Ontario’s iGaming Industry Brings in $1.5bn in First Year

When it comes to legalized gambling, the narrative is always on the ethical or moral implications of the law. One of the things that rarely gets thrown into the mix is the profitability of this move.

This, however, is an unfortunate choice of a focus since iGaming has such a massive potential to change many lives for the better. This industry creates a vast number of benefits (both provincial and federal), as well as creating new, well-paying jobs.

The best example is that Ontario’s iGaming industry has brought in $1.5bn in its first year. This number, although impressive, will only increase over the years. So, let’s see how and why this matters so much.

Additional CAD 1.6 billion to Ontario’s GDP

The preliminary numbers show that the iGaming market increased Ontario’s GDP by almost $1.6 billion. Out of this impressive number, about $900 million came in labor income. Sure, the GDP of Ontario is $758.9b, with a growth of 1.3% over the last five years, but a surplus counts differently, and GDP growth in a first-world country is much harder to achieve.

The most important part is that this is just the first year. By 2032, this income is expected to rise to $4.7 billion, which could seriously reshape the local economy and make a noticeable difference on a federal level.

The way this future growth is projected is that by the year 2031-32, it should bring in the following:

• Direct contributions: $2.3 billion in GDP

• Indirect contributions: $1.8 billion in GDP

• Induced contributions: $627 million in GDP

Together, this should amount to the abovementioned $4.7 billion GDP increase.

The most important part of this is the fact that this growth surprised everyone. Deloitte, for instance, estimated a first-year growth of $470 million, and hoped that the number may reach $1.4 billion by 2032. In other words, the iGaming industry was more than eight years ahead of schedule, and the growth rate seems to have exceeded everyone’s expectations (even their wildest guesses).

The local municipalities benefited the most, with their revenue increasing from $54 million to $115 million. This influx of revenue can completely transform the local economy. Speaking of which…

Provincial benefits and job market

It’s an unfortunate truth, but the truth nonetheless is that we’re in for an economic rough patch. So, a judicial decision that can bring 12,000 full-time jobs seems more than a saving grace. Even better, by the year 2032, it’s expected that this number could reach 22,000.

According to this projection, by the season 2031/2032, it could bring in the following:

• Direct contribution: 2,836 jobs

• Indirect contribution: 14,824 jobs

• Induced contribution: 4,472 jobs

In total, this is about 22,132 jobs in Ontario’s regulated iGaming market.

To give you a perspective of just how big this is, we’ll just mention that currently, 27,346 people are working in the mining industry in Ontario and that this industry brings in $5.7 billion in GDP revenue. Now, when you consider that the Ministry of Mines was established in 1891, while the iGaming industry in Ontario is just one year old, it will be a lot easier to put some of these things into perspective.

Even more importantly, these high-paying jobs incentivize some young experts to remain in the province instead of siphoning them elsewhere. This phenomenon’s long-term cultural and sociological impact may count more than you think. The industry is algorithmic and tech-based, attracting people with STEM skill sets and giving them more local opportunities.

According to some preliminary numbers, an average employee in the iGaming sector receives a compensation of $103,000 per year, which is 41% higher than the provincial average.

Does this make a positive difference?

The question alone is quite loaded, and it’s hard to give a definitive answer; however, it’s always worth looking at things from a different angle.

Sure, iGaming may have some negative side effects, but so do unemployment and poverty. Also, it’s not like keeping iGaming heavily restricted will prevent people from accessing sites in other provinces/countries or even traveling for this sake.

Take the example of Alberta, which has iGaming and sports betting regulated through one site only, intending to keep money played in Alberta to stay in Alberta. At the same time, Albertans aren’t prohibited from betting on offshore sites, and if you were just to consult a guide of Alberta sportsbooks, you’d see all these options available to Albertans. This concept may be a stronger incentive to introduce a bit laxer betting regulation in other provinces and territories to keep money spent on iGaming in the local economy.

Ontario merely seized the opportunity and not a minute too soon. Modern problems require modern solutions, and this boost to the Ontario economy might serve as a guiding beacon to others in this field.

All this money is being invested into Ontario’s economy, with $700 million pumped directly into the Canadian government—even those who don’t play can benefit from this.

It all comes down to being responsible, and the province’s Attorney General, Doug Downey, claims that Ontario is one of the prime examples of what it looks like to be responsible in iGaming.

A growing market

Previously, we’ve talked mostly about the growth in numbers, but how about the market? At this moment, there are 46 operators in this industry in Ontario, and, despite some concerns about the market segmentation, there seems to be enough room for a lot more.

One of the things you need to understand is that Ontario ranks ninth in Canada (out of 13 provinces and territories) when it comes to the total GDP. At the same time, it ranks fourth in growth, which is undoubtedly affected by the recent expansion of the iGaming industry.

Most importantly, the supply expands to meet growing demand, not vice versa. People love to dive into iGaming for various reasons (mainly for convenience and low stakes). Since each of these appealing reasons will improve (from the technical aspect) in the future, the growth of interest will, undoubtedly, increase.

Ultimately, this may also benefit Ontario’s tourism. A lot of people are already visiting Canada for its fantastic adventure opportunities, and with this extra incentive, more visitors may flock in from abroad.

Challenges for the regulatory bodies

Despite all these benefits, there are quite a few challenges that regulatory bodies had to overcome to make all of this come together. These are the factors like:

• Responsible gaming

• Prohibiting access to designated groups and player account management

• Public safety and protection of assets

• Minimizing unlawful activity related to gaming

• Ensuring game integrity and player awareness

Without satisfying each of these, it would have been completely impossible to regulate the market and make iGaming available responsibly.

Also, the sites themselves are obliged to provide spend-limit and time-limit setting tools, at the minimum. These customizations are unique to Ontario and made uniquely to meet the AGCO Registrar’s Standards for Internet Gaming.

An unstoppable historical process

Overall, regardless of the side you look from, iGaming is on a growing trend. While all the estimates project growth, it somehow always manages even the most optimistic of them. It brings in more money, employs more people, and the number of operators and players increases each year.

Moreover, there are no instances where iGaming was outlawed after once being regulated. This hardly comes as a surprise, with all the benefits we’ve listed above and the effort invested to ensure this is all done responsibly.

photo by Paolo Syiaco

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