Ontario Maintains Prohibition of Promotional Sports Betting Advertising
The expansion of legal commercial sports betting in Ontario remains on track for an April 4 launch. This will mark Canada’s first expansion outside of provincial government-owned gaming corporations.
These has been quite a bit of debate over Ontario’s plans as a major shift away from the current system in place. Canada amended its sports betting laws in August of 2021. The major change was the addition of legal betting on individual games and sporting events.
The change in law drew the immediate attention of major US-based operators such as FanDuel, DraftKings and BetMGM. This change also caught the interest of Ontario gaming regulators as a chance to expand the marketplace.
Commercial sportsbook operators may be coming to Ontario but the market will not be flooded with promotional advertising. Ontario regulators have maintained the province’s laws prohibiting this form of marketing practices.
As an example, a recent media advertisement by DraftKings in Ontario did not make any mention of free promotional incentives.
Part of the reasoning behind this ban is responsible gaming efforts. The main reason is protecting the business interest of Ontario’s existing land-based casino industry. Promotional incentives offered by mobile commercial operators could have an adverse impact on land-based casino profits.
Ontario lawmakers decided to expand the online sports betting and iGaming market. This was shortly after the Canadian Parliament formally legalized single-game sports betting. In response, the Alcohol and Gaming Commission of Ontario (AGCO) announced the ban.
The only exception to the rule is the ability to advertise promotional incentives online through an operator’s website or mobile sportsbook app.
There are currently 28 land-based casinos in Ontario. This group has continually expressed their concern over the impact that commercial mobile sports betting and iGaming will have.
Great Canadian Gaming (GCG) owns and operates 14 casinos in the province. This group commissioned a study that estimated a loss of $550 million Canadian. This figure was tied to lost tax revenue from land-based gaming.
The same study contends that one in four jobs in the retail gaming sector will be lost. The main issue at hand is the set tax rate on gaming revenue. The effective tax rate on land-based casinos stands at 55%. Revenue from mobile sports betting and iGaming is only taxed at 20%.
Unifor is the largest worker’s union in Canada. The union’s gaming division is bracing for a significant impact from the rollout of commercial online operators. The Ontario Chamber of Commerce has also joined the discussion, siding with land-based casinos and the union.
The simple fact remains that legal online sports betting and iGaming have each been available in Ontario for quite some time. The main goal of adding commercial operators is to detract from the money still being spent on grey market gambling.
This grey market mainly pertains to offshore sportsbooks and iGaming sites.
Written by Dave Schwab, our US Sports Betting Industry Expert.
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