25 Jun

VLTs No Match for Loto-Quebec + iGaming

Quebec online casino games help replace VLT revenue.

Quebec Online Casino Games Help Replace Lost VLT Revenue

Not long ago, it was decided that video lottery terminals (VLTs) should no longer be so prevalent in Quebec, Canada – especially in lower income areas of the province. Gaming regulators began the slow but steady reduction of VLTs in 2017. The move was expected to be a boon for reducing the level of harm these machines can bring to players, but a bane for the amount of revenue Loto-Quebec is used to generating with each passing year.

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The latest revenue reports are telling a much different story than previously expected. Not only are the gambling-related tax coffers still generating an influx of money, the lottery and gaming regulator is seeing record breaking revenue in the 2018-19 fiscal year, and they’ve got a host of new online casino games and budget-minded productions to thank for it.

Lynne Roiter, President and CEO of Loto-Québec, comments:

Over the past five fiscal years, even with our total revenues on the rise, we’ve maintained tight control over our expenses. That’s helped to improve our productivity… All of our business sectors are contributing to the increase in net income, which reflects the efforts being made right across the Corporation.”

Quebec Online Casino Games Compensate for VLTs

In the 2016-17 fiscal year, just before the reduction of VLTs went into effect, Loto-Quebec reported consolidated revenue of $3.636 billion; an increase of 2.1% on the previous year’s results. Of that, 50.3% was attributed to lottery sales, 27.3% to gaming establishments, 22.4% to live and online casino offerings. Internet casino gaming (minus online lottery) contributed $45.75 million to those stats.

The following year, as the video lottery first began to be pulled from local bars, consolidated revenue still rose 3.7% to $3.77 billion. Similarly, lottery sales made up 49.9% (-0.4%) of the totals, with gaming establishments coming in at 26.7% (-0.6%) and casinos 23.4% (+1.0%). This time, online casino gaming revenue came in at $64.31 million, up a whopping 40.6%.

Now, according to the latest financial review released by Loto-Quebec – and with even more high-yield VLTs gone from the province’s gaming landscape – revenue is climbing so fast, it’s breaking records. Consolidated revenue came in at $2.827 billion (after $1.16bn lottery payouts), up another 3.1% year over year. Contribution rates are shifting, though. Lottery sales contributed to 34.6% of total revenue (-15.3%), gaming establishments 33.8% (+7.1%) and casinos 31.6% (+8.2%). Once more, we’re seeing a significant boost in online gambling activity, with revenue up 19.36% to $76.76 million.

Reduction in VLTs a Necessary Imposition

Quebec’s choice to reduce the number of VLTs was not an easy one, but a necessary one for the sake of the gaming public. There’s been an overwhelming increase in the number of lawsuits against the manufacturers and operators of these games, accusing them of developing the machines to be intentionally predatory in nature. Their design, say opponents of the devices, is such that it encourages and perpetuates at-risk and problem gambling behavior.

In an effort to reduce harm, Quebec wrote up a new formula for how many (if any) machines could be located in any given community. There may now be only two gaming establishments per 5,000 inhabitants, and only two machines per 1,000 inhabitants. Officials confirmed in February that the approximate 12,000 machines present in January of 2017 have been reduced to less than 10,000.

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