Ontario To Issue Local Licenses to Offshore Gambling OperatorsFebuary 25, 2021
The online gambling industry in Canada has changed dramatically over the past ten years and as Ontario is set to begin offering licenses to other casino operators we are going to take a look at which gambling companies are likely to take the lead in Canada when the monopoly on provincially run lotteries and casinos is lifted. Before we can do that, it's important to take a look back at the landscape and what lead to the changes that are about to come into effect.
Gambling Advertising in Canada
Ten years ago, online casinos had the ability to advertise locally in Canada and their brands were often seen at local hockey games with branding in the rinks and their logos on team sportswear such as that worn by the Toronto Maple Leafs. As the provincial government began restricting advertising, especially of .com websites and real money offshore gambling operators, many began to apply some clever thinking and they began advertising .net websites that were free to play. Local advertising became less prevalent and as Ontario monopolized the space more and more operators pulled out of Canada.
Canadian gambling is controlled by each province and in accordance with section 207 of the Canadian Criminal Code. There are very limited exceptions to this and no persons other than the provincial government is legally permitted to supply gaming facilities or services in Canada. This is also why it's important to know where to find legal casinos to play in Canada, which can be offshore.
Provincially run online casinos were the focus in a bid to retain the revenues that players were spending at offshore sites but with the laws being much of a grey area, players still signed up with sites like Jackpot City, Spin Casino, and Leo Vegas and much of the provincial revenue was lost. Section 13.1 of Ontario's Consumer Protection Act prohibits the advertisement of internet gaming sites in the province if they are operated contrary to the Criminal Code.
In the past year, Ontario has said they are going to offer licenses to other operators as there is simply not enough federal support available to block other sites or Canadians signing up with other sites. It is anticipated that other provinces will follow if the model works and more revenue is generated. But what does it mean for provincially run sites like PlayNow and PlayOLG? These sites will continue to operate in their provinces as normal but if offshore operators are given licenses, it will mean that players will have a lot more opportunities.
Since the announcement that the province of Ontario is to introduce legislation that provides for licensing, regulation, and taxation of private online gaming companies, there has been a big increase in investments by casino operators. Microgaming owned, Jackpot City has begun sponsoring the Toronto Raptors as well as ramping up their land-based exposure. This will make them a lot more familiar with local Canadian gamblers before they are granted a local license. Microgaming also owns Spin Casino and the company has been investing heavily in the Canadian market in anticipation of the introduction of local licensing. Licenses granted to private operators will allow them to offer online gaming services directly to residents of the province.
Single Event Sports Betting A Big Draw
The Canadian Criminal Code states that only the provincial governments can offer sports betting, but they are prohibited from offering single event sports betting. Only parlay betting is permitted, and this means that Canadians must combine two or more bets, all of which must win, in order for their bet to be a success. Many sporting fans realize that this is inferior and tend to use offshore sports betting sites instead. It is estimated that Canadians wager at least $4 billion every year at offshore sports books compared to the $500 million that Canadians will spend at provincial betting sites. This is millions in lost revenues and the government turns a blind eye as is seen in the grey area that exists for Canadian online gambling. There have been no prosecutions against offshore gambling.
William Hill and Paddy Power are the two big brand names when it comes to single event sports betting in Canada. Paddy Power supplies the sports odds for the provincial gambling sites and all the parlay odds are provided by them. They have a strategic connection with the market and are in a very good position to be granted a local license. William Hill was very close to getting the odds contract at the time and they will also be hoping to get a local license for single event sports betting.
The introduction of local licenses will also help in the bid for single event sports betting in Canada as many sports betting fans still choose offshore sites specifically for this purpose. Only parlay bets are allowed in Canada and these new licenses will add more sway to the passing of the C-218 bill. Bill C-221 a bill for the regulation of sports betting was strongly opposed by members of parliament and wasn't brought into law and it is hoped that Bill C-218 will finally push through and see single event sports betting become a thing in Canada. If licenses are granted to offshore betting sites, there will also be increased pressure from operators, and this will be pushed through to provincial governments right the way up to federal level in a bid to prevent offshore gambling on sports and loss of revenues.
The passing of this bill will also increase competition and companies like TheScore will be in contention with giants like DrafKings.
Has COVID Had a Positive Effect?
The world is feeling the effects of the COVID-19 pandemic and one of the positives to come out of it in Canada is the demonstrated need for legal online gambling in provinces that don't yet have it.
Ontario has played a much greater part in provincial gambling revenues in Canada mainly due to its large number of land-based casinos. In 2019 revenues were $2.3 billion from Ontario, but Ontario's casinos closed until the very end of September 2020 thanks to COVID-19 resulting in a projected revenue of just $200 million for 2020. This is a huge decrease in provincial revenues but there were figures that showed the importance of having an online gambling presence. Residents from Ontario spent $500 million gambling online in 2019 and it is estimated that the figures for online gambling for 2020 will be at least double this. The reality is, however, that very little of the online gambling spend will go to the OLG because the majority of Canadian gamblers tend to use offshore sites because of better games, better odds, better bonuses, and better odds. These are not illegal or unlicensed sites. They are big brand operators such as PokerStars, Bet365, Jackpot City, Spin Casino, and 888. They all accept players from Canada because the Canadian government hasn't objected to it. Players from British Columbia also have options for single event sports betting.
When all the revenue figures are taken into account it really does enforce the positive effect that issuing licenses to these companies will have as the OLG will be able to collect taxes from them.
Top 3 Online Gambling Sites We Predict For Canada
As Ontario and other provinces open up local licensing to casino and sports betting operators located offshore there are a number of big brands that we expect to see taking advantage of this and becoming quite prominent in Canada. These brands already accept players from Canada, but we anticipate they will take the lead when the market opens. Below are the three brands we predict will be the first to get local licenses for the Canadian online gambling market.
- Jackpot City Casino Jackpot City Casino is a hugely popular choice among Canadian gamblers, and it has been operating online since 1998. It is owned by Microgaming and runs on their software platform as well as offering titles from the Quickfire suite of casino games. It currently holds a Malta Gaming Authority gaming license and offers more than 1200+ quality games on a no download instant play platform. The site holds the eCOGRA seal of approval and Canadian players can already reap the benefits of amazing no deposit, free spins, and reload casino bonuses. You can read our full Jackpot City casino review to find out more.
- Leo Vegas Casino Leo Vegas Casino is another brand we predict will have massive success in Canada as local licenses are provided. It launched in 2012 and offers a virtual casino, live casino, and a sports book and already accepts real money players from Canada on mobile and desktop. The excellent range of bonuses and daily free spins offers keep players coming back as do the weekly live sports bonuses that include weekly accumulator boosts. You can read our full Leo Vegas casino review for more information on what this online gambling site offers.
- Bet365 Bet365 is an online casino and sportsbook that has been providing online gambling services to Canadian players since 2001. It runs on the Playtech network and is well known and trusted around the world. New players get to choose from a selection of bonuses to suit their gameplay which includes free spins for top slots. There's a fantastic loyalty program too. The sportsbook offers more than 40 different sports to bet on including horse racing. They have more than 45 million customers worldwide and have won numerous awards including the SBC Bookmaker of the Year award four times and the EGR In-Play Operator of the Year award five times. You can read our full Bet365 casino review to find out more about what Canadian players can enjoy.
Who Will Dominate The Gambling Market?
The dominant force in the bid for the best Canadian online casino is yet to be seen. Microgaming is committed, and Paddy Power has a very good strategic position within the market already. There will be plenty of scope for all companies to compete once the market opens up and we expect to see a lot of free bets and no deposit bonuses becoming available to entice and encourage new Canadian players to signup and test out the different license holders. Most Canadians will already be familiar with Microgaming sites like Leo Vegas, Jackpot City, and Spin Casino and with new operators having to pay a percentage of their revenues to the provincial government any competition with provincial sites like PlayNow or PlayOLG will be welcomed. For now, we can only speculate on what the market will evolve to, but it certainly will be an exciting time for online gambling fans in provinces like Ontario and British Columbia as they receive more opportunities and bigger jackpots to play for.