Expanding Into Canada: What You Need To Know

Expanding Into Canada: What You Need To Know cover

Expanding Into Canada: What You Need To Know

June 2, 2022

Over the last few years, the regulated iGaming and sports betting industries have been rapidly growing worldwide, paving the way for innovative revenue streams and new sponsorship opportunities. A new market garnering a lot of attention is Ontario’s newly regulated online gaming market. With economic benefits and a strong player base, online gaming is quickly establishing itself as one of the most lucrative entertainment segments of Canada, making Ontario one of the most important iGaming markets in North America. 

For gaming merchants who have already moved into the province or those wanting to expand their offering in Ontario, it’s critical to understand how the market differs from the United States, choose the right payment partner for expansion, and abide by the new advertising regulations. The benefits of expanding into Canada are plentiful and with the right approach, your company can reap the rewards of this rapidly expanding, newly-regulated market.

Understanding The Market

Established Market: Canada’s iGaming market is quite different from the US in that Canada was already an established market before regulation. Players were able to place wagers on sports or play casino games on Grey Market Sites. While players had broad gaming options through Grey Market Sites, regulations were desperately needed to ensure consumer safety and protection. 

Bill C-218: Canada’s online gaming industry surged ahead with the passing of Bill C-218. This bill would allow single-event sports betting to happen across Canada. Before the passing of Bill C-218, consumers were only allowed to place parlay-type bets on province-run sportsbooks. 

Major Wins: Once Bill C-218 passed, players began placing sports bets through their provincial-run sportsbook on single-event sports events. In the first month of the bill’s passing, Ontario’s sportsbook Proline+ recorded more than $6 million in bets. Similarly, British Columbia’s sportsbook, PlayNow.com, recorded more than $25 million in single-event sports bets in its first two months of operation—indicating a strong market for online gaming in the provinces.

Why It Matters: With the passing of this bill, provinces such as Ontario began creating the framework for their online gaming industry, allowing international gaming operators to expand into the province. Government bodies such as the Alcohol and Gaming Commission of Ontario and iGaming Ontario set up the registration and agreement process. Just a few months later, Ontario’s iGaming market was open to players. Additionally, with Ontario being the first province to launch its iGaming market, it has the potential to cause a ripple effect leading to other provinces launching their own online gaming markets.

The Benefits of Expanding into Canada 

Early Success: Ontario’s market launch included prominent online gaming merchants such as FanDuel, bet365, BetMGM, and theScore. Players in Ontario have already shown a strong interest in online gaming with theScore Bet and bet365 being the most downloaded sports app in the province over the first 10 days of the regulated online gaming market launch.

Revenue Maker: Canada’s gaming industry is a billion-dollar industry. According to the Canadian Gaming Association, gaming is the largest segment of Canada’s entertainment industry. Provincial online gaming, which is relatively new, has already started bringing in millions of dollars. 

Active Playership: According to the Guardian, Canada has one of the most active gaming populations in the world, especially considering the percentage of the population. 

New sponsorship opportunities: International merchants can partner up with Canadian sports organizations such as the Canadian Football League (CFL) or the Canadian Elite Basketball League, which would help international operators reach a broader audience while also providing diverse sports betting options for Canadian players.

Choosing The Right Payment Partner 

As merchants move into the regulated gaming industry of Ontario, payment technology will play a major role in helping gaming operators grow their brands in Canada. ​​Payments technology is critical to both acquiring new customers and driving loyalty to keep existing customers. Payments technology also benefits operators with higher conversions, reduced costs, and security checks.  

Strong Banking Connections: As of today, credit card acceptance in the gaming industry within Canada is extremely low. Two of the major five banks are not accepting credit card payments, while the others are only accepting deposits but not withdrawals via credit card. Additionally, choosing a payment provider that has stable banking relationships with multiple banks also helps in reducing vendor risk. For a successful expansion, merchants must offer a bank-account-based payment option like Paramount Commerce. Paramount Commerce offers three products that cover all the major payment rails in Canada with 100% bank account coverage.

Known brand: Paramount Commerce is the number one provider of bank-account-based payment solutions for the gaming industry in Canada. Operators can benefit from an established user base with products such as iDebit, INSTADEBIT, and INTERACⓇ through Paramount’s platform. Paramount’s INTERAC product, a fast-growing payment solution in the online gaming industry, is a trusted financial service brand in Canada for over 35 years.

Risk management: Choosing a payment provider with a state-of-the-art risk management system is important to maximize volume, decrease rejection rate, and reduce fraud. Paramount Commerce offers a real-time decision engine proven to mitigate fraud and provides merchants with the tools needed to manage risk. Their risk management and fraud prevention solution gathers information from industry-leading sources, while their dedicated risk team continuously improves prevention and detection rules to keep transactions safe.

Compliant: New regulation brings new standards for iGaming payments in Ontario. Features such as bank account ownership checks and consumer location features add an additional layer to compliance requirements. Working with an industry insider—a company that helped create the new regulations, like Paramount Commerce—ensures that your business is not only compliant but will support your business to succeed in a new market. 

Speed of Deposits: While foreign gaming operators who have or are moving into the newly-regulated Canadian gaming space will have an active player base in their current jurisdictions, the real challenge will be attracting new players in Canada. A key component that attracts new players to a gaming platform is quick payments. According to a TrueLayer report, “8 in 10 players said fast payouts are important when choosing an online gambling or betting provider.” Payments with INTERAC are both instant and guaranteed. 

Protecting the Consumer

Consumer protection is the number one goal of iGaming Ontario. Through regulation, the provincial body hopes to achieve: 

“Regulatory outcomes that protect the public

  1. Responsible Gambling — Ensuring Responsible Gambling is embedded in Operators’ culture and players have the tools and support to gamble responsibly, including the option for self-exclusion.

  2. Game Integrity — Ensuring games operate as designed and are fair to players.

  3. Preventing infiltration of crime (including money laundering) — Ensuring criminal elements and activities are deterred and detected.

  4. Preventing access to minors — Ensuring underage individuals are restricted from gambling.

  5. Protection and security of personal information — Ensuring personal information is kept private.”

Advertising and Messaging 

The Alcohol and Gaming Commission of Ontario (AGCO) and iGaming Ontario also established important advertising and messaging requirements which helps consumers enjoy a safe and fun gaming experience. 

An important part of the AGCO’s Registrar’s Standards for Internet Gaming is advertising and marketing. The core principles of the AGCO’s responsible advertising standards can be broken down into three main categories:

  1. Protect individuals: Through responsible advertising, AGCO aims to work with operators in protecting individuals who are underage, at high risk, and have self-excluded themselves from online gambling.

  2. Stay truthful: iGaming operators must not misguide consumers through advertisements of their products or promotions. Offers cannot promote excessive play or require players to incur substantial losses.

  3. Restrict inducements: To tackle gambling-related problems, iGaming operators may only advertise inducements, bonuses, and credits on their websites.

Connecting With iGaming Ontario:

iGaming operators who have registered with the AGCO and want to begin offering gaming services in Ontario must also meet the specific requirements and conditions—which include responsible advertising—set by iGaming Ontario.

iGaming Ontario’s marketing and advertising conditions can be broken down into four main categories:

  1. Association: To let players know they are on a regulated site, operators must display an iGaming Ontario logo on their website, social media platforms, and paid visual media produced for the Ontario market.

  2. Responsible gaming: iGaming operators moving into Ontario must also commit a portion of their gross gaming revenue generated in the province towards problem gambling prevention and responsible gaming campaigns. All advertising and marketing materials must include a responsible gambling message.

  3. Location: iGaming merchants must make the best commercial efforts to restrict marketing and advertising outside of Ontario.

  4. Direct marketing: To ensure any self-excluded or ineligible individuals in Ontario are not targeted, iGaming operators must dedicate sufficient tools in their direct marketing and advertising efforts. 

Looking Forward

While the future is hard to predict, it is safe to assume that with Ontario’s iGaming market going live, it will encourage other provinces to launch their own iGaming markets. The launch of a regulated iGaming market not only brings economic benefits but also brings a better way for governments to protect the public. Through consumer protection and responsible gaming initiatives, Ontario has shown it will provide players with all the tools to enjoy their gaming in safe environments. Additionally, one of the most important factors that will help gaming operators better reach consumers will be innovative payment solutions. Teaming up with the right payment partner such as Paramount Commerce will benefit merchants through increased player acquisition, strong conversion rates, and low processing costs. Also, consumers will enjoy safe and swift transactions through Paramount Commerce’s bank account-based payment solutions. Merchants wanting a smooth expansion in Ontario’s iGaming market will need to ensure they satisfy provincial regulatory requirements, dedicate tools to protect consumers, and team up with payment partners that offer diverse payment solutions.

A Football player dashes down the field with the ball weaving through opposing team members

Ready to integrate payments?

Chat with our team of payment specialists.

Contact us