Commercial Ontario sports betting launched in April, adding fuel to an already growing technology industry in Toronto.
While sportsbooks clamored to enter ON sports betting, the online gaming industry had already established roots in the province’s largest city. The industry’s potential impact on Ontario is well-known by those in the business community in Toronto.
“This is a vitally important regulation, this is going create jobs, this is going to make Ontario continue to be a powerhouse in the gaming industry,” Toronto Stock Exchange Global Business Development Director Dani Lipkin said during an event April 4, the day commercial ON sports betting launched.
“Ontario, Canada, has done a phenomenal job in raising equity capital for those companies both at earlier and later stages. We want to continue to empower them with the capital they need for that growth domestically and internationally.”
Ontario sports betting foundation
Perhaps the most notable sports betting company with roots in Ontario is theScore. The media company’s sportsbook, theScore Bet, is operational in four US states and Ontario.
Last summer, the company announced an 80,000-square-foot headquarters in the Waterfront Innovation Centre in downtown Toronto. Its workforce has grown nearly 40% in the past year, Canadian Gaming Association President and CEO Paul Burns wrote in a letter to the National Post.
“We’ve been actively preparing for this opportunity, including aggressively hiring to further build out our Toronto-based workforce with a focus on investing heavily across technology and engineering,” theScore CEO John Levy said in a release. “TheScore has been part of the fabric of the Canadian sports scene for 25 years and theScore Bet launching in Ontario is the next step in the evolution of how we serve fans.”
Other Ontario companies are also getting into the gaming sector. For example, Toronto Star parent Torstar Corporation launched NorthStar Gaming last year.
Sportsbooks flock to Ontario for Canada offices
When the Canadian government altered its criminal code last year to allow provinces to regulate single-event sports betting in Canada, sportsbook operators started to look at Ontario for offices. PointsBet opened an office in Toronto with an aim to better understand Canadians.
Other operators have also opened outposts in Ontario, looking to secure market share. While these sportsbook companies target Ontario bettors, they also appear to see something else in the province.
Ontario tech industry is hot
The online gaming industry is not breaking new ground in Toronto. The city has pushed for several years to create a strong technology community, which includes the University of Toronto and University of Waterloo churning out researchers and engineers.
There are also plenty of coder schools, according to Matt Switzer, director of USA East for the economic development organization Toronto Global. Switzer said it is hard to put a potential economic impact figure on the sports betting industry so early in its lifespan, and to allow it a year or two to develop.
Technology companies have flocked to Toronto in recent years, so much so The New York Times published a story about it in March, “Toronto, the Quietly Booming Tech Town.” The city is now the third-largest tech hub in North America and has offices of major tech companies, including:
What makes Ontario attractive to online gaming companies?
While market access is important to online gaming companies, Switzer said there might be a more significant attractor: employable talent.
“Toronto is the third-largest tech hub in North America,” Switzer said. “Our tech ecosystem has grown faster than both San Francisco and New York. We can grow, retain and attract talent. We can attract folks from around the globe with open immigration, clear paths to permanent residency.”
Along with the existing general tech industry ecosystem, Switzer said the recent cannabis legalization offers a great parallel for online gaming. With a new industry comes growth opportunities for quality assurance, logistics, supply chain management, and programming.
Global perspective for Ontario sports betting
The quality of life and diversity in Toronto can help bring new eyes to the sports betting industry, said Daniel Hengeveld, vice president of investment attraction at Toronto Global. Nearly 50% of Toronto residents were born outside of Canada, which means there are hundreds of languages spoken in the metro area, Hengeveld said.
“It’s a value proposition for two reasons,” he said. “As more immigrants come here, they find family and they’re open to ideas. Two, for people doing machine learning and data science, it brings a new frame of mind.
“There’s all these great people doing AI work, which goes into the backend of sports betting platforms, so having that global perspective means programming on that global view is applicable to more markets.”
Thriving ecosystem in Ontario
Beyond the hiring pool, Toronto also offers a great place to live with the amenities of a major city, said Steven Salz, co-founder and CEO of Rivalry. Rivalry is an esports and sports betting startup headquartered in Ontario.
“I’m from here, born and raised. If I was going to do anything, I was going to build it here,” Salz said. “It’s just a good development and talent hub from an engineering perspective. It’s a good place to do innovation work, with a lot of tech commune. The government is friendly. It’s a helpful, fertile backdrop to build technology here.”
With its nuanced sports market, Ontario has most of the major sports, from the NBA, NHL, MLS and MLB to lacrosse, rugby and cricket. Switzer said that creates a “unique ecosystem” to partner with teams and test technology.