The announcement by Coolbet that they’re exiting the Ontario market raised a few eyebrows, but for people close to the market, it’s all part of doing business.
“Some will be winners, some will be losers,” Paul Burns, president and CEO of the Canadian Gaming Association, said. “It’s unfortunate that companies make those decisions, but it’s obviously based on their own business model, what’s best for them. They obviously weren’t seeing the return they wanted.
“This is a reflection of what kind of market has been created. The market is going to sort itself out. We’re also seeing new entrants coming in and others interested in entering the market. Structural or regulatory issues aren’t the reasons why people leave. It’s straight competition between product. That’s business.”
Coolbet closed its casino and sportsbook on March 22, offering a support email for customers who still have remaining balances in their account after April 3.
“The sheer amount of licensed operators has caused a hyper-competitive environment,” said Aly Lalani, head of marketing for BetRegal, still awaiting Alcohol and Gaming Commission for Ontario licensing. “With so many suitors bidding for the same inventory/partnerships/sponsorships, the marketing costs are significantly higher than we initially anticipated. I would assume that would apply to others that didn’t necessarily anticipate how frenzied it would be in Ontario in Year 1.”
With the “huge numbers” in terms of marketing costs in the industry so far, Lalani says there will be a “late-mover advantage” in the market to some degree. The competitive, regulated igaming market in Ontario went live April 4, 2022.
“There will be some value to operators stepping in at a later stage to benefit from this audience education,” he said. “I would love to say that the fact that BetRegal isn’t in the market yet was a shrewd strategic move as we wait for the dust to settle. It was not. However, it’s looking more and more like sitting back and letting the big marketing budgets initially fight it out over artificial market share is a viable strategy.”
Coolbet came into the Ontario market with some splash, led by a multi-year partnership last year with sprinter Andre De Grasse, Canada’s most decorated male summer Olympian, with six medals. De Grasse was Coolbet’s face in Ontario, all over their advertising and social media.
