Stakeholders Bullish On Alberta Sports Betting Potential

Written By

Updated on

Alberta sports betting

While commercial Alberta sports betting likely will not launch until next year, projections for the market show it could see significant action. 

At last month’s Canadian Gaming Summit, Alberta sports betting was a major focus as it was confirmed the province will follow a similar commercial online gambling model to Ontario. Both at the conference and in the ensuing weeks, stakeholders and analysts have been bullish on the province’s potential. 

“Per capita, Alberta punches above its weight,” Troy Ross, president at TPM Public Affairs, said on a panel at CGS. “It if follows a similar model, it will have a similar result, surpassing, at least, conservatively, C$100 million in new taxes.”

Alberta building on Ontario framework

Martin Lycka, SVP of American regulatory affairs and responsible gambling at Entain, called Ontario the “platinum standard of iGaming regulation.” With that, he said Alberta has a clear option in Ontario to follow, which Dale Nally, Minister of Service Alberta and Red Tape Reduction, confirmed later at the conference the province would do.

With a little “massaging,” of the Ontario model, Lycka sees big potential in Alberta.

“It could do as well, if not even better than Ontario,” Lycka said.

One of the panels at CGS was titled, “Alberta: A New Gold Rush?”

Alberta sports betting projections

In a note to clients, JMP Securities projected the Alberta online gambling market could surpass $700 million in revenue by the third year. That would make it North America’s eighth-largest online gaming market.

Sports betting would account for approximately $200 million of that, according to JMP’s projections. Meanwhile, Eilers & Krejcik Gaming estimates the revenue could reach nearly $900 million at maturity.

Ontario recorded $1.5 billion in operator revenue in its second full year of operation. Ontario has a population of nearly 15 million, while Alberta has approximately 4.4 million residents.

Gray market a challenge in Alberta

Canadian provinces are not new markets, so the transition to a regulated commercial industry requires bringing gray market operators into the legal framework. That means the tax rates need to be attractive for those companies. 

“We are not dealing with new markets,” said Amanda Brewer, senior executive at the Canadian Gaming Association. “We didn’t have prohibitions, so if you’re trying to get entrenched operators to come into compliance, the tax rate needs to be attractive, nothing north of 20%.”

Ontario regulators allowed a lengthy transition time after its April 2022 launch. By the time they shut the door to gray market operators in October 2022, they were pleased with the results.

Will all gray market operators come?

Even with a reasonable tax rate, HLT Advisory Managing Director Rob Scarpelli said not every operator will transition to the legal market.

“I don’t know an open market in the world that eliminated the black market,” Scarpelli said.

Scarpelli said the regulators need to lay out the goalposts so the operators know the playing field. They also need to create a model to show the operators the province cares and respects their respective investments.

Tying sports betting to Alberta casinos?

An aspect many at the CGS critiqued about Ontario was its lack of land-based casino involvement. Stakeholders believe Alberta could help boost its early performance by getting the province’s 29 land-based casinos in on the ground floor.

“Alberta has a freer and open attitude to let those casinos do what they need to do to take advantage of the opportunity,” Brewer said. “[They can] partner with sportsbooks, get and launch skins. It’s a true omni-channel experience.”

Lycka said connecting licenses to casinos is an efficient model and pointed to Atlantic City‘s continued existence despite New Jersey‘s robust online market as an argument that claims of cannibalization are a falsehood. “It’s two-way traffic,” he said.

Photo by Shutterstock/alberto clemares exposito