Last month, GBG hosted a webinar with a series of experts to discuss the topic of the season: what to know about the Ontario iGaming and sports betting launch. In the hour-long discussion, what really stood out is that Ontario is uniquely positioned in North America in a way that clearly stands out to operators and suppliers.
Director of Gaming for GBG Rebekah Jackson moderated the discussion, which covered everything from the atypical ban on inducement advertising to the unique structure where applicants deal with both the Alcohol and Gaming Commission of Ontario (AGCO) and iGaming Ontario (IGO). To be clear, AGCO is the regulator, while the IGO works with applicants to help them through the process.
Even though launch was back in April, Canadian gaming attorney Jack Tadman noted that the moment to get into the market isn’t gone. After all, this is a market forecasted to generate $795 million by year’s end and grow to $3.3 billion by the end of 2026.
“The best time to register for Ontario gaming was April 4 or earlier. The second-best time is now,” he said with a smile. Thanks to the open marketplace without restriction on the number of licensees, there are still plenty of opportunities to get in the space, or, as Tadman noted, to get out of the gray Ontario market.
“The longer you participate in the unregulated market, the greater the chance the regulators will cause some issues for you,” he said. Note that the AGCO even allowed operators in the gray market who applied prior to April 4 to continue operations in the space while they went through the licensing process. Don’t expect this leniency with gray operators to continue in perpetuity though.
As North American markets continue to grow and expand, Ontario’s welcoming environment stands out in a good way as operators weigh where to spend their money and time. Matthew Carey, a gaming and compliance writer for VIXIO, noted the strategic value of Canada’s first sports betting marketplace:
“I think the relative certainty is really important for a lot of these companies looking to enter new markets. Particularly when you have things that are moving so quickly here in the States and you have other places where you can apply those resources.”
“It’s a fairly low barrier to entry not from a regulatory standpoint, but from a strategic standpoint,” Carey added. “You really have operators going full-speed ahead, checking off all the boxes you guys talked about rather than doing the big-picture calculus of, if we’re talking about a tethering market, ‘Who is going to be our market access partner? What are we going to have to give up to get in the market? What are some of the challenges of licensing with that partner?'”
Carey pointed to New York as a great example of what happens when a limited number of licenses are in play. Operators had to weigh whether it was even worth trying to get into a state with a fixed number of licensees on top of a very unfriendly tax rate.
Chief of Staff for iGaming Ontario Mitchell Jackson echoed that sentiment and noted the open market was a very deliberate decision.
“We have no cap on licenses. In a lot of American states you’ll see a limit of books that can come into play…We don’t have that limit,” Jackson explained. “It’s a fair, open, and competitve market for anyone who is willing to play by the rules.”
Another thing Ontario offers that most US sports betting jurisdictions do not is the one-two punch of online casinos alongside sports betting.
“We legalized both sports betting and online casinos and a lot of American jurisdictions it’s only been sports betting that has gone through the legalization process, so really an advantage there to operators who may have one or the other or both offerings. Knowing the margins, you have opportunity to pursue both lines of business,” Jackson added.
With multiple options, no license caps, and no deadlines to submit applications for licenses, Ontario is, in many ways, the antithesis of how US sports betting markets have operated thus far. Operators are noticing the differences as well.
Alex Henderson, who serves as Head of Compliance for GIMO, spoke about how the process has gone from the perspective of a licensee.
Henderson spoke highly of the IGO and AGCO, using phrases like “breath of fresh air” and described the guidance as “really useful.” Though the paperwork can be daunting, the regulators are more transparent than other bodies, utilize weekly meetings to touch base with applicants, and are very forthcoming with expectations and how to meet them.
Ontario online gaming is the newest kid on the block, but given its unique approach, whether it be in open licensing or stricter responsible gambling and advertising measures, it is certainly a market to keep an eye on. The entire North American space is still in its infancy, after all, so there is still plenty to learn and glean as regulators and jurisdictions take such a varied approach to sports betting and online casino.