There’s been a lot of chatter over past week or so, after the recent quarterly iGaming Ontario market report numbers were released Aug. 30, which gave people a first snapshot into how the market has performed since the April 4 launch.
According to the public market report, covering the first full quarter of market operations for Ontario online gambling and sports betting, ending June 30, total cash wagers (not including promotional wagers, or bonuses) were just over $4 billion. Total gaming revenue was at $162 million.
As iGaming Ontario said, that is total cash wagers including rake fees, tournament fees and other fees across all live operators minus player winnings (it does not take into account operating costs and other liabilities).
‘I Think It Will Get Stronger’
We heard words like “disappointing” tossed around by people in the industry.
Canadian Gaming Association president & CEO Paul Burns doesn’t have the same perspective.
“I think the market was strong (Q1) and I think it will get stronger,” he said. “I think we will see the numbers double in the next quarter.”
Why? A lot of factors. Burns calls Ontario a “semi-mature” market, considering there was a billion-dollar black market going back decades, then some operators were allowed to stay in a grey market while transitioning with the Alcohol and Gaming Commission of Ontario over to the regulated side. The AGCO deadline for operators to get licensed is now November.
Burns points to a Regulus Partners study last week that the $162 million GGR doesn’t include reported revenues from OLG (not regulated by iGaming Ontario), or some of the larger grey market operators working toward a license an Ontario sports betting or online casino license. The parent companies of Bet99 and Pinnacle announced their licenses this week, a license announcement is expected soon for BetRegal and iGaming operating agreements for Super Group’s Betway and Spin brands are expected.
Add in a summer vacation betting lull and a busy fall betting season led by the NFL and college football that is now upon us and Burns agrees with Regulus’ projection that the Ontario market is considerably larger than the iGO market report suggested.
'A Very Good Launch'
OntarioBets: How do you think the launch went?
Paul Burns: It was very good launch. I think everybody likes to draw comparisons. We saw that transition of the grey market operators in addition to new operators coming into the market, but really the objective was understanding that the iGaming, sports betting market to a degree has been operating for 15, 20 years.
So it’s a little different here, there's lots of customers with existing loyalties and some of those operator results were reflected in the first quarter results.
I think when you look at it's going to take a couple more quarters to fully realize what the market is. Let's see when everyone gets to market what it’s going to mean. People saying the number wasn't high enough in terms of like total churn and spend — how long did it take New Jersey and Pennsylvania to get to $4 billion in handle? It was longer than three months I can tell you that.
When you look at the casino market and sports betting, from my understanding it's behaving sort of true to form. It's about 60% casino, 40% sports, which we all thought it was before.
I think the market here is pretty big, let’s be honest, a fairly significant market in North America. You know New York State is its own beast, it only has sports. It's doing exceptionally well. But in terms of total handle we will be one of the leading jurisdictions in North America.
With the busy fall season, I think that’s going to give every new operator a chance to show the full potential of their sites and their products, which I think is exciting for customers. So those that have had to start fresh, like BetMGM Sportsbook Ontario, PointsBet, BetRivers and NorthStar Bets, those companies that have had to start from scratch really, it’s a good chance to show their work.
I think it's an exciting time for people who may be interested in sports betting to take a look. The NFL has always been king of the sports betting market even in Canada. So with that, hockey, basketball, if the Blue Jays make the playoffs, I think it's going to be tremendous fall, and we have World Cup as well. I think people are going to attract some new players, people who haven't bet before, and that too will grow the market.
'Significant Dent in the Illegal Gaming Market'
OntarioBets: Do you think the AGCO took too long to announce a crackdown of the grey market?
Burns: It’s great the date has been set and it’s now upon us. It did last longer than I thought it was going to. I don't know the reason why it did last a bit longer, whether that was a reflection in the level of applications. But the important part is that it’s coming. Ontario has made a significant dent in the illegal gaming market. As an association we have always asked for iGaming to be regulated in Canada.
The province of Ontario was the first and we’re grateful for that and we hope others follow. The best way to combat illegal gaming is to create a regulated market, and then enforce your market. That’s where Ontario is shifting now, while nurturing the market, to make sure it grows and it’s successful.
OntarioBets: Some operators have been working through the licensing process but have been frustrated at the slowness in pace at the AGCO. What are your thoughts on that?
Burns: I know it's frustrating because I talked to a number of operators who would have liked the process to go faster. But at the same time there’s a large number of applications. Every license application is unique, and the AGCO needs to do their due diligence.
Yes, there has been frustration on time delays and in some ways that’s why the date has been delayed (November), to ensure that as many as possible can transition. But remember the application process opened in late 2021. It's almost a year now. (The AGCO) has moved through a lot of companies and a lot of sites have been approved.