BetMGM is poised to face a whopping $110K fine from the Alcohol and Gaming Commission of Ontario, or AGCO, for failing to restrict third-party marketing enterprises from offering bonus and other gambling lures to players in their advertising.

BetMGM Canada Inc. has been hit with a record-breaking fine of $110,000 (CA) by the Alcohol and Gaming Commission of Ontario for alleged violations of the province's strict iGaming advertising regulations. The penalty, the largest imposed since Ontario's regulated iGaming market launched in April of 2022, demonstrates the responsibility of operators to ensure compliance with marketing standards - even when working with third-party affiliates.

Ontario's strict iGaming regulations

Under Ontario law, licensed iGaming operators are prohibited from advertising gambling lures or inducements, credits, or bonuses to the general public. The regulations aim to promote responsible gambling and minimize the risk of harm from excessive gaming. While penalties for violating these rules have been relatively rare, the AGCO has previously fined major operators, including Unibet ($48,000 in August 2022), DraftKings ($100,000 in June 2022), BetMGM ($48,000 in May 2022), and PointsBet Canada ($30,000 in May 2022).

The latest fine against BetMGM highlights the increased scrutiny on operators’ marketing practices and their relationships with third-party affiliates.

Third-party marketing under the microscope

The AGCO has alleged that BetMGM went against the Registrar's Standards for Internet Gaming by collaborating with marketing companies that improperly offered financial incentives to the public for signing up with the platform. The regulator's investigation uncovered two incidents in which cash inducements were used to attract new customers.

In January, representatives from BetMGM at the National Franchise Show allegedly offered $100 (CA) in cash to individuals who opened a new account and made a $15 deposit. This practice violates Ontario's regulations, which prohibit operators from advertising monetary incentives in public settings.

Further scrutiny in March revealed that BetMGM's affiliate, 'Above the Street,' engaged in similar prohibited marketing tactics. The AGCO determined that this campaign resulted in 377 player sign-ups and $127,180 in commissions paid to the affiliate.

The violations continued into April, when another BetMGM marketing affiliate, 'Maple Leaf Marketing,' was found to have engaged in prohibited advertising. The AGCO found that this campaign led to 94 player registrations, generating $34,000 in commission payments.

Regulator emphasizes accountability

Ontario’s iGaming laws hold licensed operators responsible for the actions of their third-party suppliers, requiring them to ensure compliance with regulatory standards.

"Responsible gambling safeguards and the protection of Ontarians on registered gaming sites is among our key priorities," said Dr. Karin Schnarr, AGCO Chief Executive Officer and Registrar. "The AGCO monitors the activities of all registered operators and their third-party suppliers to ensure they are meeting our high standards, and we continue to take strong action to ensure they operate within the public interest."

Ontario has positioned itself as a leader in responsible gambling regulation, with some of the world's strictest rules around marketing and inducements in the iGaming sector. The AGCO's enforcement actions signal a strong commitment to maintaining these standards.

BetMGM's response and potential appeal

BetMGM has the option to appeal the AGCO's decision to the Licence Appeal Tribunal in Ontario. The company has not yet publicly commented on whether it intends to challenge the fine.

The case serves as a reminder to all iGaming operators in Ontario that compliance extends beyond their internal operations to the actions of their marketing partners and affiliates. As the market matures, regulators are demonstrating a willingness to levy significant penalties to enforce responsible gambling policies and ensure operators adhere to the rules. With Ontario's iGaming market continuing to grow, operators will need to exercise greater oversight over their marketing affiliates to avoid costly penalties and reputational risks.