Geolocation Failures Cost NorthStar Gaming Holdings $21,700 in Ontario
In a significant move to reinforce compliance within the iGaming sector, the Alcohol and Gaming Commission of Ontario (AGCO) has imposed a fine of approximately $21,700 on local iGaming operator NorthStar Gaming Holdings Incorporated. The penalty stems from a failure in their geolocation software that allegedly allowed access to their platform, NorthStarBets.ca, to players outside the authorized borders of Ontario. This situation underlines the critical importance of geolocation technology as a regulatory safeguard in the online gaming landscape.
Understanding Geolocation Technology
Geolocation technology has its roots in the late 20th century and plays an essential role in the online gaming industry. It allows operators to ensure that their gaming services are accessed exclusively by users located in authorized regions. The necessity of such technology has become pronounced as regulatory bodies worldwide, including Ontario’s AGCO, have mandated its use to combat issues like money laundering, unregulated gambling, and potential ties to terrorist financing.
By deploying geolocation solutions, iGaming operators can pinpoint the physical locations of their players, ensuring compliance with the law and maintaining the integrity of their platforms. Regulators now expect nothing less than stringent adherence to these requirements from licensed operators.
NorthStar Gaming: The Divergent Duo
Headquartered in Toronto, NorthStar Gaming Holdings Incorporated operates primarily through its subsidiary, NorthStar Gaming (Ontario) Incorporated, which manages the iGaming domain at NorthStarBets.ca. This platform benefits from advanced technologies crafted by leading development firms such as Playtech and Kambi Group.
Since its inception in 2021, NorthStar Gaming has also launched the online casino and sports betting site NorthStarBets.com. Notably, this site caters not only to players in Ontario but across Canada, due to its affiliation with the Abenaki Council of Wolinak and licensing from the Kahnawake Gaming Commission.
The Serious Sanction
The AGCO’s decision to levy a fine against NorthStar Gaming Holdings Incorporated underscores the imperative nature of effective compliance. The regulator determined that the operator’s geolocation technology was inadequate, causing NorthStarBets.ca to be accessible to real-money players located outside Ontario. This revelation was unveiled following a proactive third-party assessment conducted as part of AGCO’s ongoing monitoring efforts in the iGaming sector.
“To protect the integrity and legality of Ontario’s gaming sector, games on gaming sites registered in Ontario may only be provided within Ontario unless they are conducted in conjunction with the government of another province,” stated the AGCO. This ruling reflects the seriousness with which the commission approaches compliance issues and emphasizes its role as a guardian of fair play and legal regulation.
Observable Offense
The CEO of AGCO, Karin Schnarr, articulated that the penalty was a direct result of tests revealing that NorthStarBets.ca was indeed accessible from locations in Quebec and New York. The findings pointed to a failure in accurately identifying the geographical location of certain devices, jeopardizing the regulatory framework established to ensure that only Ontario players participate in the games.
Astute Alliance with GeoComply
While the AGCO did not specify which vendor’s geolocation software was at fault, it is known that NorthStarBets.ca partners with GeoComply Solutions Incorporated, a respected name in the realm of cybersecurity and geofencing technologies. GeoComply caters to a wide array of iGaming brands, including industry giants like BetMGM, FanDuel, and PokerStars. The ongoing engagement with AGCO will be crucial for NorthStar Gaming as they endeavor to rectify the identified geolocation issues and avert further infractions.
A Flourishing iGaming Landscape
Ontario, home to approximately 14.2 million residents, has emerged as the most populated province in Canada and a burgeoning hub for online gaming. Since beginning to license online casino and sports betting operators in May 2022, Ontario has transformed into one of North America’s most vibrant iGaming markets. With 47 certified operators and 77 active domains, the province reported an impressive $1.74 billion in aggregate revenues over the twelve months ending March 2023.
Martha Otton, the Executive Director of iGaming Ontario, noted that these remarkable revenues were largely fueled by a staggering 78% year-on-year surge in stakes, totaling over $45.69 billion. As the market approaches its third year, Otton expresses optimism about continued collaboration with operators and partners aiming to invest in Ontario, ensuring a safe and reliable gaming environment for players.
Conclusion
The recent fine imposed on NorthStar Gaming Holdings Incorporated by the AGCO serves as a stark reminder of the importance of compliance in the iGaming industry. As the sector continues to evolve and grow, operators must maintain rigorous adherence to regulatory standards, particularly regarding geolocation technologies, to protect both their businesses and the integrity of the gaming landscape. This incident also signals to other operators the need for continual vigilance and improvement in compliance mechanisms, as the consequences of negligence can be both costly and damaging to reputation. As Ontario’s iGaming market expands, the accountability of operators will be closely scrutinized, and only those who prioritize compliance will thrive in this dynamic environment.
