September 2, 2020 (Investorideas.com Newswire) Over the last few years, the iGaming industry comprising online casinos, sports betting (including betting on esports), and poker has grown significantly. According to a recent survey performed by CIRA (Canadian Internet Registration Authority), around 70% of adult Canadians take part in some form of iGaming, with 24% participating daily. This results in $952 spent on gaming in each Canadian household every year.
According to Paul Burns, President, and CEO, Canadian Gaming Association, "Gaming in Canada continues to grow and is an important employer and provider of meaningful returns to the Canadian economy balanced with socially responsible measures."
This is certainly true, as the online gaming industry as a whole generates around $17.1 billion per year in sales in Canada. This includes revenues from online casino staples like blackjack, poker, roulette, slots, baccarat, video poker, bingo, live dealer games, as well as sales of traditional console and PC video games, and in-app purchases on mobile devices.
In fact, gaming became the largest segment of Canada's entertainment industry which supports around 182,000 full-time jobs and brings in revenues that exceed those generated by social establishments, spectator sports, performing arts, movie theaters, and magazines and book sales combined.
The regulatory framework of the Canadian iGaming industry
It's curious to think that around half a century ago, no form of gaming (not even lottery), was fully legal in the country. Finally, in 1969, lotteries became available to the public and in 1985, individual provinces were given an option to regulate gaming activities within their borders.
This prompted 10 out of 13 provinces to use the new legal framework to come up with their own mix of allowable entertainment activities including sports betting, casino play, slot machine gaming, and lotteries. This made the whole legal situation a little fuzzy because for example, while in Ontario you can engage in any form of gaming, Prince Edward Island offers only a few regulated forms of play. But with approximately 87,000 electronic gaming machines, 60 permanent casinos, over 250 racetracks, and 25,000 licenses to operate bingos and raffles, you could say that Canada is definitely a gaming-friendly country.
The regulatory landscape looks slightly different when it comes to online gaming. As of today, only four provinces (Quebec, Ontario, British Columbia, and Manitoba) fully regulated the use of online gaming. However, this doesn't stop Canadians from all over the country from enjoying their favorite games, and the government seems to be fine with that because the industry generates billions of dollars in tax contributions every year. In the coming years, we can only expect the regulations to become more lenient towards mobile gaming as this has already happened in the US, where many states legalized gaming and sports betting in 2018 and 2019.
The online gaming revolution and revenue growth
As the technology market became more saturated with new-generation mobile devices, the growing power of AI, and increasing mobile internet speed, more adults become interested in playing online games. Moreover, in 2020 people spend more time at home than ever before, which provides even more opportunities engaging with home-based entertainment solutions.
While traditional gaming establishments saw a slight revenue drop of -1.2% between 2015 and 2020, the iGaming industry continues to grow at a healthy rate of around 5% per year not only because of growing Canadian gaming platforms but also the increased competition from American and off-shore competitors.
At this point, nothing stops players interested in playing online from accessing their favorite casino and poker games. Even if a specific platform is blocked in their province, it's easier than ever to use VPN (a virtual private network) to get access to online gaming opportunities from all around the web. This situation will force the Canadian government to legalize online gaming in more of the provinces sooner rather than later, to prevent taxable revenues from slipping through to other nation-states.
Finally, this will lead to more growth in revenues, and potential opportunities for savvy investors, looking to allocate capital in the promising Canadian gaming market that's bound to grow for years to come.
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