Written with Heidi Unrau
iGaming Ontario is celebrating two years in the province. But before your online gaming (iGaming) business can launch, you must register with the Alcohol and Gaming Commission of Ontario (AGCO). This government body regulates gaming activities in Ontario to ensure the industry operates above board and does not become a breeding ground for illicit activity. iGaming refers to casino-like games that are played over the internet such as Blackjack, Roulette, Poker, and Slot Machines.
As part of the registration process, you must establish an anti-money laundering (AML) program that complies with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and passes a gap analysis, also known as an effectiveness test. If your AGCO registration is successful, your compliance responsibilities don’t stop there.
You must then sign a non-disclosure agreement (NDA) and enter into an operating agreement with Internet Gaming Ontario (iGO). This watchdog organization oversees registered iGaming operators to make sure they consistently fulfill all regulatory obligations, including AML compliance. Here’s what to know about the role of AML in the iGaming registration process and how to set yourself up for long-term success.
Know Your AML Obligations For Registration
Anti-money laundering regulations are designed to prevent money laundering, terrorist financing, and other illegal activity, hence the name. If you plan to operate an iGaming business in Ontario, the AGCO requires you to comply with the Registrar’s Standards for Internet Gaming. These standards include specific AML responsibilities to minimize illegal activity. They typically include, at a high level, but are not limited to:
- Having documented policies & procedures
- Designating a Compliance Officer
- Establishing a training program for all relevant employees
- Conducting audits & reviews
- Identifying & verifying customers
- Risk ranking customers
- Monitoring transactions
- Transaction reporting
- Record keeping
Your AML program must pass a gap review, which is essentially an effectiveness test. This test is a mandatory part of your AGCO registration process to demonstrate that your AML compliance program meets regulatory standards and can function effectively once your platform is live.
Your iGO Operating Agreement
After successfully registering with AGCO, the next step is to execute an operating agreement with its subsidiary, iGO. This organization is responsible for overseeing and managing how private iGaming operators conduct themselves within the province of Ontario.
The iGO registration process requires you to provide a package of documents, templates, and confirmations related to your anti-money laundering and counter-terrorist financing responsibilities. You’ll be teaming up with iGO’s AML department for this part and the entire process takes approximately two weeks.
Your iGO registration is very similar to the AML component of your AGCO registration. iGO requires you to document your AML policies and procedures as part of the registration process. This documentation should outline measures for preventing and detecting money laundering and terrorist financing activities on your iGaming platform.
You will also need to demonstrate compliance with Canadian AML regulations established by regulatory authorities and iGO as the conduct managing entity.
iGO & Compliance Effectiveness Reviews
Once your iGaming platform is live, you are required to submit to an AML effectiveness review by an independent third party every two years as part of your iGO compliance obligations. The purpose of a regular, recurring review is to assess how well your AML program is working, identify weaknesses, and determine whether your business meets requirements. It is also a test to see if your business is doing what it says it’s doing.
A good effectiveness review should mimic a full-scope FINTRAC examination. As Canada’s financial intelligence unit, FINTRAC has the right to audit regulated entities at any time. In this case, iGO would be the direct subject of the examination and they would contact individual operators for specific documentation if necessary.
An effectiveness review not only ensures you remain compliant in your day-to-day operations, it also ensures you’re prepared in the event iGO is examined by FINTRAC.
Scope of the Review
Ongoing effectiveness reviews can include, but are not limited to:
- Interview staff handling transactions to assess their understanding of policies, procedures, and reporting requirements.
- Review a sample of records to check compliance with client identification policies.
- Examine agreements with agents/vendors and review sample information they use for client identification.
- Check if suspicious transactions were reported to FINTRAC within the required timeframe.
- Verify application of risk assessment in client records.
- Assess adequacy and consistency of ongoing monitoring in client records.
- Confirm implementation of enhanced measures for high-risk clients.
- Ensure adherence to proper record-keeping procedures.
- Review and update risk assessment to align with current operations.
- Update policies and procedures to comply with legislative requirements and reflect current business practices.
After a Review
Once an effectiveness review is complete, the results must be presented to senior management for sign-off. It should include a summary of the findings, a remediation plan, and the status of required changes.
Choosing an AML Program Reviewer
The right AML program reviewer is foundational to the integrity and effectiveness of your compliance program. They should have a deep understanding of the Canadian anti-money laundering and counter-terrorist financing requirements as well as the specific risks unique to the iGaming industry.
Your chosen reviewer needs to provide a comprehensive and objective assessment of the effectiveness of your AML program, with a final report that identifies deficiencies and includes an action plan for improvement. Therefore, you want a reviewer with relevant experience conducting AML reviews for similar businesses.
Need a Hand?
If you would like to engage Outlier to conduct your AML Compliance Effectiveness Review, have questions about your obligation, or need help creating, reviewing, or updating your AML program, reach out to us today.