Ontario’s gaming system is a confusing mess.
A government-run monopoly on gaming leads to a system with competing incentives. On one hand, the government encourages trepidation, telling people to know their limit and play within it. On the other hand, the government has an incentive to grow the industry since every dollar Ontario Lottery and Gaming (OLG) brings in is a dollar they do not have to raise in taxes or cut in services.
For years, that constant dilemma has forced governments to forget to put Ontario consumers at the forefront of its thinking on gaming. If anything, the gaming system is in desperate need of a consumer-focused refresh. If you will, it needs to be “for the people”-ized.
To see just how bad it is, we need to use an example. Just last weekend the Toronto Maple Leafs visited the Ottawa Senators in the normally much-hyped “Battle of Ontario.” Let’s say an Ontario hockey fan wanted to bet $5 on the outcome of the game.
First, you wouldn’t be allowed to bet on just this game due to the Federal Criminal Code’s restriction on single-sport wagering. The Ford government has rightly identified that prohibition to be archaic and in need of change in its last budget. However, Criminal Code amendments are Federal jurisdiction. So be it.
Second, if you want to bet on the game legally, you would have to bet on three different games via Pro-Line, OLG’s sports betting offering. To make this more convenient, OLG created the easy to download Pro-Line App that has received a woeful 2 out of 5 stars on the app store.
You can use the app to make your selections but then, in a rage-inducing moment, the app will produce a QR code that you need to take to your nearest convenience or grocery store to physically buy your ticket. Essentially, OLG managed to modernize only the scantron form you would normally fill out.
While you could not purchase a Pro-Line ticket online, you could have purchased a ticket to the Senators’ 50-50 raffle via the internet for a $1 fee thanks to changes made by the Alcohol and Gaming Commission of Ontario (AGCO) earlier this year. The AGCO is the regulator, yet it is more modern than OLG, the government’s actual gaming provider.
If you really want to bet online, you can always do so through a variety of grey-market providers like Bet365 or Bodog, but technically that is illegal even though you will never face charges for doing so.
OLG itself recognizes this growing trend, citing a 2017 study in its latest annual report that showed 16 per cent of Ontario adults bet illegally online. Worse yet, Ontarians gambled an estimated $500 million illegally in 2017 alone. The Canadian Gaming Association’s Vice President, Paul Burns, has estimated that Canadians spend as much as $4 billion gambling online a year.
Have no fear, though: OLG has launched PlayOLG, its own online gambling site. In the 2018-19 fiscal year, PlayOLG brought in $91.9 million, not a bad return. However, OLG only managed to give back $49.6 million to the government in profit, spending the other $42.3 million on “Service Provider fees, payments to the Government of Canada, and marketing and regulatory fees.”
Despite this one step forward, one step back approach to gaming, OLG is plowing ahead with its digital service offerings. According to OLG, early 2020 will feature the release of a new online platform that can support sports betting, peer-to-peer poker, and live dealer games. Essentially, in order to capture some share of the $500 million-plus that Ontarians are betting online every year, OLG feels it must take on the big players like DraftKings and Poker Stars.
Luckily, in its last budget, the Ford government realized the better way to capture the government’s share was through regulating and legalizing online gambling and taxing winnings. The grey market companies want to be legalized so they can properly advertise and operate in the province. Ontarians want these entities legalized so they can bet on their favourite sporting events or play poker legally from the comfort of their homes. All the while, the government can capture as much as 20 per cent of all profits – worth much more than the $49 million it makes per year now of its online offering.
This is the way of the future. In the United States, 10 states have legalized online gaming, with nine of them allowing online sports betting. These even include the biggest casino states, like Nevada and New Jersey. Six more U.S. states are actively considering regulating and legalizing online gaming in 2020.
In a legal and regulated setting, the government can set play limits to ensure people do not become problem gamblers, force proper identity verification to cut down on youth gambling, tax winnings to increase revenue, and provide consumer protection to ensure gamers do not get fleeced by unverified online operators.
Despite the obvious benefits and the public declaration of support from the Ontario government in April of 2019, the trail has gone relatively cold. If the Ford government is looking for wins to show Ontario consumers that it understands their needs and, maybe more importantly, their frustrations with government monopolies, they need to follow through on this commitment.
OLG surely has – and will continue to – put up a fight, given its belief that it can compete in the online gaming space. Despite that confidence, the Ford government should push forward with its commitment, given OLG is almost guaranteed to miss its online platform release of early 2020. If OLG made it possible in this province, I’d even bet on it.
All in all, legalized and regulated online gaming is wanted by the companies themselves, gamers, and the treasury. A properly regulated system is safer for Ontarians, more convenient, can reinforce responsible gaming standards, and helps the government reach its revenue targets faster. In gaming terms, it’s a rare win-win-win.