March 31, 2023.
 

Auditor General of Ontario: 2020 AGCO Value for Money Audit Report

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

The AGCO established a dedicated VFM Audit Action Plan Project Team overseeing working groups to address each recommendation and related action items. Throughout 2021, the AGCO provided quarterly updates to Ontario Internal Audit. The AGCO also provided an update outlining the completed and outstanding undertakings for each recommendation to the Standing Committee on Public Accounts in April 2021.

In 2022-23, the Auditor General completed a two-year follow-up review to assess the AGCO’s progress on each of the recommendation actions. The final report was published in December 2022 and reported that the AGCO fully implemented 25 (40%) of the recommended action items and that 13 (21%) action items were in the process of being implemented.

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

In March 2023, the Auditor General initiated its continuous follow-up process for the outstanding recommendations. 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 2023–24.

Risk management

The AGCO uses an Enterprise Risk Management (ERM) framework to assist the organization in identifying areas of risk and responding in a disciplined and integrated way. 

ERM is a continuous, proactive and systematic process to understand, manage and communicate risk from an organization-wide perspective and assists management in making strategic decisions that contribute to the achievement of the AGCO’s corporate objectives.

The goal of the ERM framework is to embed risk management within all operations and across all levels of staff. The framework sets out a process for identifying and assessing risks and highlighting and reviewing controls and mitigation strategies.

Key actions to address risks identified under the framework include:

• Ensuring the People First strategy addresses current workforce trends and best practices to enhance talent attraction and retention.
• Building a strong information security approach, including expeditious recovery in the event that a significant information security incident occurs.
• Developing the financial framework/dependence in order to meet operating and performance expectations.

A semi-annual divisional-specific risk management process allows divisions to better manage their specific risks. An annual risk management cycle identifies key risks and exposures that the AGCO continues to address. Staff and management are involved in these risk assessments that help the AGCO identify and action its key risks. An annual risk workshop is held with the C-Suite to identify, assess and decide on prioritization and mitigation activities for the AGCO’s top risks.

The final key risks are reviewed and approved by C-Suite, the Finance, Audit and Risk Management Committee and the Board.

These risk-assessment activities assist in the development of the AGCO’s Internal Audit Work Plan in addition to playing a fundamental role in the development of the AGCO’s Corporate Plan.

Workforce management risk

The AGCO will continue to develop its “People First” strategic plan that will include actions to retain, develop and attract the workforce needed to deliver on its mandate.

Information security risk

The AGCO will continue to assess, develop and implement information security awareness, policies and protocols to mitigate current and emerging cyber threats and increase the security maturity of existing controls. In addition, enhancing security awareness and security education increases knowledge and heightens staff vigilance.

Financial risk

The AGCO reviews and augments its financial risk mitigation measures to sustain operations and deliver on its mandate.
 

Workforce management

The AGCO continues to undertake a comprehensive transformation agenda to modernize its regulatory approach and business processes, including a focus on service excellence and workplace environment. The AGCO’s modernization efforts support and align with key government objectives for enhanced efficiency in delivering public services and reducing regulatory burden.

The AGCO’s Human Resources and Organizational Development Branch has updated its vision, strategy and roadmap to better deliver solutions that enable the organization’s talent to actively contribute to the achievements of the AGCO’s mandate and vision. A key component has been the launch of the new organizational development function to better support organizational effectiveness. This is done by ongoing development and reinforcement of programs, structures and processes to support and grow the agency’s talent.

The AGCO leverages a hybrid work model to support the needs of employees to balance their work and home lives, while maintaining an engaged, productive workforce. It enables AGCO employees, where operationally feasible, to work from other locations, such as home offices. In support of the evaluation of the agency's success in managing these priorities, the AGCO administers a monthly pulse survey to all staff and people leaders. 98% of the staff who completed the survey report that the hybrid work model contributes to their overall well-being; and 93% of the people leaders who completed the survey report that their staff regularly complete the tasks assigned to them at with a high level of quality within the time allocated. To provide optimal service delivery, the AGCO continues to utilize a risk management approach to identify priority areas and redeploy staff performing key regulatory activities to the areas of greatest need.
 

Diversity and inclusion

Since 2019, Diversity, Inclusion, and Accessibility (DI&A) has been a corporate priority initiative under the AGCO’s five-year Strategic Plan. The AGCO has made significant progress in advancing DI&A, most notably through the development of a multi-year DI&A strategy in 2021, which followed an organization-wide assessment conducted by a third-party consultant. The strategy establishes the DI&A goals of having a workforce reflective of Ontario's demographic diversity, building an inclusive workplace culture free of discrimination and harassment, and delivering services in an accessible, culturally aware, relevant and responsive way. To ensure a feasible and successful journey, our DI&A strategy comprises four foundational pillars in the following areas:

1. Recruitment and Retention
2. Strengthening and Embedding AGCO's DI&A Culture
3. Public Face and Storytelling
4. Accountability

In 2022-23, the AGCO focused on two of the pillars, as follows: 

Strengthening and embedding the AGCO's DI&A Culture

The AGCO continued to recognize significant holidays and observances that celebrate racial and gender inclusivity, including National Day for Truth and Reconciliation, International Holocaust Remembrance Day, Black History Month and International Women’s Day.

To support employees in their personal and professional DI&A journeys, several training and development opportunities with a DI&A focus were offered to employees. This included monthly videos on various topics such as unconscious bias, systemic racism, allyship and anti-harassment. Additionally, 69 staff in leadership roles were provided with Intercultural Development Inventory training to help assess, reflect, and learn about cultural sensitivity.  

The AGCO also updated its coaching and performance program to further support employee development and growth in alignment with our DI&A strategy. As of April 2022, all employees are required to establish at least one goal with a DI&A focus as part of their performance development plan.

To recognize individuals at the AGCO for being catalysts for change in areas of diversity, inclusion and accessibility, a DI&A Award was introduced and added to our existing employee awards and recognition program. The inaugural award was presented to an individual for their efforts in 2022 in helping promote an equitable, inclusive, accessible, anti-racist and diverse workplace. 

In our continued effort to meet our DI&A goals, the DI&A Committee, including its function, governance and membership, was refreshed in late 2022. Fifteen committee members were selected through a careful review process, which consisted of an agency-wide expression of interest. The members represent a true cross section of our diverse workforce and, together, serve as an advisory group to ensure diverse insights and perspectives are heard on all equity-related matters at the AGCO. To effectively carry out this work, working groups were formed and significant progress has already been made in the areas of education and training, data gathering and reporting, refining recruiting procedures, and expanding external partnerships. The DI&A Committee also participates in helping drive DI&A initiatives forward and acts as change agents to champion, strengthen and embed DI&A culture within our organization.  

Accountability

Since 2020, the AGCO has been a signatory to the BlackNorth Initiative (BNI), which aims to end systemic anti-Black racism in Canada. The AGCO continued its commitment to the initiative by meeting with other signatories on a monthly basis to share updates, goals and progress, and to understand best practices to keep us accountable.

Early in 2023, the AGCO launched an employee census to better understand our workforce demographics at all levels within the organization. The voluntary, anonymous census asked staff to self-identify certain aspects of themselves, such as their race, ethnicity, gender and sexual orientation. Before the census launched, we adopted an inclusive engagement process that consisted of two information sessions to help provide staff with context on gathering data, building trust and raising awareness. The data collected will be used to guide the AGCO's DI&A strategy and will help keep us accountable in our DI&A journey. In the first phase of the census, we had a participation rate of 51.7%. The next phase will track mobility and progression within the AGCO within our diverse populations.

Going forward, the AGCO will continue implementing its DI&A strategy, building on our four foundational pillars, strengthening our inclusive, people-first organization and continue measuring our progress.
 

Data collection

The AGCO has begun the first phase of developing and establishing an enterprise-wide data and analytics program in conjunction with an enterprise Digital Strategy. The objective of the program is to partner with AGCO stakeholders across all divisions to better leverage data as a strategic asset. The program aims to improve the efficiency and effectiveness of our regulatory oversight by producing and managing data analytics and information products, guiding the organization on how to leverage data effectively to inform business decision making and to develop evidence-based policies and programs. The program will also establish enterprise governance of data and information assets to ensure these resources are managed according to their risk and value, and optimized for use by the AGCO, its partners and stakeholders.

The AGCO has developed a Data Governance framework that will allow users to work confidently with data and information, increasing its quality and availability while continuing to appropriately protect sensitive and confidential data.  The Enterprise Data Catalogue will provide an authoritative view of the data and information landscape, connecting tangible assets to well-defined roles and responsibilities, and thereby providing critical support for the development of data-driven culture within the agency. Data privacy is further enhanced through ongoing guidance to project and business teams during system and program design, as well as coordinating and leading responses when breaches or other incidents occur. 

To enhance technical capability and build a scalable data and analytics practice, the AGCO has begun to migrate onsite data and analytics tools to the Microsoft Azure cloud platform. This will ensure the agency leverages modern analytics capabilities to help process large datasets and build agile, timely and informative analytics products. These tools will also support the agency’s ability to provide timely and relevant advice and information to the Ministry to support decision-making and policy development, as needed.
 

Digital delivery and customer service

The AGCO relies on digital platforms to deliver accessible, reliable, secure and customer-centric services to Ontarians. In line with the Government of Ontario’s Digital Service focus and commitment towards new digital practices and technologies to deliver simpler, faster, better services to Ontarians, the AGCO began the development of a Digital Strategy in 2022–23 to guide and prioritize the agency’s digitalization efforts.

The agency’s Digital Strategy will define future-state business and technology architecture needs and outline a digital maturity roadmap that will support the prioritization of initiatives, ensure continued alignment to enterprise strategy and optimize digital investments. Through the Digital Strategy, the AGCO will develop a comprehensive implementation plan that will chart the positive evolution of the agency’s digital business capabilities and portfolio, featuring current innovative and forward-thinking approaches, ways of working and alignment to digital trends.

The AGCO Digital Strategy will reinforce the service design practice that is in place to support customer and user-centred design and delivery of services, and better monitor our customers’ experience. The AGCO’s Customer Experience roadmap has been updated to include a new focus on the advancement in the use of user research to better inform our understanding of both digital and non-digital AGCO services in the coming year.
 

COVID recovery

The AGCO continues to work closely with the government to provide ongoing supports for the sectors we regulate as a result of the COVID-19 pandemic. The AGCO swiftly responded to requests from regulated sectors and the Ontario Government to adapt our regulatory requirements to help protect public health while supporting the continued economic viability of the liquor, gaming, horse racing, and retail cannabis sectors.

The AGCO worked with the retail cannabis sector to implement curbside pickup and delivery from cannabis retail stores and will continue to support these retailers. In charitable gaming, many of the temporary COVID-19–related flexibilities were updated to provide permanent flexibility where possible. In the liquor sector, many of the reforms that were introduced to support businesses during the COVID-19 pandemic have since been made permanent, such as takeout and delivery of liquor with food from eligible liquor sales licence premises and extended liquor retail store hours.

Aligning with public health requirements, all AGCO service transactions were made available to customers remotely when gathering restrictions were in place. With the re-openings of business and government services, customers continued to show a strong preference towards online services, although race day services were once again made available to support time-sensitive transactions available in person at select racetracks. Other in-person services are now available upon request by appointment. 

The decision to change from a walk-in service model to a by-appointment model was the result of declining in-person service visits following the introduction of online services that began well before the pandemic, although was accelerated by it. 

The AGCO continues to use its enhanced engagement toolkit to connect with its diverse stakeholder network within Ontario, as well as nationally and internationally, to seek feedback on the issues they care about. This includes its ConnectAGCO Digital Engagement Platform which provides the agency with access to innovative and accessible approaches to engage with its stakeholders and Ontarians. The engagement portal continues to allow the AGCO to undertake comprehensive consultations and engagements virtually and allows interested stakeholders to follow and participate in engagement opportunities to provide input on AGCO projects, policies and initiatives.

Note: These are numbers from the system excluding iGO direct costs and revenue. You will notice that 21-22 numbers don’t tie to prior year because we excluded some costs last year that we included this time for FY21-22.

* iGaming Ontario (iGO) Operating Expenditures and Recoveries are excluded from this analysis. iGO Salaries and Wages, Benefits and ODOE Expenditures incurred by the AGCO on behalf of iGO in FY22–23 totaled $7.7M (2022 – 6.1M). Expenditures incurred by AGCO to provide shared resources based on agreement are not excluded from the figures.

Overall increase in Salaries and Wages and Benefits Expenditures is mainly due to cancelled COVID-19 redeployment arrangement and increase in headcount. The increase in headcount is primarily attributable to the needs of resources for igaming regulatory activities.

Decrease in Services is mainly due to fewer Cannabis Eligibility Assessments as a result of fewer cannabis applicants.

Increase in recoveries is attributed to higher recoveries from land-based casinos, OLG cGaming, and the horse racing sector as there were no COVID-19 closures in FY22–23 compared to FY21–22. Furthermore, recoveries from igaming operators began in FY22–23 for the first time.

Capital spending decrease is due iAGCO enhancements to support igaming line of business, Liquor Reform, and other operational changes that occurred in FY21–22 and did not re-occur in FY22–23.

Increase in Amortization reflects the full year cost of the AGCO’s Regulatory Assurance Solution (RAS/iAGCO), after it went live in October 2020. 

Revenue increase in FY22–23 due to higher gaming, cannabis and liquor revenues. It is important to note that licence extensions due to COVID expired during the fiscal year and new igaming licences were issued after the launch of the igaming open market on April 4, 2022. Additionally, balances in liability accounts related to Liquor Advertising, Charity Gaming Hall Projects and Deferred Capital Contributions were written off in FY22–23.

Established through the Horse Racing Licence Act, 2015, the Horse Racing Appeal Panel (HRAP) is an adjudicative body that is mandated to consider appeals of decisions made under the Rules of Racing. 

The HRAP was established as an institutionally independent and impartial adjudicative body that operates at arm’s length from the AGCO. Members are appointed to the HRAP by the AGCO Board of Directors. The HRAP is also provided operational and administrative support by the HRAP Secretariat, which is a unit within the Corporate Affairs, Strategic Policy and Planning Division of the AGCO. The HRAP Secretariat is operated as a standalone unit and is separate from other parts of the AGCO organization to support the institutional independence of the HRAP. Although the HRAP Chair and Panel members are appointed by the AGCO Board of Directors, the AGCO has no oversight role or involvement in adjudicative matters overseen by the Panel and has no authority or jurisdiction to intervene in individual cases. 

The iGaming Ontario Annual Report is an appendix to the AGCO Annual Report. Follow this link to see the iGaming Ontario Fiscal Year 2022-2023 Annual Report.

• Table 1— Board of Directors and per diems
• Table 2—Service provision
• Table 3 —Communication with AGCO stakeholders
• Table 4 —Inquiries and Complaints
• Table 5—Online Service and auto-renewal
• Table 6—Total number of AGCO licensees and registrants
• Table 7—Total number of liquor licences
• Table 8—Total number of gaming registrations
• Table 9—Total number of cannabis licences and authorizations
• Table 10—Total number of horse racing licences
• Table 11—Liquor licences issued, renewed and amended
• Table 12—Gaming registrations issued, renewed and amended
• Table 13—Charitable lottery licences issued, renewed and amended
• Table 14—Cannabis licences and authorizations issued, renewed and amended
• Table 15—Horse racing licences issued, renewed and amended
• Table 16—Response to Public Notices—Alcohol and cannabis
• Table 17—Compliance Services inspections—Alcohol
• Table 18—Compliance Services inspections—Lottery retailers
• Table 19—Compliance Services inspections—Raffles
• Table 20—Compliance Services inspections—Cannabis
• Table 21—Cannabis private retail inspections
• Table 22—Compliance Services inspections—Horse racing
• Table 23—Rulings by Racing Officials
• Table 24—Gaming Lab
• Table 25—Notices of Proposal (NOPs) and Orders of Monetary Penalty (OMPs)—Alcohol
• Table 26—Alcohol-related settlements without a hearing
• Table 27—Notices of Proposed Order (NOPOs) or immediate suspensions—Horse racing
• Table 28—Gaming-related settlements without a hearing
• Table 29—Eligibility investigations
• Table 30—Number of IEB investigations
• Table 31—Lottery-related investigations
• Table 32—Occurrences at casinos and slot machine facilities
• Table 33—Digital First
• Table 34—Online Service and auto-issue
• Table 35—Employee experience
• Table 36 – Diversity, Inclusion and Accessibility (DI&A)