February 7, 2024
We've been waiting for another Canadian province to indicate that they wish to follow in Ontario's footsteps in creating a legal, regulated online sports betting and gambling market for their residents. We've even written a piece to highlight just how much money Canadian provinces are losing by failing to regulate online gambling. Despite the birth of new lobby group, stumping for an Ontario-styled iGaming market in Quebec, there have been no positive noises in this regard from the powers-that-be in La Belle Province. British Columbia to-date, has also given no indication about developing its own legal online gambling market.
However, with the arrival of ICE London on the calendar between February 6 and 8 this year, which is the premier annual iGaming industry conference and trade show, it has become apparent that Alberta is interested in taking steps to develop their own legal iGaming market. MLA for Morinville-St. Albert, Alberta and Minister of Service Alberta And Red Tape Reduction, Dale Nally, was at the conference. There, he met with Ontario Attorney General, Douglas Downey, whom was instrumental in creating the conduct-and-manage framework for the AGCO and iGaming Ontario.
Beyond this, Minister Nally also attended a roundtable discussion at the conference about legal online gambling in Canada. Gaming News Canada, as posted on X, quoted the Minister, where he was likely speaking to a room full of representatives from online gaming brands: "If you like Ontario, you will like Alberta. You won't come for the weather, but you will stay for the taxes." Given that Ontario has a very competitive 20% tax rate or revenue share rate, however you wish to frame it, Alberta appears to be very interested in ensuring that operators know that any framework that they develop will be one that operators find to be very favourable. This is really no surprise.
Alberta as a market has a population that is less than one-third of that found in Ontario. In order to ensure as many operators look to enter their market as possible, an inviting tax rate will be crucial to develop an attraction. This applies to "grey market" operators that serve Alberta residents currently like bet365 and Betway, which could swiftly move their existing Alberta players to a legal platform. It also applies to operators that have no such "offshore" operations and only wish to operate in fully regulated local jurisdictions, such as FanDuel, BetMGM, theScore Bet and DraftKings among others, which currently operate in the legal Ontario market.
Beyond what is likely to be a very competitive tax rate, also on the positive side of things for operators that wish to enter Alberta, as we showed in our analysis about lost gambling tax revenue, Alberta has the highest median income level in the country, nearly 10% higher than Ontario. So even though it is the 4th-largest Canadian province by population, it can be argued that on a per player basis, there is far more disposable income available in Alberta than in any other province.
Does this make Canada's most-populous Prairie province large enough to develop a market that offers lots of consumer choice for regulated Alberta betting sites and online casinos? With regard to population and personal income levels, Alberta is actually very similar to Denmark. Denmark has a legal online gambling market of over 40 operators and over 100 brands. Given that Denmark also had an initial 20% gaming tax rate, there is no reason to believe that Alberta would fail in developing a similarly robust online gambling market, if it used a similarly competitive tax rate, which would return well over $100 million per year to government coffers.
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