The latest performance report from iGaming Ontario (iGO), the government subsidiary organization responsible for the upkeep and management of the province’s burgeoning iGaming market, has unveiled many positive fiscal figures with regards to its economic performance over the last year.
With multiple data points showing a continued upward trajectory going into Q1 of 2024, many in the industry will be feeling optimistic about what is to come for this ever-developing gambling market.
Taking a closer look at the data set out in the report, where does the organization’s findings place the iGaming sector within the wider Ontarian economy and what does it indicate for the future of gaming in the province?
Ultimately, does the continued high performance of the sector have more far-reaching implications, not just regionally but across Canada?
Background Context of iGO
The creation of iGO as part of the Alcohol and Gaming Commission of Ontario (AGCO) in July 2021 can be seen as the match that lit the fuse for the booming Ontarian iGaming landscape seen today.
While the AGCO maintains authority over iGO, assigned as the regulator of the market on a legislative and governmental level, iGO is ‘responsible for conducting and managing iGaming when provided through private Operators.’
As the on the ground enforcer of legislative requirements, iGO ensures that all private companies in Ontario operate in accordance with the gaming laws, making sure consumers are suitably protected while maintaining an efficient market is in place free from unnecessary red tape. Importantly, by developing and maintaining strong relationships with operators, iGO ensures gaming revenues generated are shared with the government to help fund provincial systems.
Findings from the Report
Wagers
The first quarter of 2024-25 saw a huge $18.4 billion put down on wagers in the province, a new record for the Ontarian iGaming scene. To put the figure into context, it represents a 31% increase on the Q1 wagers from 2023-24 and a staggering 360% increase on the wagers calculated from iGO’s first performance report back in 2022.
This highlights an incredible rise in the popularity of iGaming since emerging, with continued growth in the amounts of money being put down on Canada’s best online casinos. This increase in wagers can be attributed to an increased player base, with the report indicating that there were nearly 1.9 million active player accounts throughout Q1 this year, with an average monthly spend per active player of $284.
With a 3.4% increase in wagers over the last quarter, while still growing, the market appears to be experiencing a reduction in the rate at which it is growing. While on the face of it, this may appear worrying, it likely indicates the maturing of the market with the main player base now established. Many in the industry will be looking to next performance report to assess how this key data point continues to unfold.
Revenue
Similarly, the revenue generated by gaming activities has also reach new heights, with Q1 of this year reaching $726 million, a 5.2% increase on the previous quarter and a 34% increase compared to the same time last year. An increase of over a third in just one year shows that revenues don’t seem to be slowing down, with steady increases being seen quarter on quarter across 2023-24.
This continued financial success of the market is in part driven by its continued expansion with the Ontarian scene now home to 50 operators running 80 gaming sites. This is in stark contrast to the 18 operators running 31 sites in the first quarter of 2022.
With more options than ever before, players can find the game that suits them best while operators are having to increasingly improve their offerings to attract consumers in what has become a highly competitive market.
Interestingly, P2P poker and betting revenues have stagnated while revenues generated from online casino platforms continue to grow – around 73% of total games revenue came from casinos this quarter. This highlights a possible shift in consumer preferences, with the initial betting boom slowing down and casino sites emerging as the favored iGaming activity in Ontario.
Implications of the Report
While it is important to understand that revenue and profit are different things, and factors like operating costs, platform maintenance and employee payroll will impact the true profit of iGaming operators, the figures outlined by iGO appear to paint a positive picture for the sector. While it has already been assumed by many in the industry, the qualitative data outlined in the report confirms Canada as one of the fastest growing iGaming markets anywhere in the world, largely due to the regulated market in Ontario.
Furthermore, the success of iGaming in the province is now starting to have an impact on Ontario’s economy. A recent financial report by Deloitte has determined that around $2.7 billion has been contributed to the provinces GDP by the industry, helping to support $865 million in provincial tax revenues. With around 15,000 people now working within the industry, in little over two years the market has established itself as an important cog in the machinery of Ontario’s economy.
The success hasn’t gone unnoticed either. As recently as June this year, the province of Alberta decided to follow Ontario and open up a regulated iGaming market. With no timeline set in stone yet, there is very little information regarding Alberta’s plans for its market, however the first legal steps have been taken, with legislation confirming the province’s ability to set up a market being passed through government. The question remains as to whether Canada’s other provinces will follow suit.
As iGaming across the globe continues its strides into the future, further developing online environments to improve gaming quality, it appears as though Ontario will be at the core.
The report by iGO indicates subtle shifts like the iGaming market in the Canadian province, with consumer preferences evolving as the sector matures. Whatever happens next, operators and economists alike will be excitedly anticipating the next quarter’s market insights.