Online gaming

Ontario, a complex region for geolocation technology in online games

All eyes and ears of the North American online gambling world are on Ontario, as private operators wait to hear when the province will launch its open online gambling market.

In the meantime, the Alcohol and Gaming Commission of Ontario, in conjunction with iGaming Ontario, continues to review gaming applications from private operators to ensure they meet all necessary requirements. One of these key requirements is to ensure that only users in the province of Ontario can access online gambling options, once the marketplace is live.

So how will private industry leaders meet this requirement? Enter GeoComply.

The Vancouver, BC-based company is a third-party location services provider that provides cybersecurity solutions to detect location fraud and verify a user’s true identity. Its services are already used by gaming industry companies in the United States such as FanDuel, BetMGM, DraftKings and Caesars to comply with state regulations and ensure players are located within designated geographic boundaries.

For example, to fully access DraftKings Sportsbook on a personal computer in a legal state, you must enable location services and the GeoComply plugin must be installed and then running in the background to continue playing without interruption. The company’s software is installed on more than 400 million devices worldwide and analyzes more than three billion transactions per year.

Launch of GeoComply and New York

Four sportsbooks – FanDuel, DraftKings, Caesars and BetRivers – were allowed to start taking mobile sportsbooks on Jan. 8 in New York state, which shares a border and waterways with Ontario. GeoComply was able to track all bets to maintain geographic compliance within the state, and it provided staggering statistics. In the video below, red pins indicate betting attempts outside of New York State borders.

“We have a large team of people dedicated to researching and tackling the latest spoofing risks, fake location apps, that type of thing that we can try to use to circumvent our systems. ” said Lindsay Slader, Managing Director of GeoComply Gaming. “Anyone who tries to use such a tool is going to be very disappointed. It won’t work for them.”

The first two days of legal online sports betting in New York saw 2½ times more bets than the previous highest state launch, Pennsylvania, GeoComply’s Chad Kornett Recount Sports handleby Mark Saxon. Kornett also mentioned that 8 million of the 17.2 million bets in the first two days in the state came from New York, with a huge group coming from Midtown East Manhattan.

Access to this type of information is extremely valuable for online gaming companies looking to identify and then target their user bases.

The Challenges of Geofencing in Ontario

According to Slader, there are a number of challenges related to geofencing in Ontario in particular.

“Ontario is a particularly unique geographic location to be geo-fenced,” Slader said. “Because it borders the US border, it’s probably the second most populous jurisdiction that GeoComply is going to support. So, after New York, there are 14 or 15 million inhabitants, it’s bigger than Pennsylvania, bigger than Michigan, bigger than New Jersey. Much of it is clustered all around the US border. Lots of bridges, tunnels, rivers and also some land areas.

Almost half of Ontario residents live in or around the city of Toronto, Canada’s largest city. Thus, the majority of online gaming users will access platforms from the Greater Toronto Area, home to nearly 7 million Canadians. The large number of users in this area will not cause problems for geolocation software, but some areas of the province could potentially pose problems.

“Montréal is within easy reach [roughly 19 miles] to bet on an Ontario site. What kind of risk does that pose? When you think about how you identify someone’s location, if you’re not looking at precise location data like Wi-Fi or GPS, you’re just relying on an IP address,” Slader noted. “An IP address can easily cover 50 kilometers [31 miles] or more, it can easily stretch you from Montreal to Ontario, even though you may not even be in Ontario. There are certainly risks for the different types, or calibers of different types, of geolocation that you will use.

Border cities connecting the United States and Canada, such as Detroit and Windsor and Buffalo and Niagara Falls, require precise location accuracy to ensure compliance. “There’s a lot of logic and controls that need to be built into a live system to ensure that users who shouldn’t be eligible to play are blocked in real time,” Slader noted.

Technological compliance in the AGCO guide

Private operators wishing to obtain a license to operate in Ontario must meet the requirements of the AGCO’s Internet Gaming Compliance Guide. Section 2 of the guide is dedicated to technology compliance, where there are strict guidelines regarding player location validation:

For operators, a description of how the controls put in place to meet the 3.02 standard (players must be within the borders of Ontario) have been validated to ensure:

Accuracy and effectiveness of controls on the majority of expected playback and network connection device types, including:

Compliance with Requirement 3.02.1 dynamic player location monitoring.

Compliance with requirement 3.02.2, common methods of circumventing controls are detected and/or prevented.

With dozens of sports betting and iGaming businesses applying to operate in Ontario, location-based services are an essential requirement. Existing US customers and new customers have contacted GeoComply to help them with their geofencing solutions in Ontario.

“Ontario is a very attractive opportunity for GeoComply, as almost all operators targeting the Ontario market also participate in the US market,” added Slader. “The Canadian market is a market in which we would very much like to participate.

GeoComply currently holds a virtual monopoly in the US online sports betting market.

“We welcome any competition. We still serve almost 100% of the market and are quite proud to provide excellent service to these operators,” Slader said.