Ontario is the first province in Canada to set up its own iGaming platform
As of midnight, on Monday April 4th, Ontario will be allowing private gaming companies to begin operating online in the province. Until now, the only legal online operator was the Ontario Lottery, but as part of a gambling modernization plan announced by the province years ago, along with the recent decision by the Canadian federal government to allow single game sports betting, the province has decided to allow operators to apply for a license and be regulated in the province.
All unauthorized companies that continue to offer products to the Ontario market will face sanctions, including the likelihood of being banned from getting a future license after being deemed a bad actor. This will have little effect on some offshore casinos and sportsbooks that have no intention of ever applying for an Ontario license, but it will have a large effect on companies that have legal Ontario gambling in their plans.
Unlike many U.S. jurisdictions, there is no requirement for companies to set up shop in Ontario or to be partnered with an existing land-based casino. For a $100,000 yearly licensing fee and 20% of profits as a tax, any company that is approved by Alcohol and Gaming Commission of Ontario (AGCO) can use their existing products from wherever they are headquartered. That said, some companies are setting up offices in Ontario anyways. As of Friday, 16 companies have received a license to operate, and it has been rumored that upwards of 30 companies have received indication they will get a license but just aren't ready to proceed. Among those is DraftKings.
The 16 operators that have received licenses are mostly UK and U.S. based. The full list at the time of writing are:
• BetMGM – A subsidiary of MGM with a presence in most states with will focus on sports betting
• BetRivers – A skin of RushStreet Interactive, which will offer online sports betting and casinos
• Bet365 – One of the largest UK bookmakers who will continue offering all products to Ontario residents including sports and casino games
• Coolbet – A large UK bookmaker that will offer sports and casinos
• FanDuel – One of the largest gambling companies, owned by UK based Flutter Entertainment, which will focus on sports betting and casinos
• Fitzdares – A popular UK bookmaking company that will likely concentrate on sports
• LeoVegas – A Swedish company with headquarters in Malta who will be running two separate skins under LeoVegas and Royal Panda, each with a slightly different focus, but both offering both sports betting and casinos
• LottoGo – owned by Annexio, an Isle of Man based B2B and B2C company that will apparently focus on lottery and casino products
• PointsBet – A company headquartered in Australia, but with a large U.S. presence, that will concentrate on sports betting
• Rivalry – A Toronto Stock Exchange listed company that will focus on sports and particularly eSports
• TheScoreBet – owned by Penn National, which will focus on sports betting
• Unibet – A large European gambling company that will focus on sports and casinos
• WSOP under the GGPoker name that will concentrate mostly on online poker
• 888 Gaming – A large European operator based in Gibraltar who plans to offer sports, casinos, and poker
As well, the Ontario Lottery Corporation, which has been operating for almost two months with Proline+, will continue to offer sports betting and online casinos to Ontario through the OLG.ca website and app.
Bet365 has already informed Ontario residents that they will need to log into a new website at on.Bet365.ca although nothing will really change. 888 and Unibet, which have also been catering to the Canadian market, have followed suit.
Along with the forementioned companies, Bragg Gaming has been given a license and will offer account management related services and Play n’ Go has been given a supplier license to offer its casino products.
The obvious names missing from the list are DraftKings, PokerStars and BetCaesars, but people close to the situation have informed me that they likely will get a license soon, but have not yet decided how to proceed. It’s also uncertain what will happen with William Hill. They currently cater to the Canadian market with their William Hill brand operated from the UK and there is no indication they applied for an Ontario license. Even if they have, the question will be whether they will use that license which was recently sold to Apollo Global Management or whether they will use the U.S. license which is held by Caesars. The almost certain back and forth discussions between Apollo and Caesars along with the fact that Caesars operates a land-based casino in Windsor may be why BetCaesars has yet to announce plans to operate in Ontario.
It is also interesting that Play n' Go received a license. That operator has been the main casino platform provider for Pinnacle Sports, so they may require Pinnacle to stop offering Play n’ Go games to Ontario residents. Pinnacle has already stopped offering Microgaming casino products, although other UK casinos like Bet365 and William Hill do allow Ontario residents to still play them. But all casinos stopped allowing Canadians to play SG Digital games, IGT games, Bally's games, and BluePrint games after each of those companies received a license to offer their casino games at legal iGaming casinos in Canada a couple of years back. There is no indication if Pinnacle or Microgaming has any interest in an Ontario license, or if they applied for one.
There was also a rule that the horse racing industry couldn’t apply for a sports betting license and the understanding at the time is that sportsbooks which are approved in Ontario would provide a quid pro quo. If that is indeed true, then one will have to see if all the companies will block horse racing as a product offering. If they do, then it could be a massive blow to many of the UK bookmakers as horse racing is one of their biggest revenue generators. It is notable that Bet365 stopped allowing Canadians to bet on Canadian horse racing years ago, so it’s possible that could be the compromise for all sportsbook operators.
There has been some confusion and concern expressed by many after Great Canadian Gaming published a report commissioned for them by HLT Advisory Group The report said that the province stood to lose $2.8 billion in revenue over the first 5 years if their privatized iGaming plan went forward. The report indicated that this would occur because land-based gambling is taxed at 55% of gross profits by the government while iGaming would only be taxed 20%. The report also said it expected a large percentage of casino goers would play online instead and forsake land-based visits.
Naysayers of the report, including DraftKings, said the material was very flawed because it made a lot of assumptions that have been proven inaccurate in real time situations. And looking at other jurisdictions they are likely right.
New Jersey, for example, has seen revenues skyrocket over the last two years despite land-based casino closures and restrictions during the pandemic. And even prior to COVID-19, visits to Atlantic City casinos increased and overall revenue to the state almost doubled. The only product that wasn’t seeing any real increases was Internet poker. Pennsylvania, Illinois, and Colorado saw similar overall increases. And in Ontario, the province would have lost almost all casino revenue in the last two years if not for online gambling offered on the OLG.ca website, as land-based casinos were closed most of that time as part of the province’s COVID-19 lockdown measures.
The truth is that most gamblers see land-based casinos and Internet gambling as different products with different focuses. Multiple surveys have shown that consumers view land-based visits as an excursion to be made less frequently and considered more like going to a movie or concert, whereas online gambling is simply an activity done at home to kill time or to have a vested interest when watching a game. So, one form of gambling does not actually cannibalize the other, but rather the two work well hand in hand.
There was also some concern that the iGaming plan by Ontario may be illegal after the Ontario Auditor General indicated that all gambling must be operated and overseen by the government and this plan doesn’t do that. But Ontario Premiere Doug Ford, along with most of his counterparts and legal experts, say that the Auditor General’s report lacks merit. The licenses have been approved by the Alcohol and Gaming Commission of Ontario (AGCO), the official regulatory agency that oversees all rules relating to alcohol, gambling, and cannabis, so if they have oversight of the gambling and have authorized the licenses there is no concerns. In the short term, the AGCO’s subsidiary, iAGCO, may pay closer attention to operators to make sure that issues like Geolocating are being used properly, KYC measures are put in place, that no one under the age of 19 is gambling online, and that problem gambling measures, such as self-exclusion, are available and used.
April 4th launch
So, legal privatized iGaming will launch on Monday and Ontario bettors couldn't be happier. Proline+, the Ontario Lottery's product, has proven popular, but many sports bettors have said that the offerings are limited, and the odds are not as good as those at other offshore sportsbooks and U.S. companies. There were also some complaints about customer service and the inability to get in touch with OLG staff instantly when there was a problem.
Bettors also know they will be getting some juicy sign-up bonuses and promotions, which have already been noted in ads appearing on TV and radio in Ontario. And make no mistake, the companies are already in full force trying to get sign-ups first. BetMGM has employed Wayne Gretzky as their spokesperson, LeoVegas has recruited former Toronto Maple Leafs star Mats Sundin as their spokesperson, and ads are being run constantly, particularly during live game broadcasts. The forecast by Vixio Gambling Compliance is that revenue in Ontario will reach $3.27 billion by 2026, which will make Ontario the third largest regulated online market in North America, behind only Pennsylvania and New Jersey, although when New York begins offering online casino products they will likely overtake all three. If that proves true, then the Great Canadian report will prove to be unfounded and just fear mongering. Then again Great Canadian Gaming is the largest land-based casino operator in Ontario and no business really likes competition.