Canada is currently the talk of the sports betting industry. Two separate pieces of news in the past few months have paved the way for a regulated market in the north.
First, the province Ontario revealed plans to end its online gambling lottery monopoly and allow private operators to enter the market. Just days later, the Canadian government announced plans to end the federal ban on single game sports betting.
The two steps taken together could have a huge impact in Ontario. This means that the upcoming market can now include both sports betting and iGaming.
What’s the Opportunity in Ontario?
In terms of population, Ontario would be the fifth largest state in the United States 15 million Citizen.
That sums it up 2.5 million People in front Illinois. Illinois took $ 305 million In September alone, less than six months after launch.
“The potential numbers are staggering, ”he said Yaniv Spielberg, Chief Strategy Officer of Toronto-based provider Bragg Gaming. “Even compared to mature markets like Pennsylvania and New Jersey, Ontario could be a lot bigger.”
Lottery is already an important factor
Spielberg refers to the estimates made by the province’s lottery operator OLGthat budgeted for $ 3.5 billion in the income from lottery and digital gaming in financial year 20/21.
Of course, incoming operators won’t have the lottery revenue, but the sports and iGaming market could benefit from increased marketing and competition to make up for this shortcoming.
Based in Toronto The score estimated a market potential in Ontario of $ 1.5-2.1 billion in annual gross gaming revenue. The company based its estimate on historical data from legal online gaming markets in the US and around the world.
National chance for Canadian sports betting?
The nationwide market potential will of course only exist if other provinces follow Ontario and abolish their own lottery monopolies – which is no slam dunk.
A source with experience in the Canadian market noted this Quebec was more willing to do the opposite of anything Ontario did than to copy it. However, tax money can also help overcome regional rivalries.
“As soon as Ontario goes, others will go, ”he said John Levy, CEO of TheScore. “Every province suffers. They are all spending enormous sums of money. And there’s just not much resistance to sports betting left. I would be very surprised if we talk in a year or two and Ontario is an isolated incident. Our PASPA moment is just around the corner. “
Ontario has been easy with details of the market structure up to now, but that Doug Ford Administration has a reputation for free market economy. To that end, the stakeholders are forecasting no tethering and no need to work with local casinos to obtain licenses.
Operators currently operating in the Canadian gray market are also expected to be eligible for licensing. The market could live off that second half of 2021Levy said.
Winners and Losers in Canada Sports Betting
So who are the big winners of this market liberalization?
TheScore is an obvious candidate. Its share price more than doubled following recent moves, although it has returned some of the gains this week.
Canaccord Genuity TheScore has noted 1.4 Million User in Ontario alone, and could take one 10% Market share in the province.
“We estimate that Ontario could add up to $ 100 million annually Betting revenue for Score Media, ”wrote Canaccord.
While TheScore has a massive dedicated user base, it has to show that it can convert those users better than the US. Many of these customers will already bet with gray market operators and need incentives to switch. But Levy is bullish.
“We have the inside information, ”he said. “That’s what we’ve been working towards over the years. Everyone knows there will be competition up here, like in the US.
“But up here they are chasing us, not the other way around.”
What about the DFS giants?
That brings us to FanDuel and DraftKings. You may not have the same marketing edge as you would with US sports betting. Comscore App usage data for Canada shows the two DFS companies with a fraction of the usage from media companies like The score, TSN and Sportsnet.
FanDuel and DraftKings of course have the marketing power to fill this gap quickly. But it will be interesting to see how they fare on a higher level.
Indeed, these Canadian sports media companies could be the other big winners of liberalization. Spielberg expects a similar onslaught of partnerships between media and operators as in the US.
“TSN, Rogers Sports, even the Toronto Star. These are all really interesting opportunities for providers like us, ”said Spielberg. “They need a technology partner to help them turn eyeballs into sports weather.”
This is good news for people like GAN, camp, SBTech and SG Digital.
Finally, we would like to point out operators who were present on the Canadian gray market in the past PokerStars, GVC and bet365. These companies are likely to apply for a license under the new regime and gain good market share.