Tuesday marks the one-year anniversary of the opening of a regulated, open, competitive igaming market in Ontario.
Today, 45 legal entities are doing business in the province, offering range of products from casino games and live dealers to sports betting.
With the new open-license model, some of the biggest operators and suppliers have gone live: BetMGM, DraftKings, PointsBet, theScore, FanDuel, Caesars, Rush Street Interactive, Bet365, Kindred, 888. It’s clear that three or four brands aren’t dominating the market, like in some of the U.S. jurisdictions.
That’s the positive of a regulatory regime created by the Alcohol and Gaming Commission of Ontario (AGCO) that has encouraged so many industry players to jump in. Government objectives at the outset were both consumer protection and consumer choice.
One big negative has been the level of advertising necessitated by all the competition; “ubiquitous” is probably too tame a term, especially last fall, running across the media landscape (although media companies aren’t complaining).
And now we’re starting to see a thinning of the herd. Such brands as Coolbet and Play-On Casino have shut down operations. Those exits have taken 45 operators down to 43.
However, others have applications working through the AGCO, and still more, we’re told, looking to enter the market, but haven’t even submitted their applications yet.
There’s no better person to go to than Canadian Gaming Association president & CEO Paul Burns for some perspective on what has gone well, what has not gone well, and we can all expect to see going into Year 2.
CDC Gaming Reports: In your view what’s the one thing that has surprised you about the Ontario market after year one?
The level of interest in the market is larger than I thought it was going to be. We had an idea of what the gray market was through some of the legacy operators — the Betways, Bet365s, Pinnacles. But the interest from others who want to get their feet wet in the North American market is quite remarkable. It’s been great to see the interest from smaller players, people who had unique ideas, wanting to try some different types of product offerings, focusing on narrower segments of the marketplace. That’s the fantastic part about it.
You’ve got a wide range of products. You’ve got a fair revenue-share structure. You’ve got a strong regulatory regime that took and recognized some of the industry best practices being deployed across other jurisdictions in the world.
CDC Gaming Reports: Is there anything that you would have liked to have been done differently?
How things were set up for the existing land-based casino operators in Ontario to get into the market [how long it took]. That doesn’t just fall to the AGCO or iGaming Ontario, but it also includes OLG [Ontario Lottery and Gaming Corporation, which conducts and manages casinos in the province]. I think they could have done better and paid more attention to that.
CDC Gaming Reports: How do you see the market evolving into year two?
It’s a sector that continually embraces innovation, which is great. I think we’ll continue to see that. We continue to make sure that the regulatory regime and the market rules all make sure that can all be embraced and deployed. It’s about growing customers, particularly around sports betting. I still think that there’s a need for education there, an introduction to the product. A lot of sports fans out there have probably never placed bets in their life and are interested. How can we make it more attractive and get people involved and grow that customer base? Seeing enhanced retail opportunities may help. But we’ve had tremendous take-up; we’re close to a million accounts.
CDC Gaming Reports: What are you seeing in other jurisdictions in Canada, as it relates to Ontario, and bringing in similar business models?
There’s a lot of watching and learning going on right now. I think every jurisdiction wants to get rid of the gray market. There’s a commitment to that, it’s just the “how.” And it’s challenging. The three years it took to get Ontario to market from the initial commitment of the government to say, “Let’s look at this”; it’s always a balance. If you open the market, does that mean you lessen your enforcement? Ontario has demonstrated that if you want to invite the industry to come here, this isn’t the igaming industry from the late 1990s or early 2000s. The industry has matured significantly. And if you want to invite the industry to come, they’re going to come. The industry wants to be regulated. Many are publicly traded companies. They’re not outlaws on Caribbean islands anymore. There are strong commitments to player protection and responsible gaming. All we’re doing is encouraging other jurisdictions when they’re ready to have a consultation. Talk to the industry. You’ll find out what’s going to work best for your jurisdiction because everybody is a little different. It’s not going to be cookie cutter, in my opinion.
CDC Gaming Reports: What about what one operator said, that there seems to be no baseline, or standard, in Ontario, since it seems to be quantity over quality, in terms of customer experience?
The unique part of this market is that it is going to be built on product and customer experience, not who’s giving away the most money, because they can’t do that. Maybe for some people, that’s a challenge. I think that’s the beauty of this, where the government isn’t trying to tell you how to run your business, but leaving you to compete.”