Economy Projections after Legal Gambling in Canada
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With the arrival of legal gambling in the province of Ontario set to come into force in the imminent future, there has been a lot of discussion around the impact it could have on the entire economy of Canada.
Naturally, there will be many that will be looking forward to the introduction of the wagering activity, as there will be a number of benefits and positives that will likely be experienced almost immediately by everyone involved.
Canada will be able to increase its revenue streams and generate more income, whilst there will be a positive impact on the level of unemployment, whereas gamers will also be able to enjoy their favorite games with a new level of protection due to the legalization and the regulations that will come into force on April 4, 2022.
Whilst there will be a general buzz around the fact that gambling is about to become legal in the province of Ontario, it would be wrong to think that wagering activities have not already become rather significant to Canada as a whole already.
In fact, gambling is one of the main sectors and industries of the Canadian economy, with it generating billions in a variety of different ways. Canadians are said to spend at least $4 billion a year on offshore casinos, although it is claimed that a future of $17 billion is spent by the country’s people annually on online gambling activities. It was reported that gambling revenue in 2020 had totaled $2.65 billion, with more than $1.2 billion of that said to have come from online activities.
Moreover, it is said that the industry also helps to provide hundreds of thousands of full-time jobs for local people. The Canadian Gaming Association reported that around 182,500 additional roles of employment were created, which would in turn have a positive impact on the economy, as well as the social benefits that the country could enjoy, too.
However, there is an argument that the North American nation does not generate as much money as it perhaps should, with complex regulations said to play a role. The market is not as diverse as it should be due to the requirement that operators have regarding acquiring a license from the local provincial government. This means that there could be millions, if not billions, of dollars being missed.
In fact, recent estimates have suggested that Canada could increase its annual revenue to around $4 billion if they were to make changes, with players spending more than those in the US and UK at online casinos per capita; approximately $824.68 per year is spent.
What are the demographics of Canada’s gamblers?
To fully understand the impact the gambling industry has on Canada, it is perhaps wise to take a look at the demographics, as this could also provide an insight into what to expect once the activity goes legal and live in Ontario.
The split between male and female punters is rather split, with a 54:46 split in favor of male players, although 55% of women are likely to play on their mobile devices.
Gambling is still relatively popular amongst the older generation of gamers at the moment, with the 35-55-year-old market accounting for approximately 40% of the audience. Those 55 and above account for 31%, whereas those between 18 and 34 are thought to account for 29% of the industry.
Benefits of legalization of gambling in Ontario & Canada
Naturally, as Ontario will allow online casinos in Canada to be legal within its provincial borders from April 4, 2022, there is a lot of excitement about what could happen for the region, as well as the entire country.
As already highlighted, the gambling sector is already majorly important to the North American country, with it already generating a significant amount of revenue for the country. Indeed, the move to legalize it within Ontario is one that makes huge sense and can have its own significant impact on the country’s economy.
According to industry figures, Ontarians are thought to spend around $500 million a year on internet gambling, with much of that figure to have been spent at offshore casinos, or those based in other provinces; this is thought to have been costing Ontario around $1 billion annually. Now, they will be able to generate that money as additional revenue when it was being previously lost.
Furthermore, the passing of the C-128 Bill that has allowed for sports betting and iGaming activities to be legalized should also help to create additional jobs in the area which will have an overall impact on the country’s economy. With more people able to earn, they will have more money to be able to spend, which Ontario and Canada will then be able to generate more revenue in taxes that can help to improve the infrastructure locally and nationwide.
Potential issues already being highlighted
Despite the buzz and excitement that many political figures may have regarding the introduction of legal online gambling, it seems that there are some concerns that are already being highlighted.
A warning has been made regarding Premier Doug Ford’s governmental plans about the online gambling market as some are citing that the province will lose out on hundreds of millions of dollars in annual revenue.
The report, which was prepared for Great Canadian Gambling by a gambling industry consulting firm that has been seen by CBC News, suggests that whilst there will be a new source of tax revenue, Ontario will lose out because of the big shift that has been predicted will happen from spending in a land-based casino to iGaming services.
The shift is not necessarily the problem, although it will have an influence, as online gambling sites are expected to have a much lower tax rate than their land-based counterparts. Physical establishments have a 55% tax rate on net gambling proceeds, and it is thought that a tax of as low as 20% might be introduced for online operators. Based on the assumption of those figures, it is suggested that Ontario could miss out on around $550 million annually, or a total of approximately $2.8 billion over a five-year period.
Final Thoughts
There is no denying that the legalization of online gambling in Ontario will have a positive impact on the economy of the province and Canada as a whole country, although it does appear that it could come at a cost to begin with. Nonetheless, some may argue that the cost-benefit is still there and one that will balance itself out in the future.
