The Business of Ontario Online Casinos

Since it was fully regulated and opened on April 2, 2022, the online casino market in Ontario has thrived. In its first year, the industry achieved approximately CAD$1.4 billion in gaming revenue from total bets of around CAD$35.6 billion. These figures have attracted the attention of casino industry brands from around the world that see Ontario as a key new iGaming market.

When you look at other North American online casino markets like New Jersey compared to the market in Ontario, there is still some way for the fledgling market to catch up, as New Jersey made around US$5.21 billion in 2022. However, experts are impressed by the financial achievements so far in Ontario and envisage a positive future for the regulated and licensed industry.

Regulation and licensing of online casinos in Ontario

Gambling in Ontario is regulated by the Alcohol and Gaming Commission of Ontario (AGCO) and managed by both AGCO and iGaming Ontario. There is no limit to the number of gaming operators that can compete for licensing in the province.

The rules of the regulated online casino market in Ontario are stringent. Every casino is expected to adhere to its customer (KYC) and anti-money laundering (AML) standards. In addition, they must adhere to the Proceeds of Crime and Terrorist Financing Act (PCMLTFA), under regulation by the Financial Transactions and Reports Analysis Centre (FINTRAC).

This high level of regulation has been widely popular with players. According to a study in March 2023, 85% of people who gambled in Ontario did so at regulated sites. This is a major turnaround as before the open market was launched, around 70% of online gambling was done at unregulated sites. This level of popularity is likely to make entering the Ontario market an attractive business opportunity for an increasing number of casino brands.

What is the taxation situation for Ontario online casinos?

The taxation situation in the Ontario online casino market is also attractive. Currently, online casinos are taxed at a rate of 20% compared to the 55% taxation levied on land-based casinos.

When compared to other online gambling markets in North America, taxation in Ontario remains attractive. Although the rate is higher than the 15% levied in New Jersey, it’s considerably lower than the 51% tax on online casinos in New York.

Available online casino games in Ontario

Online casinos regulated in the Ontario market provide a range of iGaming activity for players. Types of games regulated for players to enjoy include slot machines, table games like blackjack, poker, and roulette, live casino content, lotteries, and bingo. Many online casinos in the province are also licensed to provide sports betting options.

Casino brands and gaming software providers in Ontario

Currently, there are 45 casino brands licensed as operators of online casinos in Ontario. These brands operate 74 online casino sites. Brands licensed in the province include American Wagering Inc, Apollo Entertainment Ltd, Bally’s Canada Inc, Delta iGaming Inc, Ellipse Entertainment Limited, FanDuel Canada ULC, NorthStar Gaming (Ontario) Inc, and Skill On Net Ltd.

These brands use game software from top operators, including Evolution Gaming, Pragmatic Play, NetEnt, Playtech, Relax Gaming, IGT, and Red Tiger. The number of casinos operated and games available is likely to grow as the market ages and expands.

Restrictions on Ontario online casinos

The regulated online casino industry in Ontario has several restrictions in place. These restrictions include:

• A minimum legal age of 19 for gambling in online and land-based casinos.
• The banning of autoplay features on online casino games.
• A minimum spin speed of 2.5 seconds for slot games.
• The banning of advertising of bonuses and promotions anywhere except on casino websites.

There is also discussion taking place about prohibiting the use of celebrities and characters that appeal to young people in online casino advertising. The ban has not been finalized yet but will be introduced quickly once it’s agreed.

The future of Ontario online casinos

Given the positive start for the online casino industry in Ontario, experts predict further rapid growth and believe that revenue will reach CAD$1.5 billion by 2026. The growth in revenue will be boosted by new operators entering the market, attracted by the 20% taxation rate. As the market expands, it will become one of the largest in North America. The success of the regulated online casino market in Ontario is likely to lead to the regulation of online casinos in other Canadian provinces.

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