iGaming giant BetMGM has been hit with a $110,000 fine by the Alcohol and Gaming Commission of Ontario (AGCO) for using inducement marketing practices. The company has been held liable for actions taken by third-party affiliate marketers who offered players bonuses to sign up and bet with the online casino.
According to AGCO regulations, such promotions are prohibited and gambling companies are responsible for the actions of third parties acting on behalf of gambling companies.
Ontario was the first Canadian province to regulate iGaming, opening its doors to online casinos in 2022. Casino websites are popular with players because of their convenience and accessibility. They also have a wide range of games, while casinos with same-day withdrawals in Canada also provide timely access to winnings.
Ontario is fairly unique in the world of online gambling. The Alcohol and Gaming Commission of Ontario’s regulations prohibit inducement marketing practices from its licensees.
Inducements are offers made to encourage new players to sign up, typically taking the form of free bets or bonus money in player accounts. The practice is standard across the industry, with some online casinos offering hundreds of dollars in free cash to encourage players to register accounts.
The regulations state that advertising and marketing materials that communicate gambling inducements, bonuses and credits are prohibited, except on an operator’s gaming site and through direct advertising and marketing, after receiving active player consent. According to the group’s own guidance, the use of inducements, bonuses and credits is allowed but licensed operators are not permitted to advertise them.
Regulations also state that operators are responsible for the actions of third parties with whom they contract for the provision of any aspect of the operator’s business related to gaming in Ontario. This combination of regulations and BetMGM’s failure to meet them has led to a fine of $110,000 for the operator. The commission determined that a marketing affiliate, Above the Street, attended the National Franchise Show in January 2024. The representatives offered $100 to players who signed up and deposited $15. The group attracted 377 new sign-ups and made more than $125,000 in affiliate commissions.
The AGCO went on to say that in April of the same year, Maple Leaf Marketing also made similar promises to prospective players. 94 new player registrations led to the company receiving $34,000 in commissions.
BetMGM has said that since these practices came to light, they undertook reviews of their relationships with the aforementioned affiliate marketing companies and subsequently terminated their working relationships.
A representative for the gambling giant said the company admitted responsibility: “BetMGM is committed to the protection of our patrons in Ontario, and regrets and apologizes that these issues have occurred.”
This isn’t the first time BetMGM has been in hot water with the AGCO. Less than a month after the market was opened in Ontario, BetMGM was fined $48,000 for similar inducement marketing practices. The company held a $250K launch party, during which it held a competition with a main prize of $100,000 in casino bonuses.
At the time, PointsBet also received a $30,000 fine. And within the first few months of the market being regulated, DraftKings and Unibet also received fines. Unibet has since left the market.
The province has some of the strictest gambling advertising regulations in the world. New additions to the framework mean that gambling companies can no longer use any figures that are likely to appeal to children in their marketing campaigns and current or retired athletes can only feature in advertising campaigns if they are specifically advertising safer gambling initiatives.
As a result of these changes, BetVictor, another prominent online gambling company operating in the Canadian market, has launched a safer gambling campaign featuring former Toronto Raptor Tracy McGrady.
BetMGM has also recently come under fire from regulators across the border in the USA. They were fined USD 25,000 for allowing betting on prohibited college basketball games. And the Pennsylvania Gaming Control Board levied a fine of USD 260,905 for ignoring self-exclusion participation.
The board showed more than 150 instances where players who were part of self-exclusion programs were able to deposit money and play. More than USD 250,000 in wagers were placed. The board also pointed to one player depositing $180,000, asking the question: “Who’s got that kind of money to deposit $183,000? Doesn’t that raise a red flag?”
“We have players of all value who wager on our platform. Based only on deposit amount, it wouldn’t necessarily raise a flag if there weren’t any other issues that would have been flagged by fraud risk or AML,” said Sarah Brennan, the company’s senior director of compliance.
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