As an agency of the provincial government, the AGCO supports the Ontario government’s public policy priorities and fiscal objectives. The AGCO continued to review its priorities and its operations to remain consistent with government direction and to ensure cost-effective and customer-focused service delivery. Examples of government initiatives which have had a direct impact on AGCO internal operations from strategic, structural and financial perspectives include:
The Ontario Legislative Assembly passed the Cannabis Statute Law Amendment Act on October 17, 2018, setting out the legal structure for private cannabis retail in Ontario and providing the AGCO with the authority to license, regulate and enforce the sale of recreational cannabis through privately run stores in Ontario.
The Cannabis Licence Act, 2018 and its regulations came into force on November 16, 2018.
On December 13, 2018, the Government of Ontario imposed a temporary cap of 25 Retail Store Authorizations across five regions, and as set out in Ontario Regulation 468/18, gave the AGCO the mandate to hold an Expression of Interest Lottery to determine who may apply for a Retail Operator Licence, tied to one of the 25 Retail Store Authorizations. The lottery covered the period of time from January 2, 2019, when the Lottery Rules were published, to December 13, 2019, when Ontario Regulation 468/18 is scheduled to be amended.
The AGCO’s internationally accredited in-house Gaming Laboratory developed a lottery software program for the selection of the lottery applicants. Using state-of-the-art equipment to test and analyze the integrity of all lottery, casino and internet gaming systems used in Ontario, the Laboratory was well positioned to develop this program. It also submitted its software program for independent testing and certification from accredited, independent testing laboratory Gaming Laboratories International.
The AGCO retained the services of KPMG to act as a fairness monitor to oversee the lottery and ensure it was conducted fairly and according to the established Lottery Rules. On January 11, 2019, the AGCO held the lottery. There were approximately 17,000 entries. On February 21, 2019, KPMG issued its report regarding the first phase of the lottery, concluding that the process during that phase was fair to applicants and potential applicants.
On February 7, 2019, the AGCO Board of Directors approved CannSell as the authorized cannabis retail employee training program for all employees of cannabis retail stores in Ontario.
The AGCO developed a regulatory framework, compliance and audit processes and Registrar’s Standards for Cannabis Retail Stores to ensure that stores operated in the public interest. In addition, the AGCO prepared its iAGCO online portal to process all applications for cannabis-related licences and authorizations.
Ten cannabis retail stores were licensed and scheduled to open on April 1, 2019, in support of the Government of Ontario’s objective of having licensed cannabis retail stores beginning to operate on that date. The AGCO continues to work with, and support the Government of Ontario on the regulation of cannabis, including the opening of additional licensed stores.
Average monthly traffic to the agco.ca website increased considerably following the announcement of the AGCO’s role as the provincial regulator for retail cannabis. In the six months before the announcement, the AGCO had a total of 230,000 visitors on its site. In the six months after the announcement, the number of visitors more than doubled to 480,000.
During the peak months following the Expression of Interest Lottery (Dec 2018 – Feb 2019) the AGCO site experienced a 240% increase in average monthly visitors over the same period a year prior. Nearly half of those visitors were seeking information about cannabis.
As a result of intense interest in cannabis regulation, the AGCO has significantly increased its outreach. For example, in just under three months between October 2018 and January 2019, the AGCO received 1,020 cannabis-related mentions on social media. In comparison, the AGCO received 400 social media mentions in the 2016-2017 fiscal year.
In order to keep interested parties informed of developments in cannabis retail regulation, the AGCO invited people to subscribe to receive email alerts. From October 2018 to March 2019, the AGCO sent nearly 100 email messages in both official languages to its cannabis distribution list, which grew to over 11,000 subscribers by the end of the fiscal year. The average open rate of these emails was 59% - twice as high as the government benchmark average open rate of 26.5% (according to Mailchimp).
One of the AGCO’s objectives when taking on the regulation of private cannabis retail was to develop an accurate and common understanding of the key regulations and their objectives. Working with media outlets to share this information became a priority over the year. The AGCO saw a 311% increase in contacts with media outlets this year, with cannabis-related media requests spiking from December 2018 to February 2019.
Table 1 – Media Requests by Month
|
2017-2018 |
2018-2019 |
Percentage Increase |
|
|---|---|---|---|
|
September |
6 |
8 |
33% |
|
October |
10 |
11 |
10% |
|
November |
15 |
12 |
-20% |
|
December |
14 |
24 |
71% |
|
January |
16 |
115 |
619% |
|
February |
14 |
52 |
271% |
|
March |
6 |
96 |
1500% |
The AGCO hosted three cannabis-related webinars to support the April 1, 2019 roll out of private retail cannabis stores. These webinars provided an opportunity to educate potential licensees on what would be their regulatory responsibilities and also on AGCO’s approach to selecting cannabis licensees and the AGCO’s standards-based approach to regulation and compliance. The overall satisfaction rate from participants to these webinars was 88%.
TABLE 2 – Webinar Participants
|
|
Private Retail Part 1 |
Municipal Webinar |
Private Retail Part 2 |
Private Retail Part 3 |
Total Webinar Registrants |
|---|---|---|---|---|---|
|
Date |
Nov 27, 2018 |
Nov 27, 2018 |
Dec 14, 2018 |
Jan 4, 2019 |
|
|
Number of Registrants |
3,896 |
415 |
2,732 |
4,113 |
11,156 |
On March 4, 2019, the AGCO hosted an information onboarding session for the 25 selected Expression of Interest Lottery applicants to build relationships between the AGCO and cannabis retail store operators and managers, and to provide additional information on the AGCO’s reporting requirements and approach to compliance and regulatory assurance. In total 45 cannabis retailer participants attended the session with an overall satisfaction rate of 100% for this session.
The AGCO also participated in several municipal conferences, including the Rural Ontario Municipal Association conference and the Ministry of Municipal Affairs Northern Clerks Forum, to provide information on the newly regulated cannabis retail industry. These were opportunities for the AGCO to answer questions from municipal stakeholders such as city councilors, local police forces, municipal licensing and bylaw officers.
The government has committed to modernizing the rules for the retail and consumption of beverage alcohol in Ontario, and in November 2018, announced that it would develop options to let corner stores, big-box stores, and more grocery stores, sell beer and wine.
Shortly thereafter, the government launched a public consultation on the sale and consumption of beverage alcohol. Over 33,000 consumers, businesses, beverage alcohol producers, public health and safety organizations, retailers, restaurants and bars provided feedback that will inform the government’s plans for liquor reform.
Consistent with the government’s objective of improved consumer choice and enabling opportunities for businesses, in December 2018, the AGCO began allowing the Beer Store, the LCBO, off-site winery retail stores and authorized grocery stores to sell beverage alcohol from 9 a.m. to 11 p.m., seven days a week. Prior to that change, alcohol could only be sold between 9 a.m. and 11 p.m. Monday to Saturday, and from 11 a.m. to 6 p.m. on Sunday.
In addition, as of March 31, 2019, the AGCO has provided 363 grocery stores across Ontario with authorizations to sell beer, cider and/or wine. Of these:
Of these stores, 68 also have a wine boutique authorization, which allows an independent wine boutique to operate within a grocery store.
As the government implements its plan for alcohol reform, the AGCO will continue to work with the government and stakeholders on these alcohol modernization initiatives.
The government has emphasized the need for Ontario to be ‘Open For Business’ and instituted a government-wide red-tape and burden reduction initiative to support economic growth and foster enhanced interaction between government and business.
The AGCO already has a long history of working to support these goals by continually searching for ways to reduce administrative burdens for businesses and by deploying regulatory approaches to support responsible economic development. The shift towards a more risk- and outcome-based regulatory framework in the gaming sector, for example, is intended to allow operators and businesses more flexibility to adapt to marketplace changes and ultimately to increase their competitiveness without compromising the AGCO’s regulatory work.
In 2018-2019, the AGCO designed and implemented a similar approach for the retail sale of cannabis in Ontario, assuring effectiveness but avoiding unnecessarily burdensome regulatory oversight from the outset. The AGCO also continues to build strategic partnerships and share information with other government ministries and agencies to strengthen collaborative and streamlined approaches. This includes effective relationships with the Ministry of the Attorney General, Ministry of Finance, Ontario Cannabis Store, OLG and the LCBO.
The concept of reducing ‘red tape’ and burden has been a driver for many of the regulatory and internal reforms implemented at the AGCO over the last 15 years. ‘Value for Money’ is embedded into the organization’s fabric and strategic plan. The AGCO continued to work with stakeholders on a number of initiatives in 2018-2019 as part of its ongoing regulatory modernization efforts, including changes to enhance the benefits of charitable gaming. In addition, the AGCO has launched an internal Value Task Force to explore ways to work Better, Faster, Smarter by reducing the regulatory burden for our regulated entities, provide flexibility and enhanced service delivery to our customers and create efficiencies to support the government’s regulatory burden reduction targets.
In March 2012, the OLG initiated a plan to modernize lottery and gaming in Ontario, which included three key priorities:
The AGCO also embarked on a path to modernize its approach to regulating, which complements the OLG’s plan to modernize the lottery and gaming sectors in Ontario. The AGCO has been taking a modern and progressive approach to regulation, based on risk, the achievement of outcomes and providing a degree of business flexibility and efficiencies for the lottery and gaming industries. These efforts support and align with key government objectives for enhanced efficiency in the delivery of public services and reducing regulatory burden and increasing consumer choice. In addition, the AGCO’s outcomes-based approach to regulation has resulted in significant cost avoidance annually for the AGCO, as well as cost savings, avoidance or additional revenue for Casino Operators.
The OLG started modernizing commercial gaming operations by inviting private sector casino companies to become the new Casino Operators. The OLG divided Ontario casino sites into eight gaming bundles and released Requests for Proposal for private sector Casino Operators for each bundle. On May 1, 2018 and July 18, 2018, the West GTA Bundle and Central Bundle respectively transitioned to new private sector Casino Operators. To date, seven bundles (East, Southwest, North, Ottawa, GTA, West GTA and Central) have transitioned to private sector Casino Operators, and the remaining Niagara Bundle is scheduled to be transitioned in 2019. The AGCO has played a key role in supporting this transition. For starters, the AGCO conducts comprehensive due diligence and eligibility assessments to ensure that all operators meet standards of honesty and integrity and to ensure that all casino gaming will be operated within the law. The AGCO also undertakes a number of key activities during the transition process. For example, the AGCO works with the Casino Operator and OLG to monitor transition activities, assess the sites’ readiness, and ensure casino operations comply with all gaming-related legislation and the Registrar’s Standards for Gaming. Once transitioned, many private sector Casino Operators are choosing to build new casinos or expand and relocate existing ones in their respective bundles. Numerous expansions and new builds have taken place over the past year, many with plans to build hotels and live entertainment venues, as well as expand gaming facilities to include ‘live’ table games. The AGCO enhances the operators’ understanding and compliance to AGCO/OPP regulatory requirements by providing them with a Building, Expanding and Relocating Casinos guide, and participates in activities such as pre-opening compliance inspections and ‘mock’ casino exercises.
Under OLG’s Lottery Modernization Strategy, and in accordance with AGCO standards, OLG is also modernizing key components of its lottery and iGaming business including a new OLG Player Platform, the replacement of Lottery Terminals, an enhanced Sports Betting solution, a new Web and App presence as well as new games.
The goal of the OLG Player Platform and Lottery Modernization Strategy is to expand the customer base by ensuring technology and product solutions are responsive to changing customer needs. OLG intends for all lottery modernization initiatives be released at the same time, with Phase 1 releases planned for later in the coming fiscal year and the integration of all systems to be part of future phases. The AGCO is working to educate new Gaming-Related Suppliers on the regulatory requirements and expectations as well as to assess technical solutions in accordance with Registrar’s Standards, and principles of integrity and public interest.
The OLG and the AGCO continue to work together to implement the overall modernization strategy. AGCO’s approach, both in its day-to-day role, as well as in modernization, is to be standards and risk-based, as well as outcomes-focused. The agency has successfully transitioned to a standards-based approach in casino gaming, lotteries, charitable gaming and iGaming.
See OLG Lotteries for information on how the AGCO conducts audits and reviews of OLG lottery management functions, processes and systems.
The AGCO continued to support the Open Government initiative, which aims to create a more open and transparent government by sharing data and information, and consulting with the people of Ontario.
In accordance with the Open Data Directive, the AGCO has made available on its website an inventory listing data sets under its custody and control. The inventory identifies whether a data set is currently open, in the process of being opened, or exempt from being released as open data due to legal, security, privacy, confidentiality or commercially-sensitive reasons. The agency has also reviewed key data sets published on its website to ensure that open, machine-readable versions are made available. The AGCO has conducted an exercise to prioritize the data sets to be released under Open Data, and will continue to make priority data sets available to the public on its website under an open-by-default approach.
The Accessibility for Ontarians with Disabilities Act, 2005 (AODA) was created with the goal of developing standards that would improve accessibility for people with disabilities across the province. The AGCO has developed accessibility standards in the areas of customer service, employment, information and communications, transportation, and the built environment.
The AODA requires all provincial agencies to provide updates to their Accessibility Plan and Policies on an annual basis. The AGCO is committed to meeting the needs of persons with disabilities in a timely manner, by preventing and removing barriers to accessibility and meeting accessibility requirements under the AODA. The AGCO has implemented the requirements outlined in the plan and participated in various activities to inform its plan and policies, including the review and update of its practices in the areas of training, information and communication, and employment.
All AGCO employees are trained on the requirements of Ontario’s accessibility laws, including the Integrated Accessibility Standards Regulation (IASR), and the Ontario Human Rights Code as it pertains to persons with disabilities. This accessibility training has been built in to the employee orientation process to ensure that all new AGCO employees, as well as the Board of Directors and members of the Horse Racing Appeal Panel, have a better understanding of accessibility to perform their duties and provide services to the AGCO’s diverse stakeholders.
The AGCO maintains a commitment to meeting all requirements under the AODA and the IASR and continues to refine its accessibility plan with a focus on ensuring its policies and practices remain accessible and meet the needs of all stakeholders, including persons with disabilities.