After the checkered flag fell on a regulated online gambling market in Ontario on April 4, many predicted the province would quickly establish itself as one of North America’s largest markets by betting volume.
But it’s a “walk before you run” scenario in Ontario. This has been suggested in many corners. This has in part to do with how the province’s regulator, the Alcohol and Gaming Commission of Ontario, rolled out the market – putting in place a transition period, allowing foreign operators to “grey market” who had been doing business in Ontario for years to obtain their License.
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Regulated Markets and Gray Markets in Canada
This transition period ends on October 31. The Ontario government said in July 2021 that Ontarians spend nearly $1 billion a year on online gambling, about 70% of it on unregulated gray market websites with limited consumer protections and responsible gambling measures.
With a population of 14.5 million, the size of the Ontario market was estimated at GGY$800 million. Ontario’s Auditor General said the provincial government expects iGaming Ontario to make a net profit of C$18 million for the 2022-23 fiscal year.
There were indications that it was headed in that direction, looking at the number of operators seeking licenses, but it also took almost five months before iGaming Ontario, which leads and manages the industry (the AGCO regulates), releases its first public market report that shed light on gaming revenue in a legal market. The handful ending June 30 was just over $4 billion, with gaming revenue of $162 million.
These figures were considered disappointing by some, but they did not include data from the Ontario Lottery and Gaming Corporation, the province’s crown corporation (not regulated by iGaming Ontario), operating the brand. PROLINE, for its part, and the new gray market. operators who regularly join the legal market since April 27 now operate legally here.
Related: Sports Betting Hall of Fame member Johnny Avello has been talking about gambling in Ontario for 6 months
How to assess the gaming market in Canada?
Some people in the industry, with the six month mark for the industry here, will tell you that it’s too early to make an accurate analysis of the market situation, especially with respect to other regulated markets in largest volume in the United States. States.
Amanda Brewer, National Director of Kindred Group Canada, told Gambling.com that Ontario needs at least until the first quarter of 2023 before we see how strong the pipeline is, as there are still many operators making their way through the iGaming Ontario side, and operators like BetRegal are waiting for their license.
The same goes for Canadian Gaming Association President and CEO Paul Burns, who said at the recent SBC summit in Barcelona that people need to consider the transition period when assessing the current market situation in Ontario. Additionally, carriers cannot advertise incentives to attract new customers, unlike US jurisdictions.
“I think when you look it’s going to take another two more quarters to fully realize what the market is,” Burns said. Ontario bets earlier in September. “Let’s see when everyone hits the market, what that will mean.”
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How the Ontario market is perceived
A cross-section of Gambling.com reviews from people in the industry confirms all of this.
This from Dave Pridmore, OLG’s Chief Digital and Strategy Officer: “Despite the opening of Ontario’s online gaming market and many new competitors in the market, OLG continues to experience steady growth in terms of customer base and of financial performance. We actively added new products and experiences to make OLG.ca the premier destination for online gaming entertainment in Ontario. Since the market opened, we have added many new online casino products including the introduction of live game shows and many new games with new and existing game providers.
“When it comes to sports betting, we are excited that the NFL season is in full swing and have expanded our sports product offerings with new player accessories for both PROLINE+ and our in-store PROLINE and will be launching our popular game POOLS on our digital platform in the coming months. OLG looks forward to continuing to refine its online experience to meet the changing needs of Ontario customers.
Brandt Iden, head of government affairs, United States, for technology provider Sportradar, had this to say about Ontario’s six months in:
“After six months in the regulated online sports betting and gaming market in Ontario, we have seen a lot of positive progress and I believe we are on our way to even greater success. As expected, gaming operators are slowly moving out of the gray market towards a regulated environment. This process takes time and there may have been an unrealistic expectation of how quickly operators would make the transition.
“After months of reporting delays, AGCO released its first revenue figures in August, which showed $3.1 billion (USD) wagered in the first quarter of legalized bets with a holdback of $124 million from revenue for operators. On the face of it, that was pretty small compared to a state like Michigan, which has nearly 5 million fewer people than Ontario and over the same period held $465 million.
“However, there were several reasons why it was difficult to compare the initial success of the market, including the fact that the Ontario figures did not include revenue from the state-run lottery corporation. I think that was to be expected. Asking traders to just flip the switch, switch to a regulated market and pay taxes takes time. Give this market another six months and I think you’ll start to see tremendous progress.
Aly Lalani, Head of Marketing for BetRegal and a long-time market watcher here, says he was surprised by these numbers from iGaming Ontario.
“I understand that some of the bigger players weren’t in the space, and the seasonality of our business is really starting now, but I always expected to see bigger reported numbers given the big bang launch of the 4 April,” he said. Gambling.com. “The other surprise is how much some of the biggest brands have spent on marketing. I’m not just talking about sponsorships, but even high-end media channels like linear TV. The real winners of the last six months have been the media companies that sought out partnerships with the biggest brands.Somehow, those two things don’t seem to add up.
“Higher-than-expected marketing spend and a lower-than-expected GGR could lead to tough decisions. I’ll be especially interested to see what the reported numbers will look like once we have the NFL, NHL, NBA and World Cup all at once.
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