Now that iGaming Ontario has, thankfully, released more detailed data about the province’s online gambling industry, we can see how Ontario is doing against comparable US states.
PlayCanada crunched the numbers and the bottom line is this: Ontario still has a long way to go to produce the kind of numbers seen in the most similar US jurisdictions.
On Wednesday, iGO dropped financial data for the first quarter of fiscal year 2023-24. That’s the three-month period from April 1 to June 30, 2023. In that report, for the first time, iGO broke down the numbers by online Ontario casinos, poker and sports betting.
iGO also gave us data for the previous full fiscal year that ran from April 1, 2022 through March 31, 2023. This coincides with the first full year of the open Ontario online gambling industry and is what we’re going to focus on here.
The PlayCanada analysis found that in its first full year of operation, Ontario ranked a distant fourth compared to the five US states that also offer legal online sports betting and casinos:
- New Jersey
- Pennsylvania
- Michigan
- Connecticut
- West Virginia
Note, a sixth state, Delaware, has online casinos, but not online sportsbooks. So, we’re going to omit them for now.
Ontario fourth across the board ranked with comparable states
Gambling revenue, not total bets, is the most accurate number to use for comparison purposes.
From April 1, 2022 through March 31, 2023, Ontario produced total online gambling revenue of $1.4 billion. Of that, $940 million came from online casinos, $433 million was from sports betting and $40 million was from poker. First we converted those figures to US dollars using the Bank of Canada’s average rate for that same one-year period (.7565).
The rankings were as follows:
Total online gambling revenue from April 1, 2022 – March 31, 2023 (counting online poker in NJ, PA, MI and ON; online poker is not legal in CT and WV):
- New Jersey — $2.5 billion
- Pennsylvania — $2.4 billion
- Michigan — $2.1 billion
- Ontario — $1.06 billion (US $)
- Connecticut — $465 million
- West Virginia — $171.6 million
Yes, a legal open online gambling market is new to Ontario.
Sure, the numbers grew significantly over the course of the first year (up 217% in revenue from Q1 to Q4).
And yes, Ontario’s figures do not include data from the Ontario Lottery and Gaming corporation’s successful online operation.
But even given all that, Ontario’s numbers in the first year were still somewhat poor considering:
- Ontario has the most operators (currently 46 and growing).
- The province, by far, has the largest population of the six jurisdictions (15.5 million).
- Ontarians are seasoned online gamblers. Some estimates are that people in Ontario have been gambling online — albeit in the illegal grey market — for as long as 20 years. So, it’s truly not a new market.
The good news for Ontario is that numbers are expected to continue to improve and online casinos are, clearly, the ticket to the best results.
Online casinos dominate the online gambling sector
Ontario’s three most similar competitors — New Jersey, Pennsylvania and Michigan — produced revenue numbers double that of Ontario from April 1, 2022 to March 31, 2023. Particularly noticeable was the fact that online casinos provide the vast majority of the money in all jurisdictions.
Online casino revenue from April 1, 2022 – March 31, 2023:
- Pennsylvania — $1.77 billion
- New Jersey — $1.72 billion
- Michigan — $1.68 billion
- Ontario — $711 million (US $)
- Connecticut — $311.5 million
- West Virginia — $127 million
Sports betting revenue from April 1, 2022 – March 31, 2023:
- New Jersey — $780.4 million
- Pennsylvania — $609.3 million
- Michigan — $412.8 million
- Ontario — $328 million (US $)
- Connecticut — $153.4 million
- West Virginia — $44.8 million
Gap between Ontario online casinos and sportsbooks is growing
In terms of fueling revenue, which is key to driving all-important tax revenue, the growth of online casino numbers is important.
In its first year, Ontario had a more balanced revenue between online sportsbooks and casinos. About 67% of the revenue came from online casinos in Ontario.
Percentage of revenue derived from online casinos from April 1, 2022 – March 31, 2023 :
- Michigan — 80%
- Pennsylvania — 74%
- West Virginia — 74%
- New Jersey — 69%
- Ontario — 67%
- Connecticut — 67%
However, the gap between online casinos and sports betting is growing in Ontario. In the first quarter of fiscal year 2023-24, 72% of the revenue in Ontario came from online casinos.
Speaking of tax revenue, Ontario taxes online gambling revenue at 20%. Given that, the entire online gambling industry, minus the OLG, produced Ontario tax revenue of some $280 million in its first year.
