Canadian Gaming Association President and CEO talks about the upcoming launch of Ontario betting, propsective operators and tax rates.
When it comes to government policy, there is far more industry potential in setting tax rates and regulations to aim for the creation of the more robust sports betting market, with more operators, as opposed to taxing too high and creating a smaller pie, says Canadian Gaming Association President and CEO Paul Burns.
That’s what his organization is constantly communicating to government officials as the Ontario sports betting market continues to take shape, he said. The Safe and Regulated Sports Betting Act only went into effect Aug. 27. And the only way to bet legally on sports in the province now is via the Ontario Lottery and Gaming Corporation’s PROLINE+ product.
The OLG reports they have had $3.45 million accepted bets as of early October, since PROLINE+ went live. The launch date of the full Ontario online sports betting and iGaming markets will likely happen in early 2022.
Burns applauded the willingness of government officials to work with industry operators as policy gets set. There’s a lot of communication going on now. And that’s only a good thing. In addition to single-event sports wagering, at some point there should be a robust market.
“They may not get it perfect out of the gate,” he said. “But they want to make sure the market is successful and we can’t ask for more than that.”
So there’s a lot of eyeballs on Ontario right now, Burns said. He said the big takeaway from the Global Gaming Expo (G2E) in Las Vegas in early October was the high number of private operators from Europe and the U.S. market, asking him about Ontario, extremely interested and actively following developments here. The fact Ontario will be an open market means more operators can get licensed, especially younger companies in their earlier stages.
Burns sat down with OntarioBets to answer questions about the potential size and scope of the Ontario market and opportunities for all the players involved. There is a chance the market could be up and running for some NFL betting.
OntarioBets: What are your thoughts about a competitive Ontario market opening up by December?
Paul Burns: “There has been a great deal of work done and it has moved reasonably quickly up to this point. I am not sure we will see the end of December date being the opening of the market because there is still a great deal of work to be done, but it will be early 2022. I think betting on the Super Bowl will be an option for people. It has been exciting watching this. We are all encouraged we are heading on the right path. In the end it’s going to be great for consumers.”
OntarioBets: What are you hearing about tax rates?
Paul Burns: There has been a revenue share model proposed, 80-20 model. The government takes 20%. That’s what we are hearing. When it comes to sports betting, the devil is in the details in terms of how that is calculated.
Obviously if there is the ability to deduct some of the promotion and other incentives, then that will help get that rate down. (But that split) would make Ontario one of the higher jurisdictions in North America for sports betting. The CGA has recommended around 10%. I think we just need to make sure there is a recognition that it’s a low-margin business. Sports betting creates a lot of economic activity, but for the sportsbook operators, the margins are thin.
They need to make sure they offer a robust offering in the marketplace. Because if there is a lot of choice and opportunity inside a legal, regulated marketplace, people won’t need to go looking elsewhere (grey market). I don’t think people appreciate the size of the grey market that’s been here. And that’s what we are trying to encourage the government to understand, that there is a need to be able to offer a robust offering. They have been receptive to our message. We were hoping for something better (revenue share), and maybe we will still see it.
OntarioBets: What are you hearing about the number of private operators who have put in so far along with the Alcohol and Gaming Commission of Ontario for licencing?
Paul Burns: There are a lot of people who are interested. A lot of the major operators will want to play a part in the Ontario market. A few have put in applications, but everybody is waiting to understand what some of the last details are, and when we can all assess the final opening day for the market. That will dictate what a lot of people do.
It’s getting close to where companies are going to have to put in their applications if they are going to be ready on time. We are waiting to see the final market opening date and final pieces of information, but it’s on a lot of people’s radars. So I suspect it will be a very healthy market. There will be great choices (for the consumer) and that’s the benefit. That was the principal goal for the government when they set out and that’s what they will achieve.
Ontario is a great place to locate your company, with lots of great tech, skilled workforces, great tax incentives, TSX capital markets. It’s a great place for companies to come, do business here, and service the North American market and beyond. People are getting an idea that this can be a lot bigger in terms of more extensive benefits than just revenue that government may get from products being offered, with new jobs and businesses being created in the marketplace here.
Update: Since this article was written, Ontario online casinos and betting sites have been projected to launch in February 2022.