As sports betting operators continue battling the entrenched gray market outside Ontario, NorthStar Gaming announced a move last week aimed at helping its performance in other Canadian provinces as they open for regulated online gaming.
NorthStar Gaming announced it entered an agreement to purchase Slapshot Media for $1.3 million. Northstar Gaming operates NorthStar Bets for Ontario sports betting. Slapshot Media provides management services to Spreads.ca, an iGaming site owned and operated by Abenaki Council of Wolinak, a sovereign First Nation.
The Slapshot Media acquisition is meant to help bolster NorthStar’s position in other Canadian provinces as they open regulated markets for commercial gaming entities. This comes as former gray-market operators like bet365 are believed to be leaders in Ontario. While Ontario is the only province open to commercial entities, other markets like British Columbia and Alberta could model industry regulations on Ontario in the future.
“The acquisition of Slapshot expands our ability to enter new markets faster as we look to introduce NorthStar Bets to consumers across the country,” NorthStar CEO and founding partner Michael Moskowitz said in a release. “We are hyper focused on growing the reach of NorthStar and this strategic acquisition and partnership further positions NorthStar for rapid growth into new markets within Canada.”
Sportsbooks note Canada difficulties
Heading into the Ontario launch, regulated North American operators like DraftKings conceded former gray-market operators had the upper hand.
“Due to the presence of gray-market operators, many of which have been present in Ontario for several years, we do not believe that the timing of our launch will have any impact on the share we are able to achieve in that province,” DraftKings CEO Jason Robins said in May 2022.
The province’s market reports do not break down market share by operator, but multiple sources told LSR bet365 is the likely market leader in Ontario.
Last month, Coolbet pulled out of Ontario but remains active in other unregulated Canadian provinces. A company spokesperson said the “highly competitive and promotional nature of the Ontario market did not present an acceptable return.”
Canada sports betting in NorthStar sights
NorthStar Bets launched in Ontario in May 2022. The company was formed shortly after Canadian lawmakers amended the criminal code to allow single-game wagering.
NorthStar Gaming shares an owner (TorStar Corp.) with the Toronto Star. In February, Playtech invested $9.2 million into NorthStar Gaming to help with future market growth and technology updates.
Building on the Playtech investment, NorthStar Gaming executives hope the Slapshot Media will “open up the Canadian market to the NorthStar brand outside Ontario and materially expand the addressable market available to NorthStar.”
Spreads.ca will not be available in Ontario as it continues to build out databases for NorthStar Bets in other provinces.
Former gray-market books in control?
The commercial Ontario iGaming market launched in April 2022 and has grown each quarter. Provincial regulators release sports betting revenue data quarterly, albeit somewhat lacking in information.
Since April 2022, Ontario bettors have placed a combined $26.5 billion in iGaming and sports betting wagers. The fourth quarter included a 244% handle jump compared to the first quarter of action.
One of the primary goals of regulators was to migrate gray- and black-market operators to the white market after they enjoyed a decades-long head start. The Alcohol and Gaming Commission of Ontario allowed a long runway to switch over before ultimately beginning to crack down on operators in November 2022.
Major international sportsbook operators made the switch, including:
- Sports Interaction
Evolving Ontario sports betting
Since its April 2022 launch, the commercial Ontario iGaming market has changed, including the October crackdown on gray-market operators. In-person sportsbooks began opening at Ontario casinos in January.
More recently, regulators proposed adjustments to an already strict set of advertising rules, which contribute to the likely success of former gray-market operators with existing databases. A comment period is open on proposed rules prohibiting the use of celebrities and athletes in sports betting advertising.
The comment period ends May 8.
Sports betting outside Ontario?
Outside of Ontario, Canada sports betting is limited to provincial lottery companies. While most provinces have yet to make any move toward opening to commercial entities, several could in the future. Many operators are still doing business in an unregulated environment in those provinces.
Alberta Gaming, Liquor and Cannabis is “closely monitoring” Ontario’s open market, per the CBC. The province includes Edmonton and Calgary.
The CBC also reported other provinces could expand beyond the lottery offerings, like British Columbia and the provinces that make up Atlantic Canada.