The first year of a competitive market for online sports betting sites and internet casinos in Canada’s most populous province was hailed as a success on Tuesday — but there is still work needed to keep Ontario’s experiment in iGaming thriving and surviving.
Ontario sports betting underwent a dramatic overhaul on April 4, 2022, when the province launched a regulated market for internet gambling that allowed multiple private-sector operators of gaming sites to participate.
The market is overseen by the Alcohol and Gaming Commission of Ontario (AGCO) and by a government agency, iGaming Ontario (iGO), which signs operating agreements with bookmakers.
“Do I think the first year has been successful? The short answer to that is yes,” iGO Executive Director Martha Otton said during an anniversary event in Toronto hosted by the Canadian Gaming Association.
Data dump
Otton noted the provincial government crafted a mandate for iGO that includes providing choice and protection to players, as well as generating revenue for the province.
Numbers released Tuesday by the agency suggest iGO is accomplishing that mission. For instance, after launching last year with 12 operators, the province’s competitive iGaming market now has more than 40 firms offering legal sports betting, casino gaming, and poker.
Furthermore, iGO reported more than $35 billion in wagering in the first year of the market and around $1.4 billion in total gaming revenue generated, approximately 20% of which is owed to the province. The handle and revenue, iGO said, put Ontario among the top five iGaming jurisdictions in North America.
To compare, in Pennsylvania, which has a population close to that of Ontario and both online sports betting and internet casino gaming, the state gaming control board reported iGaming revenue was approximately $1.5 billion for the 2021-22 fiscal year.
Additional data suggests that the province’s new and regulated market has been successful in pulling customers away from “grey” operators, which may be licensed or regulated abroad but not in Ontario. Recent polling commissioned by iGO and the AGCO found that 85.3% of online gamblers it surveyed had wagered using regulated sites over the past three months.
“This is a significant shift from the estimated 70% of online gambling that occurred on unregulated sites before the launch of the market,” the AGCO noted in a press release.
Recent polling commissioned by the @Ont_AGCO and @iGamingOntario shows percentage of provincial gamblers exclusively using unregulated sites is down to ~15%. Before competitive market launched, gov't estimated ~70% of online gambling was on "grey" sites.https://t.co/LaXZyo64jQ pic.twitter.com/LSQrTvUXmt
— Geoff Zochodne (@GeoffZochodne) April 4, 2023
Nevertheless, it’s not “mission accomplished” in Ontario. There is still unregulated activity that watchdogs would like to stamp out, and there are adjustments that the industry would like to see made to the competitive market. The recent exit of Coolbet from Ontario caused a bit of a stir as well.
Otton mentioned her agency wants to streamline some of its operations via automation. Another priority is encouraging innovation in the iGaming market, making Ontario a place where operators can experiment with offerings.
But Otton also said responsible gambling is a top priority for the agency. iGO is working on a centralized self-exclusion list that will let players who are concerned about their gambling habits to ban themselves from all sites.
“We need to move towards a common self-exclusion registry, and we'll be working on that in the coming months,” Otton said. “But we also get a lot of data from the operators and I think this gives us a very good opportunity to use that data.”
Dave Forestell, the chair of iGO’s board of directors, said the agency learned some lessons in the first year of the market, such as banking fees that operators complained were too high. That won’t happen again, Forestell said.
“You encouraged us to share more data on responsible gaming, but also on the commercial market,” he added. “You told us we need to continue to make it more difficult for illegal operators to offer their product in Ontario. And we need to create a technology roadmap for the future. So we hear you and we're working hard to get there.”
Bonus coverage
Some in the industry hope Ontario regulators will see the light and abandon their blanket ban on advertising bonuses, free bets, and other gambling inducements. The AGCO’s standards for iGaming prohibit marketing those inducements broadly and only allow customers to be alerted to their presence on an operator’s site or through direct advertising players must choose to receive.
This has been tricky for marketing affiliates, such as Covers, which provide information to bettors about the quality of sportsbooks, including any promotions they offer. Affiliates can talk about the pros and cons of an Ontario sportsbook, except when they involve inducements.
“It's just really shortchanging the consumer and not giving them everything they need to make the best decision for them because there's such a wide variety of offerings and different operators,” said Andrew Garven, head of marketing at Covers, during an affiliate panel at Tuesday’s gathering.
Dave Phillips, chief operating officer of the AGCO, told attendees at the Toronto event that it was “a hugely successful” first year. That success happened even with concerns about the strength of the unregulated market and the challenges posed by Canadian law, Phillips noted.
The AGCO plans to keep active with its regulatory oversight and through discussions with operators.
“No one would suggest that it's been absolutely perfect,” Phillips said. “This market is anything but static, and we still have a very long road ahead.”
The digital business of the Crown
Yet the rising tide of iGaming in Ontario is lifting other boats.
Indeed, iGO reported there is more than 1.6 million active player accounts on the websites run by private-sector operators. The government-owned Ontario Lottery and Gaming Corp. (OLG) is claiming a similar number of customers for its online sportsbook (PROLINE+) and casino, which are separate from the market iGO facilitates.
“This fiscal year, despite the market opening, OLG has continued its revenue-growth trajectory,” said Dave Pridmore, OLG's chief gaming officer, during Tuesday’s event.
Pridmore added that he is getting weekly reports of record-setting revenue figures, with that income flowing from 1.6 million registered players for OLG’s digital offerings. The corporation said in its 2021-22 annual report that its digital gaming business provided a net profit to the province of $223 million for the fiscal year, up 23% from 2020-21. Revenue for the unit was up 45% year-over-year to $427 million.
While OLG was already set on expanding its iGaming business, the arrival of dozens of competitors gave the company an incentive to ratchet up its efforts, a “kick in the butt,” as Pridmore put it.
“In some ways, the opening of the market, I think, reenergized OLG to really think about our digital offerings,” the OLG executive told the CGA attendees. “So thank you very much for providing us that catalyst.”
