For some time now Canada has been relaxing its laws on gambling, and particularly in the case of online casinos and sports books. The first province to take decisive steps was Ontario which in 2022 brought in a whole raft of new measures aimed to both promote gambling in all of its forms while also imposing greater regulation and oversight.


This was to be delivered by two official bodies, the Alcohol and Gaming Commission of Ontario (or AGCO as it’s now known) and iGaming Ontario.


Almost as soon as the legislation came into place it launched a Yukon-style goldrush of operators entering the market in the online sphere. Since then, the gambling sector has continued to boom with more and more Canadians deciding to take advantage of the new, more liberal approach. Finding an online casino in Ontario is almost simple, review sites like Casino.org ensure the operators’ standards remain high, through actively suggesting those that look after their players and advising against those that don’t.


Now an increasing number of provinces, having watched the success of Ontario, are looking to emulate their model with Alberta leading the way. But while the new approach has opened up the market for some, the regulatory authorities have found that there are still a number of gambling operators who have been hoping to operate well under the radar, confident that they will never be caught.


The scourge of illegal gambling


One of the reasons for Ontario introducing the new approach to gambling was to reduce the amount of illegal, unregulated activities that were seen as a significant problem at the time. While it opened the doors for online casinos to pay fairly handsome fees that would allow them to enter a potentially very lucrative market, it also came as an invitation to others to bend the law.


This, it turned out, was less of an incentive for online operators to operate illegally. Instead, it saw a spate of illegal gambling machines start to appear in restaurants, bars and lottery retailers’ premises.


The owners of the premises where these machines are found have previously offered the defence that they are games of skill, and therefore exempt from gaming regulations. But, to all intents and purposes they are slots games and are subject to stricter restrictions as they are judged to be games of pure chance.


Some have questioned why, even if they are games of chance, there should be restrictions imposed on any machines. The answer comes in two parts. Firstly, unregulated gambling gives players no protection at all under the law. So any complaints they may have about the machines’ operators will go unheeded. Secondly, slots games of this kind are only permitted to be sited in specified locations such as in regulated casinos and must be operated by people with the appropriate licence. This is to prevent them from appealing to children and other vulnerable groups.


Gambling is also a valuable revenue-earner for the Ontario government through the betting levies imposed. Obviously unlicensed operators pay no tax on the revenue received.


We’re coming to take them away


From late Spring 2025 AGCO had been gathering evidence about the presence of illegal gaming machines across the province. By the Summer it was decided that it was time to act. As a result over July and August official inspectors paid visits to over 200 locations reported to be harbouring these machines. These included bars, diners and even convenience stores. As a result some 50 machines were found and impounded. These were then removed from the premises.


As Dr Karin Scnarr, the Chief Executive Officer and Registrar of AGCO explained; “Unapproved gambling machines have no business being in convenience stores or other locations, particularly those that are available to children and youth.”


The presence of illegal machines is by no means restricted to Canada. Recent years have seen a huge increase in their number and today it’s estimated that there are 165,000 of them being operated across the United States alone. It’s big business too with revenues estimated to be in excess of US$30 billion being generated each year.


Sanctions and compensation


Besides the confiscation of the machines themselves there are a number of punishments available to be meted out.


As well as imposing a fine, under Section 10b of the Gaming Control Act there is the ability to either refuse to allow an applicant to apply for a licence, or to remove one if “there are reasonable grounds to believe the applicant will not act as a supplier in accordance with the law, or with integrity, honesty, or in the public interest”.


Unfortunately, there are no channels through which unwitting players of these machines can be compensated – something that would not apply if they were being played in a regulated environment. So we can rest assured that the authorities will remain equally vigilant in future. As to how effective this will be, only time will tell.