A sizeable chunk of online gaming activity in Canada continues to be done in the grey market.

This is nothing new, of course. Ontario now hosts more than 50 licensed and regulated iGaming and online betting operators, many of which already boasted significant recognition and visibility by the time they officially came to market when the province opened its doors on April 4, 2022. Even now, after nearly three years of lucrative licensed business, others continue to operate without a license.

In other provinces, the lottery corporations run the only government-sanctioned gambling platforms, but most of them openly acknowledge that business is being lost to unlicensed providers. 

How the lotteries assess their own success varies. Alberta Gaming, Liquor and Cannabis (AGLC) suggested last year that its Play Alberta platform has captured around 45% of Alberta’s online gambling market. The Atlantic Lottery Corporation (ALC) stated in its full-year report that its online gambling operations hold a 22% market share.

Whether or not you take those numbers at face value, it’s clear that a large amount of business goes elsewhere.

So, what really does go on in the shadows? We may never know for sure, but experts at H2 Gambling Capital shared with CGB online betting and gaming data as of October 2024 about the apparent state of play across Canada.

Ontario channelization may be higher than thought

The core argument for regulating online gaming in Ontario was channelling as much activity as possible through regulated sites in order to achieve secondary aims of revenue capture, player protection, and increased competition.

On balance, you’d have to say the first two years of the province’s market were hugely successful in this regard. iGaming Ontario (iGO) vaunted an 86% channelization rate as of April 2024 and has publicly outlined that its goal is to achieve 90% within five years. The H2 data provided to CGB suggests that, including the Ontario Lottery and Gaming Corporation’s (OLG) operations, the province may already be thereabouts.

Per H2, as of the fiscal year ending March 2024 (FY24), total gross win across online betting and gaming in Ontario was $3.17 billion, of which $2.96 billion came through regulated sites including OLG’s platforms. That would suggest 93% of Ontario online gaming is regulated, up from what H2 data says was 83% in FY23.

H2 projects that rate will be 95% in FY25. Pre-regulation, offshore gambling made up more like 75%, although, of course, the total market itself was far smaller ($1.02 billion GGR in FY21 vs. $2.27 billion in FY23 and $3.17 billion in FY24).

H2’s data suggests that, accounting for the unregulated share, OLG holds around 16% of Ontario’s online gambling market, not including lottery. As commercial operators’ pooled market share increased from 63% to 77% from FY23 to FY24, the crown corporation’s slice thinned from 20% to 16%, although not to the same extent as the grey market, which fell from 17% to 7%.

Alberta picture is mostly grey

So, that’s Ontario. What about the other provinces?

In Québec, where Loto-Québec’s monopoly on regulated gaming has faced opposition from the operator-led Québec Online Gaming Coalition, H2 pegs the lottery’s market share at 44% as of the end of FY24. H2’s analysis since FY21 suggests that has not wavered much over the last four years, constantly sitting between 42% and 46%.

The British Columbia Lottery Corporation (BCLC) also holds close to half of B.C.’s online gaming market. However, its share has purportedly slid somewhat over the last few years, dipping from 59% in FY21 to 49% in FY24 per H2. This has come as the unregulated online gaming market has grown post-pandemic, although H2 also noted that the numbers reflect that BCLC’s online business grew strongly in FY21 and has largely remained flat since.

Given the ongoing conversations around Alberta, the data from that province makes for particularly interesting reading. The grey market appears more dominant than has been touted.

Alberta launched regulated online casino towards the end of 2020 and has grown from a low base since then. While Play Alberta’s market capture has grown significantly since 2021, H2 found that the platform has never held more than 30% of Alberta’s total online gambling market. As of FY24, it sits at 28%.

CGB was not shown data from the Atlantics or other provinces, but Alberta’s lower market share was the clear outlier from the three lottery corporation-run provincial markets.

There has been plenty of talk — including from AGLC itself — about the fact that Alberta has a robust and mature grey market. Judging from H2’s data, it may be much larger than previous public estimates have suggested. 

Where do individual brands sit in the grey market?

The data H2 provided to CGB also shines a light on some of the brands who hold a significant share in the unregulated market.

The data suggested that the biggest slice is held by Super Group. That company has five brands that are licensed in Ontario’s market —Betway, Spin, Jackpot City, Royal Vegas and Ruby Fortune — and also offers a combination of those platforms in other provinces. H2 pins Super Group’s total share of the unregulated market across Canada at 35%, by some distance the largest cut.

Stake, which has long benefited from an ambassadorial partnership with Drake and has been making headlines recently in the UK, purportedly holds at 10% share of the unregulated market, followed by Ontario-licensed brands bet365 (9%), Sports Interaction (6%) and 888 (5%). Numerous others combine for the remaining 35% of the grey market.

Online betting and gaming data courtesy H2 Gambling Capital, October 2024, unless otherwise noted. Online betting and gaming includes sports betting, iCasino, online poker, and online bingo but not lottery. Regulated and unregulated market percentages were calculated by H2 using a mixture of reported regulated GGR and forecast estimates, commercial operator reports, web traffic, affiliate traffic and search engine data.

A version of this article first appeared in the January 2025 issue of Canadian Gaming Business magazine.