Mohegan Eyes Sports Betting and iGaming Opportunities in Canada, Awaits Further Details

Canada's Parliament passed a bill to allow single-game sports betting, but the federal government has yet to set a date for the legislation to come into force.

Aug 11, 2021 • 11:22 ET • 6 min read
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Casino operator Mohegan Gaming and Entertainment is looking at offering sports betting in Canada over the next 12 months or so, although the company is still waiting on a few key details. 

“With the approval of single-event sports wagering and iGaming in Ontario, we’re … working to roll out both in Canada this coming year,” Ray Pineault, CEO of Mohegan Gaming and Entertainment (MGE), said during a conference call on Tuesday for analysts and investors. 

Uncasville, CT.-based MGE is an arm of the Mohegan Tribe of Connecticut and operates properties including the Mohegan Sun, as well as Casino Niagara and Fallsview Casino Resort in Niagara Falls, Ontario. MGE runs the latter two facilities under an operating and services agreement with the government-owned Ontario Lottery and Gaming Corp., or OLG.

Those Canadian ties could present some interesting opportunities for MGE in the near future. 

Canada’s Parliament passed legislation earlier this year that will allow provinces (or companies that the provincial governments license) to offer single-game betting, ending the country’s parlay-only model of legal sports wagering. Furthermore, Ontario, Canada’s most populous province, is planning to launch a competitive market for internet gaming, sports betting included, before the end of 2021. 

MGE’s work will hinge on whatever the country’s provinces and Ontario’s regulators ultimately settle on for their respective sports betting and internet gambling rules. Both single-game sports betting and Ontario’s iGaming market have yet to launch, and the exact details around who will participate, where bettors can place wagers, and when everything begins have yet to be determined. 

Various retail options could end up as part of Ontario’s sports-betting mix. That could include casinos, including MGE's Niagara ones, as Ontario Attorney General Doug Downey told Covers in June that the operators were being consulted. 

Nothing is set in stone at the moment, though. In an emailed response to questions from Covers, Pineault said MGE is “currently exploring our options” with regards to mobile and in-person sports betting. The company is also working with Ontario regulators and gaming-related entities to understand what those options might be. 

“Until the regulatory environment is made clearer it is difficult to say where and [to] what extent we will participate in sports wagering,” Pineault said. 

Still, Pineault said they do currently plan on participating in Ontario’s iGaming market (which, again, is poised to include online sports betting) and are working with their partners on those plans. 

“We believe we have a highly recognizable brand and large and loyal database that will allow us to be competitive in the marketplace,” Pineault added. “As for sports wagering ... we are working with the [Alcohol and Gaming Commission of Ontario], [iGaming Ontario], and OLG to understand the operating and regulatory environment for sports wagering to determine how we might participate in that market as well.” 

An unequal recovery

The comments from Pineault came after MGE reported results for its third fiscal quarter, which ended June 30. According to the company, its income from operations was around US$64 million for the three months, an improvement over the US$20.5-million loss it booked a year earlier.

Pineault said during the conference call that by the end of May, most of the remaining COVID-19-related restrictions had been removed at its U.S. properties.

“Although results continue to be positive, we are monitoring the potential impact of the Delta variant,” Pineault said, adding that they “still believe there remains additional pent-up demand in our markets."

Yet, MGE’s Niagara casinos have been hit hard by the efforts to curb the COVID-19 pandemic. The company’s latest results show its Niagara segment took a US$11.7-million operating loss for three months ended June 30, which was slightly worse than the approximately US$9.8 million deficit it reported a year earlier. 

There’s been some improvement on that front, though. Pineault noted MGE's two Niagara facilities remained closed by government order during the company's third quarter, but they reopened in late July with limited capacity.

“Although thus far we have seen a strong demand from our customers, we believe that the ongoing capacity restrictions will impact the overall operating results until the restrictions are lifted,” the CEO added.

Under pressure

Canada’s embrace of single-game sports betting could give those Niagara casinos a bit of a boost. For instance, the looming legalization of single-game betting in Canada could offer the country’s casino operators the opportunity to compete on a level playing field with rivals in states such as New York and Michigan, where such wagering is already happening at some casinos. 

“While it is estimated that legalized sports betting will bring in tens of millions of dollars and add hundreds of new jobs to the local Niagara economy, the consequences of inaction are much higher,” wrote Richard Taylor, president of Niagara Casinos, in a letter to the House of Commons’ justice committee earlier this year. “The explosion of legalized sports betting along the Canadian – United States (U.S.) border has changed everything, and now constitutes an existential threat to Niagara’s ability to compete.” 

Canadian Prime Minister Justin Trudeau is now facing rising pressure to set a date for a single-game sports betting bill to come into force, as the legislation won’t take effect until then. That day could be announced as early as Thursday, according to a report from Yahoo Finance Canada. 

Ahead of the announcement, Niagara Falls MP Tony Baldinelli reportedly issued a statement recently about the delay, warning it was allowing illegal wagering to continue. Likewise, Windsor-area MP Brian Masse recently wrote a letter to Trudeau asking the prime minister to bring the single-game sports betting legislation into force immediately. 

"Casinos like Caesars in Windsor are still waiting to develop their full implementation plans, and this [affects] their operations and job creation,” Masse wrote. 

While Canadians await the official launch of single-game sports betting, the interest that some of the major names in gambling have in the country is gradually coming into focus. In announcing its planned takeover of Toronto-based Score Media and Gaming Inc. last week, Wyomissing, Pa.-based Penn National Gaming Inc. said it “believes the Canadian gaming market represents a compelling opportunity for growth.” 

Meanwhile, down south...

There remains plenty of opportunities south of the Canadian border, too. 

Pineault said MGE is looking to offer both sports betting and internet gaming in its home state of Connecticut later this year. The CEO also said during the conference call that MGE is optimistic about being able to offer in-person sports betting at ilani, the casino resort it manages in Ridgefield, Wash., by the fall. 

But MGE is diving deeper into digital gaming as well, having recently launched an iGaming division called Mohegan Digital.

Those digital efforts include a recently announced partnership with FanDuel Group for market access in Connecticut, which is near to launching legal sports wagering.

Connecticut’s model will allow for the Mashantucket Pequot and Mohegan tribes, as well as the state lottery, to offer retail and mobile sports betting in the state.

“We are excited about the opportunities that digital gaming provides us and believe digital will diversify our revenue streams and provide customers with an exciting new way to engage with us,” Pineault said on Tuesday's call.

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