Ontario iGaming Hits $5.8B Handle, $240M Revenue

Ontario set a new record for iGaming bets last month, joining other iGaming hotspots with record or near-record revenue growth. Total handle, or all bets made, was $5.84 billion USD for the month, which was a record, and just over $240 million in revenue, which fell just short of the record $242 million made in May of this year.

The year-over-year increase is a staggering $70 million USD or about 40%. Active monthly player numbers have also surged more than 7%, at just over 1.1 million in a province that is home to about 16 million. Clearly, then, most of that revenue comes from increased spend amongst current players, and in fact, average loss per active player now sits at $236 USD a month per active user.

Unlike many online gaming markets in the US, iGaming still dominates with about 90% of the total market share, sports betting for instance had a handle of $548 million, and revenue of just $43 million.

It’s still a relatively young market as well, launching in April of 2022, and until this spring was overseen by the Alcohol and Gaming Commission of Ontario.(AGCO) In May of this year, oversight was transferred over to iGaming Ontario, though it would be hard to say the difference is stark between the two.

In fact, until last week, the new agency was working with an interim head who, in deference to whoever was named the new head of the agency, was very slow to roll out new regulations. Then, in early September, in an apple doesn’t fall far from the tree announcement, Joseph Hillier was announced as the new President and CEO. Hillier was the former Chief Strategy Officer and Corporate Secretary at AGCO. 

Top priorities will be building out a centralized self-exclusion portal, finding a way to automate a cumbersome manual Anti Money laundering system that is currently weighing down on operators, and more generally finding ways to help operators reduce costs so that they can compete against grey and black market online casinos.

It may seem odd that the Province’s top regulator would need to work closely with operators to find a way to reduce friction, but offshore iGaming remains a huge problem. Some studies show that more than 16% of online gamblers only use offshore casinos, which are unregulated and untaxed, and another 20% sometimes use one of these grey/black market sites.

Ontario has always taken a hands-off approach to competition for these licenses. There are no rules that tie these operators to land-based skins or that limit the number of online casinos. If you can pass the background checks and pay the fees, you can have a license. The laissez-faire approach has seen more than 50 online casinos competing to see who can offer Ontarians the best casino experience.

And with a 20% tax rate, it is far better than what is offered in Pennsylvania, where the online slot tax can run over 50%. It’s no wonder that many US and international casino operators have chosen to try their luck in the Canadian Heartland.

Last year, they contributed $190 million USD in taxes, and with double-digit growth rates, that number is likely to be far higher this coming year. Couple that with about 15,000 full-time jobs, and you can see why the Government wanted to break it free from the AGCO, as well as why they might be incentivised to join forces with operators to fight back against grey/black market sites.

With these low tax rates and open license model, Ontario is North America’s most competitive iGaming market. For Hillier and iGaming Ontario, the mission moving forward is clear: reduce friction and costs where possible for licensed operators, continue pushing back the grey market, and make sure that all of that cash fueling this incredible growth remains above board and from legal sources.