With Ontario launching its online sports betting and igaming market back in April, the second quarter financial result period has provided operators with their first chance to share how they are performing in the new online market.
For many operators, Ontario is a huge opportunity to grow due to its size and populous, with their entries into the market being productive in terms of returns so far.
Despite the strong start, some expect the market to produce even more once the sports calendar opens up later this summer, but there are also realistic expectations being set for the market and the country as a whole.
Jay Snowden, CEO and President of PENN Entertainment, has noted that his company is very pleased with how things are going for them in the Ontario market so far, particularly with the conversion of customers from theScore’s media assets.
“As it relates to Ontario, we’re very pleased with both the online sports betting, as well as the online casino results,” Snowden stated during PENN Entertainment’s conference call following their Q2 results.
“We have a slide that walks you through the value of customers that were already in theScore media ecosystem, so three-quarters of the volume that we’re seeing is customers that were already part of that ecosystem that have now converted from just media to media and sports betting.
“Then the cross-sell from sports betting to online casino is greater than 50%, we think we can get that number a lot higher, but I think, out of the gate during a slow sports calendar season, to be at over 50% is very encouraging for what we expect to be the busiest sports season coming up here as we get to September and football.
“We’ve actually been spending a lot of time with our partners at theScore to better understand what we believe the differences might be in Ontario vs the US as it relates to the popularity of sports and, even though hockey is clearly more popular in Canada than it is in the US, the number one sport in North America, and that includes Canada, is football.
“We think the NFL and college football season is going to be robust in Ontario. Remember, in Ontario you’ve got a very solid tax rate of around 20%, you get some deductions on that so call it high-teens, and that’s for both online sports betting and online casino.
“As it relates to the grey market in Ontario… we’ve really been focused on bringing new people into the ecosystem and then the conversion of theScore media followers into sports bettors, and we’ve been very pleased with our ability to do that. We’ll spend a little bit of money advertising, maybe on the paid side differently than we have in the US with most state launches.
“It’s really more of an educational thing in Canada because a lot of people who have been betting with these grey market operators don’t realize that they were grey market, and so we want to make sure that they understand now that there is a legal market.
“Most of those grey market operators either already have or are converting over platform-wise to the legal environment, which we think is great. We just want to make sure that they understand that there are more offerings today than there were before April 4, so we’ll spend a little bit of money there heading into football season.
“Overall, we’re actually doing as well as we thought we would do in Ontario. I think we’ll be a double-digit market share player in Ontario both in online sports and online casino. We don’t have public numbers yet, but when it’s released, we think that’s where we will be.”
Jason Robins, CEO of DraftKings, commented on his company’s progress in Ontario so far, noting that while they’re meeting their expectations in the market, they don’t believe they will have the same ceiling in Canada as they do in the US.
“As far as Canada goes, I think Ontario is kind of what we expected,” Robins said during DraftKings’ earnings call following their Q2 results.
We always said that we didn’t think we’d be able to achieve quite the same shares we believe we will be able to achieve in the US. We’ve projected 10% to 20% in Ontario, as opposed to 20 to 30% in US states.
“We also always said pretty consistently that we thought it would be more of a slower grind, given the nature of the market where there was just a lot of continuity between the grey market and now versus US states which, when they open up, it’s really more green field. So I think that those are some real key differences.
“For those reasons, we always sort of felt like in Canada, we can achieve a strong share, but probably wouldn’t have quite the same ceiling as we would have in the US, and don’t have the same expectation that we would have in the US.
“That said, we’ve always had a very strong data DFS database there. We have a brand that’s fairly well known in Canada. And you know, I think for those reasons, we do feel like we can do well there.”
Elsewhere, Bally’s Corporation CEO Lee Fenton has stated that his company’s web-only product is performing well in Ontario so far, while MGM Resorts International CEO Bill Hornbuckle noted his operations has a high single-digit market share in the region, which is growing.
Bally’s CEO Fenton commented: “We launched a web-only product in Ontario a couple of weeks ago. It’s actually done quite well out of the gate. And we expect Ontario will be the first place where we deploy our combined app for sports and igaming during the second half.”
MGM CEO Hornbuckle remarked: “We’re exactly where we thought we would be, particularly with our igaming business. Obviously, it was a grey market that’s now been regulated, so there are a couple of dozen competitors.
“We’re in the high single-digit market share and growing. And so, it’s clearly a real marketplace that is used to igaming and sports betting, and our entry into that has been productive. And we’re pretty excited by where that ultimately all goes.”
https://sbcamericas.com/2022/08/08/operators-ontario-launches-q2-2022/