Ontario online gambling is the rising tide raising all betting boats
Another look at the OLG’s Fiscal Business Plan seems to confirm Dustin Gouker’s argument that online gambling is mostly responsible for the growth of total gambling revenue in Ontario.
Dustin Gouker had an interesting analysis in his excellent The Closing Line newsletter on Tuesday about how the growth of gambling revenue in the U.S. is predominantly due to the rise of online gambling. His point was less about that tired old chestnut that online gambling does or does not cannibalize retail casinos, but more a conclusion that online gambling is a rising tide raising all gambling boats.
Going back to the Ontario Lottery and Gaming Corporation’s (OLG) Fiscal 2025-28 Business Plan that we wrote about at length in Wednesday’s Gaming News Canada newsletter, the Ontario numbers seem to be further confirmation of Gouker’s argument in a Canadian context.
“Gambling is growing in the U.S. — precisely because of the adoption of regulated online gambling,” Gouker wrote. “There’s not a great argument we’d see meaningful growth across the board for U.S. land-based casinos if regulated online options didn’t exist.”
Previously, we only looked at online numbers, but the OLG is also projecting growth in the province’s retail casino sector. The OLG oversees all land-based casinos in the province.
A reminder, the OLG is talking about fiscal years (FY), which, in its case, runs from April 1 to March 31 of the following year. Also, the OLG’s online projections include its iLottery product, so that muddies the water a bit. Still, we can make out some patterns in the numbers.
The OLG report is forecasting land-based gambling will produce revenue of $4.35 billion in FY 2023-24 and grow 7% to a budgeted $4.65 billion in FY 2024-25. The OLG is also projecting retail casino revenue will go up in slowing increments of 7.7%, 5% and 3.6% in the next three fiscal years from $5.01 billion in FY 2025-26 to $5.26 billion in FY 2026-27 and to $5.45 billion in FY 2027-28. That’s a projected increase of 25.4% from $4.35 billion in FY 2023-24 to $5.45 billion in FY 2027-28.
That certainly doesn’t indicate Ontario’s burgeoning online gambling sector is cannibalizing the retail one, but it’s important to note that retail growth of more than 25% over five years is projected to be less than the growth in the OLG’s online sector, which the Lottery Corporation predicts will increase 41% in five years despite huge competition from private operators.
The OLG’s digital division alone – which does not count revenue from Ontario’s other 50+ online operators – is forecast to produce revenue of $745 million in FY 2023-24, a figure that is budgeted to be $819 million in FY 2024-25 and grow to a projected $895 million in FY 2025-26, $971 million FY 2026-27 and $1.049 billion in FY 2027-28. That’s year-over-year projected growth of 10%, 9.3%, 8.5% and 8%, respectively.
Here’s the comparison in percentage change terms:
Since the OLG returns all proceeds from its operations to the province, it’s important also to note the projected growth of the Net Profit to the Province (NPP). Here, the growth is projected to be about the same – 51% in both sectors over five years. The difference is, the growth in the amount retail casinos return to the province is projected to be huge in the next two years — 18.7% and 15.4%, respectively — due mostly to the further evolution of the newly-expanded Great Canadian Casino Resort Toronto, the largest casino in Canada. Meanwhile, that growth is predicted to trickle to 3.8% between year four and five of the projection.
The online casino NPP is projected to hover around 12% year-over-year. That, again, shows the online gambling portion will continue to have greater influence on the whole.
As Gouker wrote, “here’s what you can’t deny: People want to gamble online, and they seek out legal and regulated options when they have them.
“People also are increasingly seeking out online gambling in other formats, sometimes regulated, sometimes not: fantasy sports pick’em/parlays, trading sports event contracts on Kalshi, sweepstakes casinos and sportsbooks, skill-based online slots, online lottery couriers and online lotteries that often resemble online casinos, online horse betting, and on and on. It’s difficult to add up all of that revenue, but it’s easily in the tens of billions of dollars. And that’s not to mention what is likely still a vibrant offshore online gambling industry.”
Gouker’s take and our reporting on the OLG fiscal business plan in Wednesday’s dispatch coincided with the announcement yesterday that PENN Entertainment is introducing a PGA Tour-branded blackjack game through Hollywood Casino in New Jersey and theScore Bet in Ontari-ari-ari-o. And, an online player on BetMGM’s Ontario app is $2 million to the better after winning two progressive jackpots over a week.
And speaking of OLG, it drew back the curtain this week on its first online casino game tailored for people with disabilities and accessibility needs.
The rise in people seeking online gambling options is another nod in favour of Ontario’s approach to try to draw more grey-market operators into the regulated sector where consumer protection and proceeds remaining in the province are key.
Registration is now open for the June 17-19 Canadian Gaming Summit at the Metro Toronto Convention Centre in the city below Beeton. Register here using the code PARLEHPARTNERVIP and get 50% off your full-event pass.
Will PROLINE become Canada’s ‘national’ sportsbook?
Speaking of the grey market, Geoff Zochodne wrote Wednesday in Covers that Canada’s lottery corporations are looking to have one “national” legal online sports betting platform and brand and that brand is most likely to be PROLINE.
To that end, the lottery corporations in British Columbia, Québec and Atlantic Canada are now reviewing bids for just such a Canada-wide sports betting operator.
There is some confusion from province to province. While the Atlantic Lottery Corporation uses PROLINE branding now for its sportsbook, the lottery corporations in BC, Manitoba and Saskatchewan use the PlayNow platform. Québec uses the Mise-o-jeu brand. Each of them has different back-end technology.
Zochodne wrote that, " Having a single sportsbook brand in several jurisdictions could also make it easier for the lotteries to hammer home the point that PROLINE is the only authorized site in their respective provinces.
“Trying to make that point right now can be difficult, as offshore operators are easily accessible in jurisdictions where they are not authorized to do business. Bettors may not know or may not care about the legal status of a site.”
Our take is that while this would help reduce consumer confusion, those provinces likely would do better to launch an open, regulated online gambling market such as the one that exists in Ontario and the one coming to Alberta.
Troy Ross returns to the Gaming News Canada Show
Troy Ross of TRM Public Affairs made his return to the Gaming News Canada Show this week. Host Steve McAllister asked Ross about a wide range of topics, including:
Recent reporting by Geoff Zochodne for Covers and Global Gaming News on sports betting and iGaming operators making their pitch to the policymakers in British Columbia to bring an open gambling market to Canada’s most western province;
The case for an open market in B.C. a la Ontario (and, over the next 12 months, Alberta), including the ongoing success by OLG in Ontario’s bigly competitive industry;
The case for an open marketplace in La Belle Province (despite the ongoing efforts by the Quebec Online Gaming Coalition, the chances appear to be slim to none and slim has disappeared to an unknown locale. . .);
The official separation of the Alcohol and Gaming Commission of Ontario and iGaming Ontario by the Douglas Ford government. And, the creation of a new Ministry of Tourism, Culture and Gaming with Stan Cho in the minister’s parking space.
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