The majority of news that is commonly seen about the online sports betting industry is that it is booming. The abundance of new online sports betting platforms is seen as evidence that there is an ever-growing demand by people who want to get in on the action. But, like any industry, online gambling can have moments when things don’t look so rosy.
The roadmap to the launch of the brand-new competitive gaming market in Ontario was launched in July 2021 with the formation of iGaming Ontario. From there, the big moment in the province came in April 2022 when the new open, competitive market for regulated casinos and sportsbooks became active.
Somewhat in its infancy still in 2024, the new Ontario online gambling market has shown a lot of positive movement. But along the way, there have also been dips, which has people wondering if, after the initial boom of interest, online sports betting is having less appeal and numbers are falling away. The only way to answer that is to look into the numbers.
Has There Been A Decline?
As revealed in the article Ontario Sports Betting Revenue Sees Slight Decline in Q2, Written by Anthony Odiase, Published by gambleontario.ca1, a Q2 report from iGaming Ontario, produced numbers that showed that things weren’t on the climb. The report showed that the total value of sports betting in Ontario had dropped in Q2 from what they had been in Q1.
Q1 had seen around $2 billion wagered on sports, and Q2 almost stayed the course at around $1.9 billion. But the biggest difference, for operators, was in the volume of revenue taken from those bets. Between Q1 and Q2 that revenue from sports betting alone had tanked by around $20 million.
That was a small piece of the overall trend in the gambling picture in Ontario. Across the entire online gaming industry (casino, sports and poker), the revenue figures were down approximately $5 million from the first quarter to the second.
Are The Numbers Concerning the Industry?
Naturally, no industry wants to see a drop in revenue, as that in turn will affect potential profit. But the Q2 declining figures were just a small drop in the overall ocean of gambling numbers because there were positives to pull out of the report.
There was, for example, more wagered in total in Q2 than there was in Q1 ($14.2 billion compared to $14 billion) across the entire industry, so things remained healthy in that regard and balanced out. Things were also looking much better when putting the figures into a longer-term context.
The overall year-to-year revenue figures from online gambling in Ontario had still seen a 105% increase. The volume of bets also showed massive growth again in the industry, a very positive 132% year-on-year growth. That all painted the picture that there was plenty of reason for optimism that the revenues would have enough room to bounce back. The figures from Q3 would show just that.
What Did Q3 Tell Us?
Q3 of the online gambling sector in Ontario was a blockbuster as the number of wagers from the previous quarter skyrocketed by $3 billion, showing some rapid growth2. That tremendous burst of extra bets being placed coincided with a positive upturn for the industry in gaming revenue.
The $545 revenue from Q2 was smashed as the growth hit $658 million for the third quarter. If there had been any concern about the overall interest in sports betting decline, then those worries were allied by the figures in Q3. A total of $1.9 billion was wagered on sports in Q2 and for Q3 that had risen drastically to $3.1 billion.
But what about the revenue, the biggest of concerns for sportsbook operators, who had seen a decline from $138 million in Q1 to $118 million in Q2? There was a huge recovery in this area as well for players in the iGaming industry, as the revenue hit $171 million in the third quarter.
Did The Trends Continue Into Q4?
Interestingly, from Q3 to Q4 the online sports betting revenue dropped from the previous $171 million to $161 million3. But still, that latter figure was still far superior to the disappointing returns from Q2. The overall money staked on online sports betting from Q3 to Q4 also dropped by $1 Billion to $2.7 billion, but the second year of operation far exceeded that of iGaming Ontario’s first.
The State of Ontario’s iGaming Market
IGaming Ontario was established in collaboration with the Government of Ontario and the Alcohol and Gaming Commission of Ontario (AGCO) to provide a structured and regulated industry that benefits players. The list of Ontario-regulated operators gives new players an excellent platform to start with because by sticking to legitimate bookmakers, things like deposits and personal information are secure, plus bettors get access to fair gaming.
As of March 31st, 2024, iGaming Ontario reported a total of 47 operators in the province offering 77 gaming websites between them. During the first year of operation, iGaming Ontario, which launched with 7 operators, took a collective $35.5 billion in wagers, which accounted for $1.4 worth of revenue.
In the second year of operation, the growth was clear for all to see4. The total wagered went up to $63 billion and from that, there was $2.4 billion in gaming revenue. Another key element of the growth was how much the average player was putting into online gambling.
Across the first financial year, the average Ontarian gambled $70 per month. Fast-forward twelve months, and the average monthly spend for active players had more than doubled to $200. That was a staggering surge and proved that the demand for online gambling is still very strong in the province.
Stepping Outside of Betting
There were further benefits from the growth of the online gambling sector in Ontario, that reached beyond the revenue targets of operators. A report by Deloitte stated that the industry sustained more than 12,000 full-time jobs in the province, and contributed nearly $1.6 billion to Ontario’s Gross Domestic Product (GDP).
The job figures related to the industry are projected to undergo a massive upward trajectory in the next eight years, where it should reach the equivalent of providing 22,000 full-time equivalent jobs and return a $4.7 billion contribution to the Province’s GDP.
What Could Cause a Decline In Revenue
There have been ups and downs and the numbers are never going to be consistent. The fluctuations in gambling revenue are always going to happen and it’s the year-on-year growth that gives a better overall picture of the health of the online sports betting sector in Ontario.
There have been no problems with that. Sports betting amounts and the revenue from sports betting were both much higher in Q4 of 2023 than it was in Q1, so there is not a decline in sports betting happening in Ontario. It’s just about how you look at the numbers.
Some quarters will be better than others and bookmakers aren’t going to consistently land the same returns every three months. There are many different factors which play into the volatility of how much people bet and the subsequent revenues that operators see.
Timing
The time of the year can have an impact on betting numbers. During the off-season of the NHL, for example, ice-hockey bets are naturally going to decline than during the preceding Stanley Cup Finals5, when there is exceptional public interest in the sport. So, what is happening and when, will massively impact how much bettors put into their wagers, naturally causing fluctuations in financial metrics like revenue.
Unfavourable Results
A run of betting patterns can also have an effect on sports betting revenue for bookmakers. A total of $2 billion gambled one quarter by bettors, can return very different revenue from $2 billion gambled in another. If the majority of bettors were putting their support behind strong favourites, for example during a quarter, then the bookmaker’s revenue isn’t going to be as high as it will be on a more even spread of bettors supporting both sides of a market.
Economy
Outside of sports betting, the overall state of the economy, which fluctuates greatly as well, is going to have an impact on how much people spend. If things are a bit tighter in the pocket and disposable income is down thanks to an economic downturn, then bettors may not be as keen to dip into their wallets to place a bet.
In Conclusion
It’s hard to take financial information from a myopic view, and the proof of the pudding is analysing the year-by-year growth. In this area, iGaming Ontario has to be pleased with the numbers they are seeing. Sports betting has not fallen away in the province and it is not in decline.
The odd blip in a quarterly return of how much sports bettors are staking is not a fair reflection of the staggering growth that the online betting area in Ontario has seen in the last two years.
The more that players feel safe online thanks to the well-regulated system that is in place, the more people are going to embrace it and more operators are going to come along and push up the competition. With such a vast range of sports betting options available at even just one operator, bettors can find what they are looking for with a great deal of convenience.
- Ontario Sports Betting Revenue Sees Slight Decline in Q2, Written by Anthony Odiase, Published by gambleontario.ca
- 3rd-quarter report shows Ontario’s sports-betting industry continues to thrive, Written by Staff, Published by globalnews.ca
- Ontario market posts record quarter to end 2023, Written by Jessica Welman, Published by sbcamericas.com
- iGaming Ontario’s FY 2023-24 Full Year Market Performance Report, Written by iGaming Ontario, Published by igamingontario.ca
- 2024 Stanley Cup Final: Florida Panthers win their first NHL championship as Oilers come up short in Game 7, Written by Chris Bengal, Published by cbssports.com