Canadian Gaming Association: Illegal gambling a sign some provinces need a new model

November 20, 2023 1:02 PM
Photo: Shutterstock
  • Mark Keast, CDC Gaming Reports
November 20, 2023 1:02 PM
  • Mark Keast, CDC Gaming Reports
  • New Brunswick
  • Nova Scotia
  • Ontario
  • Prince Edward Island

In his comments last month after his organization released their annual report, Atlantic Lottery President and CEO Patrick Daigle said one of the big challenges facing the corporation was dealing with the rising number of illegal gambling sites in the region.

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Atlantic Lottery is publicly owned by the four Atlantic Canada provinces and returns 100 percent of its profit to the four provincial governments.

“While we are pleased by the continued growth in our ilottery business line, we remain concerned about the growing presence of illegal gambling sites in our region,” Daigle said in a statement. “Players are not always aware that these illegal gambling sites are not accountable to government regulators and their profits do not remain in our region. Atlantic Lottery is proud to be the only legal and government-regulated provider of online gambling and sports-betting products in Atlantic Canada.”

According to Canadian Gaming Association President and CEO Paul Burns, the answer to the problem is to look west at the regulated, competitive, Ontario model.

“The governments there can do what Ontario did and create a regulated marketplace, with consumer protections and choice,” he said. “Like with any jurisdiction, the solutions are within their control. And they can design the market so that it fits their region. Each province has to decide what’s best for their marketplace. That’s what Ontario did. After a lot of consultation, they came up with a plan.

“[Atlantic Lottery is] rightfully frustrated, because it’s an unlevel playing field, but there are solutions,” he said.

Ontario is now one of the larger, regulated, igaming markets in North America. According to the recently released second-quarter market-performance report, Ontario saw $14.2 billion in total wagers, up from $14 billion in Q1 (April 1 to June 30). The province generated $540 million in total gaming revenue in Q2, down from $545 million in Q1, with 47 operators licensed and operating in Ontario and 71 gaming websites.

According to the just-released 2022-23 Annual Report, Atlantic Lottery had an increase in profit of $54.1 million over the previous year, driven by a strong performance within several lines of business, as well as the launch of Nova Scotia’s online casino.

Atlantic Lottery returned $160.4 million in profit to Nova Scotia, $153.9 million to New Brunswick, $148.6 million to Newfoundland and Labrador, and $29.3 million to Prince Edward Island (from $843.9 million in gross operating revenue), which those provinces use to fund essential services and programs.

When Ontario went with the regulated model, “an overwhelming number” of gray-market operators chose to enter the marketplace, “because it was a good model,” Burns said. “Why wouldn’t you want to level the playing field?”

Like other markets, Atlantic Canada is a highly competitive market for entertainment dollars.

Burns said he hadn’t heard of any push in the Atlantic Canada market to create a model similar to Ontario.