Ontario, Canada’s new online betting market could be nearly taken over by former gray market bookies that operated on the skirts of illegality for 20 years.
That’s the conclusion of Wall Street analysts doing a deep dive on the new market that includes lots of people from offshore and foreign gaming providers, who fished for Canadian players just outside of the limits of enforcement. The market is estimated to be $2.36 billion in size by next year.
Barry Jonas, managing director of Truist Securities told Yahoo Finance: “It’s a unique situation in Ontario, where gray market operators have been allowed to sort of become cleansed.” He added, “They have an obvious advantage, given that they’ve been taking bets from players for some time.”
The government of Premier Doug Ford has offered to forgive and forget with a penalty-free “business-like transition” for entities formerly considered bad actors. All it takes is approval by the Alcohol and Gaming Commission of Ontario (AGCO) and its subsidiary iGaming Ontario (iGO).
One of the formerly offshore operators expected to do well is Bet365, a U.K.-based operator, whose app went live April 4, the first day it could legally do so.
Another former gray market operator is Betway, which plans to launch its “Spin” casino brand soon.
The once-illegal operators were given a grace period to continue operating while the AGCO considered their applications. Macquarie Group analyst Chad Beynon expects this will give them an unfair advantage over those that didn’t operate that way. “The government has permitted them to just basically transfer players over to a new regulated app,” he told Yahoo Finance. “I’m not really sure why they chose to go the route.”
Stifel analyst Jeffrey Stantial agrees. “Almost without a doubt, the gray market guys will have a huge leg-up. I think you’ll see a really nice print out of the gate from the legacy, gray market operators.”
