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Ontario to open iGaming & online sports betting market April 4, 2022

January 28, 2022

Today is the day that many sports betting and iGaming operators have been waiting for. 

The date.

They wanted to know the date that they could circle on their calendar for when the Ontario iGaming & online sports betting market would officially open.  In the afternoon today, the news finally broke. iGaming Ontario has set the date of April 4, 2022 for market launch, where licensed providers would be able to offer their games to players located in Ontario.

“Consumers can be assured that companies who successfully enter the new Ontario market will have met rigorous standards of game and operator integrity, fairness, player protections and social responsibility, allowing all players to play with confidence,” says Martha Otton, iGO Executive Director in the iGaming Ontario announcement

 

Two months remain to get licensed to be live at market launch

In New York, we recently watched an immense amount of hype surrounding the market open in that state, where only four providers were licensed and ready to accept wagers on the launch date: BetRivers, FanDuel, DraftKings and Caesars.  In the first hours and days after launch, these four companies acquired an immense number of new customers. Late to the party were PointsBet and BetMGM, which launched weeks later, which was obviously less than ideal for them.

While there will certainly be a rush by some companies to become licensed Ontario betting sites in time for launch, the true urgency will only be with those firms that are not currently operating in the 'grey market'. theScore Bet, PointsBet, BetMGM, FanDuel and DraftKings, among others will be hurrying to ensure they are ready on day-one.  Current 'grey market' providers that are applying for a license will feel less urgency, since they are technically open for business now and will be able to move their Ontario players over to the new system as allowed by the AGCO. They will certainly follow the guidelines and requests of iGaming Ontario, but they won't feel the same urgency of these mainly US brands which are completely new market entrants.

 

Pressure to mount on BCLC, Loto-Québec, AGLC & other gaming regulators

Unlike the USA, where online gaming was a 'black market', iGaming and online sports betting in Canada has been a 'grey market'. Money flowed very easily from Canadian players to 'grey market' iGaming and betting sites, unlike the US, where this was a lot more difficult. When the US opens its various state markets, all operators start from zero.

This will not be the case in Ontario, as dozens of currently 'grey' operators will be able to bring their players with them to the legal market.  The AGCO will essentially be repatriating all these Ontario players to the legal market along with all of the rates of revenue that are currently being generated in existing accounts. When the Ontario iGaming market opens, they will not be starting from zero. They will have a starting point that on-boards hundreds of thousands of active player accounts.  

There has always been controversy over the size of the Canadian 'grey market' in terms of its value.  By May 2022, we will begin to get some transparency about just how big the Ontario iGaming market will be.  While the prime months for sports betting in Canada will have passed with the NFL season's closure, the NHL and NBA playoffs will be getting underway. Furthermore, know that iGaming is more than sports betting.  All of the operators will also launch their legal Ontario online casinos. The iCasino gaming vertical is actually much more important than sports betting from a revenue perspective. By May, we will have a full month of revenue tabulated across all iGaming verticals and Ontario will be getting its assumed 20% tax.

This will give at least an idea of the proportional 'grey market' size that could be repatriated in other provinces.  How will the regulators and stakeholders that control gaming policy outside Ontario be able to justify decisions that do not invite any and all 'grey market' operators to their respective tables in the way that Ontario has done? 

This level of transparency in Ontario should leave other provinces and stakeholders with questions like the following, where the answers should be self-evident:

Do we want more revenue for our province or first nations communities, or less? - More?  Great!  Bring the 'grey market' and new operators to the table.

Do we want our citizens to have a safer, less harmful iGaming experience? - Yes?  Great!  Bring the 'grey market' and new operators to the table.

Ontario will prove that the vast majority of the important iGaming companies that have been serving Canada from the 'grey market' want to be taxed and regulated here.  They want to share revenues. They want to provide a safer experience.  All other policy makers should thus follow suit.  However, if they are not invited to the table, many will simply continue to operate in the 'grey'.  Operating a pseudo-monopoly or a very limited regulated market as proposed by the AGLC in Alberta will not end the 'grey market' and will be of no tangible benefit to consumers in terms of choice, harm-reduction or tax revenues. 

If a given province or First Nations stakeholder does not think that they have the number of staff required to regulate an entirely new market for their constituents - no problem. Since Ontario has already done all the leg work, like the Northern Territory of Australia, that is home to essentially all of that country's online betting companies, they could simply pick up the phone and have a civil discussion about partnering with the AGCO and iGaming Ontario.

This is not the time to focus upon things that make our provinces different: urban versus rural, west versus east, English versus French, this political party versus that.  This is about more money for Canadian communities and less harm for the people that partake in iGaming.  We can only achieve this across Canada if the 'grey market' is invited in to be regulated.

When we get to May 2022, leaders at the BCLC, Loto-Québec, the AGLC among others will have crucial decisions to make in this regard.  Will they make the right ones for their constituents, or will these leaders look to fortify their own positions and interests?