Residents of Ontario, Canada ages 19 and up could officially bet on sports online and participate in online gaming beginning Monday.
Here’s a look at how the market sizes up and some of the largest players in the territory.
What Happened: Ontario is now offering online sports betting and online casinos, which has brought dozens of companies to apply for licenses.
PlayCanada calls for online casino revenue to be significant higher than that of online sports betting, which could impact the number of companies that apply and where their focus lies.
“Sports betting gets more attention, but it will be online casinos that deliver the truly eye-popping numbers,” PlayCanada.com lead analyst Robyn McNeil said.
Online casino revenue was 153% higher in 2021 for U.S. markets than sports betting in states where both were legal, according to the report.
Ontario is now the sixth territory in both the U.S. and Canada to legalize and regulate online casino gaming and online sports betting, with Connecticut, Michigan, New Jersey, Pennsylvania and West Virginia being the others.
Why It's Important: Along with producing more revenue and being more profitable, online casinos are also less seasonal than traditional sports.
Canada passed legislation last year that led to provinces being able to offer online sports betting and online casino platforms. The country has a population of around 38 million people, similar to the state of California, which could offer a large opportunity for companies.
Ontario is the most populous province in Canada, with over 14 million people. The territory would rank fifth by population in the U.S., showcasing how important Ontario could be given the excitement surrounding any top 10 population state that launches online gaming in the U.S.
PlayCanada previously listed the market size at $25 billion for annual wagers in Canada in a best-case scenario for every province and territory. The report called for Ontario to be worth $11.1 billion in annual wagers and $800 million in operator revenue annually.
Related Link: How Much Is Sports Betting In Canada Worth?
The Stock Plays: More than 25 operators who launched online sports betting and/or casino operations on Monday. Among them are several publicly traded companies:
Caesars Entertainment (NASDAQ:CZR)
BetMGM, a joint venture between Entain and MGM Resorts International (NYSE:MGM)
FanDuel, owned by Flutter Entertainment (OTC:PDYPY)
BetRivers, owned by Rush Street Interactive (NYSE:RSI)
theScore, owned by Penn National Gaming (NASDAQ:PENN)
The Canadian Sports Betting Landscape: One company that has not launched its Canada with an sports betting or online casino business yet is DraftKings Inc (NASDAQ:DKNG).
“DraftKings is working closely with provincial regulators to bring our top-rated mobile sportsbook and casino products to Ontario as soon as possible,” the company told Wagers.
The exclusion of DraftKings from the provincial launch could create opportunity for smaller players to gain market share and offer promotions ahead of the company's entry.
Several analysts highlighted that the Canadian market is not priced into DraftKings estimates.
Among the potential winners in the region could be theScore and BetMGM.
TheScore is one of the most well-known sports media brands in Canada, which could lead to instant brand recognition in a push for online sports betting. The company was acquired by Penn National, and Barstool Sports founder Dave Portnoy previously highlighted the strong brand awareness of theScore and synergy opportunities between Barstool and theScore. Both units are partially owned under the Penn umbrella.
BetMGM could have a smart approach by appealing to hockey fans, something for which Canada is certainly known. The betting operator has partnerships with Wayne Gretzky, Connor McDavid and The Hockey News.
Ontario marks the 23rd market for BetMGM. The company continues to show strong market share ranking in the top three in many markets for online sports betting and ranks in the top three for online gaming in many markets as well.
Additional territories and operators could mean good news for the companies that provide data from sports contests. This market is dominated by two major players: Sportradar AG (NASDAQ:SRAD) and Genius Sports Limited (NYSE:GENI).
Genius Sports has an exclusive deal with the NFL, which is a huge catalyst going forward. In Canada, the partnership Sportradar has with the National Hockey League could be a big deal for the company with the legalization happening during the NHL season and the country being a huge market for hockey.
