Alberta has passed a bill termed the Red Tape Reduction Statutes Amendment Act, allowing the provincial government to manage gaming activities in the province separately from its regulatory body, the Alberta Gaming, Liquor and Cannabis (AGLC). This decision sets the stage for the government to grow the province’s gaming industry.
The bill is part of the province’s ongoing review of the Gaming, Liquor, and Cannabis Act, which aims to explore new avenues for online gambling in the province. The government has committed to engaging with various stakeholders, including First Nation communities and casino operators to ensure that the expansion is beneficial for all Albertans.
Alberta to Follow Ontario’s iGaming Framework
The new iGaming framework aims to shift the offshore market share towards licensed local operators. According to Ben Horlock, despite the plethora of online casinos available to Canadians, offshore sites offering the fastest withdrawal casinos in Canada are proving popular since they allow players to access their winnings immediately. Currently, over 55% of Alberta’s iGaming market is held by offshore operators instead of those regulated locally.
This trend means existing operators have to adapt their payout policies to match these competitive market practices. Speaking at the Canadian Gaming Summit on June 20th, Minister Dale Nally confirmed that the province is looking to model its iGaming framework after the successful open and regulated market in Ontario. The new model will allow multiple licensed operators, both local and offshore, to offer online gaming services. This allows private online gaming operators to join the market and rival the lottery competition.
Nally also mentioned that licensed operators will need to meet the new regulatory requirements and share revenue with the province through taxes and fees. Local operators’ ability to compete with offshore operators could be impacted due to the additional costs and complexity of their operations.
Offshore casinos that are currently operating in Alberta may need to adapt their current offerings and market strategies to remain competitive in this new regulated environment. Nally expects the new iGaming model will increase competition between local and offshore casinos; however, the goal is to shift more of the market towards licensed and regulated operators to ensure a safer and more responsible gaming environment. In Ontario, a similar regulatory regime resulted in a huge increase in Canadians using legal online casino platforms.
Bill 16 Changes the Role of the AGLC
The AGLC is in support of a more regulated market and will not serve as the regulator of the Alberta market, but instead will focus on managing its own online gaming operators. Speaking to the Canadian Gaming Summit’s attendees, Nally said that the Justice Minister will be responsible for overseeing the new iGaming market.
The Justice Minister will be responsible for ensuring the new iGaming market is regulated in a way that prioritizes player protection and responsible gaming practices. This will also include ensuring that all gaming operators are licensed and compliant with regulatory requirements.
How the New Framework Will Impact Online Casinos and Sports Betting Platforms
The impact of Bill 16 and the new iGaming framework will create a more competitive and innovative market for online casinos and sports betting platforms in Alberta. Here are the key points of how things will work with Bill 16:
- Multi-operator model: This model is designed to create a more competitive and regulated market for online gaming. The government’s aim with the bill is to create various options for players. These options could potentially include various casino gaming options as well as inviting crypto casinos to enter the market, creating various new payment options for players and a more inclusive gaming market overall.
- Increased competition: The entry of new operators will increase the competition for existing casino operators, which could potentially lead to improved services and gaming offerings for players.
- New options for existing casinos: With Alberta’s government overseeing the iGaming market, casino operators under the AGLC could potentially leave to be part of the competitive market under Bill 16. However, existing casinos under the AGLC will need to obtain licenses from the provincial government and would need to meet regulatory requirements to be compliant.
- Innovation: The increased competition in Alberta’s iGaming market can lead to innovation and new products offered by operators. With several more operators in the market, there is a greater incentive to develop new and innovative games and features to attract and retain players.
- Partnerships and collaborations: New operators can lead to potential new partnerships and collaborations, including joint marketing initiatives or shared technology platforms like Web3 casino gaming that use blockchain technology and decentralized protocols to create transparent gaming experiences.
What Challenges Does Alberta Face in Transitioning to a Regulated iGaming Market?
Alberta is looking to adopt an identical proactive approach to regulating the iGaming market similar to the successful approach taken by Ontario. Like Ontario, Alberta will be faced with significant challenges.
Existing Grey Market Operators
Alberta’s iGaming market has over 55% grey market operators that are not regulated by the province. Effectively transitioning grey market players to the legal, regulated market will be the biggest challenge. The province is missing out on significant tax revenue that could be generated from a regulated market.
Timing and Regulatory Framework
Alberta still needs to set a firm timeline for launching its regulated iGaming market, unlike Ontario which launched in April 2022. The issue will be developing a comprehensive regulatory framework and licensing process, which can be complex and time-consuming. It took Ontario nearly a decade to establish its regulatory framework.
Balancing Monopoly vs. Open Market
Currently, the government-run PlayAlberta’s platform controls Alberta’s online gambling, giving it a monopoly. Transitioning to an open, competitive market will require carefully balancing the regulations, tax structures, and licensing process to attract operators while protecting Albertans and avoiding the pitfalls of over-regulation experienced in the UK.
Additionally, stakeholders like First Nation groups raised concerns about the unregulated iGaming market. The Alberta government would need to strike the right balance between regulation and competitiveness to draw operators away from the grey market while aligning its regulatory model with existing agreements with the First Nation communities.
Conclusion
Bill 16 clears the way for Alberta to launch a competitive and regulated online gambling market, similar to Ontario’s successful model. The legislation presents both opportunities and challenges for existing operators as well as the provincial government. The bill could, however, facilitate the expansion of gaming services, including sports betting and online casino gaming, which has the potential to attract a border audience and increase revenue for the province.
