How the Fledgling Ontario Gambling Market Compares with Others in North America
Viewed by some as the most important new gambling market in North America, the regulated online casino industry in Ontario launched in April 2022. The launch of the market was met with positivity by the industry and more than 40 operators now have licenses to operate numerous online casinos.
The mere size of Ontario makes it a valuable addition to a North American online gambling industry that is already thriving. It’s early days for regulated online gambling in Ontario but it’s still valuable to compare the market with two of the biggest in the U.S., New Jersey and New York, in terms of revenue, regulation, and potential for the future.
Ontario joins a thriving US online casino market
In 2022, gross revenue from online sports betting and gaming in the U.S. reached an estimated USD$12.4 billion. These figures helped the U.S. take over from the UK as the largest regulated online gambling market globally. By 2026, revenue from online gambling in the U.S is expected to reach USD$23.8 billion.
By comparison, revenue from online gambling in Canada was CAD$1.2 billion (USD$908 million). However, that was before the launch of the regulated online gambling market in Ontario, on April 4, 2022. The introduction of regulation makes Ontario an appealing market for international online gambling brands and makes it a valuable addition to the thriving North American online casino landscape.
Ontario figures compared to New Jersey and New York markets
The move from a grey market to a regulated sector in Ontario has been received positively by visitors to casino sites in Ontario according to findings from research company Ipsos published in 2023. The company found that more than 85% of players use regulated sites to play casino games.
Revenue from the newly regulated sector is also respectable, although it did not impress immediately. For quarter 2, 2022, online net revenue for the sector was CAD$162 million (USD$ 121 million). This was an underwhelming start for the sector, but revenue improved to CAD$267 million (USD$200 million) in quarter 3 and CAD$457 million (USD$ 342 million) in quarter 4.
These figures compare with overall revenue of USD$5.21 billion in the established New Jersey market. This joint record figure was achieved despite a reduction in revenue from sports betting. In terms of online casino gambling in the state, slots revenue rose 9% from 2021 to USD$2.04 billion and table games revenue rose 9.1% from 2021 to USD$741.7 million.
In New York, which is a more recent online betting market, and does not include any online casino revenue, the revenue figure for 2022 was USD$1.36 billion. That is an impressive total given that there is no legal online casino sector in the state, only sports betting.
How the legal online gambling position in Ontario differs from New York and New Jersey
The regulated open iGaming market in Ontario is similar to the market in the UK with one major difference being a stricter know your customer (KYC) process. The market is regulated by the Alcohol and Gaming Commission of Ontario (AGCO) with assistance from iGaming Ontario (IGO).
AGCO registers and regulates online gambling operators. It also sets out standards to protect players. The IGO conducts and manages the iGaming sector in the province. Providers have to complete a vigorous process with both organisations before they receive a license to operate in the province. According to the IGO’s website, it takes around 90 days for an operator to complete the required processes.
By comparison, in New Jersey, both online casino gaming and sports betting are permitted. The activities are regulated by different organizations. The New Jersey Division of Gaming Enforcement regulates online casinos and sports betting while the New Jersey Racing Commission regulates horse racing.
Regulations concerning casino gaming are contained in the New Jersey Administrative Code, Sections 13:69 to 13:69P and 19K:40A to 19K:43A. Regulations concerning sports betting are part of the New Jersey Casino Control Act sections 15:12A-1 to 19.
There is no legal online casino market in New York, but there is a major regulated sports betting sector. This sector is regulated by the New York State Gaming Commission. The New York sports betting market has flourished since it began in January 2022. There is a chance that online casino gaming will be legalized in the future as Sen. Joseph Addabbo has proposed Senate Bill 8412 (SB 8412), which aims to address the situation.
Predictions for the future of online gambling in Ontario compared to New York and New Jersey
Given the positive position of online gambling in New Jersey, the legalization of the sector seems certain to be extended past the current 10-year provision. However, Senate Bill 3075 (S3075) and matching bill A2190 which was introduced in the New Jersey Assembly are progressing slowly. When they do finally progress through both senate and assembly these bills will extend legal online gambling in the state until 2033. So, there is potential for the market to grow into an even more valuable asset for the state.
In New York, the bill to introduce online casinos will have to wait as Governor Hochul’s USD$227 billion FY2024 budget does not include iGaming. In the meantime, the fate of the online sports betting market depends greatly on how sportsbooks perform during the NHL season. Interestingly, experts predict that revenue will decrease by 26% to USD454 million in FY2024.
Compare the predicted future in two of North America’s biggest online gambling markets with that of Ontario. Growth in online gambling in the Canadian province is expected to continue to achieve forecasted revenue of CAD$1.5 billion by 2026. If these figures are reached, Ontario will be installed as one of the most valuable North American markets. Although it still has some way to go before it reaches the revenue levels achieved in New Jersey.
This performance will send a message to other Canadian provinces. It’s likely that they will consider following suit in the future in order to secure a slice of the valuable North American online gambling market as it continues to grow.
- B.E. Delmer, Gambling911.com
