There was a relatively radical proposal released into the wild this week regarding sports betting sites and one of the biggest provinces in Canada. If it didn’t sink in, maybe that’s because the headline of the press release undersold it: “Online Gaming Industry Leaders Create Coalition to Promote Regulation and Responsible Gaming in Québec.”
Who could object to such a thing? Regulation, sure, responsible gaming, great, industry leaders, fantastic. It all sounds very reasonable. Members of the recently launched Québec Online Gaming Coalition (QOGC) include Bet99, DraftKings, Flutter (parent company of FanDuel), Entain (part-owner of BetMGM), Betway, and BetRivers-owner Rush Street Interactive.
The coalition came bearing data, such as findings from a recent Leger Marketing poll that highlight the realities of the lingering “grey market” in Canada for online gambling. Those findings included that 71% of Quebecers surveyed believed the Quebec government cannot block private online gaming operators (who may be regulated abroad or outside the province, but not by the province itself) and 66% who favored regulating those operators with a license-and-tax system.
But what is being proposed would be a shakeup of legal sports betting and online casino gambling in Canada. Because what these industry leaders want is for Quebec — Canada’s second-most populous province — to become a lot more like Ontario — Canada’s most populous province.
“The Coalition wishes to work with the Québec government, local lottery corporation and responsible gaming stakeholders to develop a transparent regulatory framework for online gaming in Québec,” the group’s website says. “By doing so, we wish to help foster a responsible and safe environment that protects consumers all while providing revenues to the Québec government through licensing and taxing model – similar to Ontario.”
A coalition of gambling companies is lobbying the Quebec government to launch something similar to what Ontario has, which is a competitive market for online sports betting and casino gaming. BetMGM, DraftKings, and FanDuel are among those involved:https://t.co/tjkunJx2k4 pic.twitter.com/CsQW2cKuSF
— Geoff Zochodne (@GeoffZochodne) May 23, 2023
Again, this seems like a reasonable request. Consider the Ontario model, folks! And yet the difference between Quebec and Ontario sports betting right now is vast.
Quebec has one legal provider of online sports betting, Loto-Québec, and Ontario has, well, many. Furthermore, while the coalition may just be getting the conversation started, the Ontario iGaming model was years in the making, so crafting something similar in Quebec will take time, if it ever happens at all.
The Ontario government launched a competitive market for online sports betting and internet casinos in April 2022. That regulatory framework now houses more than 70 gambling websites, all of which are in addition to the digital offerings run by Loto-Québec’s equivalent in Ontario, the government-owned Ontario Lottery and Gaming Corp. Ontario’s setup has translated into more than $35 billion in total wagering (sports betting, casino, and poker) and $1.4 billion in gross gaming revenue in over a year of operation.
In Quebec, Loto-Québec doesn’t break out the specifics of its online gambling operations, lumping them in with other business segments. For example, the “State corporation” reported online casino revenue of $70.5 million during its third quarter, which ended December 26, and $201.6 million in receipts for the fiscal year to date. That does not include Quebec sports betting, which is included in a different business segment.
But, again, this is one operator. What the new coalition wants is to open the door for competitors to Loto-Québec. In Quebec, it’s TBD if that’s going to fly. For LQ, it’s a non-starter.
“Some members of the coalition that was formed to promote responsible gaming and a new regulatory framework in Québec are already violating Canada’s Criminal Code by illegally offering games to Québec residents, which raises serious doubts and questions about their actual intentions,” Loto-Québec spokesperson Renaud Dugas told Gaming News Canada. “In Québec, the rules could not be clearer: if it’s not Loto-Québec, it’s not legal.”
The comments from LQ should tell you all you need to know about the kind of opposition the coalition is going to face in Quebec, which is fond of doing things its own way. This is the province home to Quebec Inc., the Quebec Pension Plan, and two failed attempts at independence from the rest of Canada. An attempt to allow competition from companies based outside Quebec is going to face resistance, even if we’re just talking about online sports betting.
And yet you may never get something from the Quebec government unless you ask for it, which is what these online gaming operators are doing. Quebec also has a population size that ranks it among some of the larger gaming markets in the United States, such as Virginia. There’s a reason why a company like DraftKings, which is based in Boston, wants to take bets in Baie-Comeau.
An Ontario-like model in Quebec would also (presumably) allow operators to offer online casino gambling as well, which is a significant benefit for them in Ontario. Those higher-margin games are a cornerstone of corporate profitability plans and a big reason why bookmakers like the Ontario market.
But what’s worth remembering is how Ontario even got to this point. It didn’t happen overnight and took years of work and some lucky bounces for things to fit together as nicely as they have (notwithstanding the advertising overload that regulators are already trying to curtail).
The Ontario government first announced its plans for a competitive iGaming market in 2019; that market launched three years later. Moreover, single-game sports betting was still a no-no in Canada in 2019; it wasn’t until two years later that the federal government would decriminalize singles, which was something over which the province had no control.
Ontario’s iGaming market and single-game wagering progressed on separate tracks before finally converging with the market’s launch in April 2022. It’s honestly something of a minor miracle both things happened, otherwise, Ontario sports bettors would be placing parlays with FanDuel instead of wagering on everything under the sun in single servings (if at all). So patience may be the watchword for bettors and operators eyeing Quebec and hoping it will be the next Ontario.
Another thing to consider in light of the coalition’s announcement is who exactly the companies are targeting. Quebec seems natural given its size, but beyond that, there’s been no real indication the province was considering something like Ontario’s iGaming market.
How do we know that Quebec’s interest in a competitive iGaming market is low? Well, the coalition noted itself that a 2014 report recommended the provincial government “take steps to implement a new regulatory regime based on a licensing model aimed at private operators.”
That was nearly a decade ago. It hasn’t happened.
There is one small exception to the lack of interest in broader online gambling, though, which is Alberta. The Western province announced in December 2021 that it was seeking pitches from the gaming industry for retail and online sports betting options. Alberta Gaming, Liquor, and Cannabis said it was looking for two companies to provide these options, which it hoped to establish in 2022. It’s now 2023, and the only legal provider of online gambling in Alberta is AGLC’s Play Alberta site.
There’s a provincial election campaign going on in Alberta at the moment, so clarity about the gaming situation there may take time. But the fact a coalition of gambling companies looked across Canada and decided to pitch Quebec, the government of which has voiced no interest in broader online gambling, over Alberta, which has, is telling.
A spokesperson for Alberta Gaming, Liquor, and Cannabis told Covers in an email on Thursday that there is “nothing new” to report.
“AGLC is still working through the NRFP process and will provide an update when we’re able,” they added.
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