Cannibalization of Land-Based Casino Profits by Online Counterparts Feared in Canada
At least one Canadian land-based casino group fears that the legalization of online betting in the country may cannibalize the current gambling market and cause great levels of unemployment as a result.
Great Canadian Gaming, which operates several brick-and-mortar casinos around the country – 12 of them in Ontario – issued a report just before the Ontario online gambling market is due to go legal.
In its report, the group urged the province to scrap plans to allow online gambling and sports betting through private operators, and instead let existing casinos take control of legal iGaming.
Interestingly, the report’s findings were published on the eve of the market’s launch (now set for April 4th), which seemed like a tactical move. When questioned about the timing of its publication, Great Canadian refused to respond. Moreover, it is unknown whether the operator is planning to compete in the online market with its own gaming product. This would be rather contradictory from its current stance but would be a strategic move aimed at deterring its competition. By doing so, offering similar or better no deposit bonuses to its rivals will definitely give them a competitive edge.
Demands to Crack Down on Unregulated Sites
In a Power Point presentation put together by Great Canadian Gaming, it was suggested that the Ontario government grant existing casinos the exclusive right to accept bets online for a period of two years, in order to give them an edge over private companies.
The report also demanded that the government do everything in its power to crack down on unlicensed and unregulated online betting sites. They even demanded that steps be taken against gamblers who play at these sites.
The report said that while the legal market would grow, the province is expected to collect less tax revenue as a result. At present, land-based casinos pay 55% in taxes, while the tax rate for online betting is expected to be around 20%.
While the group supports online gambling “in principle”, according to the CEO of Great Canadian Gaming, Tony Rodio, it was expected of the Ontario government to take the report seriously.
In a statement, Rodio said that the land-based casino industry in Canada has already taken a hard hit because of the COVID-19 pandemic. Online gambling, he said, would affect profits further.
Rodio added that Great Canadian was willing and able to work with the government to develop steps that would help the brick-and-mortar gambling industry recover from the economic impacts of the pandemic.
As per Rodio in his statement: “The Ontario government needs to take the time to get this right.”
Doom and Gloom Predictions Countered by iGaming Industry
Not everyone is sharing Great Canadian’s predictions of iGaming cannibalizing the country’s land casinos, however.
Operators in the igaming space say that the report is based on false arguments that can easily be countered, and they also questioned that time of its publication so close to the market’s launch.
Multiple operators are considering operating in a legal and regulated online gaming sphere in Ontario, offering players an alternative to foreign-owned grey market gaming companies which are already active in the market.
The president and CEO of the Penn National-owned theScore, Benjie Levy, said that there was no compelling reason for there to be a delay in the opening of the iGaming market in Canada.
“There should not be another Super Bowl or March Madness where we are dealing with the grey market,” he told The Star.
The report also doesn’t have the support of other main casino operators in the province, who are intent on entering the market and launching their own online gambling products.
Mohegan Gaming and Entertainment, which runs two Niagara Falls-based casinos said that it was pleased with the launch of the iGaming market.
“The future of gaming in Ontario is bright with potential opportunities to expand legal offerings to include iGaming and sports betting. We are excited about these initiatives,” said spokesperson for the group.
Online Betting Sites to Complement Land Casinos
The Ontario government’s main objective to launch its new regime is to ensure responsible gaming standards, capture missed tax revenues and offer an alternative to the flourishing grey market.
A spokesperson for Attorney General Doug Downey added that the new online gambling market would “complement existing land-based (casino) gaming activity by providing a new opportunity for Ontario’s land-based operators to expand into iGaming to diversify revenue sources and cross-promote between online and land-based sites.”
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