Growing trade tensions between the U.S. and Canada have begun to impact the gaming market, with Alberta implementing restrictions on purchasing slot machines and video lottery terminals (VLTs) from American suppliers.
The Alberta Gaming, Liquor and Cannabis Commission (AGLC) issued a directive on March 6, following escalations in the trade war. It calls for gaming machines to be acquired from firms with operational backup within the country or nations with a free trade agreement with Canada.
This policy takes immediate effect, effectively freezing the purchase of gaming terminals from U.S.-based companies.
The action will have a sizeable fiscal impact on large gaming operators with Las Vegas-based headquarters, who draw most of their revenues from selling equipment into Canadian markets.
With this ceiling in place, such manufacturers could see revenue plummet sharply.
The action follows a recent move by President Donald Trump, proposing that a 25% tariff be imposed on Canadian goods coming into the U.S. While postponed until April, Alberta's action has raised concerns that other top gaming provinces would be likely to impose similar restrictions.
If the trend catches on, it's a step that could leave a ripple effect heavily affecting American gaming makers.
As Canada represents 16% of total North American slot machine and VLT sales, an extended trade dispute could reshape the competitive landscape of the gaming industry in both countries.
Yet, despite the growing concerns regarding the trade war, it hasn’t stopped oddsmakers from placing bets on the outcome of the trade war. Currently, odds of +125 have been placed on Bet99, with bettors believing that tariffs will last no longer than May.
A Different Gaming Environment
Canada's gaming industry is governed by a system different from the U.S. While private companies own and operate casinos in the U.S., Canadian gaming is provincially regulated.
This fundamental difference impacts how gaming machines are acquired and regulated.
In the U.S., state governments oversee lottery operations, while in Canada, provincial governments govern the industry. The new directive of the AGLC affects some of the largest gaming equipment manufacturers, including International Game Technology (IGT), Light & Wonder, and others. These companies depend on Canadian sales as a significant source of revenue.
Industry research by Eilers & Krejcik positions Alberta at roughly 4% of total sales for significant gaming equipment suppliers. Alberta possesses a robust gaming industry with significant operations located in Edmonton and Calgary, and it has a state lottery system that generates a lot of money.
In 2023, almost 15,000 VLTs and slot machines were sold in Canada, representing 16% of total sales in the Canadian and U.S. markets. Alberta alone purchases approximately 4,000 new gaming terminals annually, making it a significant player in the industry.
AGLC's most recent annual report indicates the gaming industry's contribution to Alberta's finances. Last year, its 14,400 slot machines earned CAD$1.3 billion, and its 6,000 lottery terminals earned another CAD$557 million. With a big market hanging in the balance, any disturbance in the gaming equipment supply can have considerable financial impacts on suppliers, depending on Canadian demand.
According to market data reported by Eilers & Krejcik, 83% of Canada's gaming equipment sales are controlled by Aristocrat, IGT, and Light & Wonder. If other provinces adopt Alberta's restrictive policy, the economic impact imposed on U.S.-based suppliers could be further exacerbated.
Adamant
