The much-awaited Ontario iGaming and sports betting market has now entered its third month of activity after a debut on April 4, and it continues to grow and expand, with more operators entering the jurisdiction. Even though the official financial results are yet unknown and expected are expected to come out on a quarterly basis, Ontario’s overall market trajectory seems to be nothing but upwards.
In an exclusive interview with Yogonet, CEO and President of the Canadian Gaming Association (CGA) Paul Burns gave his view on these past three months of activity in the province and his opinion on what is yet to come. Having just attended the Canadian Gaming Summit, which took place in June, Burns reflected on the event and the way it has been redefined after the launch of the Ontario market.
“We were excited to bring people back together for the first time in two years," Burns says. "A lot has happened since we were last together, with the laws changing to permit single events. Sports wagering and the province of Ontario launching its regulated market have generated a lot of interest as an open license model allowing who wishes to enter the market."
More than 30 operators have now entered the market and the number is expected to double soon: “We’re hearing close to 30 more looking at entering in the application process”. This demand has brought about international interest in Canada’s offer, which drove to a successful edition of the Canadian Gaming Summit, and the last one for the Association to organize, with the torch passing to SBC.
“For us, it was our 25th year. It was time to make a change. And so this was the last year that we undertook the programming and operations, and it will be moving over to SBC who will be our new partner going forward. Being a conference provider and having multiple media platforms, we felt it was right for the industry in Canada and for us as an association to turn the reins over," Burns noted.
As for the 2022 edition, Burns described the event as having “lots of positive feedback," with full session rooms and “everyone absorbing the new markets that are opening in Ontario and the new sports betting regime across the country."
Ontario’s iGaming and Sports Betting market was launched on April 4, 2022. It has just taken off, and its ascendent journey is still visible and pronounced. Burns attributes it to the fact that Canada has a large gray market and has had offshore operators active in the region for years.
“When they had the opportunity to sign up for the regular market, they were eager to do so. For them, it was launching new apps, new features for their customers. For many companies, it was a chance for them to bring in their new products," Burns explains. "Companies like FanDuel, PointsBet from the United States, competing with those like Unibet and Bet365, who have good customer bases here. So it was a really good mix and it’s been very positive too."
However, market data has not yet been released, and operators have been giving “very full of praise and very confident statements” about their performance up to date, providing an estimate of billion-ranging results. “We’re hearing a lot of anecdotal, or we’re hearing in terms of looking at downloads from the app stores”, Burns clarified. Nonetheless, he believes the operators’ estimates could even be falling short from reality.
“I think there is a strong interest in Canadians. I think the consumer choice has been fantastic for people and so the early days have been very positive and everything’s been working exceptionally well," he states. "The regulatory regime has been well received by operators, and I think a testament to the fact that so many are signing up is another positive attribute."
Brands such as theScore Bet have been publishing partial performance indicators since the market was launched, such as their downloading rate in store apps. For theScore Bet, owned by Penn National Gaming, the trends were favoring at the beginning, being among the top downloaded apps. Last month, the company announced it would shut down its operations in the United States, leaning completely on its Barstool brand in that jurisdiction, to fully focus on the Canadian market.
Paul Burns does not see this sort of move as a potential trend among operators in the province, but recognizes theScore Bet’s relevance in the Canadian market. “It’s a long-standing brand. TheScore were the first people to bring us a dedicated sports news and information channel in Canada," he explains. "There is probably a couple of million Canadians that have that app on their phone. And so for them, they had a great start with people who know the brand, have their app on their phone, and it was up to them to activate those into deposit-paying customers."
However, Burns also pointed out that there are also plenty of homegrown brands that are coming, and sites such as North Star bets, which is a Canadian ownership group and based off the Toronto Star, which is the country’s largest daily newspaper.
“We won’t see people shifting out of the United States so much. TheScore was unique, but we are going to see some strength of Canadian brands entering the market in the coming months," Burns predicts. "As an association, we wanted to make sure that the regulatory environment was conducive for companies to come and do business."
Even though there are no official numbers yet, a confidential report was prepared back in January where the Ontario government was warned of the possibility of losing up to $2 billion over the course of the next five years, with annual revenue hit by the shift to online. These numbers preceded the launch of the Ontario market.
On the accuracy of these predictions, Burns stated there is no certainty. However, he acknowledged there is “a lot of debate about cannibalization" from land based to online.
"Part of it is that no one really understood Canada has had wide open access to online gaming. This isn’t really new. So no one really determined what the impact of the current situation was to online, on land-based casinos," Burns argues. "Because I can click on virtually almost any site, use my bank cards and my credit cards. There were very few restrictions."
“But we do know that the casino operators need to operate on a level playing field with the online space, and there’s still some work to do, and we’ll hopefully get that done soon to make sure there is that seamless transition for customers in the casino environment to online for those sites," he says.
Ontario has also seen sports leagues take a major role in its market launch, as some of them have partnered with entering operators. “Professional sports leagues in Canada were definitely looking for the opportunity to partner. They recognize that sports betting is part of that and fan engagement," argues Burns. "The sports leagues saw the need to create these partnerships only for creating more fan engagement activity in stadiums. We have an emerging Canadian elite basketball league. So those partnerships have been important.”
Despite the fact that the market has been running smoothly since it went live, some companies have already faced monetary punishments due to alleged ads, inducements and infractions. From this perspective, Paul Burns deems compliance efforts have been good so far. “From the operator's side, there’s definitely a desire to make sure that everybody understands the rules," he notes.
He explained that it is a matter of language and interpretation. “There has been a real desire for operators to understand how that’s going to be interpreted by the Alcohol and Gaming Commission of Ontario and then enforcing the market to make sure that only the licensed operators are working with affiliates," the expert says.
“Operators didn’t have to leave the market. There was no blackout date, there was no drop dead date. They were always allowed to as they got the license to transfer into the market. So we’re in a period where it’s a bit of a gray zone, and that will change in the next couple of months because anybody who applied before April 4 was allowed to transition to the market. The last of those applications are being processed now," Burns says. A definite black-and-white market is expected to take shape over the summer.
“It was a bit of a learning experience for everybody in terms of what the interpretations are of the rules. And so there's still lots to learn," he states. "But I think as everybody's going through it, there's a good dialogue and there's a definite desire for stronger enforcement from the Alcohol and Gaming Commission."
And with such market growth, Canadian Gaming Association’s CEO also believes Ontario is arable land for new technology developments in the gaming industry. “Ontario in the regulatory regime set very high KYC requirements at account establishment and sign up before deposits could be made," Burns tells Yogonet. "There were a lot of concerns amongst operators. Technology has helped get over some of that, the perceived friction they saw coming, that it would be a difficult signup process for customers."
“We’ve seen tremendous and new options for customers in terms of payments, ease of withdrawals. So in particular in Canada, we’ve got GeoComply, which is one of the world leaders in geolocation services. So we’ve seen a lot of that innovation happen here in Canada and it’s being applied to the Ontario market and very successfully," the CEO and President of the Canadian Gaming Association claims.
The overall market performance has led Paul Burns to believe there could be a contagion effect among other jurisdictions both within Canada and around the world. “We’ve seen a lot of the provinces watching what Ontario is doing," he admits. "They want to see the effect of finally tackling the gray market in Canada, which has been a huge problem and issue for the gaming operators here who have been operating in a level playing field. I think some of the first results we’ll see at the end of the first quarter of business for Ontario’s market will be telling."
“I think that it’s driving a conversation in other markets about how do we fix the gray market? What are our solutions? Because I think that’s something they’ll take in and take a hard look at," the executive believes. "Have a discussion, talk to all your stakeholders in the gaming industry and you’ll be able to best determine what works for your market. And that’s what Ontario did. It was a great process. There was lots of engagement back and forth between government regulators, operators, and I think that’s the key to success."
Having been at the forefront of the Ontario market opening, Burns wants to see gaming become regulated everywhere in Canada: “How they choose to do it, well, that’s up to the provinces. And we’ll work with them to make sure that they get the best model that suits the needs of their jurisdiction," he pledges.