9 minute read
SPORTS BETTING
A LONG TIME COMING
From player protection to COVID-19 recovery, sports betting legislation is a logical and overdue move for the Canadian market.
BY TOM NIGHTINGALE
It feels like Canada may be on the cusp of something monumental when it comes to sports betting.
A BILL WITH THE purpose of amending the Criminal Code to allow single-event sports wagers – the Private Member’s Bill C-218 – is heading to a third House of Commons reading with overwhelming cross-party support. This time around, it looks like this progress may affect real and lasting change.
We’ve been here before. The difference today is that not only does the potential legalization of single-event sports betting have support form all major parties and major sports leagues, but Canada has an example of success in the U.S. Around half of American states now have some form of legal sports wagering, and the growth – both in terms of jurisdictions and revenue streams for operators and governments – has been exponential. In short, the market has exploded.
North of the border, only parlay betting has been legal for some time. Allowing provinces to introduce singles wagers and regulate their own markets would equal a quantum leap forward.
Such is the optimism that Canada will move forward, the Canadian Gaming Association (CGA) and its Regulatory Innovation Committee has moved on from refining its Standards for Cashless Systems to focusing on building sport and event wagering standards in anticipation of the legalization of singleevent sports wagering.
Across the country, gaming operators, sportsbooks, regulators, and everyone in between is gearing up for a new market that could open up in the near future.
“I don't think people realize just how hard the gaming industry has been hit by COVID-19,” says Gateway Casinos & Entertainment’s Chief Compliance and Information Officer, Terry McInally. “As one of Canada’s largest casino operators, we’ve haven’t had a single site in B.C. open since last March. It’s been a tough slog, so when you see something like this show up, you're pretty excited.”
HELPING THE INDUSTRY RECOVER
Not least among those benefits is the fact that the CGA estimates that billions of dollars are currently going to illegal and offshore operators. Opening up the legal single-event wager market would bring much of that back into the hands of an industry which has struggled desperately during the COVID-19 pandemic.
“The size of the market is contingent on how much you can bring out of the grey market,” says McInally. “The grey market has always operated, it's always been there and not particularly well-enforced. So, really, this would be a path provided to operators from grey into a legalized white market, and then that opens up the size of the market for everybody to operate within.”
Gateway, of course, is far from the only operator that will be watching on keenly. They are one of numerous cross-province operators, and there are also province-specific organizations like the Saskatchewan Indian Gaming Authority (SIGA) that stand to be heavily impacted. Zane Hansen, President and CEO, notes that SIGA’s non-profit status means it – and Saskatchewan on the whole – is suffering a huge “missed opportunity” with bettors’ dollars going elsewhere.
“This is where the proceeds from gaming drive the biggest impact – supporting beneficiary initiatives, programs, community needs outside our own corporate job and economic creation,” says Hansen. “Single-game sports betting has the potential to provide that opportunity with the benefits going back into our communities, charities, and support an increased labour force in the gaming industry.”
For lottery corporations, too, this is of huge significance at a time when the gaming industry is struggling to stay afloat. Revenues have shrunk and margins have become thinner. Coupled with the fact that Canadian bettors have high visibility to the blossoming U.S. market, Stewart Groumoutis, Director of eGaming at BCLC, sees enhanced sports betting as a bright light at the end of the recent dark tunnel.
“This legislation is long overdue,” Groumoutis says. “Since the last time around, with U.S. sports betting flourishing in its early stages, the Canadian industry and sports leagues have recognized how they can benefit from it. It’s extremely important that the funds return to the provinces where they're generated. Currently, with players forced to bet on illegal sites, funds and jobs don't go back to benefit the provinces. This is an opportunity to repatriate that play, those jobs, and make sure that gambling that occurs in a province benefits that province, its operators, and its consumers.”
ENSURING RESPONSIBLE GAMING IS AVAILABLE
The CGA noted in its white paper on single-event sports betting that “there is a need to address issues that will be specific to the implementation of sport and event wagering standards, such as match fixing/integrity of data, sharing data across jurisdictional lines, and marketing and the offering of odds.”
Another highly important issue to be considered is that, with so many consumers currently getting their sports betting kicks through illegal or offshore means, sports wagering is not being regulated to the extent that it should be. It is impossible to ensure responsible gambling is taking place when a large chunk of the betting is not occurring in-country.
“With the provinces, you can rest assured the best intentions are there,” says Groumoutis. “The intention is to generate revenue and benefit the provinces but not at the expense of people. An extensive legal market offers extremely strong safeguards around player health and responsible gambling that are closely scrutinized and well understood by the provinces themselves. Legislation would bring sports betting
back under the legal umbrella where players can be protected.”
The importance of ensuring that players are protected is paramount.
Groumoutis explains that due to the constraints of Canada’s current sports betting market, sports gambling is comparatively under-represented in research.
“When you look at responsible gambling and player health research, there’s definitely not the extensive research that you see for casino gambling,” he says. “People need to be aware this is quite new and we need a concerted effort across the entire industry to improve our knowledge and understanding of that. With sports, there’s a number of emotional aspects and peer pressure: all these nuances that must be researched, understood, and acted upon if we’re to do this without social harms.”
From BCLC’s perspective, he cites the influx of new players on the corporation’s PlayNow platform who have moved online due to the mass closure of land-based facilities. “We’ve had to take extra steps to ensure we’re educating those players and ensuring they have the support they need. Single-event sports would push that need even further.”
LAYING FOUNDATIONS
Canada is still some way away from moving forward with sports betting offerings. The latest step would see the Criminal Code amended to legalize single-event sports betting. Beyond that, it would be up to the provinces to decide how to move forward. Progress, and the exact direction of the steps taken, would vary from province to province.
McInally, for one, hopes that by the end of 2021, some of the first bets may be laid either through iGaming or sports betting platforms. Though that is a way down the road, operators and technology providers are moving the pieces into place right now. A key hope is that fair market access is granted, and that Canadian operators and companies may get some advantages.
“The government must see an industry that has been hit extremely hard by COVID-19 and that has put billions of dollars into the economy over the years,” says McInally. “We hope that’s considered so that when this new market opens up, operators like Gateway have a fair shake at engaging.”
That is echoed by Scott Burton, CEO of sportsbook and technology provider FansUnite, one of several companies with a focus on sports betting that have joined the CGA in recent months. “We hope companies like us will be asked to be involved more in the process as it goes forward. We’ve spent years getting prepared and now, it’s just a case of making sure there’s an opportunity for companies like ours that aren’t massive overseas business to reap the rewards.”
In order to maximize the potential benefits, traditional brickand-mortar operators like SIGA would be willing to pivot, too. Saskatchewan is the last province without an official online gaming platform, and Hansen says sports betting progress could help drive this transition. He emphasizes that harmonizing a unique sports betting experience within land-based casinos and an online platform is a “landmark milestone on (SIGA’s) radar.” In essence, SIGA and others want to make sure they can be there to provide a full-service offering to their eager sports betting customers.
A WAITING AUDIENCE
After all, the biggest certainty is that the audience exists and is ready for the opportunities seen in both the U.S. and Europe. Another Super Bowl recently passed by and Canadians were still unable to place a simple single bet on the winner through legal Canadian means.
Like the U.S., Canada is a country full of punters. Ontario represents one of the biggest sports betting markets in North America, and the provincial government is currently making efforts to establish a more open iGaming market which would go hand-in-hand with the progression of federal sports wagering legislation. It stands to reason that all Canadians provinces are getting ready to hit the ground running if and when Canada gets to the point where single-event sports betting can move forward.
“Most important is that players want this,” stresses Groumoutis. “They want to able to place a legal single-event sports bet whether through retail, at their local casino, online – however they see fit. We're seeing that significant culture shift around sports betting, so the renewed push to legalize single-event couldn't be more timely. The Canadian gaming industry needs to be responding to that: if we aren't there to serve these customers who are being inundated with sports betting coverage from the U.S. and abroad, they will be pushed further into the arms if the illegal market. That’s where the harm is done.”
The possibility of legislation has not gone unnoticed by some of the biggest sports betting companies in the world. theScore is making plans to move forward in its home market, and U.S. giants are taking big steps, like DraftKings’ recent extension of its NFL partnership into Canada. Recent CGA members like FansUnite, BetRegal, and Kambi already operate in major European markets such as the UK and see the Canadian market as a potential goldmine of opportunity.
“I think legislation is a required step to have any outside operator be interested in Canada,” says Burton. “If operators continue to be told they can’t offer single-event betting or other flexibility, the appetite might not be there, and the sports betting industry is likely to stagnate. Provinces need to be allowed to give consumers more and better choice on where they’re betting, and we’d also obviously like to see homegrown companies like ourselves be able to thrive in our home markets. If a big motivation is tax revenue, it just makes so much sense, for that reason and many others.”
For now, it is a case of watching this space and seeing how things develop. Canada is a country hungry for sports betting opportunities, and the industry doesn’t want to be left behind.
