While there’s no debating that Alberta will become the second Canadian province to launch an open online gambling market, a recent Earnings+More report suggests industry experts have competing opinions as to the potential of the province’s gambling sector once officially open.
According to Tuesday’s E+M dispatch, analysts foresee contrasting paths for the eventual Alberta market.
On the optimistic side, analysts at JMP noted the immense iGaming potential for Canada’s fourth-largest province. The argument here is that following Ontario’s lead could be a boon for the share prices of leading global operators.
And based on Deloitte’s June economic diagnostic of year two of the Ontario online gambling system, why not?
However, international consultation firm Regulus offered a more pessimistic take on Alberta’s prospective iGaming landscape.
“We suspect a combination of civil servant concerns, lobbying and genuine differences between Ontario and Alberta will make the path of an open framework more challenging than early indications suggest,” said Regulus in the E+M newsletter.
JMP says Alberta has potential to rank top 10 in NA, Regulus says pump the brakes
If JMP’s expectations for Alberta weren’t already high, the firm estimated that the market’s value could exceed $700 million at maturity.
Such a lofty valuation would slot Alberta as the eighth-largest open online gambling jurisdiction in North America.
According to further JMP calculations, the sports betting sector could potentially grow to $200 million. As far as Alberta’s online casino market, JMP estimates envision revenue as high as $533 million annually.
The team at Regulus does not appear as keen on the Alberta market’s earning potential.
While certainly not for a lack of effort — Regulus commended Alberta’s “refreshing and positive” political position on the matter — the London, UK-based company later warned that “simple does not always work.”
In other words, following Ontario and its proven licensing model isn’t a one-size-fits-all answer.
Alberta’s smaller population size key sticking point for Regulus
As noted earlier, Alberta is the fourth-largest Canadian province with roughly 4.8 million people. Ontario, conversely, is the Great White North’s most populous province with some 15.5 million residents.
This stark gap in population size is enough for Regulus to hold serious qualms over the Alberta market’s earning potential.
“Market size matters in open regimes because the economics of industry hope and the reality of effective compliance tend to clash,” Regulus told E+M.
With that, E+M says the most likely outcome is that all Ontario licensees gain an Alberta license. Currently, there are 50 registered operators in Ontario (per iGaming Ontario) offering 80 separate gambling sites in total.
At that volume, E+M reports that each individual licensee would earn average revenues of $14 million USD in Alberta.
They added that it’s possible Alberta may adopt the stance that the economies of scale between Ontario and Alberta may very well “justify such under-powered licenses.”
JMP envisions noticeable grey market carryover
Much like when Ontario first launched in April 2022, JMP expects existing grey market and daily fantasy sports brands to perform amongst the top operators in a regulated market.
In fact, JMP said these brands “would most likely dominate” in any regulated setting.
As for what that may look like in The Energy Province, E+M suggested it may follow the pattern in Ontario that saw pre-existing names like Bet365 and theScore achieve strong success after the market opened.
Until then, the government-run PlayAlberta remains the only legal online gambling option for Albertans.
