Over $400M revenue projected from first 3 years of iGaming in Ontario

Ontario’s regulated online gaming and sports betting market recently celebrated its second birthday. 

The quarterly fiscal reports released by iGaming Ontario (iGO) already suggest the fully licensed and regulated market is racking in over $100 million annually in online gaming and sports betting revenue alone. 

In addition to this, over $400 million total gaming revenue is already projected to be generated during the first 3 years of regulated iGaming in the province of Ontario. 

One must keep in mind that this figure does not include the total revenue that the province of Ontario managed to generate through the Ontario Lottery and Gaming Corporations. 

These entities include businesses revolving around land-based, online, and lottery gaming. 

In fact, the activities of the Ontario Lottery and Gaming corporation brought in a whopping $2.5 billion in net revenue in the fiscal year 2022-2023 alone. 

Additionally, it is highly likely that this same figure for the fiscal year 2023-2024 will hover at around the same amount of generated revenue. 

Total revenue generated during these last 2 years 

In order to accurately gauge the likelihood of this prediction, let’s take a look at the total revenue generated during the last two years of market operations of the fully licensed and regulated online gaming and sports betting market in Ontario. 

Comparison of Year 1 with Year 2 

• By the end of the 2023-2024 fiscal year: There was a 78% increase over 2022-2023. This figure does not include promotional wagers (bonuses). 

• The total gaming revenue at the end of the 2023-2024 fiscal year: There was a 72% increase over 2022-2023.  

• The figure for total gaming revenue comprises total cash wagers, including rake fees, tournament fees, and other fees across all Operators, player winnings derived from cash wagers. This figure does not take into account operating costs or other liabilities. 

The Fourth Quarterly Report (Q4) of the Fiscal Year 2023-2024  

The Fourth Quarter (Q4) of the Fiscal Year 2023-2024, published by iGaming Ontario, covers the period of time between April 1st, 2024, and March 31st, 2024. 

This market performance report included the following statistics regarding its fourth year of operations: 

• Total Wagers: $17.8 billion 

• Total Gaming Revenue: $690 million 

• Active Player Accounts: Over 1.3 million (Accounts with cash and/or promotional wagering activity) 

• Average Monthly Spend per Active Player Account: Approximately $263 

• Operators: 47 

• Gaming Websites: 77 

In addition to this, the following statistics take into account the wagering and gaming revenue generated during this period according to each category: 

• Q4 casino wagers: $14.6 billion (Casino games included in this figure refer to slots, live and computer-based table games, and peer-to-peer bingo). 

• Q4 casino gaming revenue: $510 million 

• Q4 betting wagers: $2.7 billion (This figure takes into account bets on sports, esports, proposition and novelty bets, as well as exchange betting). 

• Q4 betting gaming revenue: $161 million 

• Q4 peer-to-peer (P2P) poker wagers: $446 million 

• Q4 peer-to-peer (P2P) poker gaming revenue: $19 million 

The Complete Fiscal Year 2023-2024 

The following tables shed light on the total wagers and gaming revenue accrued according to the individual quarters of the fiscal year 2023-2024: 

Wagers 

Gaming Revenue 

• Total casino wagers: $51.7 billion – An 88% increase over 2022-2023 (Casino games included in this figure refer to slots, live and computer-based table games, and peer-to-peer bingo). 

• Total casino gaming revenue: $1.8 billion – An 89% increase over 2022-2023. 

• Total betting wagers: $9.7 billion – A 39% increase over 2022-2023 (This figure takes into account bets on sports, esports, proposition and novelty bets, as well as exchange betting). 

• Total betting gaming revenue: $588 million – A 36% increase over 2022-2023. 

• Total peer-to-peer (P2P) poker wagers: $1.6 million – A 64% increase over 2022-2023. 

• Total peer-to-peer poker gaming revenue: $67 million – A 67% increase over 2022-2023. 

More detailed statistics of this Fiscal Year

Q1 (April 1st to June 30th, 2023) 

Wagers and Gaming Revenue by Category (Q1 2023-2024) 

Casino 

Betting 

PSP Poker 

Total  

Q2 (July 1st to September 30th, 2023) 

Wagers and Gaming Revenue by Category (Q2 2023-2024) 

Casino 

Betting 

PSP Poker 

Total  

Q3 (October 1st to December 31st, 2023) 

Wagers and Gaming Revenue by Category (Q3 2023-2024) 

Casino  

Betting 

PSP Poker 

Total  

Q4 (April 1st, 2023, to March 31st, 2024) 

Wagers and Gaming Revenue by Category (Q4 2023-2024) 

Casino 

Betting 

PSP Poker 

Total  

Comments made with regards to the figures generated during these past two years of operation 

Martha Otton, the Executive Director of iGaming Ontario (iGO), made the following statement: 

“With $63 billion in wagering and $2.4 billion in gaming revenue, the second year of Ontario’s igaming market is more than 70% bigger than the first,” says iGaming Ontario Executive Director Martha Otton. “As the market matures into its third year, I look forward to building on this foundation of success with operators and other partners as they invest in Ontario so that Ontarians can continue to play with confidence.”  

Heidi Reinhart, the Ontario Board Chair at the iGO, made the following statement: 

“When talking about Ontario’s iGaming market, the numbers tell us a lot, but what I’m most proud of are the countless ways that our government partners, operators, responsible gambling experts, players and employees have worked together to help us create a world-class market that is Ontario-made for Ontarians.” 

The CEO of PointsBet, Scott Vanderwel, gave credit to Ontario and the iGO’s efforts, stating that it “has not only fostered healthy competition and innovation but has also contributed to job creation and revenue generation, ultimately benefiting the entire province.”  

The difference between Year 1 and Year 2 of market operations 

The total revenue generated in these past two years far exceeded that hypothesized to be the case at the very start of the formation of a fully licensed and regulated iGaming market in Ontario. 

In May 2022, just one month following the very beginning of the regulated market, an Ontario Auditor General report had predicted that the total net revenue that would be generated over the first 3 years of market operations in Ontario would amount to a total of $75 million. 

As the figures above have shown, the current trajectory for the total net revenue accrued will most likely exceed this value by more than 500%. 

In this way, the total value accrued thus far has far exceeded all early expectations. 

What the future holds for iGaming and Sports Betting in Ontario 

If all goes to plan, iGaming Ontario has projected that they will have provided a total of $162 million by the end of the fiscal year 2023-2024. 

At the end of the fiscal year 2024-2025, on the other hand, this same figure is predicted to have risen to a total value of $174 million. 

If one were to add these figures together, an estimated $432 million in gaming revenue would be generated in the first three years of market operation in the province. 

If this were to be the case, and if all goes to plan, then these figures would greatly exceed all previously held expectations. 

The current trajectory for total net revenue generated annually in Ontario, as well as the huge increase in revenue between the first year and the second year alone, makes this figure more than just a mere possibility. 

The Ontario Lottery and Gaming Corporation (OLG) 

As we have briefly discussed earlier in this article, the figures in the tables above do not paint a full picture of the exact amount generated in terms of total wagers and gaming revenue in Ontario. 

This is because the iGO’s Market Performance reports do not take into consideration the revenue generated from the Ontario Lottery and Gaming Corporation (OLG). 

The 2022-2023 annual report of the OLG reported that a total net revenue of $2.5 billion was generated. This was the first year in which the OLG experienced competition in the online gambling market. 

In addition to this, the Fiscal Year 2023-2024 is expected to bring a net revenue that is close to this value. 

Here is some additional information regarding the statistics of last year’s financial report: 

• Digital gaming only represented around 7.3% of the corporation’s gross total income. 

• There was a relatively even split between lottery and land-based gaming: Lottery-based gaming represented 47.4% of gross proceeds and land-based gaming represented 45.4% of gross proceeds. 

The first year of operation of iGaming in Ontario 

Another aspect to take into consideration is the abundant start-up costs that drastically cut into the revenue generated during the regulated market’s first year of operation. 

To put these values into perspective, we will highlight some relevant information: 

• The iGO takes 20% of the revenue that is generated by the iGaming companies that operate in Ontario’s provincial market. 

• The iGaming operators themselves take 80% of this revenue. 

• The iGO earned $87 million from the government during this year. 

• The iGO generated a total of $1.26 billion in gaming revenue throughout this first year. 20% of this value, ending up in the hands of the iGO, amounts to $252 million. 

The accumulated operating costs of the iGO during this first year of operation, all of which cut into its generated revenue, can be broken down as follows: 

• $1 billion was paid out to the iGaming operators. 

• $133.7 million was paid out in sales tax. 

• $8.8 million was paid out in salaries and benefits, as well as other costs. 

For this reason, when taking these costs into consideration, the total amount of revenue generated by the iGO amounted to $96.2 million.  

This value was further cut down by the $9 million loss that the iGO was hit with during the months leading up to the regulated market’s grand opening. This loss changes this value to $87 million. 

The iGO stated that, including sales tax, its total contribution to the province amounted to $145.7 million in its first year of operation. 

Who is the AGCO? 

The Alcohol and Gaming Commission of Ontario (AGCO) is a provincial regulating agency that is responsible for a number of sectors within the province of Ontario. 

This corporation falls under the Alcohol and Gaming Commission of Ontario Act, 2019. 

The sectors that are under the jurisdiction of the AGCO include the following: 

• Lottery and Gambling 

• Cannabis retail stores 

• Alcohol 

• Horse Racing 

In accordance with this, the AGCO administers the following: 

• The Liquor License and Control Act, 2019 

• The Gaming Control Act, 1992 

• The Horse Racing License Act, 2015 

• The Cannabis License Act, 2018 

• The charity lottery licensing Order-in-Council 1413/08 

With the public’s interest as their primary focus, this provincial regulatory agency reports to the Ministry of the Attorney General (MAG). 

More about iGaming Ontario (iGO) 

The iGO (iGaming Ontario) is a subsidiary of the Alcohol and Gambling Commission of Ontario (AGCO). 

The iGO is responsible for the managing and conduct of internet gaming in the province of Ontario: 

“iGaming Ontario (iGO) has worked with the Government of Ontario and the Alcohol and Gaming Commission of Ontario (AGCO) to establish a new online gaming market that helps protect consumers gambling through private gaming companies (Operators).” 

The iGO was established in July 2021 and has worked in collaboration with the AGCO and the Government of Ontario in order to bring the “the world’s best online gambling experiences to the province in a safer environment, helping to protect consumers and provide more choice.” 

In this way, only those gaming operators who have successfully registered their private gaming companies with the AGCO and have made an operating agreement with the iGO can provide their online games to the players of the province of Ontario, Canada. 

Regarding the operators that can offer online games in Ontario, the iGO went on to say the following: 

“Operators offer gaming sites in the market on behalf of the province in accordance with these agreements. Through these relationships, gaming revenues are shared with the Government of Ontario to be used in support of provincial priorities.”