The Alberta government could be approximately $175.5 million richer annually if it follows Ontario’s lead and legalizes online casinos and sports betting beyond the provincial lottery option.
That’s the findings of a PlayCanada analysis looking at the latest Ontario revenue figures for its regulated online gambling sector released last week.
It’s a significant number for Alberta, a province whose financial fortunes vary wildly based on the oil industry. While in FY 2023-24 Alberta is projected to have a whopping surplus of some $5.5 billion, going forward things look less rosy.
A CBC report says that if global oil prices remain relatively low for 2024, Alberta may not be able to balance its budget. In 2022, oil prices peaked at around $120 a barrel, which led to the province’s surplus. Currently, the price of oil is in the low $70 range. While it is predicted to be an average of about $82 per barrel in 2024, that’s still down significantly from its 2022 peak.
Legalizing and regulating online gambling operators beyond what is available now from PlayAlberta — the lone online option — could provide an important revenue source.
How did we arrive at $175 million per year for Alberta?
Let’s do the math.
Ontario online casinos are legal. It’s the only province with legal iGaming, as well as sports betting and poker. The market opened in April of 2022.
Last week, iGaming Ontario reported that in the third quarter of fiscal year 2023-24, the province’s online gambling sector had revenue of $658 million. That was a record quarter and a 22% increase over the Q2 revenue of $540 million. The most recent figures were up 21% from the previous best quarter revenue of $545 million reached in Q1 (April 1 through June 30).
At that rate, Ontario stands to take in some $2.63 billion in revenue per year. With a 20% tax rate, that means the Ontario government would receive about a $526.4-million injection to its coffers annually.
Ontario’s population is some 15.5 million. Alberta’s is about 4.8 million. So, by population, Alberta is about a third the size of Ontario. So, if Alberta were to also impose a 20% tax rate, one would take that $526.4 million and divide by three and get some $175.5 in annual tax revenue.
That would be over and above what Alberta already receives from online casinos and sports betting through PlayAlberta, which is part of the Western Canada Lottery Corporation lottery that governs gambling in Alberta, Saskatchewan and Manitoba. The Ontario Lottery and Gaming Corp. reports its revenue figures separately from iGO.
It’s important to note that Ontario has proven that a regulated industry has raised the OLG’s revenue, not shrunk it.
Since Ontario launched an open gambling market, OLG’s digital gambling operations sector experienced marked growth, rising to $561 million from $427 million in 2021-22. Overall, that’s a 31% increase year-over-year.
And, money is far from the only good reason to legalize online gambling in Alberta.
Money isn’t the only compelling reason Alberta needs to follow Ontario
By some estimates, Canadians have been gambling online illegally for 20 years.
The activity was going on long before PlayAlberta offered a limited online casino and sports betting option. And it continues unabated even with that option because consumers clearly want more — and better — choice.
That means consumers have long been gambling without any protection or guarantees that their money is safe and they will be paid if they win.
Also, all of the money bet illegally leaves Canada. That means it is not used to help important social programs such as problem gambling education, prevention and treatment. That, of course, is a critical part of any gambling expansion.
Meanwhile, illegal sites also have no rules about offering gambling responsibly. So, players are more at risk.
That was the main impetus behind Ontario’s open model — to move consumer from illegal sites to legal ones.
Importantly, failing to legalize online gambling beyond the provincial option doesn’t stop the activity via illegal sites.
So, the best option for both Alberta consumers and the government is legalize and control the activity.
Ontario has proven to be a great model to follow.
