21 Jul

CGA Agrees, Sportsbook Promos Aren’t Necessary in Ontario

Lack of Ontario Sportsbook Promotions a Big Hurdle for Operators

Lack of Ontario Sportsbook Promotions a Big Hurdle for OperatorsIn April, Ontario launched the first locally regulated, competitive, online gambling market in Canada’s history. It broke many a mold, giving local players not only the opportunity to bet online through provincially-approved operators, but the chance to shop around for the best iGaming website to suit their wants and needs. It took over two decades for it to happen, and thus far, no other province seems remotely interested in following suit; a fact that makes Ontario’s move to promote competition all the more remarkable.

But that’s about as far as the word ‘promotion’ goes in this market. When Ontario passed regulatory guidelines to open its doors to commercial competition, it did so with one very strict clause. Gambling sites, including the region’s imminently popular online sportsbooks – would be restricted from any form of “public advertising of inducements, bonuses, and credits.”

This isn’t the type of prohibition you see other jurisdictions invoking on their iGaming industries. Most of Ontario’s operators are unhappy with the clause, to put it mildly. Some have even broken the rule, suffering the consequences of AGCO-enforced penalties within the first 6 weeks of operation. And it comes with moderate surprise that some of the biggest iGaming proponents in Canada actually agree with the stipulation.

CGA Condones Restriction on Ontario Sportsbook Promotions

The Canadian Gaming Association (CGA) spent years fighting for online gambling regulation in all provinces. In Ontario, especially, the CGA’s efforts to push for expansion into a competitive commercial market were significant. But none of the CGA’s iGaming initiatives came anywhere near the extent of its lobbying for legalized single-event sports betting, both online and on land.

After fighting so hard for these things, you would think the CGA would back operators just a little more. That clearly hasn’t been the case when it comes to public promotions. CGA President and CEO Paul Burns, who has been the most outspoken voice for single-event sports wagers over the years, says the ban on public advertisements is perfectly reasonable; at least, for the time being.

“There are some challenges, for sure. There is concern on the cost of acquisition, there is concern around advertising restrictions and bonuses,” said Burns in a recent interview. But he doesn’t feel it will take regulatory change to solve those challenges.

“There are still lots of ways to offer bonuses and incentives to customers,” he told Sports Handle, shortly after becoming the first Canadian to be inducted into the SBC Sports Betting Hall of Fame.

He didn’t elaborate much on what some of those ways might be. He did, however, support the AGCO for its “walk before you run” attitude. After all, this is the first time a province has attempted to regulate such an expansive market, and it’s only been three months since it launched.

Regulations are “Not Written in Stone”

As AGCO Chief Operating Officer, Dave Phillips, pointed out just 24 hours prior to Burns’s statement, the guidelines can always evolve. The provincial regulator is watching to see how the market reacts to current standards. They are watching to see how operators conduct themselves under the current regime, and how will customers respond to it.

To alter the rules at this nascent stage would be impetuous, at best. In time, however, regulations will surely evolve and adapt to provide the best practices for all parties. But the fact remains, player protection must always come first.

“The standards are not written in stone,” said Burns. “They don’t last forever.”

At the same time, it’s hard to ignore the growing level of competition, and the difficulty smaller operators – especially those late to the game – will face in attracting new players without the ability to present sportsbook promotions to Ontarians.

As of writing, there are 31 authorized online gambling websites licensed to operate in Ontario. Among them, 18 present sports betting opportunities to their members. They are allowed to promote their brands, in a very general manner. But they cannot promote bonuses, credits or other inducements.

BetMGM can display a banner as big as the moon with its name next to a photo of their brand ambassador, 2x NHL MVP Connor McDavid. But no betting promotions or inducements can be included in that ad.

How will Anti-Promotional Rules Impact Revenue?

That’s a question that will be difficult to answer for some time now. Most of the world’s iGaming markets issue revenue reports on a monthly basis. That includes operators just south of the Canadian border – namely, New York and New Jersey. Monthly reports make it easy to compare figures when facing specific challenges.

Ontario, on the other hand, is only planning to release revenue reports once per quarter. That’s the plan for the first year of operations, in fact. After the first year, the AGCO will review the market status, making whatever changes it deems necessary.

Making things even harder is the fact that Ontario’s sportsbooks have yet to experience any of the major annual betting trends. March Madness wrapped up just before Ontario’s iGaming launch in April. The NFL football season has yet to kick off. Because reports take a full quarter to release, the AGCO won’t have monthly reports to compare when NFL betting takes effect.

“We’ll see a better picture this fall, because NFL season is coming, the World Cup coming, hockey will be back, and basketball will be back,” reasoned Burns. “Those numbers going forward will be more telling to see what the splits are between casino and sports and what the handle is starting to look like in the market.”

Too Little, Too Late?

The truth is, it’s going to take at least a year to come up with any hard data to quantify the impact of banning Ontario sportsbook promotions. No matter what the results may be at that time, it could be too little, too late. Smaller and lesser-known businesses could dissolve by then. Long story short, if you don’t have a big enough name in Canada, like Caesars, DraftKings, or theScore, you may not last long enough to experience the evolution of iGaming regulations in Ontario.

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