In this episode of The iGaming Show, we take a look at the first-year milestones and the future of Ontario and Canada’s online gaming market with Paul Burns, the President & CEO of the Canadian Gaming Association. We will discuss the achievements, regulatory framework, player experiences, and future implications for both Ontario and other provinces venturing into iGaming.
The iGaming Show, presented by Paramount Commerce, is a podcast that will analyze gaming industry trends with experts from various gaming organizations.
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Full episode transcript:
Varad Mehta: Hello everyone, and welcome to the 12th episode of The iGaming Show, presented by Paramount Commerce. I’m your host, Varad Mehta, and in this podcast, we analyze gaming industry trends with experts from various gaming organizations. But before we begin today’s podcast, I want to share some exciting news. The Paramount Commerce team is exhibiting at the 2023 Canadian Gaming Summit, which is happening from June 13 to June 15 at the Metro Toronto Convention Centre. Visit booth D110 and let’s discuss about how we can support your payment needs. Also, we’re hosting the party of the season Gaming & CO In T.O. Returns. For more information about all of this, please visit our website: paramountcommerce.com. In today’s episode, we’re looking at the first year milestones and achievements of Ontario’s and Canada’s online gaming industry with Paul Burns, the president and CEO of the Canadian Gaming Association. So without further ado, let’s get the show rolling. So Paul, last time we didn’t get to do this, but I wanted to ask you a few fun questions. Last time we began on a note that you had I think just received the Hall of Fame Award. So this time I’m not going to embarrass you like last time by comparing you to Drake and Celine Dion.
Paul Burns: Please don’t.
VM: But I’ll just ask you a few fun questions.
VM: So the first fun question is nowadays on the radio you hear like 80s music influence coming back. You see a lot of 80s influence just in fashion coming back. So what is one old school trend you’d love to see return once again?
PB: Oh, wow. I’m all for 80s music coming back because that was my time in university and high school and it was great. And I’m going to see The Cure next week in Toronto, so that should be fun.
VM: The second question is when you attended Northern Secondary School, what was your favourite place to visit around the place? Was it Sherwood Park? Or was it Sunnybrook?
PB: You know what, that’s funny. You spent a lot of time in the bleachers. That’s a pull. You did some research to find out where I went to high school. Spent a lot of time in the bleachers, didn’t go too far. Yeah, Northern was a great school only because pulled from all over the city and I have a lot of friends who actually lived in the annex. So that’s how I spent a lot of time downtown actually, even though I didn’t live too far from Northern.
VM: And last question is what is your favourite food dish of all time? Something that you have and it’s like absolutely peaceful. The perfect moment for you.
PB: Oh, wow. You know it’s, that’s a lot of choices. I didn’t get this size eating McDonald’s. I eat a lot of good food. I like to cook. You know what I have a weak spot for a well-grilled steak. That’s kind of the piece, that’s a bit of comfort food, I guess you could say. But grilling is nice. A nice grilled steak is always good. And hey, it’s barbecue season. I’m getting on it.
VM: There we go. See, we always begin on such a fun note with Paul. This is perfect. Now, going back into what we’re here to speak about, it’s been a year since we both spoke and a year has passed for Ontario’s iGaming market. There’s been so much development, so much to talk about. But just looking over the first year, what are some big moments that just strike to you that you would love to highlight these specific achievements in the first year of the regulated iGaming market?
PB: Well, I think we have to look at the 45 or so companies that have entered the market. Making that choice, recognizing that it was a unique opportunity in North America, being the only open license market. I think we needed to understand that appreciation of the broader market construct was attractive enough to want to come when given the opportunity. We’ve seen a very competitive marketplace emerge. And I think it’s a testament to the balance that the regulatory regime is while it’s strong and it provides great consumer protection, the operators understood it and they knew they could compete in it. And I think that was really the fun part that I think we all saw emerge that I think has been very good for everybody to see the experience, because I think we’ve had really good opportunities to get people in to understand the marketplace. Ontario, Canada in general is a very good gaming country. And so I think everybody, some people were surprised by it, some people already knew it. And I think we’ve seen a good, robust marketplace. So I take that away as real success that those companies chose to make the effort, put down the money and risk to come. We’re grateful for that, I think, to see that and we hope that it creates a market where they can all stay.
VM: For sure. I think you said something really interesting that people don’t realize that Canada was kind of active already in lose terms. But what sort of feedback or have you heard much from merchants coming to you that, “hey, this is amazing because people are already into it,” they just want to jump into the party? So have you heard a lot from merchants or have you heard from just talking to everyday consumers who are now getting involved in online gaming?
PB: Well, I think there’s two parts to that. One is that the operating companies that have chosen to come, some were here. We knew that there was an invitation for the grey market to come, and an overwhelming portion of that 45-plus companies came for the grey market. And I think that was a testament to, one, that if you create a regulated market, people do want to come to it, the conditions are fair. And I think that’s one. Two, that the market model was conducive enough for the innovators and startups to want to come and set something up as well. And so there’s been a number of those. And then when you look forward to how it’s going to evolve from here, I think customers are really thrilled with choice. I mean, that was one of the tenants the government set down was: consumer protection, consumer choice. Well, consumers have choice. And you talk to consumers and they’re like, hey, there’s lots to choose from here. There’s some neat things. Some people have gotten over any hump that they had, or misconception or not even, I wouldn’t use fear, that’s kind of too dramatic, but over online gaming because it’s offshore, I don’t where they are. But a lot of other people now, it’s like, yeah, I’ve always kind of wanted to bet on sports and no one was going to make the effort to go seek something out. I knew a lot of people who went to Vegas, they hung out at sportsbooks and spent time doing that, but otherwise they didn’t bet a whole lot or participated in pools or fantasy stuff. But I think you wanted to, the consumer is like, hey, there’s choice here, there’s some new things I’m open because I always said early on, I actually haven’t said it in a while, but there’s a lot of sports fans in Canada, and one of the parts of watching a game is maybe making a bet or two. It’s a social exercise too, even though people would be doing it on their phones. There’s a lot of chatter through WhatsApp and other things about how we’re all going to do and what we’re going to do this weekend. I think that that opened new opportunities for people to sort of say, hey, this is okay, it’s something I want to try. And I think we’ve seen that the results have been pretty impressive.
VM: For sure. Like a diverse population, you have diverse wants and needs. People are into one sport, two sport. Like here, there’s so many sports to choose from. But I was looking at the year-end results and they were like, I think 1.4 billion in revenue gained. It was absolutely amazing. So what sort of benefits have you seen for the province? Like economic benefits have you seen for the province after this year has passed?
PB: Benefit for the province has been seeing the jobs and the industry that’s being built here. Yes, there’s government revenue, there’s a bit of that, that’s terrific. But the real true economic impact of this is creating the online gaming and building the online gaming industry in Ontario and actually building upon what already was here, which is not insignificant. Ontario and Canada particularly, has a huge depth of talent available. There’s strong nodes in Montreal to the AI space, is doing some great work in that space for the gaming industry there. You’ve got a lot going on in the lower mainland in Vancouver. One of our board members, Scott Burton with FansUnite, he’s built a great platform. I think that there’s really good things going on all over the country. In Ontario in particular, home of PokerStars for 30 years, which a lot of people don’t, at least 25, don’t recognize that they’ve had almost 600 people working just north of Toronto in Vaughan for decades. They got to put their name on the door for the first time. They were working under a different. Company, like the folks at Rivalry and TheScore and NorthStar Bets. But the supplier community as well has thrived. And I think that’s the other side of what people have really seen, the economic benefit come from the supplier side. There’s been enormous amount of suppliers. I think many people were surprised by the number of suppliers that have come to the market to support operators. And the payment space is very robust. And Canada has a long history of being leaders in payment technology. So we’ve got all these attributes that we’ve just been able to unleash through one simple act of creating a licensed environment. And I’ve been telling this story for a while, we did events at ICE back in 2018 and 2019 saying Canada is a great place to come if you want to access the North American iGaming market. There’s tax credits in most provinces for digital development work. There’s a ton of talent. Canadian dollar is pretty favourable when you’re paying for inputs and you’re selling in other dollars. We’ve been trying to tell the story for a long time and it was one that we had to raise with the government in Ontario a few times through the process saying, hey, you know what you’re going to do here? You’ve got all these government programs that people are already using, but you’re just unleashing it for more people. But the licensing was the real key to say you’re welcome here, we want to have you here. And that was the tool, that was the piece that I think flipped the switch in many cases. And we’ve seen dozens of operators set up offices and development studios and continue to grow in the province and for me, that’s a real great success. Yeah, the government will make a few dollars on top of that, but they’re going to see more benefit from the jobs and the economic activity created through the whole licensing regime.
VM: For sure. And I think just going on that same thought, I’ve seen many land-based operators also open up sort of or maybe launch their online gaming platform. So what have you witnessed on that end? Because that in itself is adapting and innovating and going forward with the time. So what have you seen on that front? Because we’re talking about online gaming, but even land-based operators have come on this side as well.
PB: Yeah, the land-based industry supported this. They wanted access to customers, their own customers that would come into their properties, they’re able to gamble with them online. It’s worked out okay. It hasn’t been great because the way the model has been created and the nasty term of connect and manage, that everybody has to follow that no one understands what it means because everybody’s taking a different definition of it, created two different models for the land-based operators. So they have to follow their own relationship with OLG, and then they have to create a new relationship with iGaming Ontario. Two regulatory structures, two contracts. That’s a lot of red tape in my mark. And that wasn’t probably the best way to help them set up their online space. But they’re doing it. They’re investing it because for them, it’s being able to create that omnichannel experience for customer, create that extension of brand where they haven’t been able to. And I think that’s important. Those companies invest billions of dollars in this province, employ tens of thousands of people as well. And so ensuring that they have the right environment to succeed and it’s not to the detriment of anybody else. It’s being able to compete on a level playing field is something we want to see. And so there’s still some work to be done in that space for them to do that. But it’s important because their experience Mohegan Sun, which is the operator of Fallsview Casino in Niagara Falls, saw the impact of sports betting, online sports betting, attached to their property in Connecticut. And they saw younger people start showing up in their casino. They saw people. They were getting new customers too. And so that was important for them because those who like to bet on sports or play table games or whatever, also people like to go to casinos too. So it’s being able to have that social experience combined with the online experience, which I think people appreciate. And that’s the plus for the land-based operators wanting to get into the space. And we’ve seen them starting to do that.
VM: I think you mentioned something really important at the beginning of this conversation, which was whatever initiative was rolled out in regards to the regulated iGaming market, something that was at the core of all of this was consumer protection. And part of consumer protection is having great responsible gaming initiatives that the province has. And then you work with other bodies to ensure that consumers are better protected. So what sort of trends or what sort of initiatives have you witnessed this past year, and what responsible gaming measures do you see rolling out this year? Because that has been like a really important topic as well.
PB: It has, and it was at the forefront of what the regulatory model. It was clear, Canada has been a world leader in the responsible gaming space, from research to programs. We export a lot of our work to other parts of the world. And the AGCO when they set about setting the regulatory structure and working with iGO, there’s features that here that don’t exist anywhere else, especially in North America, for operators already. So very strong KYC at the front end. In the grey market people could drop an email, make a deposit. No one would ask you for a piece of ID or see anything. You can’t do that in Ontario anymore. And that’s why minors don’t get access, because you need an ID. It’s verified. Your location is verified. It’s a very stringent process to be able to open an account. That’s one. Two, once that account is open operators are required to monitor players for risky play. So within their own operations, understanding a player’s patterns, how they’re behaving, what they’re doing, to be able to make sure that they have a healthy relationship with their customers. Other things, like customers have to opt-in to receive bonusing and incentive emails and other promotions. You don’t just get them automatically, you have to opt into those. There’s no mass market advertising of bonusing and incentives, which has been the mainstay of a lot of the US sports betting business. That doesn’t happen here. Yes, they’re available, but they’re not in mass market advertising. So when you look at those things, you look at the RG check requirements that everybody’s responsible gaming programs are audited, and now they’re into a consultation with iGaming Ontario about operators, their commitment to responsible gaming through dedicating a portion of their GGR. These are all really saying the RG was at the forefront of this, player protection was at the forefront of the Ontario model.
VM: For sure. My last question has to be taking into account what you’ve seen this year. What sort of innovations or trends do you see following this year, whether it’s related to Ontario or even Canada in general? What sort of innovations or trends are you going to see in Ontario and other provinces? Do you see more iGaming markets or progress there? What’s your hope, and then what do you expect to see?
PB: Well, I think other jurisdictions are watching Ontario’s experience, I think, and learning from it. I think a lot of early misconceptions that I think have melted away. I think everybody understands, the telling points for me were, the AGCO did research with Ipsos at the anniversary, and it showed that 85% of those who gambled, used all or most of their gambling on a regulated site. That’s really the objective. It was to bring in greater consumer protection. Obviously choice came with that. But I think that what they’ve seen is that not everybody was convinced that, oh, they’re not all going to come. People won’t sign up, and they have an option to stay out and be unregulated and not pay taxes and not follow these rules. You know what, the industry proved that it actually does want regulation. It welcomes regulation. It wants healthy relationships with its customers. And I think that’s important to recognize, and I think the other jurisdictions are seeing that now. No, I think what you’re seeing in other jurisdictions, always that they’re learning, they’re watching, but there’s only really one way to solve this in any kind of way, and that’s dealing with regulation. The Internet has been a great disruptor. The Canadian government chose not to regulate the Internet until very recently, and only selectively. And I think as a disruptor, you got to adapt, and you can’t just say, well, we’ve always done it this way, and we’re going to keep doing this way. So within that, though, there’s a lot of room for the provinces to create a regulatory model with a lot of choices. It’s not limiting at all. And Ontario chose what they felt was best for the province of Ontario. They did a lot of consultation, a lot of work to get to this point, and we’ve encouraged other jurisdictions to do the same. Start having conversation with the industry, start having conversations with your gaming industry within your province that is there today. Through that, you’ll find the best path. And I think the trends in any way, I think we’ll see, always continue to see product innovation. I think from new features inside of sports betting, I think there’s still lots of room for broadcast innovation when it comes to sports and sports betting. So I think with a healthy consumer market, there will always be innovation. So I think we have something to look forward to.
VM: For sure. Again, thank you, Paul. This has been sort of a must-do annually, so I hope we can continue this year-by-year, just these yearly checkups and just seeing how the market does. But thank you again for joining and always providing your expertise, and it’s amazing. It’s always an honour to talk to you. Thank you so much.
PB: All right, happy to do it, and good to chat with you and we’ll see you soon.
VM: Yes. Thank you, Paul. After year one, Ontario has proved itself to be one of the biggest online gaming markets in North America. I want to thank Paul Burns, the President and CEO of the Canadian Gaming Association, for joining us today and providing his expertise. If you have any questions for us or Paul, please do comment them down below. Please don’t forget to, like, share and subscribe to our YouTube channel. Again, I want to remind everyone that the Paramount Commerce team is exhibiting at the 2023 Canadian Gaming Summit, which is happening from June 13 to June 15 at the Metro Toronto Convention Centre. Visit Booth D110 and let’s talk about how we can support your payment needs. Also, for more information about our Gaming & CO In T.O. social event, visit our website: paramountcommerce.com. Thank you so much for tuning into The iGaming Show presented by Paramount Commerce. I’m your host, Varad Mehta. And until next time, keep gaming.