A PlayCanada analysis proves the rest of Canada is missing out on massive revenue by not following Ontario’s open online gambling model.
Over the past several months, gambling authorities across Canada released their annual reports for the 2022-23 fiscal year. Among those to file were:
- Ontario Lottery and Gaming Corporation
- iGaming Ontario
- Atlantic Lottery Corporation
- British Columbia Lottery Corporation
Interestingly, each of these companies delivered banner years, and none were shy about letting the public know. However, OLG, unlike the other crown corporations on this list, did so while contending with iGaming Ontario, which oversees the 47 live operators currently vying for position in the province.
With that in mind, we can’t help but wonder how the jurisdictions outside of Ontario might have fared had they adopted a similar open online gambling program.
Québec, British Columbia, Maritimes operate differently than Ontario
Bottom line, Québec, British Columbia and the Maritime provinces could be making, on average three times more revenue per capita. That is for online gambling that is currently going on illegally and unabated in their provinces, leaving their citizens unprotected and depriving the provinces from much-needed revenue.
To explore the idea, PlayCanada used the 2022-23 online gaming revenue figures from the four Maritime provinces, British Columbia, and Québec to calculate each region’s revenue per capita revenue and compare it to that of Ontario. Notably, Prince Edward Island is still the only Maritime province where users cannot access the ALC’s online casino offering.
Here’s how the three government-run gaming sites stack up to the only Canadian gambling market with both government and privately operated wagering options.
Jurisdictions ranked by online gambling revenue, population
Based on online gaming revenue from the five reports (OLG and iGO presented as one), the jurisdictions rank as follows:
Total online gaming revenue for the 2022-23 fiscal year:
- Ontario – $1.961 billion
- British Columbia – $440 million
- Québec – $403.9 million
- Maritime provinces – $100.1 million
Generally speaking, a larger population helps provinces churn out greater gaming revenues. So, it’s no surprise to see Ontario on top. Its population of 15.6 million is nearly twice that of the next closest province, Québec:
- Ontario – 15.6 million people
- Québec – 8.8 million
- British Columbia – 5.44 million
- Maritime provinces (NS, NB, NL and PEI combined) – 2.59 million
Per capita results show promise on the West Coast
There’s no denying that Ontario is the Canadian iGaming king, but how much of that has to do with a lack of competition from other regions? Although we won’t have a concrete answer until other provinces allow private operators, we can try to get an idea by looking at the numbers on a per capita level.
Total online gaming revenue for the 2022-23 fiscal year, per capita:
- Ontario – $125.64
- British Columbia – $80.92
- Québec – $45.90
- Maritime provinces – $38.73
The most intriguing result from our per capita analysis is BC ranking second, ahead of Québec, despite having a noticeably smaller population. What’s more, Ontario’s population is 187% larger than BC’s, yet the Pacific Province more than holds its own on a per capita basis.
However, it’s not necessarily a fair assumption that BC would exceed or even match Ontario’s per capita output in a hypothetical scenario where the populations even out.
Ontario online gambling model is three times more successful
In sheer dollars alone, in the most recent fiscal year, the Ontario online gambling sector produced:
- $1.86 billion more than all of Maritime provinces combined
- $1.56 billion more than Québec
- $1.52 billion more than BC
Per capita, Ontario’s revenue was:
- $86.91 higher than all of Maritime provinces combined
- $79.74 higher than Québec
- $44.72 higher than BC
In percentage terms per capita, Ontario’s revenue was:
- 3.25 times higher than all of Maritime provinces combined
- 2.74 times higher than Québec
- 1.55 times higher than BC
That’s a massive difference and it comes at a huge cost to the citizens of the other provinces.
Other reasons the Ontario model is simply better
It has been well established that Canadians are betting significant amounts of money via “not legal” grey-market online gambling sites.
In fact, about half of Ontario’s 47 legal operators currently take bets from Canadians in other provinces despite the fact they are not legal outside of Ontario by provincial law.
That should send a clear message to provincial governments across the country.
Failing to legalize and regulate online gambling beyond the provincial lottery option does not stop Canadians from betting illegally.
That means the provinces receive zero benefit from the activity. And consumers receive no protection when gambling with illegal operators.
At a time when the inflation and interest rates are relatively high and the cost of living is higher, it is a missed opportunity for provinces looking to:
- Build more housing to tackle rising homelessness
- Provide, or better fund, much-needed social programs.
- Fund any number of other government priorities such as health care, education, infrastructure.
Ontario has also debunked the theory that legalizing outside gambling operators will hurt the provincial gambling outfits that return 100% of profits back to their citizens.
Ontario is proof a rising tide raises all boats
Ontario has proven a government-run gambling operator can thrive in a regulated online gambling environment.
How do we know? Both industry stakeholders and the latest numbers say so.
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.
Fortunately, it doesn’t have to be one or the other. Government and privately operated sites can coexist, and more importantly, grow, in a shared iGaming space.
Just look at Ontario.
Could Québec become the first to follow Ontario’s lead?
Earlier this fall, a spokesperson for a coalition lobbying to legalize online gambling in Québec told PlayCanada the effort to establish an open online gambling market is gaining momentum.
Nathalie Bergeron of the Québec Online Gaming Coalition said the possibility of a second regulated online gambling market is beginning to pick up steam after the National Basketball Association, Major League Soccer, and Canadian Football League vowed their support in favour of the coalition’s bid.
Since then, no new developments have emerged, or at least been made public.
That said, Bergeron did point to Ontario as evidence the system works.
“I think in the long run it will be because [Ontario] shows tangible, concrete proof that the system works. We have a Québec government that has had a tendency to compare itself to Ontario quite a lot over the past few years. I think this is one area where we would all benefit if they did.”
In the meantime, the longer the other provinces drag their heels, the more money and opportunity is lost. The numbers don’t lie.