A lot has happened since the Ontario iGaming and betting market opened two years ago on this day on April 4.

The biggest change of all, of course, is that before Bill C-218 passed in summer 2021, Ontarians’ only option for online gaming and betting was through the Ontario Lottery and Gaming Corporation’s platforms.

An effect of OLG’s monopoly on legal online betting in the province was that many betting enthusiasts were doing their business through grey market channels. The Alcohol and Gaming Commission of Ontario (AGCO) claimed that prior to market regulation, 70% of online gambling in the province occurred on unregulated sites.

Unsurprisingly, given the proliferation of legal options in the province two years later, there has been a sea change.

Fast-forward to Thursday’s two-year anniversary of the regulated market opening, when 12 private online gaming and betting sites went live on day one to compete with OLG, the AGCO reports there are currently 47 registered operators offering 77 regulated sites to Ontarians. The cornerstone result of that evolution is that the majority of online betting and gaming now happens through legal channels which bring revenue for not only the private operators offering those bets and games but also for the province’s coffers.

86.4% of Ontarians gamble on regulated sites

An Ipsos study conducted in February 2024 in conjunction with iGaming Ontario, the agency of the Government of Ontario that conducts and manages privately operated online gaming in the province, was published by the AGCO on Thursday to coincide with the two-year anniversary of the market. It found that 86.4% of Ontarians who gambled online over the preceding three months did so on regulated sites conducted and managed by iGO.

For the quarter ending Dec. 31, iGO reported $17.2 billion in handle taken from 1.2 million active player accounts in Ontario. The 2024 Ontario Budget projects that iGO’s activities will have provided $162 million for the 2023-24 fiscal year. That would be up from $87 million reported last fiscal year, the first 12 months of the regulated market being online.

All told, the government expects to take $423 million in net revenue from legal Ontario iGaming through the first three years of the market, far eclipsing the expectations laid out in the Ontario Auditor General’s report in May 2022 that predicted a three-year revenue total of around $75 million.

The financial results are a reflection of many things the province has offered. It pursued an open approach wherein no restrictions were placed on the number of operators who could be granted registration. It took a practical approach to regulation, standards, and tax. Plus, Ontario’s sheer population makes it one of North America’s largest gaming jurisdictions and its sports fandom and intrinsic ties to major-league U.S. sports (Ontario is the only Canadian province with a team in the NBA and the MLB in addition to Canada’s deep roots in the NHL) meant a hungry base of sports enthusiasts were ready and waiting.

“When talking about Ontario’s iGaming market, the numbers tell us a lot, but what I’m most proud of are the countless ways that our government partners, operators, responsible gambling experts, players and employees have worked together to help us create a world-class market that is Ontario-made for Ontarians,” said Heidi Reinhart, iGO Ontario Board Chair, in a statement on Thursday.

Scott Vanderwel, the CEO of regulated sportsbook PointsBet, credited Ontario’s government and industry regulators’ work in creating a market that “has not only fostered healthy competition and innovation but has also contributed to job creation and revenue generation, ultimately benefiting the entire province.”

Where does the Ontario iGaming market stand?

The Ipsos study finds that there is still a ways to go to achieve a market where all online gaming activity is done through legal channels. Participants in the study admitted to using over 350 unregulated websites over the last three months, an eye-opening insight into how much those avenues still permeate the province.

While OLG is still anecdotally the number-one legal operator in the province, Ontario’s regulated market is bustling. Online gaming operators and sportsbooks of all shapes and sizes have either dipped their feet in the waters or waded in up to their knees, from European and North American titans to former grey market players, land-based casinos that have turned digital, media brands that have sprouted a betting arm, and made-in-Canada startups looking to capitalize on that homegrown allure.

Some have been helped on that front by a deep-rooted history in the province’s grey market. Canadian Gaming Association President and CEO Paul Burns has previously referred to the market as “semi-mature” to reflect the fact that many companies who are now legal and regulated were already present for years prior. bet365 is a prime example of that; it was a prominent grey-market brand with strong player recognition before regulation, something that helped it hit the ground running.

Others with a firm foothold include the likes of Penn’s theScore Bet, the online betting and gaming arm of a company that has been a Canadian sports media leader for years and a good example of the confluence between traditional sports consumption and betting.

Not every operator finds its place. Coolbet withdrew after less than a year in April 2023 while Kindred’s Unibet officially withdrew in late March. But the market has proven a fertile feeding ground for many.

“There’s success available for companies with the right message and the right opportunities,” Burns said in January. “But it’s now highly competitive with that number of sites and operators in the marketplace. I wouldn’t say it’s crowded, but it’s comfortably cozy.”

Things have changed beyond just the operational makeup, of course.

While the AGCO set out early that operators would not be permitted to offer bonuses and incentives to consumers pre-sign up, things have evolved in response to real-time developments.

One notable example is the AGCO’s move last summer to prohibit the use of athletes in iGaming advertising and marketing in Ontario after a flurry of operators leaned on some of Canada and North America’s most familiar faces to sell their products.

Sportsbooks and online gaming companies can still recruit stars to be the face of their brand but now only if they are the face of the brand’s responsible gaming measures.

It’s all part of the journey: seeing what is unfolding and addressing the growing pains as they arise.

Where does Canadian gaming go next?

There is still more work to do.

On the topic of responsible gaming, there is still no centralized self-exclusion solution to provide a universally applicable way for players to prevent themselves from gaming. iGO announced last month that it has opened the RFP process and is seeking proposals from prospective partners for its SaaS project until April 24 in its quest to protect players.

While the iGO and government revenue figures paint a rosy picture of the industry’s progress and profitability, there are still grumbles from some corners over the depth and regularity of the communications. Revenue figures are only provided quarterly, in stark contrast to the way U.S. jurisdictions report financials on a monthly basis, and the numbers given are few and shallow.

What’s also not clear is how the rest of Canada will proceed. Ontario has provided a yardstick for regulated Canadian gaming but it’s hardly a universally applicable framework; the model is unique and shaped by many things specific to the province. Ontario’s slogan is “Yours to Discover” and for the near-50 operators who have been welcomed with open arms, that has rung true. This may not be the case in other provinces.

There is optimism that Alberta is gearing up to follow the rainbow but it appears we may still be far from reaching that particular pot of gold. Alberta’s Services and Red Tape Reduction Minister Dale Nally is working to fulfill the July 2023 mandate to finalize the launching of online gambling in Alberta and the wheels are in motion but there is no firm timeline for that process unfolding. Things may accelerate now that $1 million has been devoted in the 2024 budget to study the feasibility of launching the regulated market.

The horizon is hazy for regulated gaming across Canada but two years on from Ontario’s launch, business is good. Where we have been makes for interesting reading, but it’s where we may be going that’s truly fascinating.