Alberta is set to become the next North American jurisdiction to launch an open online gambling sector. But, before it does, it is critical it gets the regulatory structure right to return the most value to Albertans.
PlayCanada is here to help with six suggestions for how Alberta can develop a responsible, thriving, regulated gambling market.
Previous estimates suggested Alberta could launch its regulated online gambling market as soon as November of this year. Though, that is, admittedly, a very optimistic estimate.
But before it launches, it is critical Alberta get the framework right.
Word is Alberta is basing its sector on Ontario’s successful open gambling market. That’s a great place to start. There’s a lot to like about the Ontario model. But, Alberta would be ill-advised to follow Ontario’s structure too closely.
PlayCanada will delve into most of these topics in more depth in the weeks to come. For now, we present our list of suggestions for maximizing the potential of an open, regulated online gambling market.
First and foremost is developing robust responsible gambling initiatives
To better protect consumers, responsible gambling needs to be first priority
Increased gambling comes with a heightened risk of problem gambling. One of the key reasons for a regulated gambling sector is to better protect Alberta citizens who are completely unprotected while gambling in the non-legal grey market.
That’s why Alberta needs to make responsible gambling the first priority of any open, regulated market. And, that funding needs to be cemented into the legislation before launch.
Also, Ontario is just now trying to put in place a centralized self-exclusion program where those with gambling problems can ban themselves from using any of the operator sites. Alberta needs to put that in place from the start.
PlayCanada’s recommendation: The Alberta government should set aside a minimum of 1% of revenue from the sector to better fund responsible gambling education, prevention and treatment programs. And, honestly, committing 2% of revenue to better protect and help Albertans would make the province a leader in responsible gambling in North America. This commitment is always better to carve out before other parties get their hands in the pie, as is a centralized self-exclusion program.
Also, to best justify and sustain the sector, Alberta needs to be completely transparent about:
- What percentage of revenue is going to responsible gambling initiatives
- How much that is in real dollars when the money starts rolling in
- Which ministry is administering the responsible gambling funding
- Where Albertans can go to get the necessary resources
Favourable cost to entry to entice operators in from the grey market
The main goals of a regulated market include better protecting consumers and keeping more of their money in Alberta.
For the last 20 years, Canadians have been gambling in a thriving “grey market” of unlicensed, unregulated and, largely, illegal and mostly offshore gambling sites.
As such, a key goal for Alberta should be to attract as many grey-market operators over to the new regulated market. This means, like Ontario, attracting as many products as possible — online casinos, sports betting, poker, bingo, daily fantasy sports — over to the legal sector.
It is also the reason Ontario has a relatively-low cost to entry. Ontario’s open online gambling sector has a fair tax rate of 20% and an annual fee of $100,000 per operator.
No cap to the number of licensees
That low-cost-to-entry strategy, in addition to there being no cap on the total number of operators, has worked very well. There are now more than 50 operators in Ontario collectively running more than 80 online gambling sites. iGaming Ontario has reported that 85% of former grey-market sites accessed by Canadians are now licensed and regulated in Ontario.
Prior to launch the Alcohol and Gaming Commission of Ontario estimated some 70% of online gambling by Ontarians was taking place on illegal site. Even better? An IPSOS study found that in 2024 over 86% of gamblers in Ontario were now betting on regulated sites.
PlayCanada’s recommendation: To entice the greatest number of grey-market operators to become licensed and legal, Alberta should have no cap on the number of operators. It should offer online casinos, sports betting and poker. Also, the tax should be no more than 20%. The annual licensing fee should be even less than Ontario’s (say $75,000 per operator) due to Alberta having a population (4.9 million) that is one-third the size of Ontario’s (16 million). Due to its smaller market, Alberta needs to do even more to make it attractive to operators. Finally, Alberta should follow iGO’s lead and ensure the sites that are regulated carry a clear logo indicating they are approved by the Alberta government. That will help consumer play only on regulated sites.
Ensure the tax revenue is helping address Albertans’ biggest concerns
After carving out appropriate funding for responsible gambling resources, Alberta’s next job is to figure out the best way to allocate the revenue from a regulated online gambling market.
Ontario still provides scant information about where, exactly, the money from its online gambling sector is allocated.
Earlier this year, a poll conducted by CBC found that, currently, the most pressing concerns of Albertans are, in order:
- Cost of living
- Health care
- Housing
- Alberta government
- Education
- Economy
PlayCanada’s recommendation: Rather than designate all of the online gambling revenue to general government coffers, Alberta should say exactly where that revenue will be allocated. To help address some of Albertans’ biggest concerns, we suggest designating 25% to reduce the cost of living (i.e. lowering property taxes as the online gambling industry does in Pennsylvania), 25% to health care, 25% to education and the final 25% to the general coffers. That way, the revenue is spread around and touches the most lives.
Transparency, transparency, transparency and proper industry metrics
From the start, Alberta needs to do a better job than Ontario on transparency and reporting. We expect that won’t be too hard considering Ontario is woefully behind other jurisdictions.
It’s common in the US for states to report online gambling revenue data monthly and provide data as to how much revenue each operator has made and how much tax revenue has flowed back to the state.
Ontario only reports quarterly and gives very little information. For instance, iGaming Ontario provides no operator data and no direct tax revenue information. That means, Ontarians have little idea about the true health of the industry and its benefits to them. Also, those at the AGCO and iGO are far too reticent to speak publicly about the industry, when they should be speaking often about its benefits to Ontarians, particularly given the success of the sector.
Ontario did get job and economic activity numbers right
However, one thing Ontario did get right was to hire Deloitte to provide annual reports on the health of the online gambling sector in terms of job figures and the total economic activity driven by the industry. Recently, Deloitte reported that in its second year, Ontario’s online gambling sector supported some 15,000 jobs in the province and $1.24 billion in combined tax revenue to provincial, federal and municipal governments.
This is critical data to justify the sector to the citizens and sustain it, particularly since Alberta’s retail casinos are sure to raise cannibalization concerns and point to their superiority in terms of jobs they support.
PlayCanada’s recommendation: From the start, Alberta should publicly report monthly and provide a complete breakdown by each operator in terms of handle, revenue, promo spend, tax revenue with a breakdown by online casinos, sports betting and poker. Also, Alberta should measure the number of jobs the industry supports in the province and total economic activity driven by the sector. Finally, the government should frequently tout the benefits of the online gambling sector to Albertans.
Control the advertising
When it comes to advertising, less is more.
There’s lots to like about Ontario’s harm-reduction plan to ban the promotion of bonuses and misleading language such as “risk free” from the start. This does not preclude operators from having bonuses. They just can’t try to entice customers with such lines of “$500 in bonus bets just for signing up.”
Ontario was criticized in some regions for restricting free enterprise and not allowing operators to be transparent. But 30 months after launch, many US jurisdictions have now followed Ontario’s lead at least in restricting the promotion of misleading language.
This year, Ontario also banned the use of celebrities in operator ads — unless those celebrities are used for responsible gambling messaging such as Oilers’ star Connor McDavid. This strategy was to lessen the gambling enticement to minors. It’s a noble effort, despite the fact Ontarians are still bombarded with celebrity spokespeople in gambling ads when watching US channels.
PlayCanada’s recommendation: Follow Ontario’s lead here and do not allow operators to advertise bonus offers or use misleading language such as “risk free” or “free bet.” Also, don’t allow operators to use celebrities to promote gambling sites unless those celebrities are providing responsible gambling messaging. Heavy fines should be issued to operators that break these rules.
The case for a stronger role for affiliates
Disclaimer: PlayCanada is an affiliate site operated by Catena Media. There are many other affiliate gambling operators in the market. Instead of driving revenue from advertising on their sites, affiliates earn their money via a commission for those that choose to further navigate to gambling sites and sign up as customers. So, this next part is self-serving, but provided as something Alberta should ponder.
Ontario also has far too adversarial a relationship with affiliates and it’s never made a lot of sense to those in the affiliate business. Clearly, the Ontario regulator does not understand the benefits affiliates provide to consumers. So, let me try to make the case.
Affiliate sites aim to educate gambling consumers not only with real journalism in the news feeds — like the one where this story appears on PlayCanada — but also through hundreds of pages of information to help consumers safely navigate the world of online gambling.
How affiliates work
Pages affiliate sites provide include topics such as:
- How to sign up for an online casino
- How the different games work
- Where responsible gambling tools can be accessed
- Which operators provide the best customer service
- Payment options
- What the different bonus offers actually mean
- The strengths and weaknesses of gambling products
Open advertising via broadcast or print bombards all consumers exposed to them.
Those coming to affiliate sites have purposely sought out information about the gambling industry.
Clearly, we’re biased on this one. But, we think that’s a better way for consumers to get information to make informed choices. But, that doesn’t mean affiliates should be free to operate with guardrails.
PlayCanada’s recommendation: License affiliates at a nominal cost to provide a critical role in helping educate consumers and drive business for gambling operators through informed choice. By licensing the affiliates, Alberta can ensure the affiliates can be held accountable to following a code of conduct.
