Ontario Seeks to End iGaming Monopoly with Open Market

The Ontario government confirms it will introduce legislation to end a provincial tradition. The Ontario Lottery and Gaming Corporation (OLG) has long maintained a monopoly over the online gambling market. Lawmakers intend to change that.

Perhaps it was the coronavirus pandemic that relegated so many players to the online gambling world. Maybe it is the ever-growing amount of revenue lost to offshore gambling sites. It could be the OLG monopoly that prohibits any competition in an ever-growing market.

Whatever the reason, the Ontario government is ready for a change.

Initial Reports of iGaming Competition

Bloomberg was one of many media outlets to report last week that Ontario intended to put a plan in the new budget bill to welcome online gaming operators. The law will need to be changed to permit new operators in the virtual space, however, as it is now restricted to OLG only.

Prior to the unveiling of the budget on November 5, Ontario lawmakers planned to add the regulatory change as a part of the coronavirus pandemic response. The closure of so many land-based casinos and gambling halls in 2020 prompted more players than ever to find gaming online. However, with OLG as the only option and no single-game sports betting allowed, many Ontario residents chose to wager via offshore sites not regulated in the province.

Premier Doug Ford had promised to push for a “competitive market for online legal gambling” in 2019 but did not do so. He may keep that promise this year.

Revenue Needed

For years, the Ontario government has fretted over the amount of money that its residents spend on offshore casino sites, as Ontario has been unable to collect revenue from it. Just last year, Ontario estimated that its residents spent $500 million on internet gambling sites, not OLG.

Government spokesperson Scott Blodgett told Bloomberg last week that Ontario will work to develop a new – and competitive – online gambling model that will please customers, drive revenue to the province, and further protect players.

That new legal model may deliver $547 million per year within the initial five-year introductory period. The amount, however, will depend upon the taxation rate on gross gambling revenue. If Ontario followed the industry norm and taxes 18% to 20%, it could generate $100 million to $110 million in tax revenue per year, according to the Canadian Gaming Association.

Considering Ontario is likely to show a $38 billion deficit at the end of 2020 and Ford promised no tax increases, online gambling expansion could be the key to some financial woes.

Legislation Forthcoming

Indeed, the new budget did include online gambling intentions to open Ontario’s online gambling market. By including the wording in the budget, it will spur lawmakers to develop a plan and introduce a bill.

The budget information includes the desire for the Alcohol and Gaming Commission of Ontario (AGCO) to oversee the online gambling market in a new role as the industry’s regulator in the province. Its primary goal will be to manage the relationship between the government and new online gaming providers. Additionally, it will consult with stakeholders to ensure the market reflects customer interests.

Online gambling proponents praised the move. The largest representative of the industry, the Canadian Gaming Association (CGA), issued a press release with comments from President and CEO Paul Burns:

“As we grapple with the economic recovery from Covid-19, it will be helpful for Ontario to generate revenue from the licensing and taxation of offshore online operators who qualify to operate in Ontario. It will also allow land-based casino operators to access online gaming, enabling them to diversity their entertainment options and interact with customers outside of property walls.”

The CGA emphasized that Ontario is already strict about responsible gambling programs and online gaming controls. IN addition, Ontario offers a technology-based, skilled workforce that will enable a smooth transition for many companies to a dual (digital and land-based) market.

Sports Betting Too?

Another issue long supported by many bettors and gambling advocates may find its time in the limelight as well. This will benefit Ontario but also Canada as a whole, and there is a law proposed and awaiting action.

See if this sounds familiar. Conservative MP Kevin Waugh of Saskatoon introduces a bill called the Safe and Regulated Sports Betting Act. It will amend the Criminal Code to allow for single-event sports betting. As it stands currently, bettors must wager on three or more games together.

That actually happened in February 2020. Waugh proposed a change to the current law to make it lawful for the Lieutenant Governor in Council to license sports betting operators to manage a lottery-style scheme “that involves betting on a race or fight or on a single sport event or athletic contest.” It will amend Criminal Code paragraph 207(4)(b).

Waugh introduced C-218 on February 25, but it fell by the wayside as the coronavirus pandemic demanded more immediate attention. Longtime sports betting expansion advocate MP Brian Masse seconded the Safe and Regulated Sports Betting Act.

As of November 4, iGB North America reported that Waugh plans to reintroduce the bill without delay.

The bill continues to boast of support from the CGA and a group of sports leagues that includes the National Basketball Association (NBA), National Hockey League (NHL), Major League Baseball (MLB), Major League Soccer (MLS), and the Canadian Football League (CFL).

Estimates as to the potential revenue from expanded sports betting range in the billions, with as much as $1.47 billion for Ontario alone.

 

 

Jennifer Newell

Jennifer Newell

Jennifer Newell has been writing about poker and gambling since 2004. As the online gaming sectors have changed and grown, particularly in the United States and Canada, she has followed it all and written about it for websites like World Poker Tour and PokerScout. In her free time, she runs a small business, reads, cooks, and enjoys music.

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