April 18, 2024
The numbers were extremely impressive: blowout growth over year-one. From our perspective, this was completely expected. The actual results were even better than we predicted. While American pundits would see initial quarterly results from iGaming Ontario and comment with snark, those of us with actual knowledge of idiosyncrasies of the Ontario market context knew the realities, and that the true size of the market would not become more apparent until the second full year was in the books.
Here we are, and none of those US commentators have any snark left. By the time online gambling intelligence firm Vixio comes out with their rankings of the largest regulated igaming markets in the world later this year, Ontario will be well-established in the top 10 jurisdictions, behind no more than two US state jurisdictions. Total wagers in the legal Ontario market for the 2023/24 year was $63 billion with $2.4 billion in revenue. This is 70% year-over-year revenue growth.
The idiosyncratic nature of the Ontario roll out, migrating from a "grey market" to a legal one, meant that not all major operators made their transition at the same time. In fact, it stretched out over the course of about 6 months. Thus, for much of the first year, the wagering and revenue figures for some incredibly important incumbent brands were not being counted within the legal market reporting, even though the brands themselves were live in the Ontario market from their "grey market" jurisdiction platforms. For year-two, essentially all key brands were live and reporting results within the legal market for all four quarters.
Sometimes mistakenly called "igaming", the icasino market in Ontario received the lion's share of both wagers and revenue. Legal Ontario online casinos took $51.7 billion in wagers and earned $1.8 billion in revenue over the 2023/24 year. This accounted for over 82% of overall wagers and for 75% of total revenue for the year.
iGaming Ontario reported their second-year sports betting handle figure at $9.7 billion, with revenue at $588 million - about a 6% hold. As we wrote earlier, we expected iGO's second-year sports betting handle to be in the region of $9 billion.
70% year-over-year growth is incredible, but it is accountable due to the idiosyncrasies of the Ontario market opening process. There will not be a similar increase in revenue and wagering figures in year-three over year-two. While some casino-only brands will likely enter the market, they will not likely add to the size of the market. They will look to take market share from others already in the market. The time for formerly "grey market" brands to shift into the legal market is now long past, so that huge step change in reporting has been realized.
There could be an upward tick up in revenues for year-three, as we will likely see increased engagement with legal Ontario sportsbooks and online casinos due to this being a year with both the Olympics and the European Football Championships, which can boost the quieter summer months.
Conversely, the health of the typical Ontario consumer is likely down from year-two, given the result of high interest rates taking their toll on the economy and those with mortgages, lessening disposable income at the margin.
Thus, in the end, the year-three results could be a little higher, or a little lower than year-two, given these realities. However, barring some large economic black swan event, with the inelastic demand regarding something like online gambling, and the continued brand entrenchment in the market from ongoing media campaigns, we do believe there will be a modest increase in results for iGaming Ontario's year-three results.
|
Go back to SNBET's Ontario gaming news page.