Is iGaming Ontario telling the truth when it says the Ontario online casino, poker and sportsbook sector is “among the top five iGaming jurisdictions” in North America? PlayCanada put iGO’s claim to the test.
The answer? Ontario is indeed in the top five. But after looking at the numbers, it’s less impressive than it seems.
On Tuesday, as part of the one-year anniversary of the launch of the open online gambling market, iGO dropped that little nugget about being a top-five jurisdiction. It was part of a press release that contained iGO’s typically-scant numbers. iGO clearly believes that’s the highlight of Ontario’s first year since it titled the release: Ontario Emerges as One of North America’s Largest iGaming Markets in First Year.
Too bad that statement about being in the top five lacked any context.
Truth: Ontario is a distant fifth out of only eight jurisdictions
First, you need to understand Ontario is one of only seven jurisdictions in North America that offer both online sports betting and casinos. The others are: New Jersey, Pennsylvania, Michigan, Connecticut, West Virginia and Delaware.
Then, you need to look closely at the numbers.
Some states report handle figures differently. So, about the only consistent measure is revenue reports. We looked at those figures and converted Ontario’s first-year revenue of $1.4 billion (April 2022 to April 2023) into US dollars at the average Bank of Canada rate from the last week. That produced the following ranking of the top five jurisdictions in terms of online gambling revenue from April 2022 to April 2023:
- New Jersey — nearly $2.3 billion
- Pennsylvania — nearly $2.2 billion
- Michigan — nearly $1.9 billion
- New York — $1.3 billion
- Ontario — $1.04 billion (USD)
It’s important to keep in mind a few things about those numbers.
Only Ontario has reported through March 2023. The figures for the US states are through February 2023 (the most recent figures available). So, the gap between the states and Ontario is even larger than shown.
We also included New York which has not, yet, legalized online casinos. In the states with both sportsbooks and online casinos, sports betting accounts for between 23% and 30% of the total iGaming revenue. So, New York, on just sportsbooks alone, already produces much more revenue than Ontario does with both casinos and sports betting.
Sure, New York’s population of nearly 20 million is also much higher than Ontario’s 15.1 million. But Ontario has a higher population than all the rest.
Ontario has the highest population and number of operators
Now, let’s compare by population and the number of live gaming operators in each jurisdiction.
Just looking the regions that have both online casinos and sportsbooks, Ontario is king. By population it is as follows:
- Ontario – 15.1 million people
- Pennsylvania — 13 million
- Michigan — 10 million
- New Jersey — 9.26 million
- Connecticut — 3.6 million
- West Virginia — 1.8 million
- Delaware — 1 million
Then number of live gaming operators in each area is as follows:
- Ontario: 47
- New Jersey: 33
- Michigan: 15
- Pennsylvania: 14
- West Virginia: 6
- Connecticut: 3
- Delaware: 3
But, wait, isn’t Ontario a new online market?
We also challenge the argument that Ontario’s online market is the equivalent of a one-year-old baby that hasn’t even learned to walk, yet.
It has been well documented that Ontarians have been betting through illegal, “grey market” online sportsbooks and casinos for many, many years.
Benjie Levy, the president and COO of theScore, which operates theScore Bet in Ontario, told PlayCanada last week that the grey market has been “thriving” in Ontario for “the better part of 20 years.”
So, Ontario is hardly the nascent online gambling market some might have you believe.
The numbers will likely improve
That said, Ontario’s numbers have improved dramatically from one quarter to the next over the last year.
In the fourth fiscal quarter alone (Jan. 1 – March 31, 2023) Ontario’s market had a handle of $14 billion and revenue of $514 million.
That means:
- Handle was up 244% from the first quarter total of $4.067 billion.
- Revenue was up 217% from the Q1 total of $162 million.
- Handle was up 21% from the Q3 total of $11.53 billion.
- Revenue was up more than 12% from the Q3 revenue of $457 million.
- The number of active player accounts, reported at 1.6 million by the end of Q4 is up 225% from the first quarter total of some 492,000.
- The number of player accounts grew 76% from 910,000 in the third quarter.
That means figures will likely continue to improve now that Ontario has a regulated, legal market.
But, as we’ve seen in the other states, a plateau is likely coming soon.
Other parameters to keep in mind about Ontario numbers
Also, keep in mind, not all number comparisons, even when talking about revenue, are apples to apples.
There are some important caveats about Ontario’s numbers:
- The revenue numbers do not include figures from the Ontario Lottery and Gaming Corp’s online operations which had a record handle of $511 million in FY 2021-22 and is expected to smash that record when FY 2022-23 concludes.
- The combined numbers do not include revenue from a few well-established grey-market operators. They were still doing business in the non-legal market in Ontario through the end of October 2022.
Also, unlike comparable US jurisdictions, Ontario’s regulator does not allow the advertisement of bonuses, inducements and credits. One could make an argument that this has a negative impact on customer acquisition and thus, handle and revenue. Operators are otherwise permitted to advertise — and there has been a glut of advertising in Ontario. But the jury is still out how much this really impacts the total bottom line. And operators can — and do — offer bonuses, credits and inducements to their customers. They just can’t advertise them. Customers must seek out the operators to find out what they are.
Still, Ontario has a long way to go
Yet, the bottom line still remains the bottom line.
Yes, Ontario is a (distant) fifth out of only eight regions. But it is even surpassed by one state (New York) that only has sports betting.
And, despite having an well-establish online gambling culture, a population of more than 15 million people and the most online operators of any place in North America, Ontario has still driven less than half the revenue of both New Jersey and Pennsylvania and about 55% of the revenue Michigan has produced.
Which probably explains why iGO omitted the context.
