The explosion of regulated sports betting sites in Canada’s most populous province is providing residents with plenty of choices, but fresh research suggests it is also delivering significant economic benefits.
Findings from a study conducted by consulting firm Deloitte for government agency iGaming Ontario, released on Wednesday, include that the competitive market for Ontario sports betting and internet casino gambling sustained the equivalent of more than 12,000 full-time jobs in the province.
The same study found the iGaming market, which Ontario launched in April 2022, generated almost $1.6 billion in economic activity, such as $900 million in pay and other compensation for workers. The report also found that the estimated average annual salary in the province's nascent iGaming industry of $103,000 is 41% higher than the norm in other sectors.
“Over the past year, Ontario’s igaming market has been internationally recognized for creating a safe, legal and competitive landscape while supporting the province’s economy and displacing the existing unregulated market,” Ontario Attorney General Doug Downey said in a press release.
Setting up shop
Ontario remains the only province in Canada with a competitive market for legal sports betting and online casino gambling. While peers grant government-owned lottery and gaming corporations legal monopolies on iGaming in their provinces, Ontario has allowed more than 40 private-sector operators to set up shop in addition to Ontario Lottery and Gaming Corp. The new framework resulted in more than $35 billion in total wagering and $1.4 billion in gaming revenue in its first year from online sports betting, casino gaming, and poker.
Some operators, such as PointsBet and theScore Bet, have physical offices in Ontario and a decent-sized workforce to support their local operations. That economic development is translating into considerable tax revenue for the province and Ottawa.
"Being the first Canadian province to introduce a licensed and regulated iGaming market offers Ontario an opportunity to position the province as a North American jurisdiction for investment for international operators,” the study says. “This has been witnessed by the numerous international operators who have invested in and established a foothold in the province in the early days of the market."
Big numbers
According to the Deloitte study, the new regulatory framework supported an estimated $469 million in additional Ontario government revenue in its first year. The federal government and municipalities saw an estimated $238 million and $54 million in incremental revenue driven their way, respectively, as a result of the market as well.
The revenue underpinned by the iGaming market includes sales, property, and corporate taxes, in addition to the provincial government's share of gross gaming receipts (which, of course, come from money gambled and lost by bettors). Part of the price of doing business in Ontario for iGaming operators is turning over approximately 20% of revenue to the province.
Deloitte projects that iGaming-related employment, gross domestic product, and government revenue could rise, too, to 22,000 full-time equivalent jobs, $4.7 billion in GDP, and more than $2.1 billion in government receipts a year by 2031-2032.
The Deloitte report assumes iGaming regulations in Ontario remain the same and does not include OLG's contribution. The economic activity covered by the study includes direct impact, such as the government's share of gaming revenue and employee salaries, and both indirect and "induced" contributions, like advertising and household spending by iGaming-related workers.
For example, 1,803 of the estimated jobs tied to the iGaming market in its first year were direct employment, while 7,916 were indirect, including ad jobs. Another 2,353 roles were induced, such as jobs at companies that supply products and services to the iGaming industry.
Quelling concerns
The study’s release comes as concerns have grown about the burst of advertising associated with Ontario's new regulatory framework. In particular, the ads broadcast during the Stanley Cup playoffs have prompted pushback from critics, as even intermission segments on television have had wagering-related content.
With worries about gambling addiction on the rise, the wheels are already in motion for change. Members of the opposition parties in Ontario have begun to make noise about the issue, and the Alcohol and Gaming Commission of Ontario (AGCO) has moved to curb certain forms of marketing.
Nevertheless, the iGaming market has arguably been successful in shifting what was estimated to be hundreds of millions of dollars in wagering with “grey market” sites, which may be regulated abroad or outside the province, into provincially regulated channels. A survey done for provincial regulators in March found 85.3% of online gamblers in Ontario who responded had used a regulated site over the previous three months.
The Deloitte report also highlights opportunities for further development of and investment in responsible-gambling tools, such as harnessing the data being collected about player behaviour and the provincewide self-exclusion list that is still in the works.
“Today’s report reveals that the newly regulated igaming market in Ontario is delivering real benefits to every resident of Ontario, whether they play or not,” said Dave Forestell, chair of iGaming Ontario, in Wednesday's press release. “The igaming industry is a real economic driver in Ontario. Together, we can help realize our goal of leading the world’s best gaming market right here at home.”
