In Canada, online casinos and gaming sites must acquire a governmental licence to operate legally. However, no licence is necessary to operate an online gambling business. As a result, thousands of offshore websites operate in Canada, offering their gambling services to citizens. Meanwhile, major restrictions have historically barred the Gambling industry in Canada from cashing in on surging demand offshores operators have gobbled up, but that might change.
Betting on a change in the winds
The recent passing of C-218, a bill amending Canada’s criminal code for single-game wagers, is expected to result in increased online sports betting once an effective date is set by Prime Minister Justin Trudeau. Before the C-218 bill, Canadian’s were limited to only parlay betting, a wager on two or more teams, on government licensed sportsbooks. With the passing of the C-218 bill, Canadians are expected to be able to place single-game sport bets on any team in any sport on legal government sportsbooks.
Currently, Canada’s sports wagering industry is expected to generate $14.5 billion, of which $10.0 billion is wagered through illegal bookmaking operations and $4.0 billion is wagered through offshore online sports betting platforms. The other $500.0 million is wagered through legal provincial sports lottery platforms. Although each province is entitled to set their own gambling regulations once the federal bill is passed, the Ontario Lottery and Gaming Corporation (OLG) is already expected to launch a new digital sports betting platform called PROLINE+.
Penn National’s acquisition of theScore
In addition to companies releasing new gambling platforms to cater to growing demand, companies are also merging with one another to gain market share across North American markets. For example, in August 2021, US gambling giant Penn National Gaming Inc. acquired Toronto-based Score Media and Gaming Inc. (theScore) for an estimated $2.4 billion.
Penn National is one of the largest casino operators in the United States and is attempting to expand its market share through strategic acquisitions, which will likely enhance its online sports betting platform and reach a larger market across the United States and Canada. Conversely, theScore began as a sports media platform, offering its customers scores, news and betting information. In 2019, theScore launched its mobile betting app using in-house technology, which was one of the main drivers for this acquisition.
Upping the ante
TheScore’s in-house technology will likely enable Penn National to significantly reduce costs by terminating its contracts with third-party technology platforms. In addition, Penn National is expected to benefit from theScore’s data-driven analytics with its nearly 4.0 million monthly users, which will likely help drive customer acquisition, engagement and retention strategies. Meanwhile, theScore is expected to benefit from Penn National’s popularity across the United States, which will likely help gain major market share concentration in Canada’s emerging sports-betting industry. Overall, this acquisition is expected to increase the market share concentration within the North American sports betting industry.
