Ontario’s online gambling sector is clearly soaring. And, by one important measure, it’s the number one jurisdiction in North America.
On Wednesday, iGaming Ontario released the fourth quarter revenue figures that closed the book on the sector’s second full fiscal year.
A PlayCanada analysis of those numbers shows that compared to comparable US jurisdictions that, like Ontario, offer both online casinos and sports betting, Ontario’s second year was better than the second-year totals for Pennsylvania, Michigan, and New Jersey.
For the full fiscal year that ran from April 1, 2023 to March 31, 2024, iGO reported that total online gambling revenue — combining Ontario online casinos, sportsbooks and poker — was $2.4 billion (Cdn).
We then converted that number to US dollars using the Bank of Canada’s average conversion rate of 0.7415 during that time period. In US dollars, Ontario produced total online gambling revenue of $1.78 billion.
That compares as follows:
- Ontario (2nd year – April 1, 2023 – March 31, 2024) — $1.78 billion (in US dollars)
- Michigan (2nd year – Feb. 1, 2022 – Jan. 31, 2023) — $1.74 billion
- Pennsylvania (2nd year – Aug. 1, 2020 – July 31, 2021) — $1.56 billion
- New Jersey (2nd year OC: Dec. 1, 2014-Nov. 30, 2015 + SB: June 1, 2019 – July 31, 2020) — $441 million
OLG numbers will push Ontario’s 2nd-year numbers even higher
Keep in mind, iGO figures do not include the Ontario Lottery and Gaming Corporation’s online revenue numbers. Those are released separately later in the year.
As a guide, in the first year of Ontario’s open market, OLG reported $451 million (Cdn) in online casino and sports betting revenue or about 24% of the total online gambling revenue of $1.851 billion (Cdn).
So, using that just as a benchmark for year two, if OLG stays steady at 24% of the total market, that means Ontario’s yearly totals are missing some $576 million (Cdn) in revenue. That’s more than $427 million when converted to US currency.
Add that in to the year two total iGO released this week and Ontario’s second year revenue was more like $2.2 billion US.
That’s way ahead of where Michigan, Pennsylvania and New Jersey were after year two.
Keep in mind, comparisons are not apples to apples
Though, it’s important to note a few things here when making comparisons between jurisdictions.
First, Pennsylvania, which is currently the most lucrative online casino jurisdiction in North America (online casinos produced $233 million in revenue in March 2024 alone), had a slower rollout of online operators for its first two years.
New Jersey’s online casino industry launched way back in 2014, long before the current proliferation of online gambling.
All three US states are smaller than Ontario in terms of population. Ontario is home to some 15.6 million people, compared to 13 million in Pennsylvania, 10 million in Michigan and 9.2 million in New Jersey.
Ontario is also home to some 50 online operators offering more than 70 online gambling sites.
Though, bottom line, that should be to Ontario’s credit for setting up a wide-open, competitive online market right out of the gate.
And, unlike those US jurisdictions, Ontario’s regulator also 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.
Ontario sector grew $1 billion – or 71% – year-over-year
Ontario’s online gambling sector has shown incredible growth in two years.
Leaving aside OLG numbers and just counting iGO’s figures, the sector increased $1 billion from the first fiscal year to the second, an improvement from $1.4 billion to $2.4 billion — an increase of 71%.
Despite a slight dip in Q2 of 2023-24 (July 1 – Sept. 30, 2023), revenue in Ontario has increased each and every quarter — iGO only releases numbers quarterly — since the market opened on April 4, 2022.
For the most recent fourth quarter (Jan, 1 – March 31, 2024), iGO reports the following online revenue breakdown:
- Casinos — $510 million (74% of total revenue)
- Sports betting — $161 million (23%)
- Poker —$19 million (2.75%)
- Total for the quarter — $690 million
It was an Ontario quarterly record for total online revenue.
Soaring revenue is a win for Ontario taxpayers – $760 million in two years
The growth of Ontario’s online gambling sector is a win for Ontario taxpayers.
Online operators are taxed at 20% in Ontario.
That means, the sector produced tax revenue of $480 million in year two. With the $280 million from year one, in two years the online gambling sector has produced combined tax revenue of $760 million.
Online casinos were 75% of the revenue or $1.8 billion in year two
The iGO report provided further proof that online casinos dominate the Ontario market.
Of the $2.4 billion in total online gambling revenue, 75% of that or $1.8 billion came from online casinos.
Online sports betting was $588 million and poker was $67 million.
In fact, the power of online casinos likely led Ontario to the top of the heap in comparison with the second years of Pennsylvania, Michigan and New Jersey.
Converted to US dollars, the online casinos revenue ranking for each jurisdiction’s second year was:
- Ontario — $1.334 billion
- Michigan — $1.327 billion
- Pennsylvania — $1.1 billion
- New Jersey — $145.6 million
When it comes to sports betting, Pennsylvania was on top and Ontario was second. The second-year rankings are:
- Pennsylvania — $454.5 million
- Ontario — $436 million
- Michigan — $415.8 million
- New Jersey — $295.8 million
