What Illinois Can Learn From The Online Casino Market In Ontario
While it may be frustrating for many Illinois residents waiting for the Illinois online casino market to be legalized, the long delay could actually pay off.
On Feb. 8, The Internet Gaming Act was filed in the Illinois Senate by Senator Cristina Castro. The bill is SB1656. Meanwhile in the house, Representative Edgar Gonzalez Jr. filed companion bill HB2239.
As those bills works their way through the Illinois General Assembly, state lawmakers have a lot they can learn from the states and jurisdictions around them that have already legalized iGaming.
Today, we’re going to take a closer look at the online casino market in Illinois’ Great Lakes neighbor in Ontario, Canada to see what things Illinois could learn.
Ontario’s online betting market is massive
When we say Ontario has a huge online betting market, we’re not only referring to the fact the province is home to nearly 15 million people. We’re also pointing to the high-number of online casino and sportsbook operators.
In Ontario, there are 44 active online gaming operators that run 68 individual sites. This is the largest number of online operators of any jurisdiction in North America. Ontario’s online gambling market opened on April 4 2022.
Ontario also has a bunch of Europe-based operators offering action. This includes bet365, Fitzdares, BetVictor, Pinnacle and Unibet, among others.
For the iGaming market to reach its max potential in Illinois, more operators will be a necessity. Plus, adding some overseas operators wouldn’t hurt to give bettors a variety of options.
Ontario gaming commission cracks down on advertisements
The Alcohol and Gaming Commission of Ontario (AGCO) is in charge of regulating gaming operators. In one area in particular, the AGCO rules with an iron fist. The province’s advertising laws are much stricter than the rules in Illinois.
Take AGCO rule 2.05 for example. It prohibits advertising and marketing from communicating “gambling inducements, bonuses and credits.” The only exceptions include incentives on a licensed operator’s platform and those sent directly to bettors that give consent.
Then, you’ve got rule 2.04 that says operator’s advertisements and marketing must be truthful and refrain from misleading players or misrepresenting products. Implying that the chance of winning increases with a higher wager is specifically prohibited.
While it’s unlikely the Illinois Gaming Board will ever create regulations that strict, creating stiffer advertising laws for gaming operators would be a step in the right direction. Having a plan to prevent an increase in problem gambling after online casinos are legalized is crucial, and limiting advertising would be a good start.
Proposed fee for Illinois online casino license more reasonable
A major reason Ontario has far more gaming operators than Illinois is the difference in cost of entry.
There are at least 14 openings for new Illinois online sportsbooks to enter the market:
- Six through a partnership with an active brick and mortar casino.
- Five through a partnership with a retail casino applicant.
- Three through online-only sportsbook licenses.
- Possibly four or fewer in connection with a pro sports venue.
The minimum price of an Illinois sportsbook license is $5 million. To join the market through a partnership with a retail casino, 5% of adjusted gross receipts is the cost. Operating a sportsbook at a pro sports venue costs $10 million. An online-only license requires a $20 million payment.
Online gaming operators must pay an annual regulatory fee of $100,000 per gaming site in Ontario. Suppliers of gaming services and equipment pay $3,000 in annual registration fees, and manufacturers of gaming equipment pay $15,000 yearly.
Illinois lawmakers clearly understand the cost to entry is too high for its online sportsbooks. That is why the Internet Gaming Act proposes Illinois online casinos would pay a license fee of $250,000 and a renewal fee of $100,000. That alone would likely increase the number of operators in the market. Ontario is proof operators from jurisdictions around the world believe $100,000 annually is a fair price conducive to doing business.
The Ontario online market isn’t perfect
One area the AGCO dropped the ball is transitioning grey market gaming operators into the legal market when Ontario announced regulation was coming. The “non-legal” grey market operators are those that are illegal, but are not stopped by authorities from taking bets from Canadians.
In August 2021, when Ontario announced gaming regulation was on the way, grey market operators continued taking wagers without penalty for more than a year. On Jan. 28, 2022, the AGCO announced that the online market would launch on April 4.
Yet, grey market operators continued taking wagers until Oct. 31. During that time, the “non-legal” operators transitioned to the regulated market.
This gave the grey market sites an advantage because they didn’t have to follow AGCO regulations, and they were able to carry a loyal base of customers into the legal market. This was a disservice to both Ontario taxpayers and gaming operators that operated legally.
While it was smart to get the grey market operators to transition into regulation, the way the AGCO handled it was disappointing.