And the Winners are…?
Tax revenue: With an anticipated budget deficit of $33 billion for 2021, as the impact of COVID continues, Ontario looks set to reap some big tax revenue rewards, if and when the legislation is passed. A recent report indicates that legalising online gambling would generate $547 million revenue, five years down the line. How that translates to tax revenue depends on the tax rate – probably between 15 – 25%, if other countries’ models are applied. And, for Ontario alone, legalised single event sport betting could bring revenue up to $1.47 billion for the province. So, Canada and its provinces look set to be big winners.
The big players: As COVID continues to impact on bricks-and-mortar casinos, and the growth in online gambling sites continues, the same is true of sporting events. Fans, worldwide, and more and more accustomed to streaming events, watching online, so it follows that sport betting and online gambling should have the same growth.
One company looking to capitalise on the changes is TheScore. Based in Toronto, TheScore estimates an annual gross gaming revenue potential of $1.5 – 2.1 billion and, with the potential relaxation of the gambling laws, the company’s potential to cash in was reflected in a doubling of its share price. Canaccord Genuity estimate that TheScore could reap $100 million from Ontario gambling law changes. And a $40 million bought deal launched in November last year would seem to echo this confidence and the investor interest in the legislative changes.
FanDuel and DraftKings, albeit bigger players in the US than in Canada, have both seen rises in share price and look poised to use their marketing capabilities to gain a share of the new Canadian market. Some of the biggest potential must be for media companies – TSN, the Toronto Star – and some interesting partnership opportunities, with tech companies. GAN, SG Digital, SBTech and Kambi are all set to take advantage.
And telecoms company Rogers Communications Inc. are building their strategy, creating the role of “Director, Sports Gaming”. As a payment processor, Nuvei Corp, based in Montreal, the company with the biggest tech IPO in TSX history, is already approved to operate in Colorado and Indiana, so it’s obvious they’ll likely be looking to benefit from opportunities closer to home.
But what about the players – the gamblers:
While the big players are investing and competing, working on their offers, it makes sense that forthcoming changes will mean better choice for punters. Sponsorship for clubs and leagues should bring more revenue, which can only be good for the fans.
Moving from the grey market – and sometimes the black market – in betting will help gamblers be assured their money is safe, and that they are still going to be able to bet on their sport of choice but in a regulated and secure fashion. So, it looks like it’s a game where everyone wins!