What’s the status quo for sports betting and igaming in Canada?

June 25, 2024 7:46 AM
Photo: CDC Gaming Reports
  • Mark Keast, CDC Gaming Reports
June 25, 2024 7:46 AM

It was interesting at last week’s Canadian Gaming Summit in Toronto to get an even clearer sense from industry leaders on how casino is dominating the Ontario market as much as it is.

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Still, sports betting is growing as well.

To put it into context, Ontario saw a 78% increase in total wagers ($63 billion) for fiscal year 2023-24 compared to the previous year, according to a market-performance report issued in April by iGaming Ontario (period covering April 1, 2023, through March 31, 2024). In terms of total gaming revenue, the market saw $2.4 billion for the full fiscal year (72% increase over FY 2022-23).

Casinos (including slots, live and computer-based table games, and peer-to-peer bingo) led the charge with a total of $51.7 billion in wagers, an 88% increase over 2022-23, followed by sports betting ($9.7 billion over the fiscal year, a 39% increase over FY 22-23) and player-to-player (P2P) poker ($1.6 billion, a 64% increase over FY 22-23).

At the summit, a panel discussion, featuring Scott Vanderwel, CEO, PointsBet Canada, Jared Beber, CEO, Sports Venture Holdings Inc. (Bet 99), and Byron Bridger, VP Commercial, MD – Canada, iGaming, Light & Wonder, looked at whether the market in Ontario is heading toward a plateau or if there is growth there still, as some European operators pull out and buzz in the industry focuses on the market opening in Alberta. How can operators that are dug in open up new revenue streams?

“It’s been overlooked how much casino moves the needle in Ontario,” Beber said.

In the province, operators can’t run ads that promote bonuses or incentives to sign up. But that didn’t seem like a bad thing to Beber; loading up on incentives is an impediment to establishing a market angle and building credibility. There’s no magic bullet when it comes to growing sustainably in Ontario.

“Is that really the way you want to start the customer relationship, by saying here’s as much money as possible?” he said. “I don’t think that’s conducive to a long-term, healthy relationship. [Not advertising bonuses] will allow us to build a deeper relationship with the customer that’s rooted in education and engagement. Responsible gaming is a big part of that, embedded in every part of our DNA.”

Vanderwel says there are a few noticeable differences between the Ontario market and the one in the U.S. and in Europe.

“The type of play on sports definitely favors in-play and live-action markets,” he said “For PointsBet, about two-thirds of all of our bets happen in-play after the game has started.”

On the acquisition side, sports betting gets customers through the door. They can be sold on casino as well, once they’re there. That’s a particular focus for PointsBet, Vanderwel said. More than a third of the customers who come to them to bet on sports end up being casino players over time.

“So the prevalence of both product sets in the marketplace actually sets up a fairly robust product experience for our customers and an ability to build a relationship regardless of the sporting calendar,” Vanderwel added.

The market is going to shift toward a casino-first model when it comes to advertising, across different media, and time slots, finding those casino customers where they are.

Said Beber, “When it comes to sports betting, customers want to write their own narrative. We’re an entertainment product. The overall experience is rooted in entertainment. And everyone I’m sure has seen the same-game-parlay micro-betting markets. Player props, all the above … rather than just placing a money-line bet. The importance of that, the ability to combine these different markets all together, is an opportunity for the customer to write their own narrative, to drive a deeper level of engagement.”

Beber also spoke about the challenges of catering to the cultural mosaic and nuances doing business in Ontario, how you cater to each different community, how you speak to them, to tailor the product and to provide the most engaging experience.

The partnerships the sports betting partners have with pro sports leagues and athletes has been key in helping to solidify trust and credibility.

“At the end of the day, this is a business of trust,” Beber said. “Customers need to feel comfortable that their data is safe, that their funds are safe, that they’re going to get unparalleled level of services.

“Our belief is that the next generation of brands is really going to focus on building community, giving people an opportunity. This is not a community around gambling. This is a community around entertainment and lifestyle. And by creating that community, by driving that engagement, ultimately, it’s on us to determine how we drive it with the KPIs we need to see. But we can reshape the perception of brand loyalty and how our customers are engaging with us as an entertainment company that’s focusing on community first, as opposed to simply just driving gambling down people’s throats.”

What complicates the customer experience, however, is the “noise” or broadcasting feeds that come from markets to the south, where inducements are front and center in the communications. An active gray market continues to advertise in Ontario today, Vanderwel said. Plus, confusion is created in other provinces, with national broadcasts featuring ads for sportsbooks that aren’t even available in those other provinces.

“So you end up in a situation where you’ve got a handful of operators, genuinely trying to do the right thing, build a safe, sustainable business, and play by the rules,” he said. “And it’s conflated by a series of inputs that are happening outside of the borders of the ecosystem and outside of the regulatory parameters. And that noise is a complicating factor, because we don’t have a Canadian-wide framework. We don’t have geo-blocking on broadcasts across the country. So we end up in a situation where there’s an inequity of the rules by which different players must participate and that inequity ultimately leads a certain amount of instability in the marketplace that needs to be addressed.”

There needs to be a regulated framework for igaming across the country, he added, so the industry is less about operating in the shadows, where every gray-market operator will be incentivized to participate in the regulatory framework. That way you will see the channelization numbers you now see in Ontario – with 87 percent of play taking place in the regulated framework.