Firms Prepare for End of Ontario’s Online Gambling Monopoly
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Firms Prepare for End of Ontario’s Online Gambling Monopoly

Firms Prepare for End of Ontario’s Online Gambling Monopoly

Ontario could soon move to bring online gambling from the shadows and allow private players into the market, while boosting revenue for Canada’s most populous province.

Gambling firms are already anticipating the changes to Ontario’s laws, which are expected sometime in 2021. Presently, online gambling is controlled by provincial authorities and closed off to private players. But this is certain to change following the Nov. 5 budget presentation.

The province is set to introduce legislation to give the Alcohol and Gaming Commission of Ontario (AGCO) authority to conduct and manage iGaming, in addition to having the role of the regulator. 

Score Media and Gaming (theScore) founder and CEO John Levy said his company fully supported “this action by the provincial government that moves us a significant step closer towards safe and regulated sports betting in Ontario. Canada is theScore’s home turf and we are eager to bring our award-winning sportsbook, theScore Bet, to our highly engaged fans across Ontario, a huge market with a population larger than all but four U.S. states.”

Online gambling is well advanced in the U.S., with mobile casinos being a hit.

“Ontario legalizing online betting could also spur other Canadian provinces to follow suit, providing an even bigger opportunity for companies like Bragg Gaming Group to gain first-mover advantage in the country's largest market. From there, it will be easy to expand into new Canadian markets as they open up,” the Bragg Gaming Group said in a statement.

The COVD-19 effect

The Canadian Gaming Association said it welcomed the bringing in of private players into the internet gambling (iGaming) market as this would allow the people of Ontario have access to safe and legal gambling options online.

With the COVID-19 pandemic forcing the closure of land-based casinos, online gambling could offer salvation to the gaming industry that has seen its revenues decimated by nationwide stay-at-home orders.

To illustrate just how devastating the COVID-19 pandemic has been, the Ontario Lottery and Gaming Corporation (OLGC), which controls gambling in the province had to seek a $500 million bailout just to keep going. 

“As we grapple with the economic recovery from COVID-19, it will be helpful for Ontario to generate revenue from the licensing and taxation of offshore online operators who qualify to operate in Ontario. It will also allow land-based casino operators to access online gaming, enabling them to diversify their entertainment options and interact with customers outside of property walls,” said Paul Burns, president, and CEO of the CGA.

The CGA further said by advancing Ontario’s iGaming initiative, the province can begin to capture an important new revenue source while encouraging investment in the Ontario economy through tax revenue, employment opportunities, purchasing goods and services, and establishing a presence here in Ontario.

“There’s a tremendous benefit to bringing this out of the shadows and into the forefront and take advantage of this regulatory change that will protect consumers and bring revenue to the government. It will also be a very strong economic driver to the industry to get companies to locate and operate here,” Burns of the CGA continued.

It is not yet clear when the legislation permitting online gambling will be brought to the provincial legislature.

“Over the coming months, the government will work to develop a new model for online legal gambling to help foster an exciting gambling experience. Financial details will be determined once further work has been undertaken,” said spokesman Scott Blodgett.

It is projected that Ontario could generate as much as $547 million in annual revenue after five years by privatizing iGaming.  

New problems to contend with

But not everyone is happy with the opening up of the iGaming sector to private players, with the Auditor General of Ontario foreseeing a conflict of interest on AGCO’s part. The Auditor-General said the AGCO “would have both regulatory responsibilities and operational/revenue-generating responsibilities through its subsidiary, which could be perceived as a conflict of interest.”

Another ever-present concern is the likelihood of addiction among players. Critics say online gambling is more accessible and this could lead to addiction. With COVID-19 enforced shutdowns of land-based casinos, many gamblers have moved to online gambling, but this brings with it the risk of addiction. 

A study by the Gambling Exchange Ontario into the impact of COVID-19 on online gambling in Ontario, Canada noted that participants who gambled online during COVID-19 were more likely to have lost some or all of their income. It also said such players were more likely to gamble to earn income, to chase their losses, and to feel less nervous or depressed.

Another study found that online gamblers had a significantly higher prevalence of moderate and high-risk gambling. The report said online gamblers had nearly twice the risk of being moderate risk gamblers than non-online gamblers. Online gamblers also had eight-times the risk of being high-risk gamblers, relative to non-online players.

“High levels of anxiety and depression were correlated with online gambling. Approximately 60% of those with moderate anxiety reported gambling online in the six weeks following the declaration of emergency measures. The survey data also revealed that moderate and severe anxiety were key risk factors for high-risk gambling,” the report said.

There are a number of resources to help players gamble responsibly. These are some of the habits that gamblers should get rid of in an effort to stave off addiction.

 


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