In April 2022, when Ontario became the first province in Canada to legalize iGaming, the announcement was met with intrigue and enthusiasm, with many Ontarians excited to finally have a regulated market of virtual casinos and online sports books with which to try their luck. In what has been somewhat of an iGaming revolution on the North American continent in recent years, Ontario was heralded as the next big thing on the scene.
Fastforward two years, the burgeoning Ontarian iGaming market is so far living up to expectations, if not exceeding them. The province's iGaming sector has experienced significant growth and evolution in its first two years with the total gaming revenue generated in the last year alone reaching a staggering $2.4 billion. A recent report by Deloitte has indicated that many of its five-year projections for the market have already been achieved, with the sectors contribution to Ontario’s economy already being felt. Just how has this flourishing market managed to grow so large, so fast?
Background on iGaming in Canada
Understanding the wider context of Canada’s national gambling landscape is key when assessing the importance of Ontario’s approach to iGaming. Gambling is a popular pastime in Canada, with around 60% of the population stating that they gamble on a monthly basis. And while land-based establishments have long been a feature of Canadian gambling, regulation surrounding other forms of gaming has been seen by many as out of date, particularly considering the emergence of online platforms. A bill to legalize single event sports betting was only passed in 2021, while the concept of iGaming markets is still a hotly debated topic in many provinces. While some, such as British Colombia and Manitoba have unveiled government run online platforms, Ontario remains the sole province with a regulated iGaming market. Check out this online casino in Ontario that is part of this exciting emerging market.
The Data Behind Ontario's iGaming Market
Looking at the financial data behind the first two years of the Ontarian iGaming industry, it becomes clear just how successful the industry has been. In year one, a remarkable $35.5 billion worth of wagers was spent on iGaming activities, with the industry taking $1.4 billion dollars in revenue. Already clearly a lucrative market, the second year has proven even better for iGaming operators in the province. With total wagers increasing to $63 billion, a 78% increase, and revenue generated up to $2.4 billion, a 71% increase. The market has truly exploded. If the market continues this growth trajectory, it could soon be rivalling some of the leading markets across the border in the US, staking its claim as a global player in the iGaming sphere.
What is also interesting about the Ontarian market is the large number of different operators finding success in the market. While American iGaming has very much become a two-way tussle between industry giants, FanDuel and DraftKings, the Ontarian market is far more competitive. With over 46 companies operating across the industry, the diverse nature of the market points to a healthy future with the innovation forced by intense market competition likely to allow for further market growth.
The Bigger Picture: iGaming’s Impact on Ontario’s Economy
The influence of iGaming on Ontario’s economy has now become apparent, with the province now experiencing a myriad of economic benefits due to opening and regulating its gambling market. Global financial consultancy firm, Deloitte, were engaged by Ontario’s primary iGaming agency, iGO, to assess the economic contribution the iGaming market had provided to the province. Deloitte’s report found that by the end of year 2, the industry contributed $2.7 billion to GDP and had sustained nearly 15,000 jobs, either directly or indirectly. The market supported $865 million in provincial government revenue and a further $380 million in federal government revenue through various forms of tax such as income tax, corporation tax and sales tax. For every dollar spent by operators, approximately $1.4 was added to the Ontarian economy in terms of GDP. These statistics highlight that although iGaming in Ontario is little over two years old, it is punching well above its weight and is already significantly contributing to Ontario’s growing economy.
There is still however, plenty of room for further market expansion. Following the legalization of cannabis in the country in 2018, cannabis cultivation is another new industry that has experienced rapid growth since emerging in Ontario and could provide some insight into the future path for iGaming in the province. While the cannabis sector is currently much larger than that of iGaming, providing $13 billion to Ontario’s GDP, it experienced similar market growth in its first few years and should serve as a template for the emerging iGaming sector.
As consumer demand for online betting and virtual casinos continues to rise in the province, Ontario remains a lucrative proposition for investment firms and tech start-ups. It is worth remembering that Ontario has a higher population than all but four US states, and in Toronto, is home to one of the leading technology hubs anywhere on Earth. This combination of consumer demand and digital capabilities means that Ontario is perfectly primed for the rapid evolution currently underway in the iGaming world. As iGaming operators continue to innovate, it is likely that this exciting industry will continue to increase its influence on Ontario’s economy, creating more jobs, increasing tax revenues and attracting greater investment.
