iGaming Ontario, subsidiary of the Alcohol and Gaming Commission of Ontario (AGCO), has released the first quarterly performance report for the regulated gambling market in the province.
The report covers the period from launch on 4th April 2022 to 30th June 2022.
The key numbers from the report are as follows:
- Total Wagers on licensed operator sites: CAD $4,076 million
- Total Gaming Revenue on licensed operator sites: CAD $162 million
- Total Licensed Operators: 18
- Total Gaming Websites (Casino and Sportsbook) run by licensed operators: 31
- Active Player Accounts across licensed operators: 492,000
The press release issued today (30th August 2022) contains the following definitions:
Wagers do not include bonus funds.
Gaming revenue is wagers minus wins not accounting for operating costs.
Active player accounts may include players who have accounts at more than one operator site.
These numbers do not include the state-run OLG.
Slow Start Shows Potential and Challenges for Ontario Market
This first report from Ontario’s gambling regulator has been keenly awaited. Ontario is widely believed to offer some of the best business potential for gambling operators from all of North America’s newly regulated markets.
It is the most populous province in Canada and if it was part of the US it would be the fifth most populous state in the country. Only New York, of all the states currently offering legal sports betting, has a greater population size than Ontario.
With this to consider, and a favourable tax rate of around 20%, it is no surprise that Ontario has already attracted 18 licensed operators with 31 sports betting and casino websites since its launch in April.
However, the wagering and revenue numbers represent a relatively slow start.
iGaming Ontario do not provide a breakdown of Gross Gaming Revenue by month from April so it is not possible to assess how much growth there has been since launch. However, a total gross gaming revenue of $162 million each quarter would put the province on track for a yearly revenue figure or $486 million.
This figure would fall well short of the $989 million predicted by industry analysts, Vixio Gambling Compliance, though it is reasonable to assume that the wagering and revenue numbers will grow over the course of the year, bringing the total closer to that prediction.
By way of a comparison, we could look at Michigan state in the US which launched its regulated market in January 2021.
Total gross gaming revenue in Michigan for their first quarter of operations (January to March 2021) was just over US $200,000,000 (around CAD $261,000,000). And monthly revenue in July 2022 reached US $126,000,000 (around CAD $165,000,000).
For comparison, Michigan has a population of around 10 million and Ontario has a population of around 15 million.
Meanwhile, in New Jersey (population of just under 9 million), the monthly gross gaming revenue sits at around US $135,000,000 (around CAD $175,000,000), which gives them a quarterly gross revenue average of around US $405,000,000 (around CAD $530,000,000). Though it’s worth remembering that the gambling market there has been active since 2013.
We can only speculate about how quickly Ontario can grow its revenues. However, we do know that restrictions on gambling advertising that preclude messaging with inducements to bet will make it difficult for regulated sites to compete with offshore sites that continue to promote sign up offers regardless of the regulations.
So far, the AGCO have been quick to issue fines to any operator who breaches these rules. Unibet, Draft Kings, PointsBet and BetMGM have all been issued with fines in the first quarter of operations.
This long-awaited report gives us some insight into how Ontario’s gaming market is shaping up. With low licensing fees and taxes, the province has attracted a high number of operators in its opening months. Whilst some may be disappointed by the low wagering and revenue numbers, it is fair to assume that there will be further growth throughout 2022 and into the first quarter of 2023 despite challenging conditions.
So, now we await the report for July to October! iGaming Ontario promise further numbers in their next release, including a breakdown of spend by casino and sports, player protection statistics related to responsible gambling, player demographic breakdowns, and more on the economic impact of the gambling industry in Ontario.
iGaming Ontario Performance Report