INFORMATION BULLETIN No. 72
The Registrar of Alcohol and Gaming (Registrar) has established new risk-based standards to regulate Ontario’s gaming sector (the Registrar’s Standards).
The Registrar’s Standards are a foundational piece in the AGCO’s modernization of gaming regulation and its transition away from a “command and control” regulatory approach to a standards-based regulatory model. The objective of a standards-based model is to shift the focus from requiring registrants to comply with a specific set of rules or processes, which tend to be prescriptive in nature, towards the broader regulatory outcomes or objectives they are expected to achieve.
The introduction of the Registrar’s Standards follows from statutory and regulatory amendments to the Gaming Control Act, 1992 in June 2012. These amendments were introduced to modernize gaming and allow a more risk-based approach to regulation of Ontario’s gaming sector. Specifically, the changes provided the Registrar with the authority to put in place risk-based standards to address various key areas of regulatory concern, such as surveillance, security, access to gaming sites, protection of players and responsible gambling.
Moving forward, the Registrar’s Standards will replace the prescriptive, rules-based approach taken in the previous regulations. The new standards were drafted at a high level of generality so as to capture the purpose behind the rules. This offers greater flexibility to regulated entities to design their own control environments and determine the most efficient and effective way of fulfilling their regulatory obligations, while at the same time ensuring that the integrity of gaming is preserved. Ultimately, the goal is to strengthen regulatory outcomes in a way that does not unnecessarily burden regulated entities.
Other benefits of a standards-based approach to gaming regulation include:
- Increased efficiencies for gaming operators to respond to changing market conditions.
- Strong proactive compliance culture and monitoring of performance by gaming operators against their own controls.
- A more effective regulatory structure that is geared to the achievement of results or outcomes and regulatory oversight focusing on high impact areas of concern.
The Registrar’s Standards were developed based upon a comprehensive risk assessment conducted in consultation with key gaming industry stakeholders, including the Ontario Lottery and Gaming Corporation (OLG), public interest groups, operators of casinos and charitable gaming sites and other governmental partners. Risk assessments will be conducted periodically to ensure that the standards continue to be relevant, and that the highest standards of integrity for gaming in Ontario are maintained.
In a 2011 value-for-money audit, the Auditor General commended the AGCO for having one of the most effective regulatory regimes in North America, and expressed strong support for the AGCO’s ongoing transition away from a “command and control” model to a more risk-based regulatory approach. Risk-based and standards-based approaches are common across many regulated sectors and reflect best practice thinking about effective regulation.
Implementation
Implementation of the Registrar’s Standards will be phased across all applicable gaming sectors over a period of time. A comprehensive implementation plan will be developed in collaboration with OLG and operators in order to facilitate a smooth transition to the standards-based model and to preserve the integrity of and public confidence in gaming in Ontario.
Regulatory Assurance
The AGCO will support regulated entities in achieving regulatory outcomes by broadening its approach to one of support for registrant compliance with regulatory obligations. The AGCO will provide that support through the effective use of a broader range of regulatory tools that will allow it to do more than enforce regulatory obligations. The AGCO’s regulatory assurance activities will be both proactive and reactive in nature and will include education, assessments, inspections, investigations, audits, equipment testing, as well as reliance on internal or external audits or attestations, among other things.
In the event that a registrant fails to comply with its regulatory obligations, the AGCO will continue to have a number of enforcement tools at its disposal, including warning letters, the imposition of enhanced regulatory assurance activities, additional requirements or terms of registration, monetary penalties and, in cases of material or ongoing instances of non-compliance, suspensions or revocations of registration.
Ultimately, the regulatory framework is designed to provide regulated entities with maximum flexibility, while still continuing to ensure the highest levels of integrity within the gaming industry.
For more information on the Registrar’s Standards for Gaming, please see: Frequently Asked Questions – Registrar’s Standards for Gaming, or contact AGCO Customer Service at 416-326- 8700 (GTA) or 800-522-2876 (toll free in Ontario).