Online sports betting to reduce the Quebec government’s deficit?

Despite the repeated lack of interest from Finance Minister Eric Girard, the sports betting industry is back in action: with a deficit of $11 billion in its budget, can the province do without the revenue that would be generated by relaxing the rules that prohibit online gaming giants from setting up in Quebec?

The Quebec Online Gaming Coalition suggests that the Legault government take inspiration from iGaming Ontario, a provincial agency created at the initiative of the Premier of Ontario, Doug Ford, in order to regulate the fast-growing market on its territory online gambling, and more specifically sports betting.

Ontario has thus issued several dozen practice permits to private operators of online gambling sites. By contrast, in Quebec, the law prohibits the presence of these operators. It is Loto-Québec and its Mise-o-jeu program which occupy the entire online sports betting space.

The coalition, which brings together international online betting giants, including Bet99, Betway and DraftKings, provided Minister Eric Girard with an analysis of the most recent annual report from the Office of the Auditor General of Ontario based on the model of its iGaming agency.

According to the coalition, this analysis demonstrates “the profitability of the iGaming Ontario model”. She highlights in particular that the revenues generated by the different levels of government were $230 million in 2022-2023, i.e. iGaming Ontario’s first year of activity. The provincial government collected 145 million, including 96 million in direct revenue and 40 million in sales tax.

“For any government, the sum of 145 million is a considerable income, knowing that it is new additional revenue and not an additional tax on taxpayers,” concludes the Coalition québécoise du gaming en ligne.

A surprising request

In Quebec, the Minister of Finance has already repeatedly repeated his disinterest in the legalization of casino and online betting sites in the province. Despite the deficit financial situation of his government, it is not in the plans to change its mind, we assured Tuesday afternoon within his cabinet, a few moments before the study of the budgetary appropriations for the next financial year, during which the situation of Loto-Québec was going to be discussed.

At Loto-Québec, in fact, we would be very surprised if the government changed its tune, given the way in which the companies that form the Quebec Online Gaming Coalition have behaved in the past.

“It is extremely unusual that operators who act illegally with full knowledge of the facts are promoting a new regulatory framework, while they contravene current regulations and laws,” said the Loto spokesperson. Quebec, Renaud Dugas.

“Loto-Québec does not have the mandate to stop the black market, but to offer Quebec players a legal, honest and secure alternative. Its profits go entirely to the benefit of the community,” added Mr. Dugas.

iGaming Ontario, not so paying

It must be said that the success of iGaming Ontario remains to be determined. Before the creation of the agency, Ontario expected to garner total annual revenues of $380 million in its first year of operation. The results of 230 million put forward by the coalition to encourage Quebec to follow in the footsteps of its Ontario neighbor are therefore lower than expectations. There is no guarantee, therefore, that such a Quebec agency would achieve its financial objectives.

Revenues generated by the Ontario government were lower than expected despite an increase in revenues generated in the gambling sector. He bet $17.2 billion in Ontario between 1er October and December 31, 2023, an increase of 21% compared to the previous quarter.

At the end of 2023, Ontario had 1.2 million active player accounts on the 72 online casino and betting sites authorized to operate on its territory. Each player would spend an average of $186 per month on these sites. These statistics are also on the rise.

Ontario is following an international trend: online betting, particularly through sports betting of all kinds, has been growing for more than a decade, all over the world. Even in Quebec, many Internet users circumvent the rules to access sites offering live betting during games.

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