How Does Ontario iGaming Compare to U.S. Cities?

Recent reports from the Ontario Lottery and Gaming Corporation show that the province is producing well, but still has a ways to go to catch U.S. cities that are near them.

How Does Ontario iGaming Compare to U.S. Cities?

The Ontario online gambling sector has made significant progress in its first year of operation. However, when compared to similar jurisdictions in the United States, Ontario still lags behind.

The Ontario Lottery and Gaming Corporation (OLG) recently released its annual report for the 2022-23 fiscal year, providing insights into the province’s online gambling scene. However, the OLG’s revenue figures are not included in the reports released by iGaming Ontario (iGO), which leaves the iGO figures incomplete. According to a story by Play Canada, they analyzed the figures and were able to provide a clearer picture.

In the first full year of operation (April 2022 to April 2023), Ontario’s online operators generated a total revenue of $1.4 billion. When the OLG’s digital operations revenue of $561 million for the same period is added, Ontario’s total online gambling revenue for year one was $1.961 billion in Canadian dollars. Converting that to U.S. dollars using the average Bank of Canada rate (0.76), Ontario’s total online gambling revenue was $1.49 billion in year one.

To understand Ontario’s standing in the North American online gambling market, Play Canada compared the province’s revenue figures with other jurisdictions. The top five jurisdictions in terms of online gambling revenue from April 1, 2022, to March 31, 2023, were:

  1. New Jersey – $2.47 billion
  2. Pennsylvania – $2.38 billion
  3. Michigan – $2.07 billion
  4. Ontario – $1.49 billion
  5. New York – $1.3 billion

It’s important to note that New York has not yet legalized online casinos, but its sports betting revenue alone is already comparable to Ontario’s revenue from both casinos and sports betting. Despite having a smaller population than New York, Ontario still has a higher population than the other top-ranking jurisdictions.

When comparing jurisdictions by population and the number of live gambling operators, Ontario stands out. With a population of 15.1 million, it surpasses Pennsylvania (13 million), Michigan (10 million), New Jersey (9.26 million), Connecticut (3.6 million), West Virginia (1.8 million), and Delaware (1 million). Additionally, Ontario has 47 live gambling operators, which is significantly higher than the other jurisdictions.

The OLG plays a crucial role in Ontario’s gambling industry and contributes significantly to the province’s revenue. In fiscal year 2022-23, the OLG delivered a net profit of $2.505 billion to the province, surpassing its budget expectations by 7.4 percent.

These figures do not include the OLG’s contributions to the horse racing industry and charitable gambling. The OLG’s revenue growth in 2022-23 can be attributed to the success of its digital gambling operations and the thriving retail casino sector.

Ontario’s digital gambling operations experienced significant growth in the 2022-23 fiscal year. Revenue from online gambling increased by 31 percent, reaching $561 million. This growth can be attributed to higher spend per player, the launch of new online products, and an improved customer experience.

The retail casino sector also saw remarkable year-over-year growth. The 30 facilities under the OLG’s purview generated $2.112 billion in revenue, a 94 percent increase from the previous year. This growth can be attributed to the uninterrupted operation of brick-and-mortar casinos throughout the fiscal year, with fewer Covid-related restrictions compared to the previous year.

However, the OLG’s lottery sector experienced a slight decrease in revenue. Revenue decreased by $65 million, amounting to $1.857 billion. This decrease can be attributed to lower proceeds compared to the previous year.

Despite the challenges and competition from other North American markets, Ontario’s iGaming industry has shown promise in its first year of operation. According to iGaming Ontario’s Q2 revenue report, online casino revenue increased by 3.8 percent from Q1 to Q2, accounting for 75.4 percent of the overall revenue figure. Total gambling revenue and wagers also experienced significant growth.

While Ontario still has room for improvement to catch up with the top-ranking jurisdictions, its performance against more mature markets has been strong. With the continuous growth of online casinos and the potential resurgence of sports betting revenue, Ontario’s iGaming industry is poised for further success.