There were rumblings in Ontario, Canada that Coolbet’s recent departure from the province’s online market would be just the first of many. So far, however, that mass exodus hasn’t materialized and several industry insiders don’t believe it will.
The Ontario market swelled since allowing sports wagering in April 2022. There are now 70 sites active in the province.
“The sheer amount of licensed operators has caused a hyper-competitive environment,” Aly Lalani, head of marketing for BetRegal, told CDC Gaming Reports. “With so many suitors bidding for the same inventory/partnerships/sponsorships, the marketing costs are significantly higher than we initially anticipated. I would assume that would apply to others that didn’t necessarily anticipate how frenzied it would be in Ontario in Year 1.”
Paul Burns, president and CEO of the Canadian Gaming Association, told CDC Gaming Reports that Coolbet is more of an anomaly rather than the norm.
“Some will be winners, some will be losers,” Burns said. “It’s unfortunate that companies make those decisions, but it’s obviously based on their own business model, what’s best for them. They obviously weren’t seeing the return they wanted.
“This is a reflection of what kind of market has been created. The market is going to sort itself out. We’re also seeing new entrants coming in and others interested in entering the market. Structural or regulatory issues aren’t the reasons why people leave. It’s straight competition between product. That’s business.”
Coolbet announced it was closing its casino and sportsbook on March 22. It suggested customers pull out their funds by April 3.
Kris Abbott, former head of North America for Coolbet, spoke on a recent Gaming News Canada podcast and said the Ontario market is a challenging one.
“The cost of operating here hit them hard a bit because their model is built on slow, steady growth,” Abbott said. “From a business perspective, their strategy was low-vig sports betting, which in this market is dangerous, and they never had big marketing budgets.
“The product itself, there’s nothing wrong with it. In fact, I think casino-wise they have one of the best. I think there’s other factors at play for why they made this decision,” Abbott said. “I think a lot of operators clearly thought that Ontario was going to be a land of milk and honey, and it’s a challenging market largely because of the competition. I think there will be plenty of companies in the market that reevaluate their stance.”
