The legalization of single-event sports betting in Canada will allow provincial governments to reclaim some of the revenue that is now being flows out of the country through online betting platforms.
According to the Canadian Gaming Association, it isn’t expected to be a large cash cow in comparison to what casinos and lotteries bring in for provincial governments (CGA).
However, it will at least skim some of the profits that currently flowing out of Canada through offshore betting platforms to government coffers, and allowing casinos to host on-location single-event sports betting, it would be an added draw.
CGA president Paul Burns said that
“The profit margin on sports betting is very low,”
Lotteries and casinos are the most profitable forms of legalized gambling in Canada. For the 2018-19 fiscal year, casino gambling alone generated about $1 billion for the provincial government in British Columbia.
In British Columbia, there are 16 casinos, 17 community gaming centers, and two horse-race betting tracks. In Nevada, there are 219 commercial casinos and four tribal casinos, however due to the way gambling is regulated in Canada, the share of casino revenue is considerably lower.
While the state of Nevada collects taxes and fees from casinos, the government of British Columbia receives a direct take of casino profits. For example, the government receives 75% of slot machine revenue, while the casino operators receive 25%. Table games, like as blackjack, poker, and craps, are worth more to casinos, but overall, the B.C. government gets about 65 % of casino profits, with the operators getting 35 %.
According to Ballotpedia, the state of Nevada, which has a low tax rate, received $987 million (US$783 million) in gaming tax revenue in 2019. In the 2018-19 fiscal year, the British Columbia government received $1.4 billion in revenue from casinos and lotteries.
The CGA estimates total GDP contributions from gaming in B.C. at a little more than $3 billion. The biggest money-makers are casinos.
Lotteries and e-gaming generate about $600 million each year, generating about $1.9 billion in revenue. The B.C. government earned $983 million from casinos and $432 million from lotteries and e-gaming in the 2018-19 fiscal year.
Casinos are also significant employers. According to the BCLC, gaming provides 37,000 jobs in B.C. both directly and indirectly.
According to the BCLC, gambling generated $2.5 billion in revenue in the 2019-20 fiscal year, with $1.3 billion going to the BC government for distribution. This represents a $69 million reduction from the previous fiscal year, and reflects the fact that casinos (and bingo halls) were closed for over 17 months due to the pandemic.
Some of the losses from casino closures were made up through online gambling through BCLC’s Playnow.com platform.
BCLC stated in its 2019-20 annual report that
“While many players moved their play to our online channel … this migration was unable to make up for the revenue lost from brick-and-mortar channels,”
$147 million went into a special health-care account, $140 million went to community groups in the form of community grants, and $93.5 million went to “host” communities that operate casinos, out of the $1.3 billion generated by gaming for the 2019-20 fiscal year.
In 2019, B.C.’s First Nations began receiving a share of gaming revenue. First Nations received $93.5 million in gaming revenue in 2019-20.
Municipal governments that have casinos receive 10% of the casino’s net profits. The River Rock Casino in Richmond appears to be the most profitable casino in British Columbia, with a revenue of $16 million for the fiscal year 2018-19. The Grand Villa Casino in Burnaby comes in second with $12 million. The Parq Vancouver Casino and the Hastings Racecourse and Casino each provided $9 million to the Vancouver.
Single-event sports betting would not be a significant moneymaker for casinos per se, but if BCLC agrees to allow casinos to participate, it would be an additional draw card that could bring in more people into casinos.
Burns said that
“It’s a great amenity to have because it brings those customers who want to bet on sports; they can get that in your building. But then they can also play a table game or play a slot machine or have a meal. And that’s why they want this: it’s one more amenity to help drive business into the property.”
Burns said that in New Jersey, which allows casinos to offer single-event sports betting, 80% is still done online and only 20% in casinos. Even so, it has helped boost New Jersey’s casino business.
Burns added that
“That 20% actually had a huge impact for the state. because it drove a 16% increase in casino revenue.”