Canadian Gaming Association gathers the gang to fete Year 1 of Ontario's regulated gaming biz

As your resident VJ (as in virtual jockey) and aficionado of songs from the 1970s, it’s quite apropos that we present this little ditty from the Little River Rand as the stakeholders in Ontario’s legal sports betting and gaming business pour the OJ and bubbly this April 4th morning.

We look forward to hearing from leaders across different sectors of the industry throughout the day, and we’ll compile the best bits from today’s forum for Thursday’s dispatch.

Over the past couple of weeks, your congenial chronicler has canvassed several industry insiders for their thoughts on the first year of the most robust legal gambling jurisdiction in Canada and the U.S., while also looking ahead to the next 365 days (and beyond). From those conversations – and our own observations – we tackle this morning some topics of interest around the industry.

The landscape in Ontario, today and tomorrow

As of this morning, there are 80 gaming sites available to the province’s players by 44 operators, according to the information provided on the iGaming Ontario website, which was updated late yesterday afternoon.

Coolbet, which announced last month it was leaving the Ontario market, is still listed. While, unlike the U.S., there’s been a cone of silence around which operators are the early clubhouse leaders, there’s a belief that Bet365 has taken full advantage of its former grey-market status and enjoyed a seamless transition into the regulated world (although it’s worth noting Bet365 dedicating advertising/branded content dollars to Sportsnet and other media/social media platforms, which wasn’t the case in the past).

One source of frustration with regulated operators is an operator – rhymes with Go Frog – which appears to be staying the course as an illegal operator in the province while being allowed to advertise on television and social media platforms being seen/heard by Ontarians.

As Amanda Brewer mentioned on the Gaming News Canada Show podcast a couple of weeks ago, Coolbet’s departure won’t be a one-off as others will follow. The expectation is some addition and subtraction on the operators front, with some M&A conversations taking place although it would appear to be a longshot for any done deals in ’23.

Customers can expect to see the continued evolution on the product side for the rest of the year. This corner sometimes gets fixated on the sports betting side of the business, forgetting that wagering on games/matches/etc., is a small piece for the pie for the majority of operators. Several of the industry experts we spoke with recently referred to the audibles being called by companies coming here from the U.S., Europe or other parts of the world on the products they offer. One insider mentioned the sophistication of sports bettors here who have been playing in the grey market for decades. Every time we go to a gaming conference, we’re bombarded with information about innovation, whether it’s better access to data for providing more in-game betting opportunities, or improved technologies around payments, education and geolocation.

Finally, there seems to have been a cooling off from the warm and fuzzy feeling that accompanied market opening a year ago from a collaborative process between operators and the AGCO/iGO. As GNC reported in early March, many operators were caught off-guard when being notified by iGO that they would be invoiced for charges related to banking due diligence. Not every player in the Ontario market is of the large variety, so any unforeseen expenses have a tangible impact on their business.

As Canadian Gaming Association president/CEO Paul Burns said on the latest Gaming News Canada podcast, and this has been echoed in many corners, the industry is still its infancy as a regulated one in Ontario-ari-ari-o.?

Happy anniversary iGaming Ontario!?At GBG, we are proud to support over 60% of iGaming brands who hold the iGaming Ontario licence, helping them to maximise their player acquisition rate, onboard more good customers first time and deliver FINTRAC compliance. Want to learn more??Get in touch today.?

A story of economic development

Perhaps the most fascinating segment from an info-filled hour on LinkedIn Audio last week was both Burns and Sightline Payments’ Canadian executive Will Hill weighing in on the boost that the new regulated industry has given to an economy that needed some helping hands coming out of the COVID-19 pandemic.

That includes operators (theScore Bet, PointsBet Canada, NorthStar Bets and Flutter Entertainment come to mind immediately - and we await your cards and letters wishing you hadn’t forgotten others) who have invested in people and office space. That includes a still-growing technology and data hub in Halifax, parts of New Brunswick, Montreal, Toronto, Waterloo, Vancouver, and across B.C. That also includes payments, compliance and other ancillary businesses. It includes agencies and other organizations providing third-party support. And it includes great stories like GeoComply, the Vancouver-based business which was able to remove employees from war-torn Ukraine and create a new home for them in Toronto.

“We have a great history in the gaming business,” Burns said. “Now we’re telling government that they’ve unleashed something on the economic development side that this is a good place to be. (It’s) allowing us now to demonstrate, show and promote the fullness of what the industry is. . . the jobs that have been created over the past 18 months and the investments have been made.”

Hill, who cut his teeth in the gaming industry with OLG almost a dozen years ago, chimed in on the bricks-and-mortar side, where Ontario now has 29 casinos (with a 30th - a $1 billion resort - to be opened this summer by Great Canadian Entertainment adjacent to Woodbine Racetrack), Alberta has 29 casinos and B.C. is now up to 30.

“There’s a fervent digital (gambling industry) but there’s also a broader industry,” added Hill. “The (expansion of the casino biz) is part of a larger growth of gaming entertainment broadly on a pan-national basis. It’s an industry that’s evolving in a very positive way.”

Is Ontario a leader, or on its own?

It’s a very safe bet that there won’t be another province following Ontario’s lead in 2023.

For starters, half of the provinces in our home and native land will be holding elections this year. Prince Edward Islanders went to the polls yesterday, one of five scheduled provincial elections this year (Alberta, Manitoba, the Northwest Territories and Nunavut are the others).?

There’s widespread belief that the Ontario model, with many choices of operators and products for customers, and, for the most part, a spirit of cooperation between operators and regulators that includes a mutually-agreed-upon 20 per cent tax rate, is a great place to start for other provinces looking to expand legal sports wagering and online gaming.

Geoff Nixon of CBC.ca, in an article on the first anniversary, was told via email by Alberta Gaming, Liquor and Cannabis spokesperson Karin Campbell that the AGLC is “closely monitoring” what’s going on in Ontario.

Proclaiming the next province to open up its market makes as much sense right now as placing a fiver on the Canadiens to win this year’s Stanley Cup (sorry, Habs fans).?

On the first anniversary of Ontario’s regulated iGaming market, Osler wants to congratulate its clients, the Alcohol and Gaming Commission of Ontario, iGaming Ontario, and the Canadian Gaming Association for their contribution to the establishment of a regulated online gaming market.

For any questions you may have regarding the online gaming landscape and applicable Canadian law, please contact Eric Levy, Chair of Osler’s Gaming Group at 416.862.5884 or visit our website.

The debate continues on advertising and content

We’ve written and discussed ad nauseum the (gold) rush of gambling ads and sports betting content since market launch a year ago.

On the front burner these days is contemplation inside the walls of the AGCO about placing some form of restrictions on the use of brand ambassadors, including athletes past and present, actors, musicians, social media influencers (we assume) etc., etc., etc. in advertising/promotion. That, in our humble opinion would appear to be a slippery slope of a black diamond ski hill type (how do you get consensus on the definition of a “celebrity”?).

Just to add some logs to that fire, the new, seven-year collective bargaining agreement between the NBA and the NBA Players Association includes a clause for players to make some money with sportsbooks as ambassadors and/or investors.

Some quick thoughts on advertising:

• Overall, the amount of sports betting and online gaming has been pretty much on par with other categories (food and beverage, retail, automotive, banking/financial).
• Hopefully, operators will follow the lead of FanDuel last spring, and more recently, BetMGM’s pledge to feature responsible gambling messages in their ad spots.
• One more time (with even more feeling), it shouldn’t take the involvement of regulators for operators and agents/marketing reps to make RG a focus of any endorsement deal with a current athlete (and if you’re a former athlete or other kind of celebrity who’s built their brand around integrity, we suggest you follow suit).

And, some quick thoughts on the continued efforts around integrating sports betting and sports media:

• It seems to us the exclusive relationship between FanDuel and TSN - which added another layer yesterday with the news that FD will be the presenting sponsor of sports talk show Overdrive - has hit the right notes by using insight, data (we’re a fan of Meghan Chayka’s Strength In Numbers hockey segments) and other forms of storytelling to set up betting lines.

While the DraftKings’ partnership with Hockey Night in Canada continues to be a work in progress, we like the BetMGM Breakdown feature on Sportsnet’s hockey coverage, and a Bet365-sponsored segment on the Blue Jays’ pregame show last night that was heavy on information and insight, and light on betting lines.

• In short, there’s a realization that branded content that focuses on storytelling is a better bet with sports fans. The Homestand Show (which shares the same owner as your friendly neighbourhood source of industry happenings includes appearances by the likes of NorthStar Bets hockey insider Chris Johnston and Bet99 brand ambassadors Alysha Newman and Matthew Barnaby.
• Our unscientific polling of sports fans online, at arenas and in sundry other settings indicates there’s a need for more education around betting on sports.

Paging the AGCO and iGO

Over your (usually) humble correspondent’s almost-42-year professional career, we have worked on both sides of the fence – as a journalist for community newspapers, the people’s wire service, Canada’s national newspaper and a global digital media company, and as a communications/media relations specialist/consultant for national sports federations, the NHLPA, a former federal Minister of Sport, and a nuclear company. (No wisecracks on being unable to keep a job, s’il vous plait.)

For yours truly, it continues to amuse/amaze/annoy us that very smart people who are leaders and have no problem speaking in various and sundry forums, suddenly go full-on Ralph Kramden when it comes to answering a journalists’ questions.

It’s akin to watching owners of successful businesses suddenly lose double-digit IQ points when they become owners of a professional sport franchise.

One of the pleasant surprises of covering this industry for more than two years now is the cooperation we’ve received from various leaders across the industry, with the support of the many accommodating communications folks. We’d like to see more of that, when it comes to the AGCO and iGO, although in fairness to the leaders of the two government agencies, the elected officials they serve are, more often than not, masters of turning into Andre DeGrasse or Maggie Mac Neil when it comes to dashing away from media requests.

A New York Times investigative series last November into the new world of legal sports betting in the United States caused a major stir although the Times’ articles were, for the most part, bereft of quotes from industry leaders. The same was true of a January report by The Fifth Estate on The Gamification of Canada, which was criticized by people within the gambling business for focusing too heavily on the UK market and opting not to interview Canadian industry experts such as Responsible Gambling Council CEO Shelley White.

“Without a coordinated, concerted effort focused specifically on telling the full story of legal online betting, the industry will always be highly vulnerable to criticism,” said sports betting industry investor, founder and executive Chris Grove in an email last week to GNC. “Some of that criticism will be valid and should be addressed, but much of it will be nonsense that will nonetheless do significant damage if the industry isn't ready, able, and willing to respond.”

In Canada, that’s a tangled web to weave given the divide between the provincial lottery corporations, grey-market operators, and, in Ontario, the regulated operators. There’s not a PLC to be found on the Canadian Gaming Association membership page. The participation of OLG chief gaming officer Dave Pridmore in today’s CGA event and a positive working relationship between the national body and the British Columbia Lottery Corporation leave room for optimism of a more collaborative future.

iGO is expected to release the market’s fourth-quarter numbers this morning, and it’s also expected there’ll be a little more of the proverbial meat on the bone (for example, could we see breakdowns on the types of bets being made, and also which sports/leagues are most popular among Ontario bettors?). That’s a step in the right direction.

And, if you take the recently-released results of a survey conducted by Spin Genie Ontario that showed the major of Ontarians believe most of the major operators in this province are unregulated, there’s?more work to do on the information and education front.

What’s next on the partnership front?

There was a rush to onboarding partners prior to, and during the first week, of the Ontario market a year ago. A few thoughts:

• As someone pointed out last week, the decision by Maple Leaf Sports & Entertainment to not going down the exclusivity road when it came to sports betting and igaming sponsors is of more than a passing interest. MLSE did deals last spring with FanDuel, PokerStars and PointsBet and have since added Jackpot City, Fallsview Casino and OLG.
• In case you forgot, this year’s Canadian men’s curling championships was the final one with Tim Hortons as the title sponsor of The Brier. When Curling Canada made the announcement, the speculation was immediate that PointsBet Canada was a leading contender to expand its partnership with the NSO. While the inaugural PointsBet Invitational last spring was deemed a success with its March Madness-style format, it’s still not known how popular curling is with bettors.
• While BetRegal has done partnership deals with some CFL clubs, its sponsorship with the league itself that was announced in August 2021 has taken a back seat while it awaits getting AGCO and iGO approval. If and when BetRegal gets the green light, we wonder how that relationship takes shape, especially given the relationship between the league’s TV rightsholder TSN and FanDuel.
• Speaking of FanDuel, we’re watching to see how its Canadian business exploits last month’s announcement that MLB is now an official North American sports betting partner of MLB.
• Speaking of MLB, does theScore get a boost from its 10-year partnership with the Toronto Blue Jays as a result of the Rogers Centre renovations?
• Speaking of theScore, can it upstage its Sightline Seats marketing activation from last year’s RBC Canadian Open?
• The Toronto-based National Bank Open, Canada’s premier men’s and women’s professional tennis tournament, didn’t have a gambling partner last year (Loto-Quebec was a partner of the Montreal-based NBO). Does that change in 2023?

GeoComply keeps on keeping tabs on bad actors

Thanks to the above-and-beyond efforts of Steve Hoare and William Parry from the GeoComply communications team, GNC has some risk numbers for Ontario going back to last April, including:

• More than 744,000 users have attempted to log in 19.9 million times to Ontario operators from around the world.
• More than 54,000 users from within the U.S. have attempted to log in 305,000 times to Ontario operators from south of the border
• More than 3.3 million location spoofing attempts into Ontario operators have occurred from around the world.

GeoComply’s data also let it be known that the regulated market has caught the attention - unwanted as it is - from fraudsters:

• More than 219,000 devices have been prevented from gambling for fraud reasons.?
• GeoComply has detected 1,045 fraud rings affecting multiple operators.

GC’s services have also put up other roadblocks when it comes to accessing Ontario’s licensed operators illegally, including:

• Over 127,000 devices known to be associated with fraud.
• Over 56,000 devices with multiple users (typically a sign of bonus abuse).
• Over 34,000 devices using illicit software (normally to hide location).
• Nearly 1,500 devices that have been jailbroken or tampered with.

“GeoComply remains vigilant alongside our operator partners,” said Danny DiRienzo, the company’s director of risk services, and a former U.S. Secret Service agent. “During the last 90 days, a third of GeoComply’s fraud investigations have involved Ontario operators, despite Ontario accounting for far less than a third of our overall traffic.

“The investigations have affected most Ontario operators, so fraudsters are targeting almost everybody.”

We’ll have more in Thursday’s newsletter about GeoComply’s work in Ontario.

Speakers Corner, GNC style

Gaming News Canada also asked others for their perspectives on the Ontario industry so far, and here’s what we received:

• “As we reflect on the progress and learnings over the past year, we have found that the regulators’ willingness to consult early and engage constructively with the industry has been a critical success factor in the market’s development.?We believe that stakeholder collaboration is a really important factor for enabling the long-term sustainability of the market.?Ontario continues to be at the forefront of responsible gambling, and we look forward to partnering with a wide range of Canadian stakeholders to delivering and advancing a safer and fairer gambling experience for consumers.” - Charmaine Hogan, Playtech’s Head of Regulatory Affairs
• “It’s been interesting to watch Ontario opening up.?I’ve been involved in producing i-gaming events in Canada since 1999 so I know the hard work that has gone into seeing this become a reality.?As with any new jurisdiction, there are hiccups; but, I feel pretty confident that this will shake out in a way that benefits the players with lots of options available to consumers.” - Sue Schneider, VP/Growth & Strategy, Americas, SBC Gaming
• “Canada continues to be a leader in responsible gambling, some even say that it is the gold standard internationally, due to its commitment to consumer protection.?AGCO has in place robust responsible gambling regulations, and they are monitoring the compliance with the standards carefully. Additionally, they are also evaluating the efficacy of the standards, and have demonstrated to date that they are committed to revising the regulatory standards as required,?to provide greater player protection.?iGO’s licensing requirements which include the requirement for RG Check accreditation, responsible gambling research and?advertisements, further enhance the safer gambling ecosystem in Ontario.?
• “In Year 2, it will be important for the province to formalize a multi-year Responsible Internet Gambling strategy, along with the necessary?funding to support its implementation,?increase the availability of public information and player supports to promote responsible gambling, particularly to priority populations,?as well as increase the overall the utilization of responsible gambling tools by all players, and ensure that players have easy access to supports, if they need help.” - Shelley White, Responsible Gambling Council CEO
• “When iGaming launched in Ontario last April, we saw strong demand from consumers across the province. iGaming in Ontario lived up to the hype with the increase in active players and fierce competition to attract and retain those players. We saw tremendous growth during this time across the Ontario market and within NorthStar Bets.
• “Looking ahead, we expect to see market growth continue as Ontarians, and Canadians, become more familiar and educated on the iGaming market. Ontario’s operators laid that groundwork and proved there’s appetite for this kind of immersive experience across Canada. We at NorthStar Bets look forward to building on that momentum coast-to-coast.” - Michael Moskowitz, NorthStar Bets’ founding partner and CEO
• “Ontario has quickly become one of the most robust and competitive online gaming markets in North America. We commend the Alcohol and Gaming Commission of Ontario (AGCO) and iGaming Ontario (iGO) for the successful establishment of a regulated online gaming framework that provides important consumer protections, features comprehensive responsible gaming measures and contributes to economic development throughout the province.?
• “As Canada’s first province to establish a legal market for private operators, Ontario has distinguished itself, while proving the widespread benefits that derive from a consumer friendly and commercially minded framework. We believe Ontario’s successful model provides a road map for other provinces to modernize their online gaming frameworks and stamp out the illegal grey market.” - Benjie Levy, Head of PENN Interactive, and President/CEO of the Score
• “With a year under our belts we are beginning to see what many of us suspected all along, which is that Ontario is an absolutely massive market with an enthusiastic population of sports wagering enthusiasts. Ontario has established itself as a critical component of the overall North American landscape.
• “While controversial, I think it was wise of Ontario to allow its grey market participants to pursue licensure.?Granted those existing operators enjoy a competitive advantage over the Ontario upstarts who have to build a user base from scratch but bringing them into the legislated ecosystem beats the alternative.?I think Ontario is better positioned than the US states to minimize the growth of the illegal markets in the years ahead.?Hopefully this will extend to additional Canadian provinces if and as they embrace the Ontario legislative blueprint.
• “It has been interesting to see how various operators with a strong US presence have approached the opportunity in Ontario.?Some are putting boots on the ground whereas others are primarily remote.?There is an abundance of talent that can be incubated in Ontario and by extension all of Canada so I expect moving forward we will see more operators and suppliers finding ways to embrace that emerging influx of talent.
• “With a seemingly endless barrage of advertisements across the province, it is no surprise that there has been a fair bit of criticism from the media, politicians, and bettors themselves.?The criticism is justified as objectively there simply are too many ads and commercials in and around live broadcasts.?Water will eventually find its level here but for the time being the arms race to win customers in Ontario will remain a black mark on an emerging market, even if it is arguably in the best interests of those operators securing market share via excessive promotion .” - Benjie Cherniak, Principal, Avenue H Capital
• “Coolbet exited the market prompting concerns – what happens to futures tickets???The answer is refund.??That’s pretty sour for bettors sitting on the (Boston) Bruins right now and IGO/AGCO needs to setup a mechanism with funds on hold to payout futures winners in event of exit.
• “The days of crazy bonuses are behind us.?Caesars made claiming bonuses complicated, thankfully IGO stepped in on my behalf to avoid an incident, but the process took a month and most consumer are unlikely to be that persistent.
• “Consumers voiced frustration about not being able to bet the (Kentucky) Derby or when on vacation outside Ontario –negative changes versus the grey market.??
• “Too much talk from sportsbooks and media about locks and crazy 20-leg, lottery-style wins promoting irresponsible gambling.?AGCO erred allowing young athletes like (Connor) McDavid to promote products (that targets kids).?Also it was an error to not let companies advertise bonuses or low VIG or commissions.?Pinnacle charges 1/3 as much as Caesars in fees for NBA & NHL bets.”?- Harley Redlick, professional bettor

Post-CGA forum talk on LinkedIn Audio this week

Not surprisingly, the focus of our regularly scheduled Gaming News Canada Show on Thursday afternoon (first cliche drops at 2 ET) will be parsing the many conversations from today’s Canadian Gaming Association gathering.

We invite you to join us before starting your Easter weekend or finishing up your work day.

Quick Hits

• ICYMI, Play Canada editor Dave Briggs did his own canvassing of the operators and others for their respective takes on Year 1. And, he undertook the same exercise with some experienced bettors.
• CDC Gaming Reports’ Canadian correspondent Mark Keast captured the highlights and lowlights.
• Greg Warren, for CanadaSportsBetting.ca, wrote a good-bad-ugly take.
• Your humble informer jumped on a Zoom call last Friday with Louie Butko of the Trending Now CHCH podcast for a conversation on the state of the gambling game in Ontario.
• DraftKings passed along some information yesterday about the betting habits of their Ontario customers since joining the market last May:
• Most bet on Players (All)

1. Aaron Judge
2. Vladimir Guerrero Jr.
3. Connor McDavid
4. Brayden Point
5. Luka Doncic

• Most bet on Players (NHL)

1. Connor McDavid
2. Brayden Point
3. Auston Matthews
4. Jack Hughes
5. Alex Ovechkin

• Most bet on Sports Teams (All):

1. Toronto Blue Jays
2. Golden State Warriors
3. Kansas City Chiefs
4. Buffalo Bills
5. Toronto Raptors

• Teams that have won the most money for users in Ontario

1. KC Chiefs
2. Ottawa Senators
3. Milwaukee Bucks
4. Montreal Canadiens
5. Sacramento Kings

The Company Line – Strategy9

In this edition of GNC, we shine the TLC candle on Canadian Gaming Association member Strategy9.

Birthdate:?1999

Home Base:?Las Vegas

Founder:?Current CEO Andrew White

Raison D’Etre:?The software development company provides data-driven SMS messaging, email marketing, customer relationship management and database solutions to casinos.

If you’d like to have your business featured in The Company Line,?please drop us an email ([email protected]).

Follow us?@GamingNewsCA?on Twitter for the latest news on the sports betting and gaming industry. For our daily picks and other sports video content, visit?@Homestand. If you’d like to appear on our Thursday afternoon get-together at LinkedIn Audio, please let us know.

Gaming News Canada has advertising and sponsorship opportunities with our twice-weekly newsletters, LinkedIn Audio, and the Gaming News Canada Show podcast. If you want to reach a highly engaged audience in the space, please email?[email protected]?for more information.