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Ontario iGaming & Sports Betting Handle Hits $4.3B in Q2 of Regulated Activity
By Jeff Osienya Oct 18, 2022 IndustryFollowing a dismal Q1, things are looking up in Ontario’s second quarter of regulated online gaming. Here’s a closer look into the Q2 market performance and what it means for the future of iGaming in Canada’s most populous province.When iGaming launched in Canada’s most populated province, Ontario, on April 4, 2022, it did not take off as revealed in the Q1 market performance report. Fortunately, the second quarter numbers released on Wednesday last week by iGaming Ontario (iGO) show that the industry is picking up steam.
The Q2 statement covering July to September 30, 2022, revealed that the province saw a total handle of $4.3 billion (CA$6.04 billion). This handle generated $191.9 million (CA$267 million) worth of gaming revenue for the said period.
Meanwhile, the Q1 market performance report from iGO cited a $3.11 billion (CA$4.07 billion) handle and $123.8 million (CA$162 million) in total gaming revenue. That’s a 48% increase in wagering handle and 65% in total gaming revenue between the two quarters.
Stellar Q2 Numbers Driven By A Surge in Player Volume & Activity
Ontario’s online gaming industry consists of online poker, online casino gambling, and online sports betting. The report released by iGO for the second quarter of the financial year 2022 to 2023 documented information about the market performance statistics of the said verticals. The stats covered in the report include the total bets placed, the average monthly sum spent per active account, the industry’s total gaming revenue, active operators, and active player accounts.
However, the report does not include the wagers placed on the website of the government-owned Ontario Lottery and Gaming and Proline+, a sports betting product that also runs online gambling. This happened because Ontario became the first province in Canada to allow private-sector online casinos and sportsbook operators to take bets from resident bettors legally. In all other provinces, government-owned gaming and lottery corporations are the only ones taking online wagers from residents.
So, over the three months between July to the end of September, there were 628,000 active player accounts, an increase from 492,000 active player accounts in Q1. Additionally, the average monthly spending for each active player account increased from CA$113 in Q1 to CA$142 in Q2.
Additionally, according to the report, in Q2, the number of gaming operators stood at 24, an increase from 18 in Q1. Similarly, the number of gaming websites also increased from 31 in Q1 to 42 in Q2. Nonetheless, it’s worth noting that even though more operators mean players can create more accounts, iGO only considers active accounts as those with cash or bonuses.
An Outlook of Expected Market Performance
The Q1 results announced by iGO in August were not very impressive as they were still below the optimistic projections, especially if you compare them to the US market. For example, the Q1 market performance from Ontario compared to that of the leading online gambling market in the US, New Jersey, portrays a very weak start.
Moreover, comparing the US sports betting industry to Ontario might be difficult because Ontario regulators have not split sports betting and gaming numbers. In the US, receiving a report on poker and online casino handle is not common. Still, within the same timeframe, New York’s handle amounted to about $3 billion and more than $300 million in sportsbook revenue for sports betting alone.
With nine new online gambling brands approved at the beginning of the month alongside market growth, the online gambling figures are expected to grow exponentially in Q3. Ontario’s spring budget highlights that online gambling net income in the province will reach $12 million (CA$18 million) in the 2022-2023 fiscal year and $22.3 million (CAD 31 million) in 2024- 2025.
The End is Nigh for the Grey Market in Ontario
Research undertaken by the Canadian Gaming Association (CGA) suggests that each year about CA$4 billion is wagered on offshore gambling sites. The CGA is Canada’s national trade association representing prominent operators and gaming suppliers in the sports betting, lottery, and esports industries.
Last Tuesday, the Alcohol and Gaming Commission of Ontario (AGCO) announced the imminent end of the transition period for active unregulated gaming-related suppliers and operators. The new gaming standards issued by AGCO will come into effect on October 31.
Since the debut of Ontario’s iGaming market, AGCO’s primary objective has been to help operators and suppliers transition from the unregulated to the regulated internet gaming market. To achieve their goal, AGCO started receiving applications from operators in September 2021 ahead of the iGaming launch on April 4, 2022. A statement released by the sports betting regulator said:
Quote“A key objective of the AGCO has been to move iGaming operators and gaming-related suppliers into Ontario’s regulated market as quickly and as seamlessly as possible. Since market launch on April 4, the AGCO has provided a reasonable amount of time for these operators and gaming-related suppliers to join the regulated market in a business-like and seamless fashion.”
Additionally, the New Standard 1.22 coming to effect on Halloween reads:
QuoteOperators and gaming-related suppliers must cease all unregulated activities if, to carry out those same activities in iGaming Ontario’s regulated online lottery scheme, it would require registration under the GCA (Gaming Control Act). Operators and gaming-related suppliers shall not enter into any agreements or arrangements with any unregistered person who is providing the operator or gaming-related supplier with any goods or services if, to provide those goods and services in iGaming Ontario’s regulated online lottery scheme, it would require registration under the GCA.
AGCO maintains that along with the already registered operators in the iGaming market, the New Standard 1.22 will also affect those applying for their licensees. This move aims to create a competitive, safe, and regulated betting space for residents of Ontario.
The generous grace period given by AGCO was to help all operators and gaming-related suppliers have enough time to transition without affecting their customer base in Ontario. But then, operators who were compliant on April 4, when the province’s regulated market went live, have been criticizing the lengthy grace period as they have an untaxed advantage.
Operators such as Pinnacle, Bet365, Bodog, Betway, 888, and Bet99 had been taking bets from Ontario residents long before April 4. However, 888, Bet365, and Betway have already transitioned to regulated gaming, whereas Pinnacle and Bet99 received their AGCO licenses and are currently transitioning.
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