Online gambling is coming to Alberta, Canada

The province of Ontario just celebrated the three-year anniversary of its open market for gambling, and it has been a rousing success. And Alberta has taken notice, introducing a bill this year to open the iGaming market in the province.

Ontario currently has 50 operators running 83 websites for sports betting, casinos and/or poker, and the profits for both the province’s coffers and the gambling companies have been enormous. For the 2023-2024 fiscal year the province saw $63 billion in bets and $2.4 billion in revenue, but that number is expected to show an increase of around 22% in both areas when the 2024-2025 report is released in the next two weeks, based on monthly reports issued by iGaming Ontario in 2024. If those figures prove accurate then the total wagered for April 2024 to March 2025 will be around $76 billion with revenues of $3 billion. At a 20% tax rate that means that Ontario will reap nearly $600 million from taxes along with the $100,000 annual license fees for each gambling vertical.

Ontario vs Pennsylvania

To compare Ontario’s success, it is probably best to look at Pennsylvania, which launched all forms of iGaming in 2019. In the last reported year Pennsylvania saw a slightly smaller handle but $2.1 billion in iGaming revenue, an increase of over 25% from the previous year. In fact, the annual rate of growth in Pennsylvania has been pretty constant for several years. Pennsylvania is a good comparison to Ontario since the state and province have a population of around 13 million and 14 million people respectively and many of the demographics of both places are identical. That said, Pennsylvania only has 10 licensed online operators, meaning that per operator, the revenue is substantially higher in Ontario. It's also noted that the legal gambling age in Pennsylvania is 21 compared to 19 in Ontario.

Alberta finally taking the step

Nearly all industry analysts have called Ontario an unquestionable success, so when the province of Alberta introduced a bill that would allow for an open market like Ontario, there was some excitement. The bill isn’t unexpected since it was the main topic of conversation at last year’s Canadian Gaming Summit, but until it was actually put on paper, there was still some concern the province would back out. The legislation on the table is Bill 48, titled the Alberta Gambling Act, and was introduced by Dave Nally, the Minister of Service and Red Tape Reduction, who was a keynote speaker at last year’s Gambling Conference, where he said that the bill was a go and operators just needed to bide their time. While not all rules and regulations for the bill have been written, it is clear that it will include measures to stop underage gambling (the legal gambling age in Alberta is 18), problem gambling and provide for a legal means to bring revenue to Alberta coffers.

The stated obligations of the new regulated market are:

 - Maintaining compliance with all applicable federal and provincial legislation.
 - Promoting responsible gaming, including the development of self-exclusion tools and other harm reduction strategies.
 - Entering into agreements with other provincial or territorial governments to jointly manage online lottery schemes.
 - Submitting annual reports and audited financial statements to the Minister.

As was the case with Ontario and pretty much every other jurisdiction that legalized online gambling worldwide, Nally said that the main motive for Alberta wanting an open market was that the province was losing too much to grey market operators, and it only made sense to force them to enter into a legal and regulated market so that consumers could be protected against bad actors and the province could benefit from tax revenues and license fees. All taxes and surplus revenue from licensing fees would go directly to Alberta’s General Revenue Fund which could then be allocated to social programs for things like health and education. As is the case with Ontario, Alberta plans to set up a new Crown Corporation called iGaming Alberta which will report to the Alberta Gaming, Liquor and Cannabis Corporation (AGLC), who for their part will be the industry regulators.

There isn’t expected to be a great deal of opposition to the new bill which means it could be passed into law later this year or in early 2026. But before all the rules are written, many operators are asking Alberta to avoid making “mistakes” that Ontario made and to look out for the best interests of both the consumers and the gambling sites.

One of those operators is a medium sized company that offers sports betting and casinos and the manager from the company, who I met at last year’s conference, agreed to talk to me provided I kept his name and company anonymous. He said with the current political climate he didn’t want to ruffle any feathers that could result in his company being passed over or targeted. While I asked him several questions, I’ll stick to the three main ones I posed, which I think led to interesting responses.

I first asked was whether he was happy that Alberta was preparing to follow the lead of Ontario.

"Yes and no. Ontario has been a very successful endeavor for us, so naturally we’re excited to have another province to launch our brand with but you have to realize that Alberta is only one quarter the size of Ontario so we have a much smaller pool to fish from. No doubt FanDuel, DraftKings and MGM will take the majority of the market share so we’ll have to see how much is actually left over for everyone else. Ideally what we would have liked to see and have been calling for from the beginning is a country wide market where all provinces would launch an open market with a standard set of rules that applies all locations. We were really hoping for rules on things like advertising and promotions that would apply to all provinces and a set 20% tax on all gaming revenues. We were also hoping that the provincial barriers could be lifted to allow for more liquidity to help maximize impact and also make poker more appealing but that obviously isn’t going to happen. A market of almost 40 million on the same page is much more appealing that a split market with a few million here and a few million there. With 40 million all operating the same way and under the same rules there is far more room for ingenuity and risk taking."

I wanted to know whether there is anything Alberta should do differently than Ontario.

"Cut the number of licenses by at least half and don’t handcuff us on promotions and advertising. In respect to my first point, Ontario allowed every operator to come on board as long as they paid the fee and as a result all the revenue is going to a very few. Fortunately, you can operate a casino and still make money in a crowded field when you have a population approaching 20 million people, but if Alberta licenses over 50 operators, they will see a huge rush to the exits from companies that just have no chance of succeeding. That is what happened in Ontario and it is what will happen in Alberta."

To be fair, Ontario saw CoolBet, Mansion and Unibet leave the market after about a year of operating as they said they couldn't compete, but there have been no known exits from Ontario since then so the comment by the interviewee seems a bit unfair to claim there was a "rush to the exits".

"And for the second point, Ontario’s rule that disallows us to advertise promotions except on the website or in direct emails has made it pretty much impossible to compete fairly with the big sites. The best way we can differentiate our brand from say a BetMGM is by offering great signup bonuses or promotions, but if we can’t advertise them on TV, social media, search engines or radio it’s a waste of time. Everybody knows who DraftKings and FanDuel are but most wouldn’t know of our company unless they saw it in an ad or were referred by a friend. And we offer several bonuses including a 100% match bonus on the first deposit which is how we were able to get customers to begin with. If we can only offer it if a customer finds us by accident, then we will always be behind the eight ball. I have less issue with the rule that athletes can’t promote a gambling company which probably works in our favor, but not being able to advertise our promotions openly is a disaster."

The last question I asked was whether he believed the tariffs put on Canada by Donald Trump could have an impact on the launch.

"Absolutely they will. Tariffs will cause prices to skyrocket and the first thing consumers cut are luxuries like gambling. Don’t get me wrong, bettors will still take some of their income and bet on sports or casinos, but the amount they wager will be far less and considering the costs involved in running a gambling company, the loss in overall handle and revenue will no doubt cause some operators to consider whether to launch in Alberta right away or wait for a better climate.

Also, tariffs are concerning because Alberta, unlike Ontario is heavily reliant on oil and if the province has an issue selling its oil to the U.S. it could lead to layoffs which could have ripple effects. I’ve been told that a very large percentage of workers in Alberta are from other parts of Canada such as Newfoundland, so if they leave or are forced out then there is no long term vision for Newfoundland to have an online open market which means companies could be spending a lot to acquire a bettor which will then have no long term benefits.

The tariffs also have a big impact on tourism in the U.S. which hurts sites like MGM and Cesars as well. I have many friends at MGM who tell me that Canadians taking advantage of the cross promotion on BetMGM to get free stays in Vegas casinos has dropped dramatically since Trump won the election and  particularly in the last 2 months. I’m an American and sadly I have to admit I supported and voted for Trump. I thought he would do something to reign in unnecessary spending but I thought he would do it smartly. What he is doing now will only harm all economies, Americans and yes, the gambling industry. And it’s for that reason I’m urging the Alberta government not to pass rules that handcuff the small to medium sized operators with unnecessary restrictions on promotions."

One thing of note is that despite a smaller population, Albertans wager far more than the Ontario gambler, since it is a very rich province with an industry comparable to Texas. If land-based wagering is any indication, then the amount bet by Albertans could be as high as 15% more than what is wagered by the average person in Ontario.

So, the stage is set for Alberta’s open market going forward. Despite what the operator I interviewed wished for, there is no real vision for a nationwide launch of iGaming, so the launches will have to be province by province. Ontario and Alberta are very conservative governments which seem to be the ones promoting gambling expansion, so for that reason, only Saskatchewan and Quebec are provinces that will follow the lead of Ontario and Alberta in the near future. Alberta will no doubt still provide a license to the lottery operator and will provide the chance for native casinos to obtain an online license as well. Still with over 4.5 million citizens and a GDP of almost $350 billion, the province presents a great opportunity for those in the industry to make money.

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