Ontario's first financial reports on its newly-expanded gambling market show it's on track to fall well short of private-sector estimates for the industry.
On Tuesday, the government announced $162 million in total gaming revenue in the first quarter since allowing new legal forms of wagering and opening its market to private competition in April.
In a recent report, U.S. consulting firm VIXIO GamblingCompliance estimated the Ontario market to be worth about $1.6 billion in gross gaming revenue this year, rising to $2.36 billion in 2023.
Following Ottawa's move to legalize new forms of betting last summer, including individual sports games and events, Ontario has set itself apart from other provinces by allowing private companies to compete with government-run betting products like Proline+.
iGaming Ontario (iGO), a subsidiary of the Alcohol and Gaming Commission of Ontario (AGCO), released its first set of financial figures for the market on Tuesday. The report covers April 4, the day the market opened to private competition, to June 30.
iGO says Ontarians wagered $4.076 billion in total during the quarter through 18 operators running 31 authorized gaming websites. Total gaming revenue was $162 million.
On average, the monthly spend per active player account was $113. iGO reported 492,000 active player accounts for the period.
iGO says it intends to release market reports on a quarterly basis, at a minimum. The agency adds that its numbers are unaudited, and subject to adjustment. In May, the Auditor General of Ontario estimated that iGO will generate net income of $18 million in 2022-2023, $26 million in 2023-2024, and $31 million in 2024-2025.
The preliminary figures suggest "people in Ontario are interested in the strong player and anti-money laundering protections that are being offered in the regulated market," according to iGO.
For years, Ontarians have had access to so-called "grey market" betting websites and platforms, which typically operate offshore and under foreign licence. Wall Street analysts expect companies that have transitioned from the "grey market" to the legal market will leverage their experience, and grab the largest market share.
"Our aim is to be the best gaming jurisdiction in the world and these positive results are an early sign that we're on our way," Dave Forestell, iGO's board chair, stated in a press release on Tuesday.
"With a competitive revenue share rate and low barriers to entry, Ontario is an attractive i-gaming market with a strong player base."
Lofty expectations for Ontario's market have lured some of the biggest global names in the gambling industry to the province. These include DraftKings (DKNG) and PENN Entertainment (PENN), which purchased Toronto-based Score Media and Gaming last August for US$2 billion in cash and stock.
"The market report released today by iGaming Ontario speaks for itself," said Scott Vanderwel, CEO of PointsBet Canada, the Canadian subsidiary of Australia-based PointsBet (PBH.AX). "With 492,000 active player accounts, total cash wagers of $4.076 million, and total gaming revenue of $162 million, the desire for a regulated market is strong."
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.