Ontario Lottery CEO Wants ‘Better Balance’ of Sports Betting, iGaming Ads

Going from one legal iGaming operator to dozens has meant Ontarians are seeing plenty of advertising from the newer entrants, such as bet365, DraftKings, and FanDuel.

Last Updated: May 29, 2023 5:33 PM ET Read Time: 5 min
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The chief executive officer of Ontario Lottery and Gaming Corp. would like to see online casino and sports betting sites dial back the advertising a bit.

During an appearance before the Legislative Assembly of Ontario’s Standing Committee on Public Accounts on Monday, OLG CEO Duncan Hannay was asked about the apparent explosion in advertising for legal sports betting and otherwise in the province.  

“We are facing 47 new legal operators... in the iGaming space,” Hannay said. “I think it would be appropriate to have a better balance of advertising, on balance. And I know that's how the regulator is looking at this issue and reviewing input from stakeholders across the province, within the operator community, with outside interests, with public health organizations, and from OLG.” 

Hannay’s comments were in response to questions from New Democratic Member of Provincial Parliament France Gélinas, who said "every commercial” during the Stanley Cup playoffs seems to be from one of the new companies offering Ontario sports betting and internet gambling.

“I have kids and grandkids,” Gélinas said. “They all know more about iGaming than I do. And I was wondering if you're as worried about this as I am. How could it be that I learned more about iGaming watching the Stanley Cup than I ever cared to know about iGaming?”

Ad boom

The question from Gélinas echoes what some in Ontario have been saying for more than a year, as the province launched a competitive market for iGaming in April 2022, allowing more than 40 legal competitors to OLG to take bets. In just a year of doing business, private-sector operators have handled more than $35 billion in wagers and generated over $1.4 billion in gross revenue, approximately 20% of which is owed to the province. 

But going from one legal iGaming operator to dozens has meant Ontarians are seeing plenty of advertising from the newer entrants, such as bet365DraftKings, and FanDuel. Some marketing has been done during popular sporting events in Canada, namely, the hockey playoffs, irking longtime viewers. OLG has done its fair share of advertising as well, including using Toronto Maple Leafs captain John Tavares as an ambassador

Deputy Finance Minister Greg Orencsak noted during Monday’s committee meeting that the Alcohol and Gaming Commission of Ontario (AGCO) is in the process of reviewing its advertising rules and proposing to ban iGaming marketing that uses athletes and certain celebrities. Orencsak added they expect to hear more from the AGCO, the regulator of iGaming in the province, in the future. 

OLG’s iGaming business and its online sportsbook, PROLINE+, must abide by the AGCO’s rules. Hannay said he thinks it is “wise” the AGCO is reviewing the advertising standards and that the government agency’s marketing complies with the regulator’s standards. 

“Our feedback to them is in line with your feeling, I guess, from a consumer perspective... that the amount and the nature of the advertising can sometimes be seen as offensive,” the OLG CEO told committee members. “The use of celebrity endorsements, for example, from… athletes or celebrities, as the case may be, I know is one of the areas that AGCO is looking at as they review the standard.”

The OLG advantage

OLG’s iGaming business is separate from and competes with the new market, which flows through a government agency called iGaming Ontario. While OLG used to be the only authorized iGaming operator in Canada’s most populous province (in addition to offering lottery products and being legally responsible for brick-and-mortar casino gambling), now it faces an army of rivals. 

That competition will affect the amount of money OLG provides to the provincial government, and the company is one of Ontario’s largest non-tax sources of revenue. What’s more, OLG’s iGaming business is supposed to be a source of growth for the company, especially as digital gambling grows in popularity. 

Hannay said net profit to the province from OLG's digital business for its fiscal year that ended March 31 is expected to be $302 million, which would be more than what the competitive iGaming market provided to the provincial government in its first year. The public accounts committee also heard that OLG’s share of the overall iGaming market in Ontario is around 20%.

The purpose of Monday’s meeting was to consider the review Ontario Auditor General Bonnie Lysyk did on government-owned OLG last November, as part of her 2022 annual report. 

Lysyk found, among other things, that OLG was seeing slower growth of internet gambling revenue following the introduction of private-sector operators of online sportsbooks and casinos. While OLG booked $108 million in iGaming revenue for the three months ended September 2022, up 7% from the previous quarter, the private market generated $267 million in revenue, up 65% quarter-over-quarter, for the same period.

“Although a part of this growth could be attributed to iGaming Ontario adding six new operators, average monthly spending per active player on iGaming Ontario websites also increased by 25% over the same period,” Lysyk’s report stated. “There would be a significant revenue advantage for the Province if OLG’s Internet gaming revenues could be maximized… the Province receives approximately 45% of OLG’s Internet gaming revenue, compared to only 5.7% of gaming revenue from play on private Internet platforms registered with iGaming Ontario.”

Making progress

Lysyk's office made several recommendations to OLG, including creating a "comprehensive strategy" for introducing new products, exploring options to offer more real-time games, and leveraging its lottery business to drive customers to its iGaming business.

OLG, meanwhile, said it anticipated maintaining an iGaming market share of around 25% to 30% in Ontario and forecast its revenue from online gambling would hit $530 million by its 2025-2026 fiscal year. The company planned to maintain this market share with faster product releases, live dealer games, and other customer-acquisition strategies. 

“OLG plans to expand its live dealer category and is currently exploring the implementation of new products such as peer to peer poker,” the company said in its response to the AG. “OLG will also seek to further expand by introducing its core lottery players to other online gaming products that are offered by OLG, and will include this ‘cross play’ metric as a key performance indicator for performance management purposes next fiscal year.”

Hannay said Monday that OLG has completed or made progress on 76% of “actions related to” the auditor general's recommendations in last year’s report.

“We agree with the auditor general that it is important to maintain a competitive OLG online gaming offering, particularly in the new, open, and evolving online gaming market in the province,” Hannay told committee members. “As a result, we're updating our iGaming strategy to include more comprehensive information on market share, and we will monitor market share quarterly and we'll adjust our strategy where required.”

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