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Ontario’s legal online gambling market brought in $162 million in revenue in its first quarter of operations, according to new numbers that provide an initial look at the province’s effort to regulate and profit off the formerly grey market for internet betting.
The provincial agency that manages the online sports and casino betting market, iGaming Ontario (iGO), published the figures Tuesday and said it would release regular quarterly data on the industry.
The agency said Ontarians placed a total of $4.1 billion in online wagers during the three-month period ended June 30. There were almost 500,000 active accounts and the average player spent $113 per month, iGO said.
The top-line revenue figure is the total that operators brought in after paying out player winnings and does not represent the profit the government will ultimately receive.
IGO confirmed to the Star on Tuesday that the tax rate for licensed operators has been set at 20 per cent (the industry term for this is the “revenue share rate”), which would translate into about $32 million for provincial coffers in the quarter.
Paul Burns, CEO of the Canadian Gaming Association (a lobby group for the gambling industry, which styles itself as the “gaming” business), said the first-quarter numbers are “a positive reflection of interest in the market,” but added there is room to grow.
Burns predicted an increase in revenue figures in the coming quarters, noting that several big-name operators, including PokerStars and Betway, did not officially join the Ontario market until either part way through the first quarter or well into July and August. Sports betting also ramps up significantly in the fall with the beginning of the NFL season, he said.
Other prominent players in the international online gambling and sports betting business, such as Bet365, DraftKings, and BetMGM, have registered to operate legally in the province, bringing many of their pre-existing users with them.
Another entrant in the market is NorthStar Bets, owned by NordStar, an investment company led by Jordan Bitove and Paul Rivett, which also owns Torstar, the owner of this newspaper.
There were 18 operators with a total of 31 igaming websites as of June 30, iGO said (some operators run multiple different sites). There are now 23 operators and 40 websites.
Ontario is the first Canadian province to launch a legal online betting regime for private operators, a bid to spur economic development and generate new tax revenue from the previously unregulated grey market, as well as introduce mandated measures to protect consumers.
Before the market launched on April 4, only the Ontario Lottery and Gaming Corp. offered a legal online option, but with little to no enforcement cracking down on other websites, many Ontarians placed bets on sporting events and played online casino games with private gambling sites.
The Ontario government has previously estimated that 70 per cent of money Ontarians spent gambling online every year went to grey-market operators.
The OLG reported $295 million in revenue for its digital gambling division for all of fiscal 2020-21. For the entire previous five-year period, revenue for the division totalled $406 million.
Since the launch of the legal market, television, radio and online advertising for betting websites has become ubiquitous, particularly tied to sporting events.
“Part of creating a regulated market is allowing people to advertise,” Burns said when asked about the volume of ads.
“I think the operators are balanced in their approach, there are ads about player tools for managing your play and responsible gaming advertising as part of their advertising mix,” he said.
IGO said in a news release that the revenue and player accounts numbers, “suggest that people in Ontario are interested in the strong player and anti-money laundering protections that are being offered in the regulated market.”
The agency said no one was available for an interview on Tuesday, but in an email it said it could not speculate on revenue trends or the growth of the market based solely on one quarter of data.
“That said, we are encouraged by the results so far and the number of operators who have made Ontario a priority market for their businesses,” iGO said in the email.
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