Jason Logan: Cell and Management Keys to the Success of Sports activities Betting in Canada

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Given the political will to legalize individual event sports betting in Canada, we asked Jason Logan, Senior Industry Analyst at Coversto provide his view of how the market is taking shape and how it is being received by the betting public.

How much of a game changer would legalization be?

Single bets allow Canadian regulated sports betting to compete with unlicensed books for offers. The current parlay-based betting through the provincial lotteries is not an attractive product and continues to push new and existing sports bettors to these unlicensed operators and underground bookmakers, taking their taxpayers' money away.

Approving single bets is only half the battle, however. Two other decisions will determine how big sports betting in Canada can be.

First of all, the license and tax models for non-lottery operators must be checked and whether these costs fall on the customer. If the tax on sports betting revenue is too high, operators will increase their position by offering unfair margins (-130 flat rate compared to standard -110) and this will still lead some of the existing and new bettors to unlicensed books.

Second is mobile betting with the ability to fund, withdraw and wager money from your phone. Mobile betting is driving the sports betting markets, and easy entry into the platform is the biggest speed boost in attracting new players. Mobile betting also enables in-game betting, which is growing rapidly in North America.

Do we have some insight into the current appetite for sports betting in Canada?

The appetite for sports betting is huge in Canada, especially considering the estimated $ 15 billion is leaving the country to wager with unlicensed books. The rapid expansion of legal markets in the United States and the incorporation of sports betting into mainstream media coverage are also transforming the conversation about sports games among Canadians.

How you satisfy that appetite depends on who you are talking to. Lottery and casino based sports betting would like to remain the only regulated operators, relying on the fact that 100% of their profits go back to the provinces, while independent operators could only send a fraction of that back in taxes – aside from new tax models.

Many Canadian gaming stakeholders want the industry to open up to independent operators, as in many US states, and license the online operators that are currently accepting Canadian customers. This wouldn't limit the provinces to just one channel and offer a variety of online and land-based options for sports bettors.

The more options the Canadian sports bettor has, the better. A competitive regulated industry is great for customers not only in terms of choice but also in terms of offers and bonuses as these operators compete for market share. We saw a similar situation when sports betting was launched in New Jersey and many operators pushed advantageous promotions to attract new bettors. It could be a buyer's market for a number of Canadian bettors who have only had one regulated option for decades.

How would covers predict themselves in relation to the shape of the market – what are the possible scenarios for the market structure?

Similar to the state launch in the USA, sports betting will be introduced with a new look, province by province. Sports betting in the Atlantic provinces could therefore be set up differently than in Quebec or Alberta. The golden goose in all of this is of course Ontario with a population of 14.3 million and several professional sports teams.

Ontario is likely to set the table for the rest of the country, especially if things open up to independent operators. Many of these companies have business plans and their ducks in a row ready to turn the key once regulations and licenses are in place. The scope of licensing and, above all, the tax models determine what the future of sports betting will look like.

We hope that provinces looking to expand their sports betting offerings like New Jersey and Colorado as role models for successful consumer-first markets and avoid some of the short-sighted decisions of other states. Provinces need to be aware that sports betting is at its core a stable long-term revenue generator if done right – not a get-rich-quick program.