“Tremendous” Interest in Sports Betting Offers Canadian Gaming a Huge Opportunity
December 3, 2020
By Tom Nightingale
Bill C-218, the Private Members Bill to legalize single-event sports betting which has become a government bill in recent weeks, offers Canadian gaming a “tremendous” opportunity, said Canadian Gaming Association president Paul Burns this week. The interest is certainly there in Canada, and experts in the U.S. offer some insight into just how much of a step forward it could be.
Burns and other industry experts were speaking at the Betting on Sports America conference which took place virtually on December 1-2.
With all that has been going on both north and south of the border in recent weeks and months, it was only natural that sports betting was high on the agenda.
“The industry has taken a tremendous hit this year – in many parts of Canada, the industry’s not even open – so having a new product to offer to the public in Canada is very important,” Burns said during a BOSA session on Dec. 2.
“Combine this with Ontario’s work in creating an online gaming regulatory framework, there’s tremendous potential now for sports betting to take off in Canada. There’s definitely demand from the public and I think we’ll see a great deal of that potential loosed when this gets passed.
Burns thanked the Saskatoon Grasswood MP Kevin Waugh for his efforts. Waugh has helped to drive what looks like imminent change in Canada by picking up Windsor, Ont. MP Brian Masse’s previous Private Members Bill to legalize sports betting and getting into onto the House of Commons slate as a government bill. The bill had its first reading as a government bill last month and a second reading is expected to be imminent.
“We probably could have got it to the Senate by June but then COVID-19 arrived, parliament shut down, the government prorogued,” said MP Waugh in the session. “So it wasn’t until November 3 that I had second reading of the PMB in the Commons. Justice Minister David Lametti then took it over as a government bill. The government is moving ahead.”
A different landscape
This is the third such attempt to legalize single-event sports betting in Canada, but it’s a different proposition this time around thanks to the combination of government-level and industry experts’ endorsement.
Burns added that the positive steps have been the culmination of huge efforts on behalf of “a great coalition of support” from businesses, labour, the gaming industry, the communities we operate in, and sports stakeholders. “There’s a finish line in sight.”
David Phillips, the COO of the Alcohol and Gaming Commission of Ontario, notes that the support of major sports leagues has also been a big factor. “The major sports leagues who have recently been advocating for this prominently in the U.S. have a very significant interest and presence in Ontario,” he noted, citing the influence of the NBA champion Toronto Raptors and NHL lynchpin the Toronto Maple Leafs.
The U.S. influence
A vital shift in the reception of a Canadian sports betting bill has been what’s happening south of the border. Since single-event sports betting was legalized in the U.S. in 2018, the uptake has been quick and widespread.
In the U.S. election last month, six more states made progress of some form on sports betting, with three more legalizing it. That will bring the total number of states (including the District of Columbia) where sports betting is legal to 25, a 50% rate. The American Gaming Association says that post-election, some 44 states plus D.C. have legalized some form of casino gaming, including sports betting.
That pace of regulatory approval since sports gambling was legalized in the US in 2018 is “staggering,” said Kip Levin, CEO of FOXBet and US CEO of Betfair, at another BOSA panel. “It’s well beyond what we would have expected. We thought we had a good view as to how big the market would be, but it’s probably two or three times what we would have estimated by now.” Adam Greenblatt, CEO of BetMGM, added that the urgency to adopt sports betting in the U.S. has taken executives by surprise.
Meanwhile, one of the early adopters, New Jersey, has been estimated as the third-largest sports betting market in the world now, said Ron Segev of Vancouver-based law firm Segev LLP. That is particularly interesting to Canada and its overwhelmingly most populous province of Ontario, he note,d because Ontario has almost twice the population of New Jersey. “I don’t think we can overstate how exciting the market opportunity is in Ontario alone,” Segev said.
The role of a pandemic
COVID-19 has had an impact, too, with revenues down astronomically in many gaming markets. Speaking at BOSA, gambling executives, analysts, and lawmakers suggested the allure of new tax revenue in times when COVID-19 has desperately impacted government coffers could prove irresistible. Combine the hits to U.S. state and Canadian provincial budgets with the clear eagerness of fans to bet on sports, and the train is likely to keep gathering speed.
“Online casinos and sports wagering are new opportunities for this. Sports wagering is not just a new source of revenue, but also a hedge against brick-and-mortar (casinos) having to close for a period,” noted Andrew Winchell, director of government relations for FanDuel.
Indeed, Barry Jonas, senior gaming analyst at Truist Securities, stated that the firm estimates the overall U.S. market for sports betting and iGaming could hit $20 billion by 2030.
Thinking in financial terms like that may still be some way down the road for Canada, but things are certainly picking up the pace. It’s a different story this time around when it comes to the quest to legalize single-sports betting, and Burns said he hopes that by fall 2021, Canadians across the country will have begun to get the access to legal sports betting streams that they have been looking for. “It’s an exciting time ahead.”