The Canadian gaming industry is booming, particularly in Ontario, where a regulated iGaming market was launched in April 2022. The transition from unregulated to legal iGaming in the province has shown remarkable progress, with significant increases in revenue and wagers placed in just a few months.
The market is still ongoing, but early indications suggest that the iGaming industry in Ontario has been successful, providing player protections and adhering to established standards of the operator and game integrity.
The new regulations had a huge impact on the emergence of Ontario licensed online casinos and increased safety for the players. This article highlights the background of the new Ontario regulations and their impact on the gaming industry, particularly in relation to the global industry. It also offers some suggestions for the development of the global online gambling markets based on Ontario’s positive scenario.
New Ontario Regulations That Triggered Market Change: Background
The Alcohol and Gaming Commission of Ontario (AGCO) has updated its standards for internet gaming, requiring unregulated iGaming operators and gaming-related suppliers to comply with new Standard 1.22 by October 31, 2022, or risk having their registration application refused and facing appropriate regulatory action.
This activity comes after the Ontario provincial government launched an open and competitive legal iGaming niche on April 4, 2022. Prior to this launch, the government estimated that 70% of online gambling was taking place on unregulated casino platforms that did not follow any legislation because there was no such legislation for them. The only Canada-based agency that issued licenses for off-shore casino operators was the Kahnawake Gaming Commission.
Now, with a regulated iGaming, the provincial government is able to qualify the organizations that may operate legally, ensuring they adhere to established standards of the operator and game integrity, provide player protections, and contribute to provincial revenues.
By transitioning to a legal industry, Ontario is increasing transparency and accountability in the online gambling industry, while also protecting its residents from potentially harmful practices of unregulated operators.
What Happened Next: Insights
The Ontario iGaming market has shown impressive results in its first year of operation. In the first quarter, ending June 30, 2022, the industry recorded a total gaming revenue of $162 million, 492,000 active player accounts, and total cash wagers of $4,076 million.
While these figures may seem lower than those of comparable U.S. markets, it is important to note that Ontario had a significant unregulated market prior to the introduction of the legal market, and the transition of unregulated operators to the legal market is still ongoing. In the third quarter of the 2022-23 fiscal year, the market’s total gaming revenue rose to $457 million, with a remarkable $11.5 billion in wagers placed from October 1 to December 31, 2022. The data also showed that 36 operators were active in the province during Q3, with 68 gaming websites in use and 910,000 active player accounts.
These accounts had an average monthly spend of $167, an 18% increase from Q2 2022. The quarter was an undeniable success, with a 71% increase in revenue from Q2 and a staggering 91% increase in wagers. This growth shows the confidence gaming companies have in Ontario’s iGaming niche, as the number of operators doubled from the previous quarter.
Ontario’s iGaming industry after the new laws:
Total gaming revenue
Active player accounts
Number of operators
Although it is still early to make a complete assessment of the state of Ontario’s iGaming market, the solid player base and low barriers to entry to the legal market continue to give a reason for optimism.
What Global Chance Can Be Expected Based on the Positive “Ontario Scenario”
The Canadian gaming industry has recently experienced significant growth with the launch of Ontario’s iGaming market in April 2022 and the legalization of single-event sports betting by the federal government back in 2021. These developments have created a dynamic and rapidly evolving regulatory and commercial space, presenting lucrative opportunities for current and prospective operators and suppliers. It’s important for those looking to capitalize on these opportunities to engage with local counsel for guidance on navigating the regulatory landscape.
The popularity of Live Dealer games has also been on the rise. These games are played with live presenters or dealers, and players connect to them through iGaming sites. In response to this trend, AGCO has made further amendments to the Standards to address potential risks related to the use of physical gaming equipment and live presenters. As a result, players can be assured of a safer gaming environment.
Based on this positive Ontario scenario, online gambling industries globally are very likely to start changing in order to make them more transparent, safer, and more profitable for the countries.
Key Takeaways For Global Industries
Based on the positive case of online gambling legalization in Ontario, here are some suggestions for the development of the global online casino gambling markets:
- Legalization: Governments around the world should consider legalizing online gambling, as it has the potential to generate significant revenue and provide a safe and legal environment for players.
- Consumer Protection: Strong consumer protection measures should be put in place to prevent problem gambling, underage gambling, and fraud. This can include measures such as age verification, self-exclusion programs, and responsible gambling tools.
- Partnership with Industry: Governments should work closely with the online gambling industry to ensure that regulations are effective and do not stifle innovation. This can involve partnering with industry leaders to develop effective policies and regulations.
Ontario became a true pioneer in the modern online gambling market and its example will most likely stimulate other governments to implement similar laws or improve their existing legislation in order to take online gambling out of the grey zone and make it a profitable and supervised industry.