Canada: A tectonic shift

For the better part of the last decade, there have been myriad attempts to overturn Canada's federal ban on single-event sports betting. Each time it felt like there was enough momentum for a change, but inevitably they came up short.

Last month, however, a tectonic shift occurred in the Canadian gaming industry that could have major ramifications for the global gaming community. Canadian regulators and politicians signaled their commitment to a pair of significant changes, one federal and one provincial, that if passed will generate new revenue streams, drive money back into the country's economy and put Canada on equal footing with the world's great gaming jurisdictions.

Introduced in November by Minister of Justice David Lametti, Bill C-3 replaces Bill C-218. It proposes to lift the federal prohibition against provincial and territorial governments offering single-event sports betting. Reading the tea leaves and listening to public statements, the bill seems to have broad support and enough weight behind it to get passed. No timing has been given, but I believe a target date of fall 2021 for implementation - before next year's NFL season kicks off - is on people's minds.

Numerous factors combined to accelerate the shift, including economic losses from the COVID-19 pandemic, the rapid legalisation of sports betting in numerous US jurisdictions and the proliferation of offshore betting. According to the Canadian Gaming Association (CGA), Canadian gamblers annually send roughly CA$4bn (US$3.14bn) offshore to online sportsbooks, a figure some industry analysts believe is low. Bettors also wager another CA$10bn each year with illegal bookies.

Throw in recent allowances for legalised US sports betting in Canadian border states such as New York, Michigan and soon Washington, and the current laws risked sending even more money outside the country. While this news hasn't exactly made tsunami-level waves internationally, those of us in Canada realise just how big this can be. Even with the single-match restrictions, Canada has ranked in the top 10 of gambling nations in every major statistical survey of the last decade, with CasinoCanada.com estimating that 76% of Canadian adults engage in some form of gambling annually.

Removing the constraints will keep more money in legal channels and propel the industry's revenues and innovation. "There's tremendous potential for sports betting to take off in Canada and I definitely think there's demand from the public," said Paul Burns, president and CEO of the CGA, at the announcement press conference. "We just think it's time."

The current setup is anathema to serious bettors, who actively avoid Canadian Government sites. The Government shut down choice and forced Canadian gaming companies to operate entirely in other countries. This push for new regulation is a forward-thinking move by the Government, though, presented with reams of data by businesses and gaming commissions that clearly illustrate the time is right for change. The Government saw the marketplace potential and made a much-needed shift.

Previous attempts at decriminalising single-match sports betting were once met with resistance by the NFL, NHL, MLB, NBA, Major League Soccer and the Canadian Football League. Those barriers have since evaporated, with most leagues now having signed deals with betting partners. The likely federal shift goes hand in hand with a second government policy change that will be equally as important in the long run.

Ontario, Canada's largest province with nearly 40% of the country's population, announced in early November it will remove gaming oversight from the Ontario Lottery and Gaming Commission, and place it under the purview of the Alcohol and Gaming Commission of Ontario (AGCO) through a dedicated subsidiary. The biggest impact of this move is it aims to create a regulated, private gaming marketplace and open the province to outside gaming operators.

To put this in context of just how big a market Ontario can be with regulated gaming, look to the US state of New Jersey. In 2019, the state with a population of 8.9 million people (nearly five million fewer than Ontario), generated US $4.5bn in legal sports wagers. And New Jersey has already surpassed that mark in 2020.

While Ontario would be the only Canadian province operating under the new regulatory model, for now, the widely held belief is a successful implementation of the new structure will lead to adoption of similar guidelines across the country as a whole. This would increase sports betting, esports betting and online gaming offerings, and make Canada a prime destination for a wide swath of new businesses and tax revenues. Listening to the CGA and AGCO, the goal is to move quickly to allow gaming operators to come into the province. Though they will still need to go through a yet-to-be determined Ontario licensing process, Canadian companies such as ours - already licensed in jurisdictions such as Malta and soon the United Kingdom - may see a light-touch, fast-track approach to acceptance in the province.

Ontario might as well have put up a "Welcome Home" banner aimed at Canadian gaming companies. FansUnite has been around for seven years and yet, until now, we've been shut out from doing business in our own country. By opening up to outside operators, Ontario shuts the door on unregulated sites, gives Canadian gaming companies the opportunity to showcase our products in our home country, paves the way for more innovation and keeps talent at home. We know they can also effectively work to shut down bad actors as Australia has shown in the past.

Combined, the changing laws are going to impact every level of the country's sports and gambling industries. Anticipate a bevy of moves from Canada's largest companies who are already in the space or have publicly stated they plan to be, such as Great Canadian Gaming Corp, Rogers (Sportsnet), Bell (TSN), and Score Media (theScore).

Yet, as big as this is for Canadian and outside companies, the real winners are Canada's consumers. They are about to be deluged with a plethora of choices, such as in play/in running betting, bet builder (allowing bettors to build their own multiples and get instant markets), cash-out options and access to new prop bets from single-game matches. It's not even the end of this year's NFL season, and bettors and gaming businesses are already looking forward to the 2021 season, as well as the implementation of the new regulations.

It's been a long time coming. Now it can't come soon enough.

Scott Burton is CEO of FansUnite Entertainment. Learn more at FansUnite.com and follow him on Twitter @fans_burton.