Last week, GAN Ltd. announced its financial results for the three months ending on December 31, 2022, but also shed more light on why its Coolbet brand left Ontario’s iGaming sector. The company cited that in the province it was competing with a swarm of promo-friendly and familiar-looking sports betting sites, and it was one of the most competitive markets in the industry.
Ontario’s sector for mobile sports betting and gambling is the first of its kind across Canada. It allows for an unlimited amount of operators and sites to enter, provided that they have met the rigorous standards of the Alcohol and Gaming Commission of Ontario. Coolbet was one of the first operators to go online at the start of the market in April 2022, and is now the first to leave it.
Market is Too Competitive
In the middle of March 2023, Coolbet announced that it will be departing the market and that GAN will now focus on Latin American territories such as Mexico, instead of Ontario. CEO of GAN, Dermot Smurfit, said that the company does not see a clear and rapid path to profitability in markets outside of Latin America, and it will be suspending operations or decreasing investments.
The CEO noted that the sheer number of entrenched operators and heightened promotional environment did not represent a path to profitability or provided the same sort of return as the company’s investment into LatAm sectors. He shared that the set-aside resources for Ontario sports betting would now go to a higher-return market and generate cash flow.
Furthermore, Mr. Smurfit described the market as one plagued by a competitive, promotional-oriented obsession in the first few months of operations, and that it was driven by new entrants and brands that were previously operating in the grey sector. He added that tons of U.S. brands were pushing toward the market very aggressively combined with the operators who have been there for quite some time.
GAN’s CFO also elaborated that the operator had other difficulties in the Ontarian market. The official said it was possible for the company to violate the terms of the loan and potentially speed up the need for repayments. The brand is also in negotiations with its lender over amending the loan agreement to remain in compliance, however, there is no agreement yet.
Meanwhile More Brands Join
While Coolbet exits the market, other operators are making their way into it to this day. In March 2023, Rivalry announced its entry into the market. The gambling brand has been licensed by the Alcohol and Gaming Commission of Ontario and it will now be able to debut its iGaming product in Ontario via its Casino.exe platform. Its operations will begin with eight casino games.
In addition to that, March saw the debut of Pariplay through a collaboration with Caesars Sportsbook & Casino. Now, Ontarians who register or have an account for the iGaming platform will be able to enjoy a plethora of the provider’s world-class titles. This includes favourites such as Gods of Kemet, Spirit of Mustang and Wolf Riches.
Source: Zochodne, Geoff “Coolbet’s Ontario Exit Partly Due to Sports Betting Promo ‘Mania,’ GAN CEO Says” Covers, March 31, 2023