There was a lot of chatter following the first batch of online gambling and sports betting market and revenue numbers by iGaming Ontario. The release covers the first three months of Ontario’s online gambling industry, which had a much-ballyhooed launch on April 4.
After the buildup and excitement, the industry waited months for revenue numbers. And when they finally arrived, the iGO release was quite disappointing, containing only topline numbers: total handle, total revenue, accounts created, and the number of operators as of June 30.
The dearth of data allowed analysts and observers to play a game of Mad Libs and fill in the blanks to explain the market’s poor start (Ontario online gambling operators generated just $162 million in revenue over the near-three-month period).
That said, a more comprehensive look at the structure and subtleties of the Ontario online gambling market paints a different picture.
As Amanda Brewer, Kindred’s country manager for Canada, said on LinkedIn:
“I would encourage anyone comparing Ontario’s first set of results with any US jurisdictions to resist, as Ontario’s market is not comparable to any of them. Some of the biggest operators in the world only entered in the last 4-8 weeks and the AGCO is seeking to end the transition period on October 31. These early results are encouraging and should be celebrated, but they do not show the full picture. Patience. We’ll get there.”
3 Things to Consider When Looking At The Ontario Numbers
#1: A Lot of Revenue Wasn’t Reported
Per the iGO press release, the numbers do not include the Ontario Lottery and Gaming Corporation (OLG) casino or sports betting sites.
“The Ontario igaming market described in this report includes all igaming Operators that executed an operating agreement with iGO between April 4 and June 30, 2022. As such, it does not include OLG’s igaming offering.”
Further, the numbers do not include operators the AGCO has yet to license, nor does it contain revenue from licensed operators that haven’t fully migrated to the iGO platform.
Essentially, yes…
But in some cases, the firms ARE licensed by the AGCO, but they have not yet integrated to the iGaming Ontario platform (which you would note with the iGO logo).
Then there are brands not yet licensed, but will be soon, & operate in ON w/ this understanding.
— SNBET (@SNBET_ca) August 31, 2022
And as SNBET pointed out, the province’s top online casino operator (Betway-Spin) isn’t included in the iGO’s Q2 results.
Again, "North America" is dominating results for $SGHC in 22Q2 at 44% of its GR.
The "North America" where it is not a leader in the USA nor Mexico.
When you are wondering why $DKNG $FLTR $MGM $PBH $CZR $KIND $BALY are mainly quiet about ON results: 👇https://t.co/Ph8zBRhXk3 https://t.co/vaSzbMwvPg pic.twitter.com/CX1pEyzeAR
— SNBET (@SNBET_ca) August 11, 2022
#2: Advertising Restriction on Licensed Operators
Ontario has placed onerous marketing restrictions on licensed operators. Perhaps the most significant is a prohibition on highlighting bonuses and promotions on social media and external marketing. The policy restricts the advertisement of bonuses to a licensed operator’s online gambling website. Operators cannot advertise them in external marketing, on their social media channels, or through affiliates.
The policy will create a much slower burn to maturity in Ontario than in US markets. It will also keep existing customers in the black market; as a recent Betting Hero study found, “25% of Ontario bettors would try a new sports betting app because of promotions.”
To that end, another Canadian explained that black-market operators can advertise bonuses and promotions free of the restrictions imposed on licensed operators.
I mean, this is a much worse start than Michigan, but much better than what happened in PA at first. But I don't think Ontario will ever rival US states per capita for a few reasons. It'll be better than this but not on par with NJ/PA/MI.
— Alex Weldon (@BeneFactumGames) August 30, 2022
#3: Canada Is Not the US
This heading has two meanings. First, the betting culture is simply different in Canada.
Agree. And early numbers are just early numbers. They aren't an indication of how the market will pan out. And yes, it's Canada, not the US.
— Steve Ruddock (@SteveRuddock) August 30, 2022
Second, US sports betting giants need to understand they cannot airdrop their US strategies into Ontario. To this point, SNBET noted that some major operators are using odds formats Canadians are unfamiliar with.