Can Alberta Match Ontario's Online Gambling Boon? Analysts Are Split

^{Alberta (left) is all smiles at the possibilities expanded online gambling presents, based on what its neighbors to the east in Ontario (right) experienced three years ago. (Photos: Rapisan Sawangphon, Sean Pavone / Alamy)}

On the week that Alberta opens its doors to the international online gambling market, the question on everyone’s lips is: Can the Western Canadian province really recreate the success of Ontario?

As of Monday (July 13), operators beyond the provincially-owned PlayAlberta have been permitted for the first time to obtain a gambling licence and accept customers within Alberta. 

Industry experts tell Casinos.com that building on lessons from Ontario’s success puts the second province in Canada to step out of the shadow of its grey market in the perfect position to succeed.

Ontario’s transformation into a flourishing iGaming and sportsbetting market, loaded with locally licensed operators, is broadly viewed as a major success.

Revenues have soared in the years since 2022, with corresponding tax returns for the provincial government.

Analysts say that Alberta is poised for an even more dramatic launch.

“Alberta's nationally high level of disposable income per capita and deep roster of major brands ready to go live on day one should position it to launch with an even bigger bang (population-adjusted) than Ontario four years ago,”  Daniel Stone, director of data & insights at regulatory intelligence firm Vixio, told Casinos.com.

The Ontario Blueprint

In its first full year, Ontario’s re-regulated online market generated C$1.26bn ($890m) in gross gambling revenue (GGR), before climbing more than 70% in its second year to C$2.4bn ($1.7bn).

The attraction to legislators in Alberta is obvious. In its most recent annual report, the Ontario government announced that it had earned C$2.04bn in tax revenue from online gambling since the market opened. According to its most recent monthly report, iGaming Ontario saw record online casino revenues in May -- C$9.48 billion, for a 17% year-over-year increase.

Player protection success is harder to measure, but at the very least Ontario has definitively succeeded in bringing the vast majority of its gambling activity into the regulated market.

An April survey by the Alcohol and Gaming Commission of Ontario (AGCO) found that 91.1% of gamblers in the province were wagering with regulated operators. That compares to less than 30% in the months before licensing began in 2022.

Like its Eastern cousin, Alberta has also grown a flourishing grey market over the past decades. Prior to this year, its online environment was largely populated by operators with a fluctuating commitment to responsible gambling, based in far flung jurisdictions well beyond the reach of provincial authorities.

Many of those operators have now taken up the opportunity to enter the Albertan licensed market, on the condition that they cease all grey market activities.

A similar amnesty approach was widely credited in Ontario as the primary driver in moving players into the regulated space and Alberta officials will be hoping for the same upswing.

Where Alberta Might Have an Edge

On a very basic level, the answer to the central question of whether Alberta can deliver the same raw revenue output as Ontario is a clear ‘no’.

That’s simply a consequence of headcount, as at 16.1m, Ontario’s population is more than three times the size of Alberta’s 5m.

However, that figure still puts Alberta at the same scale as some entire nations, including strikingly close to the 5.6m residents of Finland - a European nation currently generating significant gambling industry excitement as it goes through its own re-regulation program.

So while GGR may not skyrocket all the way to the heights of Ontario, the province still has the potential to be one of the world’s most exciting new markets.

There are also hopes that Alberta’s oil-rich economy and low levels of income tax will see its residents punch above their weight.

The average Albertan has a gross domestic product (GDP) almost 30% higher than their countryman or woman in Ontario, fueling belief that the provincial population will have the financial muscle to drive high revenues.

Alberta has also borrowed liberally from Ontario’s well regarded regulatory model, although with certain tweaks designed to avoid some of the hurdles encountered by the first-mover province.

These include more explicit taxation splits and the fact that Alberta launches on Day 1 with a market-wide self-exclusion system.

Alberta is also starting with tougher rules on advertising. following public discontent and operators who, in the view of the Ontario regulator, pushed the boundaries of acceptability.

In particular, the role of sports stars in gambling marketing has been limited strictly to promotion of safer gambling tools.

“Alberta has taken real lessons from Ontario, and it shows,” said Mike Venner, a director at Advanced Compliance Technology, which is preparing to offer its services to Alberta’s newly licensed operators.

“That’s a strong foundation to build from, and it’s a good sign of how seriously Alberta is taking compliance, anti-money laundering, fraud prevention and market integrity from day one,” he told Casinos.com.

Alberta by Numbers 

Despite some modest variations, it’s undeniable that the broad strokes, regulatory structure and consumer appetite are highly similar in both provinces, which has analysts optimistic that Alberta can repeat Ontario’s success.

Economists at Vixio estimate that the regulated Alberta online gambling market, including incumbent PlayAlberta, will generate gross gaming revenue of C$967m ($683m) in its first full year of operation, rising to C$1.7bn ($1.2bn) by 2029.

“Looking beyond this year, the consistently strong upward momentum maintained by online casino operators in Ontario since 2022 augurs well for Alberta's growth potential,” said Stone, the Vixio data director.

Representatives from the gambling industry appear to share this optimism. Izabela Slodkowska-Popiel, of game supplier Wazdan, says that she believes Alberta is poised to succeed.

“Ontario has demonstrated that a competitive framework can effectively channel players towards licensed platforms, while also providing operators and suppliers with valuable insights into compliance, localisation and player expectations,” she said.

“Alberta can build on those lessons, which may allow its market to develop more quickly. We expect Alberta to become an important and highly competitive market in its own right.”

A Test Case for the Rest of Canada

Belief in Alberta’s ability to prosper is so strong, that some analysts are already beginning to look further afield.

"Ontario has established itself as not only one of the largest regulated online gambling markets on a global scale, but also a strong model of regulation for other jurisdictions to look to,” explained Vixio’s chief analyst James Kilsby.

“Launch of the Alberta market will now provide a critical proof point for how well the Ontario model can be exported to other provinces in Canada. If Alberta is equally successful, then that may encourage further provinces to liberalize their online markets,” he said.