Canada: BCLC iGaming revenue to be hit by illegal gambling, operators in other jurisdictions

The British Columbia Lottery Corporation said on Tuesday that, despite projected continued growth, online gambling sites operating illegally in B.C. are increasing their investments in sponsorships and advertising in both the Province of British Columbia and across Canada, which could cut revenues for the company.

The Canadian Crown corporation expects enhanced opportunities from the legalization of single-event sports gambling last year, with revenue set to grow 7% in the 2022-23 fiscal year through its online gambling brand PlayNow.com.

However, according to a three-year service plan published with the provincial budget, other gambling sites and jurisdictions are expected to cut into revenues, reports Business in Vancouver. The BCLC says it is becoming “more costly” for its brand to compete for advertising and sponsorship opportunities that enhance presence and draw players “to the only legal option” in the province.

“While we are projecting continued growth, online gambling sites that operate illegally in B.C. (characterized as ‘grey market’) are increasing their investments in sponsorships and advertising here and across the country,” said the BCLC.

Another factor complicating revenue prospects for the BLCL concerns Ontario, where the province’s regulator, the Alcohol and Gaming Commission, has begun licensing gambling companies for online operations, many of which have already launched heavy advertising nationwide.

“In preparation for their legal entry into the Ontario gambling market, some operators are developing national partnerships with media companies and sports leagues, resulting in further competition and challenges for PlayNow.com when it comes to B.C.-based media and marketing partnerships,” BCLC said.

Ontario’s new iGaming market is set to launch on April 4 and it has already confirmed some of its first licensed operators: the list includes Penn National’s subsidiary theScore, Rivalry Corp. and PointsBet. The Ontario Lottery and Gaming Corporation offers sports betting through its PROLINE product.

The BLCL, which reported CAD $430 million ($338.1 million) net income in 2020-21, says it hopes to improve the figure to CAD $1.2 billion ($943 million) this year and CAD $1.4 billion ($1.1 billion) by the next.

The Crown corporation also revealed it had insufficient data to assess the impact of the Covid-19 omicron variant on casino operations in the province, although it forecasted a 2022-23 decrease of lottery revenue by 7%, amid the replacement of 3,500 terminals across British Columbia.