Analysts: Ontario’s iGaming Future Bright

The Ontario, Canada, iGaming industry has enjoyed a record first quarter of 2023 and a report showed that the market will continue to grow for the next decade.

Analysts: Ontario’s iGaming Future Bright

There was good news at last week’s Canadian Gaming Summit in Toronto, Canada. Martha Otton, executive director of iGaming Ontario (iGO), told a large audience during a panel discussion that Ontario’s regulatory regime is “crushing it.”

Otton, whose iGO is a subsidiary of provincial regulator Alcohol and Gaming Commission of Ontario (AGCO), pointed to the revenue numbers as a big reason for the success. While she didn’t release specific numbers for the first quarter, which doesn’t end until June 30, she did say gross gaming revenue is “3.5 times as large as Q1 last year.”

Joining Otton on the dais for the panel discussion included Tom Mungham, chief executive officer of the AGCO; Doug Downey, attorney general of Ontario; and Dave Forestell, board chair of iGaming Ontario.

The panel also released the results of a study by Deloitte. The company estimated that Ontario’s new open and regulated igaming market generated more than 12,000 full-time-equivalent jobs across the province and contributed nearly $1.2 billion to Ontario’s gross domestic product, including more than $900 million in labor income.

“Whether they’re direct or indirect jobs in the market and an average salary well above the provincial average,” Otton said, “they’re good jobs for this province coming here.”

The report, “Economic Contributions of Ontario’s Regulated iGaming Market,” took a look at economic benefits to Ontario. The report said the industry had the potential to support up to 22,000 full-time-equivalent jobs, $4.7 billion in GDP, and over $2.1 billion in government revenue annually by 2031-32.

Employees in the iGaming industry are also well compensated according to the report. They earn an average of $103,000 a year in compensation, 41 percent higher than average job compensation across all industries in the province.

Based on the 20 percent revenue share model in Ontario, the report also predicted provincial government revenue from iGaming will grow from around $470 million last year to just under $1.4 billion in 2031-32. Also annual federal-government revenue will grow from an estimated $238 million to $647 million in those years and revenue to Ontario municipalities will more than double from $54 million to $115 million.

While it appears the industry is healthy financially, attention has turned to the responsible gaming aspect. Ontario lawmakers are concerned with the proliferation of iGaming and sports betting advertisements.

Because of that, lawmakers have introduced a bill that would prohibit iGaming advertisements. The bill was introduced in the waning days of the spring session and will be debated in the fall.

“We’re seeing an explosion of advertising,” Member of Provincial Parliament Lisa Gretzky, one of the bill’s sponsors, told Legal Sports Report last week. “I live in a border town, and we see a lot of sports games, and it’s upwards of 15 percent of advertising. In Toronto, you can barely walk a block without seeing an ad; BetMGM, Bet99, the list goes on: subway stations, on the subway, on the radio.”

Gretzky likened the advertising ploy to tobacco industry ads in the 1980s. In 1988, Ontario lawmakers banned advertising for tobacco companies.

“The tobacco industry is still thriving,” Gretzky said. “I don’t think this would be a major blow to the gaming sites and their revenue. But I know it’s the responsible thing to do.”

Ontario Liberal Party leader John Fraser told LSR that legislation is needed for the ads.

“For many of us, these ads are simply intrusive and really annoying,” Fraser said during a press conference this month. “For some, it comes at a much higher cost, and it’s something that we need to do something about.”