Why private online casinos are legal in Ontario: iGaming Ontario and "conduct and manage"

“Conduct and manage” is the Criminal Code test that decides who may legally run a lottery scheme in Canada, and in Ontario it is the reason private online casinos are legal. Ontario’s private iGaming market does not rest on licensing private sites. It rests on iGaming Ontario (iGO), a provincial agency, being the legal operator of every game those sites offer.

“Conduct and manage” under s.207(1)(a)

Section 207(1)(a) of the Criminal Code makes it lawful, despite Part VII’s gaming and betting offences, for the government of a province, alone or with another province, to conduct and manage a lottery scheme in that province in accordance with provincial law. The exemption belongs to the province. Licensing someone else is a different act from conducting and managing a scheme yourself.

Section 207(4)(c) removes computer-based play from paragraphs (1)(b) to (f). For the purposes of paragraphs (1)(b) to (f), which include charitable lotteries under (1)(b), a lottery scheme does not include a game operated on or through a computer, video device, slot machine or dice game.

Why Ontario cannot simply license private casino sites

The 1985 gambling bill clarified that a province could itself conduct a lottery scheme on or through a computer, video device or slot machine, but could not license others to do so. An online casino run by a private company under a provincial licence falls outside paragraphs (1)(b) to (f). A province that wants private companies in an open market has to bring them in without handing over conduct and management.

How Ontario’s agency model works

Ontario’s answer is agency. The standard-form operating agreement, as quoted in 2024 ONSC 2726, states that “iGaming Ontario shall at all times have the sole authority to conduct and manage Eligible iGames in accordance with the Criminal Code and in accordance with Gaming Control Legislation.” Under the agreements as described in the 2024 ruling, operators accept bets on behalf of and as agents of iGO. They keep player funds in an account separate from their other operating accounts, remit all collected funds to iGO, and are paid a share equal to 80 percent of gross gaming revenue (GGR).

Take an operator with $1,000,000 of GGR in a period: every dollar collected from players goes to iGO, and iGO pays the operator $800,000.

Two instruments make an operator fully registered and authorized in Ontario: a registration from the Alcohol and Gaming Commission of Ontario (AGCO) and a signed operating agreement with iGO. OLG.ca is the one exception to the agreement requirement; iGO does not conduct or manage OLG.ca, which the Ontario Lottery and Gaming Corporation (OLG) offers. As of 2026-09-01, iGO’s directory listed 49 operators running 84 gaming websites, including BetMGM Canada Inc. and FanDuel Canada ULC.

The operating-mind test: control, not money

In Mohawk Council of Kahnawà:ke v. iGaming Ontario, 2024 ONSC 2726, the Ontario Superior Court held that a province acting under s.207(1)(a) may engage private entities in an operational capacity but may not delegate conduct and management to them. It must keep enough control to remain the lottery’s “operating mind.” The 2024 ruling is a first-instance decision of the Ontario Superior Court and binds only at that level.

The 2024 court read the facts of Keystone Bingo Centre v. Manitoba Lotteries Foundation (Man. C.A., 1990) as showing that a private company supplying premises, personnel and game cards to licensed charities was the scheme’s true operating mind. In Great Canadian Casino Co. v. Surrey (B.C.S.C. 1998, affirmed on this point in 1999), a profit-sharing arrangement came “dangerously close” to delegation, but the provincial Lottery Corporation, not the private casino, managed and controlled the slot machine scheme.

The 2024 court held that profit-sharing is not a particularly useful indicator under s.207(1)(a). Unlike the charitable exemption in s.207(1)(b), which requires proceeds to go to charitable purposes, s.207(1)(a) does not ask where the proceeds end up. The 80 percent share is therefore not the legal question. Control is.

Mohawk Council of Kahnawà:ke v. iGaming Ontario (2024)

In November 2022 the Mohawk Council of Kahnawà:ke applied to the Ontario Superior Court against iGO and Ontario’s Attorney General, calling the new arrangements “illegal and unconstitutional.” A council chief said the system shut its operator, Mohawk Online, out of Ontario. The Council’s core argument was that the scheme was a disguised licensing scheme that outsourced conduct and management of internet gaming to private enterprises. Before launch, the Auditor General of Ontario had raised a matching concern: that key decision-making power and business risk would rest with private operators.

The court relied on these controls: iGO controls which games may be offered, controls use of gaming data, holds ultimate authority over advertising, restricts operator subcontracting, controls responsible gambling, governance, integrity and player-awareness requirements, and oversees customer care and dispute resolution. It rejected the argument that many of these controls were illusory and found that iGO, not the operators, was the operating mind of Ontario’s scheme as it stood in 2024. On May 13, 2024 it granted the Council public interest standing and dismissed the application. As reported in June 2026, Kahnawà:ke did not appeal the 2024 ruling and shut down Mohawk Online’s Ontario operations.

Kahnawà:ke’s sovereignty claim and Ontario’s Criminal Code exemption

Kahnawà:ke and Ontario license or run gaming on different foundations. The Kahnawà:ke Gaming Commission grounds its authority to license and regulate gaming in Kahnawà:ke’s sovereign right to govern its own affairs, and states that the Mohawks of Kahnawà:ke never entered a treaty waiving that sovereignty. The 2024 court described the Council as regulating and conducting land-based and online gaming through an assertion of its inherent right to self-determination under s.35(1) of the Constitution Act, 1982. Ontario’s model rests on the Criminal Code’s provincial exemption. The 2024 application tested Ontario’s scheme against s.207(1)(a), so its dismissal answers who conducts and manages Ontario’s scheme, not whether Kahnawà:ke’s own licensing authority exists.

The AGCO and iGaming Ontario as separate roles

The AGCO is the regulator. It determines eligibility for and registers igaming operators and gaming-related suppliers, and registers the independent testing labs that certify igaming technology. iGO is the operator in law: its mandate is to conduct and manage igaming in Ontario provided through regulated private operators. The AGCO states that its regulatory role is kept separate from iGO’s commercial role and that it oversees private operators, suppliers and iGO itself.

On May 12, 2025 the iGaming Ontario Act was proclaimed, iGO became a stand-alone Crown agency, and its ministry oversight moved from the Ministry of the Attorney General to the Ministry of Tourism, Culture and Gaming, the ministry that also oversees OLG.

Territory: Reference re iGaming Ontario (2025 ONCA 770)

The second legal limit on the model is territory. AGCO Standard 3.02 (standards last updated 2026-05-14) requires games on Ontario sites to be provided only within Ontario unless conducted with another province’s government. As last documented in November 2025, iGO’s contracts restrict access so that peer-to-peer games involve only players located in Ontario, known as closed liquidity.

In November 2025 the Court of Appeal for Ontario split 4-1 on a proposed model letting Ontario players play peer-to-peer games with players outside Canada. The majority held the model would remain lawful under s.207(1)(a) provided Ontario continues to conduct and manage the Ontario component through iGO. Justice van Rensburg dissented: a provincially managed lottery must be conducted and managed in the province, and pooled games would not be.

As of 2026-09-13, the appellants in Supreme Court of Canada file 42141 are Atlantic Lottery Corporation, British Columbia Lottery Corporation with Manitoba Liquor and Lotteries Corporation, and Loto-Québec; the Attorney General of Ontario is the respondent. The hearing is scheduled for October 7, 2026. As reported in June 2026, Kahnawà:ke, an intervener in the Court of Appeal reference, chose not to seek leave to intervene at the Supreme Court of Canada. The model’s legal limits after the two Ontario rulings are control and territory; profit-sharing is not one of them.