O Canada
While most of the industry is hyper-focused on the US, Ontario's legal online gambling industry is off to a strong start, but will that success lead to legalization in other provinces?
The Bulletin Board
NEWS: The US grabs most of the headlines, but don’t sleep on Canada. The numbers from Ontario could spark a wave of legalization North of the Border.
NEWS: The top headlines from Day 2 of G2E.
NEWS: Light & Wonder brings a new live dealer studio to Michigan.
NEWS: Gambling provides more jobs than the “air transportation, postal service, or motion picture and video sectors,” per a new AGA report.
AROUND the WATERCOOLER: the poker world mourns the loss of Anthony Holden.
STRAY THOUGHTS: Why legal sports betting proliferated while online casino hit a brick wall.
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Canada Gets Plenty of Airtime at G2E
iGaming Ontario plans to release its Q2 revenue report sometime this week, but we were provided with a little teaser at G2E on Monday. As reported by Gaming News Canada, iGO executive director Martha Otton disclosed that “total wagers for the latest quarter was “around” $14 billion, compared to $6.04 billion for the same quarter in 2022.”
Once again, per Gaming News Canada, “The Q2 results are very consistent and stable with what we saw in Q1,” Otton said. “When you take into consideration the months we just covered, which you know is slow sports (period), we’re very pleased.”
Also of note, the number of operators has nearly doubled over the last 12 months, going from 24 to 47, with more than 70 sites. The revenue and operator numbers are quite strong, considering the province’s population of 14.5 million.
Per Otton, online casinos are leading the charge, but the gap between sports and casinos is expected to shrink as we head into prime football months. During FY 2022-2023, the gap was closer to 2-1.
Q2: iCasino 80% of revenue; Sports 20%
FY 2022-2023: iCasino 67%; Sports 31%; Poker 2%
Two other Otton comments of note reported by Gaming News Canada were:
The quality of data it receives from some operators makes more transparent reporting difficult. “I’ll be honest, that’s been a challenge for us. We want to ensure the data is accurate before we go public on it.”
Some thoughts on other Canadian provinces joining Ontario as legal, regulated markets.
If you’re not subscribed to Gaming News Canada’s substack, you really should be. The G2E coverage, particularly, is spectacular, including a list of interesting quotes.
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G2E Day 2 Roundup
Tuesday was showroom day at G2E, but in the education hallway, it was CEO day at G2E.
Churchill Downs CEO on sports betting failure: In an unusually candid for G2E keynote address, Bill Carstanjen, CEO of Churchill Downs, explained what went wrong with the company’s foray into sports betting.
“At first, we thought everything we knew about horse racing online would translate to other sports,” Carstanjen told Contessa Brewer, per reporting by US Bets’ Mike Seely. “But they really haven’t.”
According to Ryan Butler, Carstanjen pinned Churchill Downs’ failure on a playing field the company didn’t want any part of. Per Butler, “Sports Betting was set to be dominated by a small number of big-spending operators willing to take big initial losses and low margins, Churchill Downs William Carstanjen, said during today’s G2E conference; that’s why TwinSpires withdrew from the US online sports betting market.”
US Bets quoted Carstanjen as saying, “That just wasn’t the way our company was going to go. The long haul you needed to sign up for just didn’t feel right to us.”
MGM CEO talks cyberattack: Another CEO, MGM’s Bill Hornbuckle, spoke about the company’s recent hacking, calling it “corporate terrorism at its finest” and confirming the estimated cost to MGM at $100 million - but stressed it would be covered by cyber-insurance.
According to Hornbuckle, via excellent reporting from CDC Gaming Reports, the company was able to protect customer credit card and banking information.
“For a couple of weeks for our company, it was devastating. We reacted quickly to protect the data,” Hornbuckle said. “You saw us shutting down systems by our own design, and what ended up happening is the criminals understood what was happening and shut them down for us.”
That meant virtually every system went offline, from telephones to key cards. Hornbuckle called the attack something he doesn’t wish on anyone.
G2E Quote of the day 9from Monday): “iGaming has been the most productive revenue generator of any gaming launch in history.” ~ Light & Wonder Head of Government Affairs and Legislative Counsel Howard Glaser. Via CDC Gaming Reports.
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Light & Wonder Enters the US Live Dealer Space
Through a partnership with BetRivers, Light & Wonder has launched Authentic Gaming’s Premium Live Dealer games in Michigan. This is the company’s debut in the US live dealer market.
The games will be broadcast from a live dealer studio that L&W built in Farmington Hills.
“We believe in creating next-level experiences for our players, and Light & Wonder Premium Live Dealer by Authentic Gaming certainly fits the bill,” said Richard Schwartz, Chief Executive Officer at Rush Street Interactive. “Authentic Gaming has created a compelling array of content that speaks directly to the preferences of players in Michigan, and this is a partnership we believe will prove to be highly successful going forward.”
Adding Authentic Gaming through L&W brings the number of live dealer studios in Michigan to three, with Playtech and Evolution already operating in the state.
This is a small story in the grand scheme of things, but live dealer is an often overlooked part of the online ecosystem. And with three companies jockeying for partners and market share, that competition should drive innovation.
What’s all the fuss with live dealer games? First, they’ve effectively bridged the gap between brick-and-mortar customers and online products.
After launching live dealer games in Pennsylvania in 2020, Schwartz explained the appeal:
“Many online players prefer live dealer options because they watch the action as it happens, which gives them a higher level of trust in the outcome. A live dealer game is the closest you can get online to playing in a land-based casino…”
Second, they are also a revenue generator. Two years after launching live dealer games in New Jersey, Golden Nugget Online Gaming’s Thomas Winter told me online table game revenue increased by 150% since live dealer games were first offered in 2016.
Gambling Is a Massive Industry in the US
“We’re bigger than US steel.” ~ Hyman Roth.
Measuring the impact of gambling is complicated. A new study from Oxford Economics, commissioned by the American Gaming Association, attempted to do just that.
Per the study, commercial and tribal gambling:
Contributes $328.6 billion to the US economy.
Supports 1.8 million jobs and $104 billion of wages and salaries across the country.
Generates $52.7 billion in tax revenue to federal, state and local governments.
With 2022 casino revenue (commercial and tribal) totaling $122 billion, the study puts indirect revenue (supply chain) and induced revenue (downstream spending) at roughly $200 billion. In simpler terms, an additional $2 (generously rounding up) is contributed to the economy for every $1 of revenue generated at a casino.
Per the AGA, there are more than 1,000 casino gaming locations in the US:
478 commercial casinos in 27 states
527 tribal casinos in 29 states
Additionally, sports betting has been legalized in 38 states plus Washington DC, and online gambling (casino and/or poker) in eight states.
Around the Watercooler
Social media conversations, rumors, and gossip.
The poker world lost a pre-boom poker legend this week with the passing of Anthony Holden, whose book, Big Deal, was required reading when I came through the poker ranks.
Poker.org EIC Brad Willis explained Holden’s importance in the eyes of poker writers and journalists.
Stray Thoughts
This popped into my head following an email exchange with a reader who sought clarification from yesterday’s newsletter about Howard Wang’s concerns over iCasino legalization.
“It’s going to come very slowly because no governor or official wants to be the first to allow this to happen, and then all of the sudden jobs are lost, or you start cannibalizing existing revenue.”
The reader’s (correct) concern was the words “no one” rather than some, but the statement still rings true, as concerns exist among states now considering online gambling.
I like interactions like this because it forces me to think and sometimes rethink my positions. In this case, I was able to crystallize a point that is often lost in the conversation whenever comparing the rapid spread of legal sports betting with the inability of states to pass online gambling legislation.
Simply put, sports betting never had to deal with cannibalization fears. Outside of Nevada, there was no existing land-based sports betting industry to cannibalize and no brick-and-mortar jobs to displace.
The same cannot be said for online casinos, which is one of the significant differences between the two.
No matter how strong the arguments for legalization are, these lingering cannibalization concerns keep states from embracing online gambling. Lawmakers feel there is little to gain politically for supporting online gambling and a massive penalty for being on the wrong side of the vote.