The Alcohol and Gaming Commission of Ontario (AGCO) is continuing its efforts to combat unregulated gambling and protect the public. As part of these efforts, the AGCO took steps this week to revoke the lottery seller registrations of a number of retailers in the GTA that were found to be offering unapproved electronic gambling machines under the Prime Slot brand.

The AGCO regulates all gambling in the province of Ontario to ensure gambling products and gaming sites are held to high standards of game integrity, player safety, and the protection of minors and vulnerable individuals.

Over the past decade, unregulated gaming machines have increasingly proliferated across North America. While they largely rely on chance like traditional slot machines, manufacturers have claimed they are games of skill and have installed terminals in convenience stores and other locations where gaming machines would otherwise be prohibited.

The AGCO will continue to take every action within its authority to protect the public against the risks that these unregulated machines pose – particularly in locations easily accessible to children and youth.

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A registered lottery seller served with a Notice of Proposed Order to revoke their registration has the right to appeal the AGCO’s action within 15 days to the Licence Appeal Tribunal (LAT), an adjudicative tribunal that is part of Tribunals Ontario and independent of the AGCO.

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

Background:

Under Section 10(b) of the Gaming Control Act, the Registrar shall refuse to register an applicant as a supplier or to renew the registration of an applicant as a supplier if there are reasonable grounds to believe that the applicant will not act as a supplier in accordance with law, or with integrity, honesty, or in the public interest.

Under Section 12 of the Gaming Control Act, the Registrar may propose to suspend or to revoke a registration for any reason that would disentitle the registrant to registration or renewal of registration under section 10 if the registrant were an applicant.

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Rivalry Corp., an internationally regulated sports betting and media company, announced financial results for the three-month period ended March 31, 2025 (“Q1 2025”). All dollar figures are quoted in Canadian dollars unless otherwise noted.

Q1 2025 was the first full quarter operating under Rivalry’s restructured model, following a company-wide transformation that began in Q4 2024. This included a strategic shift toward high-value users, deep cost rationalization, significant product upgrades, and tighter execution across every layer of the business. The result is a streamlined, modernized operating model with materially improved performance and long-term leverage.

“This quarter marks the full emergence of Rivalry 2.0 – leaner, sharper, and structurally stronger,” said Steven Salz, Co-Founder and CEO of Rivalry. “We’ve rebuilt the foundation of the business around high-efficiency acquisition, high-value users, and a proprietary product – and we’re already seeing the impact. Rivalry today is not just a leaner version of itself – it’s a fundamentally different company built for scalability.”

Key Highlights

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• Net revenue of $1.3 million, consistent with the preliminary results announced on April 16, 2025. While temporary sportsbook margin variance impacted topline outcomes, underlying KPIs continued to improve and validate the strength of Rivalry’s rebuilt model.

• Operating expenses decreased 58% year-over-year to $4 million in Q1 2025, down from $9.6 million in Q1 2024.

• Net loss reduced by 43% to $3.0 million in Q1 2025 from $5.2 million in the prior-year quarter.

• A meaningful portion of Q1 expenses were non-recurring or non-operational in nature, including annual audit costs, regulatory fees, and legacy payables from prior periods. The Company’s adjusted marketing spend during the quarter was approximately $175,000, materially lower than the reported figure due to these factors.

• Average Customer Acquisition Cost payback across H1 2025 was approximately 1.5 months, reflecting improved funnel conversion, higher player value, and stronger retention – all achieved under constrained spend conditions.

• Q2 2025 set new all-time records across key user economics¹:
  
  • Net revenue per player increased 49% versus Q1 2025, and was 210% higher than the historical average prior to the Q4 2024 transformation.
  • Wagers per player rose 7% quarter-over-quarter, and nearly 300% above the pre-rebuild average.
  • Average monthly deposits per player in Q1 2025 were over 175% higher than the historical average. In Q2 2025, this increased a further 28%.
  • Monthly deposit frequency per player in Q1 2025 was up 115% over the historical average, and rose another 22% in Q2 2025.

• Ongoing improvements in VIP identification, segmentation, and servicing, driven by Rivalry’s proprietary Business Intelligence (“BI”) tools and Customer Relationship Management (“CRM”) infrastructure, further contributed to gains in deposit behavior and overall player value.

These improvements reflect the effectiveness of Rivalry’s strategic overhaul – including product modernization, in-house BI tooling, optimized segmentation, and CRM systems that support higher-value customer behavior and lifecycle retention.

Streamlined Operations

Rivalry’s breakeven net revenue is now approximately $600,000 USD per month, down from more than $2 million USD per month a year ago, based on current run rate operating expenses, with further cost optimizations planned in Q3 2025. The rebuilt business is operating on a structurally lower fixed-cost base with proven user economics and performance-ready infrastructure.

“We’ve created an operating model that is not only lean and disciplined, but also high-leverage,” Salz added. “This is a structurally better business than it was a year ago. The team is tighter, the product is stronger, and the KPIs are outperforming – all with limited capital deployment. The engine is rebuilt.”

Strategic Review & Outlook

Rivalry is actively exploring strategic alternatives aimed at maximizing shareholder value. As part of this ongoing process, the Company is also evaluating non-dilutive capital options as part of broader strategic initiatives to accelerate growth. These are intended to complement the broader review and enable Rivalry to fully capitalize on the performance capacity of its rebuilt model.

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As the Company progresses into H2 2025, key initiatives include:

• Deployment of a new promo engine, enabling more dynamic and cost-efficient bonus structures.

• Casino-led engagement mechanics, including lootboxes, missions, and summer campaigns to drive offseason activation.

• Geographic reactivations and enhanced CRM, focused on high-value player segmentation and deeper lifecycle engagement.

• Further operating cost reductions in Q3 2025, aimed at lowering the breakeven point and increasing flexibility.

Rivalry’s transformation over the past three quarters has positioned the business with a distinct set of structural advantages: a deeply aligned and experienced team, proprietary technology and BI systems, strong regulatory licenses in Ontario and the Isle of Man, and a globally recognized brand with demonstrated reach. These strengths now form the basis of a highly scalable and differentiated operator in the global online gambling market.

“Rivalry today is a high-performance engine – structurally rebuilt, road-tested, and positioned to scale,” said Salz. “We’re focused on unlocking the next chapter of growth, and the strategic review process is designed to support that path.”

As of July 11, 2025, the Alcohol and Gaming Commission of Ontario (AGCO) no longer requires Registrar approval for responsible gambling (RG) training programs for casino and lottery employees. This change applies to both the Gaming and Lottery Standards and supports a more flexible, outcomes-based approach.

What’s changing

• Standard 2.5 has been updated to remove the need for Registrar approval of RG training.

• Training must still be mandatory, regularly updated, and based on best practices.

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• Employees must understand responsible gambling, their role in player protection, and how to support those showing signs of gambling harm.

What this change means for operators and lottery retailers

• Casino and lottery operators now have more flexibility to design and update RG training.

• Existing PlaySmart training remains valid.

Why this change matters

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This change reduces red tape, encourages innovation, and maintains Ontario’s high standards for player protection. This also aligns with AGCO’s outcomes-based regulatory approach and brings greater consistency across gaming sectors, including iGaming.