Canada could become a $2 billion-a-year sports betting market, study finds

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anada could grow into a $2 billion-a-year sports betting market according to a white paper authored by market analyst company PlayCanada.

According to the paper, co-authored by Eric Ramsey, Dustin Gouker, and Robyn McNeil for the Play Network of sites, “under an idealistic hypothetical scenario in which all Canadian provinces and territories authorize competitive online sports betting,” operators could combine to generate as much as $2.02 billion in annual revenue on $25.3 billion in total wagers.

With a 15% tax, local governments would collect upwards of $300 million in associated taxes per year, although the Canadian Gaming Association expects a rate closer to 20%, which could further boost the provincial haul by another $100 million.

The report comes as Friday, August 27 marks a new era for sports gambling in Canada as Bill C-218 comes into effect, meaning residents can now make single-event sports bets. Before the passing of the law, consumers were only permitted to wager on at least three games or more.

“These changes to the Criminal Code will allow provinces and territories to use revenues to fund programming, such as health care or education, as they do with other lottery revenues,” said Justice Minister David Lamett earlier this month when announcing the August 27 date.

Happy to be in the Niagara area, where I grew up, to make a great announcement with @Chris_Bittle and @VBadawey. Single sport betting will be completely legal as of August 27th. All Canadians will benefit from safe and responsible gambling and the profits that come with it. pic.twitter.com/AShpKGoUeP

— David Lametti (@DavidLametti) August 12, 2021

The British Columbia Lottery Corporation (BCLC) will offer single-event sports bets via its PlayNow.com platform, joining the Ontario Lottery and Gaming Corporation, also launching single-event wagers starting August 27 through its betting platform Proline+.

“This is a landmark moment for BCLC and our players,” said Lynda Cavanaugh, BCLC CEO. “We’re excited to enhance our offerings on PlayNow, the only gambling website operating in BC where revenue goes back to British Columbians by supporting provincial initiatives like healthcare, education and community programs.”

As variables still remain, as provinces and territories consider the expansion to sports betting, Canada at a mature stage could “generate billions of dollars of gross proceeds and hundreds of millions in taxes and fees annually,” further states the “Legal Sports Betting in Canada: A preliminary analysis of the prospects of single-game wagering” PlayCanada report.

“Like the U.S., the Canadian market will be decentralized, leaving each province and territory to adopt legal sports betting and then create their own regulatory frameworks,” explained Gouker, lead analyst for the Play Network.

The plus side of #sportsbetting is here with NEW PROLINE+ online betting. With Single Event Betting & more. Register now.

— PROLINE (@OLGproline) August 27, 2021

Because of that decentralization, the expert believes “many questions remain” about what Canada’s market will look like once it has been built out. However, Gouker believes it is safe to say that, at the moment, sportsbooks view Canada “as one of the largest single remaining opportunities in North America.”

According to the paper, by the third year, as much as $25 billion in wagering could be generated annually, more than 80% through online sportsbook operators. Ontario would be the most prized Canadian market, “with a potential to generate $11.1 billion in wagering and more than $800 million in operator revenue” on an annual basis, making it one of the largest markets in North America.

One of the variables still remaining is which structure will the market take in every province adopting single-game wagering, whether it is an open market with numerous sportsbooks, or a closed model with tighter limits in total amount of operators.

This decision “can have far-reaching effects” on the performance of each market. PlayMarket believes Canada will be home to both types of markets, although remarks that “in the U.S., open markets offer broader benefits for the state and its consumers.”