Scott Stinson: The province always wins
Scott Stinson: The province always wins
Ontario has been the only jurisdiction to embrace legal private-sector sport betting. Love it or hate it, it's bringing in a ton of money.
By: Scott Stinson
One of the many sports-gambling advertisements that have inundated Ontario’s broadcast airwaves never fails to elicit a chuckle.
It’s for the sportsbook run by the provincial lottery corporation, which competes in the space against private operators with big, international profiles: FanDuel, MGM, theScore, DraftKings and many others.
The advertisement emphasizes that “100 per cent of the profits” from its sports-betting operations “go back to Ontario.” Joe and Jane Sports Bettor are therefore “playing for the home team” when they wager with Ontario Lottery and Gaming.
The thing is, the ad is talking about losses. It carefully avoids saying it, but what OLG is touting here is that when you lose, at least your terrible bets go to fund highways and schools. And also the salaries of the people who came up with this ad pitch.
For the life of me, I cannot imagine that a single prospective gambler considers where their losses will go. They generally don’t consider their losses at all. That’s kind of the whole point of the industry: you make bets expecting to win. You don’t imagine the (un)likelihood of a high-risk bet losing, but instead think of what you will do with the big payout it would bring.
WIFE: Why is there $500 missing from the chequing account?
HUSBAND: I gambled it on the Leafs to beat the Bruins and Auston Matthews to have at least two shots on net.
WIFE: What happened?
HUSBAND. Auston Matthews had three shots on net! And also they lost.
WIFE: (Death stare)
HUSBAND: It’s OK, 100 per cent of the profits went back to Ontario.
Strangely enough, it remains only Ontarians who have to make the choice between their potential losses going back to the public purse or instead going into the revenues of a private operator. It’s coming up on the second anniversary next month of Ontario throwing open the metaphorical doors to private-sector participation in the legalized betting market, and yet so far no other province has followed its lead.
Opinions will differ on whether Ontario’s jumping-in-with-both-feet approach to the private-sector pool has been a net benefit to the province because of the downstream effects of increasing gambling, but from a pure revenue sense it has absolutely been a boon. The most recent quarterly report from iGaming Ontario, the provincial regulator, said that more than $17 billion had been gambled in the three months ending in December. The majority of that wagering was on casino-type games, but almost 20 per cent was in sports betting, or almost $3.1 billion. Total internet gaming net revenue was just under $660 million, with sports betting accounting for about 25 per cent of the total. That revenue is up about 46 per cent from the same quarter a year earlier.
To pick one province by comparison, Alberta’s gaming regulator said revenues were up by about 18 per cent in 2023 from 2022. Sports betting accounted for just three per cent of the 2023 total.
That’s a stark contrast, and suggests an obvious way for provinces to goose their revenues. Provinces, of course, are always looking to goose their revenues. It’s a little bizarre that Alberta, run by the freedom-lovingest premier in the federation, hasn’t already done so.
The counter-argument is that keeping everything in-house is the more cautious play. Other provinces haven’t experienced the blizzard of ad spending that has taken place in the highly competitive Ontario marketplace, where the regulator has already moved to curb the use of athletes and celebrities as spokespeople out of fear that young folks were too susceptible to their influence.
But the problem with that line of thinking is that the provinces already do allow gambling, and plenty of it, whether in casino settings or through the various products offered by the lottery corporations. You can’t be half-pregnant, but on the gambling file most provinces seem willing to try. Some of them still allow the use of video lottery terminals outside of casino settings — on the counter of a bar, for example — that studies have repeatedly shown to be highly addictive.
Keeping VLTs legal while banning the entry of, say, DraftKings from the province’s mobile phones seems incongruous at best.
The argument for sports-betting legalization was that it would take an industry with a large grey-to-black market, bring it out into the open, and regulate and tax it. That’s the argument that the Trudeau government eventually accepted in dropping the line from the Criminal Code that prohibited single-event wagering.
But a key part of combatting illegal operators is by giving space to a legal market to grow. In Ontario, some former grey-market operators like bet365 applied and received licences to operate legally. Sports Interaction, which operated before sports-betting legalization and was headquartered with the Mohawks of Kahnawake, was sold after the law changed for $300 million to a UK gaming conglomerate. Bet99, familiar via its lavish ad buys to any sports viewer, is also licensed by the Kahnawake Gaming Commission.
Some would-be gamblers in provinces that still prohibit retail participants are almost certainly sticking with the grey-market products that they used before the industry was legalized. Some of those same users might not even realize their preferred gambling site isn’t legal. Having written about Canada’s move toward legalization in the past, I occasionally had readers who insisted that sports-betting already was legal since they did it on their computers all the time. Their shop in question would invariably be headquartered on the Isle of Man. Or in Estonia.
That might even still be the case for some bettors in Ontario. But amid all the promotional campaigns flying about the province, you’d have to work pretty hard to find the sports-betting operation that was not, in fact, above board.
Scott Stinson is a writer based in the Toronto suburbs, and author of the Unobstructed Views newsletter.
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What if Ontarians put 68 billion (extrapolated to an annual spend) into their respective local economies to support wages and services. Simply put, gambling is nothing more than bottom-feeding economics.
On-line gambling is a curse. Lately several of the senior gals of my acquaintance have had to bail out adult kids or their spouses who got into real financial trouble as a result of on-line gambling. This will not go down in history as one of Doug Ford’s finest achievements.