As far as gambling in Canada is concerned, the last few years have been quite a ride.
The passage of Bill C-218, allowing single-event sports betting in 2021, forever changed how Canadians legally bet on sports. And since April 2022, the launch of Ontario’s online gambling attracted a flood of newly regulated Ontario casinos and sportsbooks. It’s a change felt beyond Ontario, too — as seen by the heavy rotation of sportsbook ads shown on Canadian TV.
With so much in the rearview, PlayCanada’s Robyn McNeil pondered what’s next for Canada’s casinos and sportsbooks.
Read on for the predictions.
Ontario’s online casinos and sports betting market begins to settle
Before the Ontario online casino and sports betting launch, Canadians were only allowed to wager on provincially run gaming sites.
In Ontario, Ontario Lottery and Gaming Corporation controlled the long-running monopoly. But since April 4, registered operators have joined the market. According to iGaming Ontario, that equals 37 operators and 67 legal Ontario gambling sites to date. And offerings span casino, poker and sports betting.
But the arrivals haven’t wrapped up yet. At least eight operators have registered with AGCO and are still awaiting an iGO agreement.
So, it’s a safe bet we’ll see a few more operators land in the Land O’Lakes in 2023. But, by the end of the year, some of those operators could disappear as competition thins the crowd.
However, which operators take the “L” is still unknown, though it’s unlikely to be the big players like FanDuel or DraftKings. Most likely, it will be smaller brands that exit or get acquired.
Size matters
Since Ontario first announced its intention to expand its market back in 2019, there’s been speculation about how big it could be.
Previously, U.S. consultancy VIXIO Gambling Compliance estimated Ontario would bring in nearly $1.6 billion in gross gaming revenue in 2022. And they expect that number to climb to as high as $2.36 billion this year.
Alternatively, a 2021 PlayCanada white paper estimated a more modest rake of about a billion per year.
So far, however, Ontario only has three fiscal quarters under its belt. And while the results of the first two quarters were somewhat underwhelming, they show positive growth. Otherwise, third-quarter results should be available from iGO over the coming weeks.
That report and the next few to follow will set a baseline for the actual size of Ontario’s market. At this point, it would be fair to say the expectation is revenue will continue to rise, at least for a while. But sooner or later, things will plateau. When they do, we’ll better understand where Ontario stands and how it compares to other North American jurisdictions.
Ontario will face its first legal challenge
To be fair, this isn’t much of a prediction. The Mohawk Council of Kahnawà:ke mounted a legal challenge against the Ontario market a few weeks before Christmas.
The Notice of Application, filed against iGO and Ontario’s Attorney General, asks the Ontario Superior Court to quash Ontario’s market for violating section 207(1)(a) of the Federal Criminal Code.
Under the code, provinces must “conduct and manage” all lottery schemes, which include casino and sports betting operations. MCK argues that due to the Registrar’s Standards for Internet Gaming and iGO’s commercial agreements, the operators are conducting and managing their business. And that simplistically, because of the way Ontario’s regime operates, MCK is blocked from running their Sports Interaction brand in the province as before. Which has cut deep into the gaming revenues the community relies on.
If the courts favour Kahnawà:ke, it could mean more than a bump in the road for Ontario’s burgeoning gambling scene. If they don’t, it’s another blemish on Canada’s relationship with Indigenous peoples.
Sports betting advertising will remain a bone of contention
One thing many seem to agree on: sports betting advertising has become a bit much.
These days, especially in the aftermath of Ontario’s launch, it seems like there’s a story or think piece every other week on the explosion of sports betting ads. Detractors blame consequences ranging from casual annoyance to psychological harm on the abundance of ads. Of particular concern is the impact on youth and those with addictions.
It is worth noting that Canada restricts ads on things like cigarettes, alcohol and cannabis. But, whether there’s enough appetite to put similar controls around gambling advertising is (so far) untested.
Personally, I don’t often mind the ads (that said, I see less without cable in Nova Scotia). However, a few regulatory tweaks would make sense, especially for everyone outside Ontario.
Curbing sports betting ads outside Ontario a good start
For those folks, being spared ads for technically illegal sportsbooks would be an excellent first step. Books like Bet365, which still serve Canadians outside Ontario on the unregulated market, might disagree. But, a coalition of provincial lottery corporations that formed last year would love to see it.
The group, representing lotteries in BC, Alberta, Manitoba, Quebec and Atlantic Canada, was formed to combat gambling’s “grey” market. That grey market, they argue, is actually black. And it siphons money to offshore sites, shorting provincial revenues. But, provinces say they need the Fed’s help to close the loopholes that allow unregulated gambling to flourish.
Putting a stop to promoting online sportsbooks and casinos wholly unregulated in Canada is also worth considering.
Without naming names, some media and broadcast outlets have referenced unregulated, offshore books in their coverage. Seeing ads for sportsbooks that are only legal in Ontario or, worse, not legal at all confuses Canadians. Plus, it, too, puts Canadians at risk and redirects revenues from provincial coffers to offshore pockets.
Reigning in gambling advertising so the intended audience sees it is a simple way to further protect Canadians.
Increased focus on responsible gambling messaging should follow
Lastly, for those in Ontario, more responsible gambling content could (and should) play a greater role. In a province with dozens of legal sportsbooks and casinos, there’s a lot of room for enhanced RG messaging. While some books have done this better than others, Ontario could require more of all regulated operators.
But, even if they don’t, operators can and should do better independently—particularly those with athletes and celebrities as brand ambassadors or spokespeople.
As Gaming News Canada’s Steve McAllister has repeatedly lamented, not utilizing these partnerships along RG lines is a wasted opportunity.
But whether we see changes to sportsbook advertising in Canada is nothing but speculation (and hope) at this point.
Indeed, the only sure thing is there will be more debate around gambling ads in Canada in 2023.
Illegal casinos and sportsbooks will remain a problem for Ontario, other provinces
In early October, AGCO drew a line in the sand against unregistered operators still doing business in the province.
With the line, AGCO declared that any unregistered operators serving Ontario customers after October 31 would risk having their registrations denied. In the line’s aftermath, AGCO reported 18 operators withdrew as a direct result of the threat.
While in many ways a success, we know operators without plans to enter Ontario legally took little notice. And it’s these operators AGCO has little recourse to block from Ontario’s black market. At least as far as we’ve seen, anyway.
For the rest of Canada, the battle’s more complicated. Provincial operators must compete with the illegal operators noted above. Additionally (and also noted higher up), many operators regulated in Ontario still serve the rest of Canada. And that overlap makes those national ads more of a problem.
Considering this, we’ll undoubtedly hear more from the lottery coalition. But other than pushing for the federal government to step in, it’s unclear what its impact could be.
The uncertainty lends easily to our prediction that illegal casinos and sportsbooks will remain an issue across Canada in 2023.
