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iGaming Market Could Hurt Ontario Land-Based Casinos

A report conducted for Great Canadian Gaming Corporation predicts that the launch of Ontario’s new open iGaming market could have a negative effect on land-based casinos. According to the study, the electronic gaming changes could lead to a 25% job loss at Gateway Casinos Sault Ste. Marie, as well as cost it CA$1.9 million over five years to the venue.

The report is formally named Ontario Gaming Market Assessment Draft Results, and it was conducted for the company by HLT Advisory Inc. This is a private company that has the largest share of Ontario’s casino framework. While Gateway Casinos Sault Ste. Marie in the province is owned and operated by Gateway Casinos & Entertainment.

The Study

The 130-pages report by HLT Advisory Inc aims to provide an overview of what the land-based casino market would look like if the province implements an open license e-gaming model. Which, will not have a limit on how many licenses can be awarded. Last summer, the government introduced iGaming Ontario, which is the entity that will oversee all online gaming in the province.

The study states that Gateway Casinos Sault Ste. Marie, which operates 340 slot machines, would be impacted by the new market and the possible implementation of the open market model. Currently, brick-and-mortar casinos must pay 55% of their net gambling proceeds to the province through the OLG. As of now, the casino pays CA$1.4 million to the City of Sault Ste. Marie every year.

It must be mentioned that the report predicts that if the open license system is introduced, it would result in a drop in annual revenue-sharing agreements from the casino to the city. Estimations suggest that annual payments drop to around CA$1 million per year, thus resulting in a total loss of approximately CA$1.9 million over the next five years.

Additionally, bad news could be in store for land-based casinos such as the Sault Ste. Marie one, as the report foresees about 15 job losses. Currently, the casino employs 58 full-time workers, and it is expected their number to drop to 42 with the licensing changes. The total amount of job loss could increase to 2,500 in the whole of Ontario.

Payment Received

Most recently, the City of Sault Ste. Marie received its quarterly revenue-sharing allocation from the OLG for the hosting of the Gateway Casinos & Entertainment property. The payment was in the size of CA$273,611 and it was for the period of October 1, 2021, through December 31, 2021. Since the opening of the casino in the area in 1999, the region has received a total of CA$32.3 million.

One More Potential Problem

Another recent study suggested that the Ontario new regulated iGaming market could come with some more bad news. The research by, predicts that the new market could cause trouble to the legacy online licensed operators, who would have difficulties adapting to the new market. It is predicted that these operators will not be as profitable as the new ones, and they will fall behind in the pecking order.

Source: Armstrong, Kenneth “Report estimates a 25-per-cent future job loss at Gateway Casino due to proposed electronic gaming changes”, SooToday, January 21, 2022