TORONTO — The first year of legal single-game sports betting in Ontario has been a whirlwind for NorthStar Gaming CEO Michael Moskowitz.
The province’s fledgling market celebrates its first anniversary Tuesday. Northstar Gaming became a legal operator in May and it’s been full speed ahead ever since.
“It’s hard to believe it’s been a year,” said Moskowitz, also a founding partner of the company. “It’s incredible how fast this market has expanded.
“We expected strong demand from consumers and players and that’s exactly what we’ve experienced on our platform. We’re seeing very strong and growing demand from gamers in Ontario and I don’t see any of that stopping.”
According to the most recent figures released in January by iGaming Ontario, the market experienced a 71 per cent increase in total gaming revenue in the third fiscal quarter. From Oct. 1 through Dec. 31, total gaming revenue was $457 million compared to $267 million in the second quarter (July to September).
That figure was up 182 per cent from the opening quarter ($162 million). Since opening fully April 4, Ontario’s sports-betting industry has surpassed $21.6 billion in total wagers and reached $886 million in total gaming revenue.
The upward trend is expected to continue with a fourth quarter that included both the Super Bowl and March Madness, the two most popular sports-betting events. Ontario’s launch followed last year’s NFL championship game and came on the final day of the NCAA men’s basketball tournament.
Ontario had 18 operators and 31 total gaming sites in the first quarter. There are reportedly now 46 and over 70, respectively.
“Competition is always good,” said Dale Hooper, general manager of Fanduel’s Canadian operation. “The reason you wanted to do this if you were Ontario is you want consumers to have a choice, you want it to be safe and you want the ability to have the revenue that comes from a regulated environment.
“Having more people involved just makes everybody a little sharper and provides more choices for Ontarians to play.”
Moskowitz agrees. Last month, NorthStar Gaming listed its common shares on the Toronto Stock Exchange.
“It’s good for us because consumers are going to be selective around the platforms and where they want to put their money and wager,” he said. “If we have unique and differentiated experiences, then we will do well and I think we do exactly that.
“Whether you take them or not is your decision but we provide insights and experience and then we tie that right back to the whole wagering environment so we have a unique spin on it.”
An open market means more competition for the Ontario Lottery and Gaming Corp.
“We know the Ontario market better than anybody — OLG is an Ontario company with all our offices and employees located in the province,” the company said. “So, we remain hyper-local in many of our offerings especially in sports.
“OLG is the only online sportsbook and gaming site that delivers 100 per cent of profits back to Ontario. Through customer research, we know it’s very important to our customers that our profits support local communities and key provincial priorities.”
The figures also show total wagers of $11.53 billion, a 91 per cent increase over the second quarter ($6.04 billion). The first-quarter handle was $4.076 billion.
Sports betting became legal in Canada in August, 2021. It followed Conservative MP Kevin Waugh (Saskatoon—Grasswood) introducing a private member’s bill to amend the Canadian Criminal Code and legalize single-game sports betting.
Waugh’s bill followed two legislative attempts by NDP MP Brian Masse (Windsor West) to do so.
Before the legislation became law, the only sports betting allowed in Canada was parlay betting — wagers that require bettors to successfully pick outcomes of multiple events. But Waugh argued Canadians were spending about $500 million annually on betting compared to an estimated $14 billion spent annually in an unregulated “grey market” and offshore sports-wagering websites, which offered single-event betting.
“When I look at the money that was leaving Canada and going elsewhere … and getting no benefit in this country on taxation, I know we did the right thing,” Waugh said. “That was really the essence of the private member’s bill, to get the money back.
“People are betting and were betting long before the bill even passed, we knew that. Now we’re seeing, ‘Wow, that much (in revenue)?’ Yeah, it was that much and it’s going to grow. It’s a custom now in this country, we’re seeing it.”
Queen’s Park has been criticized for releasing quarterly sports-betting figures late and not divulging where wagering revenues are being allocated.
“Governments are going to have to find a way to report better back to the public about what they’re doing with the extra revenue they’re getting,” Waugh said. “But that will take time, it’s a learning experience for the provincial governments.”
Ontario operators can’t advertise or provide marketing materials outlining gambling inducements, bonuses and credits. However there are no limits regarding how much they can advertise overall, prompting many to enlist big-name athletes like Auston Matthews, Connor McDavid and Andre De Grasse as ambassadors and spend millions on advertising campaigns, much to the chagrin of the general public.
“I think the irritant is the ads,” Waugh said. “People are really upset with that, I get it.”
The question now remains if/when other provinces will follow Ontario’s lead and open the market to private internet gaming providers.
“(Legal single-game wagering) is still in its infancy,” Waugh said. “No criticism to Ontario, they went a different way and everybody wants to see how they’re going to kind of come out of this.
“It was a different way to do business. Ontario decided (on) an open market and we’ll see who does well and who doesn’t.”
There have been some first-year casualties. Coolbet, for one, left the Ontario market Monday but remains in Canada.
Moskowitz couldn’t predict what might lie ahead for sports-betting in Canada. But he does see some interesting parallels here and the industry’s growth in Europe.
“It’s a cultural norm that’s been accepted and regulated in many markets for almost 10 years,” he said. “I think that’s a very good indication of where the market (in Canada) might go as it matures.
“I expect consumer demand to continue, I expect other jurisdictions and provinces follow in the footsteps. The numbers are very compelling. Maybe it’s a slightly different environment or its cut a different way but I think the proof is Ontario is doing quite well. Operators are learning. How quickly that happens, though, I don’t know.”
Hooper envisions Ontario operators continuing to be innovative to keep customers entertained.
“Where we see it going is continuing to evolve, having people be entertained and get more engagement with the sports they love,” he said. “I think (there) will be more fun things people can engage with in ways that will make watching games more fun.
“Across Canada, I hope we see governments replicating what’s happened in Ontario. I hope we see this extend so other Canadians can have the same opportunity from a choice perspective.”
This report by The Canadian Press was first published April 3, 2023.
