Embracing a digital revolution
To understand how the iGaming market has evolved, we must first examine the gambling industry as a whole. In 2023, Canadian gambling reached a revenue milestone of roughly C$16.6 billion. Experts have attributed this significant growth to a number of factors, including emerging technology, increased disposable income and evolving regulations.
Arguably the most significant growth came as a result of online gambling — or iGaming. The rapid digital transformation over the past several years presented a unique opportunity for iGaming, owing to increased internet usage and accessibility. Companies in the sector have embraced this opportunity, ramping up their marketing efforts and leveraging new tactics, such as the integration of recognizable characters from popular culture into their platforms.
This combination of gambling and entertainment has attracted a new wave of fresh players, which gambling expert Harry Thompson notes has "propell(ed) the popularity of online gambling platforms to unprecedented levels." August 2022 data from Statistics Canada suggests roughly 65 percent of Canadians aged 18 and above participated in gambling activities over the prior year. Lotteries, casinos and sports betting sites were the most popular gambling choices.
Beyond digitization, the growth and direction of both gambling and iGaming have been heavily influenced by a number of trends.
Mobile gambling
Mobile gambling represents a huge growth driver for the iGaming market. Thanks to the widespread use of mobile devices, digital gambling is more accessible than ever. Alongside an influx of mobile casino apps, there are also apps for everything from lottery tickets to online poker.
Video streaming, augmented reality and virtual reality
Possibly inspired by the prominence of tools such as Zoom during the pandemic, live dealer games use real-time video streaming to create an immersive, engaging hybrid gambling experience. These games have become increasingly popular in recent years, as they are essentially the "next best thing" to physical casinos.
Augmented reality and virtual reality, meanwhile, have the potential to create an even greater splash than live dealer games. As VR headsets become more available, players increasingly have the opportunity to step into digital replicas of some of the world's most iconic and luxurious casinos and destinations.
Artificial intelligence
Gambling companies are increasingly using artificial intelligence and machine learning to create more personalized, dynamic gaming experiences for their customers. Along with tailored game recommendations and bonuses, AI provides more efficient customer support. On the business side, gambling companies can use AI to ensure a fair gaming environment and protect against fraud.
Social gaming
Technically, social gaming — digital games of chance played for fun rather than using real money — is only tangentially related to iGaming. At the same time, the fusion of iGaming and social media should not be ignored. Online casinos are increasingly connecting with social networks such as Facebook, X and Instagram, promoting a sense of community while also offering improved ease of use, and some have even gone so far as to call this particular format the future of iGaming.
Gamification strategies
To provide deeper interactivity and improve customer loyalty, iGaming providers have started borrowing elements from video games when designing their user experience. From leaderboards to ongoing reward systems and interactive storylines, these features provide players with a sense of enjoyment beyond the thrill of gambling.
Blockchain
Blockchain technology, especially cryptocurrency, is becoming popular. Along with the promise of security and transparency through decentralization, crypto gambling also offers quicker transactions and greater safety. The value of the global crypto gambling market currently exceeds US$250 million.
New regulations
For years, iGaming has been something of a "Wild West" industry, especially in Canada. This changed with the establishment of iGaming Ontario (iGO) in 2022. A subsidiary of the Alcohol and Gaming Commission of Ontario (AGCO), the market provides licensed operators with easy access to their target audience. Working on behalf of AGCO, iGO enforces applicable regulations while also giving iGaming companies an opportunity to influence future regulations.
An inside look at Canadian iGaming
The creation of iGO in April 2022 was a banner event for Canada's iGaming market, culminating in Ontario's emergence as one of the largest iGaming markets in North America. As mentioned, the IGO also completely displaced the unregulated market that existed prior to 2022, and Ontarians not only bet more but did so more frequently. By the end of March 2023, iGO reported that the regulated market delivered roughly C$35.6 billion in total wagers and C$1.4 billion in gaming revenue.
As of September 2023, iGO's market comprises 71 websites maintained by 47 operators. At that time, there were 943,000 active player accounts with an average monthly spend of C$191 per account. Casinos represented the most popular category for iGaming, with C$11.9 billion in wagers and C$407 million in revenue during the quarter ended September 30. Betting and pay-to-play poker brought in C$118 million and C$16 million in revenue during that time, respectively.
The market is in a good place and its future is similarly bright. In a presentation during the 2023 Canadian Gaming Summit, iGO executive director Martha Otton said by 2031, the iGaming market could support up to 22,000 full-time-equivalent jobs, C$4.7 billion in annual GDP and C$2.1 billion in annual government revenue.
iGaming market in Canada
Primed for rapid expansion, Canada's iGaming industry shows considerable promise, and we have profiled some of the players in the space below.
With triple-digit growth in both wagers and revenue from February to September 2023, NorthStar can potentially become one of the most significant iGaming operators in Canada. In addition to leveraging artificial intelligence for personalized sports betting, the company leverages tier-1 partnerships with sports betting and technology providers such as Playtech and Kambi to ensure best-of-breed entertainment and betting experience for customers. Most recently, the company signed a strategic partnership with BettorView, an in-venue screen technology provider, to soon deliver NorthStar's sports betting services to consumers in restaurants and bars throughout Ontario.
Jackpot Digital (TSXV:JJ)
Positioning itself as an innovative and disruptive Electronic Table Games provider, Jackpot Digital manufactures digital touchscreens for multiplayer casino games such as blackjack, poker and baccarat. The company's flagship product, Jackpot Blitz, is a digital smart table designed to minimize costs while improving operator efficiency and flexibility.
Bet365
Bet365 is one of the top iGaming companies in the world, with a comprehensive portfolio that includes sports betting, poker and casino games. Known for its user-friendly platform and dedication to high-quality customer service, the company has maintained a foothold in Canada's iGaming market. The company's size and reputation make it well-suited to establish a dominant position in Ontario's hypercompetitive iGaming sector.
FansUnite Entertainment (TSX:FANS,OTCQB:FUNFF)
A technology-focused sports and entertainment company targeting iGaming, FansUnite recently sold its Chameleon betting platform to increase its focus on its affiliate vertical through its subsidiaries BettingHero and American Affiliate.
In the company's financial update released in December 2023, CEO Scott Burton reported a gross margin of 63 percent and adjusted EBITDA of $1.1 million for the first nine months of 2023, an increase of C$2.3 million year-over-year. The company also completed a C$3.04 million private placement, including a significant investment from Tekkorp Capital.
Investor takeaway
For investors interested in the iGaming industry, Canada is arguably one of the world's most promising markets. iGaming Ontario has redefined how iGaming companies engage with their audiences, establishing a safer, more efficient and more profitable source of revenue. With other provinces likely to soon follow suit, now may be an excellent time to start investing.
This INNSpired article is sponsored by NorthStar Gaming (TSXV:BET). This INNSpired article provides information which was sourced by the Investing News Network (INN) and approved by NorthStar Gamingin order to help investors learn more about the company. NorthStar Gaming is a client of INN. The company’s campaign fees pay for INN to create and update this INNSpired article.
This INNSpired article was written according to INN editorial standards to educate investors.
INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.
The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with NorthStar Gaming and seek advice from a qualified investment advisor.
