LSR Q+A: Deloitte Advisor on Canada Sports Betting

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Canada sports betting

As sports betting in Canada continues to evolve into its next form, there are plenty of eyes on the industry.

Last week, Ontario regulators announced the commercial online gaming market will open April 4. Approximately 30 operators are looking to go live, including PointsBet and NorthStar Gaming, both of which have been active in Canadian partnership announcements in recent weeks.

Ontario sportsbooks could generate up to CAD $570 million in sports betting revenue this year, according to an Eilers & Krejcik estimate. BetMGM, FanDuel and theScore will be among the other sportsbooks looking to capitalize on the Canadian market.

Eyes on Canada sports betting

Jeff Harris, national sports business advisory leader in Canada at Deloitte, is one of those people watching Canada sports betting closely.

As Bill C-218 was making its journey through the Canadian government, Deloitte projected the Canadian market could attract up to CAD $28 billion in bets annually within five years of launching.

To get a better grasp on Canada, and specifically Ontario sports betting, LSR recently caught up with Harris. (Editor’s note: Some responses have been condensed.)

LSR: We’re nearing Ontario’s date to open. How do you think that will shape the future of Canada sports betting?

Harris: A couple of things stood out to me. Beyond sports, the government communicated the standards apply to betting, betting exchanges, fantasy and esports. It gives perspective to what can be available.

Ontario, by population, would be the fifth-biggest US state. So there are going to be some different variables to consider when you look at the market as an operator. From the population perspective, the economic indicators to the presence we have in pro sports. It is definitely a market that is attractive. 

We’ve seen the activity in New Jersey and Pennsylvania and, most recently, in New York and it’s getting consumers excited. It’s getting sports organizations, media organizations, operators excited about, and the government, candidly, in the opportunities.

Will there be some nuance in what is successful? Will there need to be an understanding of our sporting landscape, an understanding the diversity of our fandom? But those are happy, important considerations for an operator’s success in Ontario.

LSR: What’s the opportunity from sports betting for the Canadian teams and leagues?

Harris: First, from a league and team perspective, is the understanding that (although) this is a lucrative partner category, (do) not to just look at it as another partner category. The opportunities from single-event reform really do justify a cross-enterprise approach. 

We believe these organizations can play a central role in shaping the fan experience. If we look at the assets the operators have been and continue to accrue, they operate at a confluence of technology, data, media and content and the next generation of customers. It provides opportunities to build an audience and greater breadth and depth of engagement. 

Yes, there is category excitement around the revenue that comes from that in particular. It’s not a category to sneeze at, but there is also the indirect opportunities to drive engagement and revenue growth.

LSR: It seems like media companies in Canada are ready to go with partnerships?

Harris: If we look at other jurisdictions, we’d expect an increased convergence of sports betting and media, whether that is fans having a choice to use a regular feed or a bet cast. 

Media organizations do need to be cognizant of over-saturation and fatigue with advertising and live broadcasts. Individuals need choice, whether that’s a lean-back experience or a lean-in experience, but not presuming the population wants the same thing.

The advertising revenue that will come through will be notable, as will the shoulder content. We’ve had some personalities repatriate here to Canada with headlines they’d be involved in the sports betting content that these organizations are putting out. I’m interested to see what that strategy manifests. 

I’m also curious to see what happens from a media perspective in so far as digital channels. If you’re somebody that’s reading a line for the first time, it’s not terribly inclusive and accessible. So what do they do to help grow the addressable market and promote responsible safe gambling? 

There does need to be a demystification. I’ll be looking for operators, teams, leagues to put forward some educational content with the objective of making it more accessible. 

LSR: Aside from Ontario, what other provinces are worth watching right now?

Harris: It was notable when the RFP was released that the Alberta Sports Coalition — the two CFL teams and two NHL teams — has the opportunity to offer retail sports betting at the stadiums and arenas. They want these options by 2022 as well. 

The other province that I’d like to highlight with a different approach is Saskatchewan. The Federation of Sovereign Indigenous Nations amended the gaming act to establish a new framework to establish an online gaming site. It’s a different approach and has indicated that it will be a 50-50 revenue share with the government …

I also think it’s a reflection that there’s a general push in Canada to modernize regulations and look for new revenue sources. 

The question and analysis being done are: What is the best way to do that? Is that best achieved through new products through existing lottery channels? Is it by inviting the private sector? A hybrid approach? 

There are a lot of eyes of Ontario, just to see ultimately the return to the province. Ontario could be a catalyst across Canadian gaming.