During a panel at the Canadian Gaming Summit, Ontario Attorney General Doug Downey shared concerns about liquidity issues in the daily fantasy sports sector. The province’s chief legal officer noted that these problems stemmed from the launch of the competitive market for online gambling and sports wagering and which were first noticed with the start of the market.
Ontario’s private market for iGaming is the first of its kind in Canada as it allows for an unlimited number of operators to join, provided that they have met regulatory requirements set by the province. It is governed by the Alcohol and Gaming Commission of Ontario and it was introduced as a way of protecting consumers from the offshore market.
Speaking at the Canadian Gaming Summit
At the conference Mr. Downey spoke briefly on the current state of daily fantasy sports, admitting that the sector experienced liquidity challenges. He said he does not want to go into much detail about what is he looking to do about the issue. The problems date to the launch of the market as many DFS operators started offering iGaming in the new market.
After Ontario debuted its iGaming sector, big operators such as DraftKings and FanDuel were among those firms to cease DFS services in the province. Hence leaving locals without many options as many used to rely on their offerings. The province suffered a similar issue with online poker, as many companies suspended operations for the very same reasons.
These factors are associated with the regulations governing online gambling in Ontario. Firstly, the province considers “pay-to-play” DFS as a form of gambling rather than a “game of skill” as recognized in certain U.S. states. Consequently, operators are obligated to register with Ontario authorities, pay licensing fees, and contribute a portion of their revenue to the province.
Current regulations state that all players on an igaming website should be located within the province, which further reduces the pool of players for DFS and poker. Fantasy Sports and Gaming Association said that the decrease in DFS in the country was due to the launch of legalized sports betting and the debut of Ontario’s regulated iGaming framework.
Market and First Impressions
It should be elaborated that the start of Ontario’s online gambling market provided plenty of other digital options for local bettors to choose from. In its first year, the local sector recorded a total of CA$35.6 billion in betting handle and around CA$1.4 billion in revenue. Additional estimations show that active player accounts had an average spend of CA$70 every month.
However, the emergency of the regulatory framework for online gaming has brought in another downside: an influx of betting ads, which upset some people. That is why AGCO has recently come up with a suggestion to ban sports stars from participating in such kinds of endorsements. This is due to the fact that these celebrities appeal to younger audiences.
Source: Zochodne, Geoff “Ontario Pondering ‘Liquidity Challenges’ Caused by Sports Betting, iGaming Market” Covers, June 14, 2023