Since April 2, 2022, Ontario has had a regulated online gambling sector. In the first year following its launch, the sector generated revenue of just over $1.48 billion. As the sector continues to grow in its second full year of operation, opportunities and challenges exist.

Ongoing regulation by the Alcohol and Gaming Commission of Ontario (AGCO), in collaboration with iGaming Ontario (iGO) is both an opportunity and a potential challenge. The European-style regulation of the market means that overseas operators are not required to cease activities in other Canadian areas to offer services in Ontario. So, some of these Ontario licensed casino sites operate in a variety of markets, giving them an opportunity to optimize revenue.

In addition, regulation has proven to be popular with players. In March 2023, more than 85% of players asked said they used regulated sites. This is a big turnaround, given that 70% of all gambling took place on nonregulated sites prior to the launch of the open market. For providers, there is a big opportunity to benefit from the popularity of regulated gambling.

In contrast, ongoing regulatory activity could present a challenge to providers. For example, the recently announced ban on celebrities and sports stars in gambling advertising takes effect from February 28, 2024. This development could have an adverse effect on the advertising revenue of online gambling providers.

Some experts also believe the number of operators in the regulated market represents a challenge to future growth due to the potential of saturation. It may seem as though this is a fair assumption given that there are more than 75 operators in the province, an increase from 18 when the market first launched.

However, the 50% growth rate in the market over its first year of operation tells a different story. This figure suggests that Ontario and its 14.5 million citizens can support significant future growth, and the saturation point is not even close yet.

This potential for growth will be supported by technological advancements that create further opportunities in the regulated online casino market in Ontario. One of the biggest opportunities in this area is the development of the smartphone market. Ontario already has a smartphone penetration rate of 89%, which is higher than the 86% penetration rate for Canada overall.

These penetration rates are only likely to grow, bringing igaming content to more people. Developments such as increased mobile processor power, enhanced graphics, and a growing 5G network, give developers an opportunity to create a better user experience for those people they reach.

Considering the overall opportunities and challenges for the regulated online gambling sector in Ontario, the future seems to have a lot of potential, although there will be obstacles for operators to overcome. Forecasts support this observation as they suggest that the market should achieve revenue of around $1.5 billion by 2026. If this figure is realized, it will place Ontario as one of the top-performing online gambling markets in North America.