Describing his younger self as a "punk", Oates said he partied frequently. He dropped out of high school to focus on hockey and ended up working as a gas station attendant at age 19. Oates played two full seasons and parts of a third with the Junior A Markham Waxers of the Ontario Provincial Junior A Hockey League (OPJAHL). He scored 89 points in 43 games during 1980–81, and 159 points – including 105 assists – in 1981–82. He went unselected in the NHL Entry Draft, however, as scouts considered him too slow to play in the NHL. He returned to high school to complete his diploma when he was recruited to play for Rensselaer Polytechnic Institute (RPI).