Great Canadian Gaming Claims Ontario iGaming Will Devastate Land-Based Casinos

Posted on: January 18, 2022, 10:30h. 

Last updated on: August 16, 2022, 11:33h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

The Great Canadian Gaming Corporation (GCG) is warning the Ontario government and Premier Doug Ford of the financial consequences of legalizing iGaming under the province’s proposed regulations.

Great Canadian Gaming Ontario casinos iGaming
An empty Casino Woodbine is seen in December of 2021. Great Canadian Gaming, which owns Casino Woodbine and many other Ontario casinos currently closed on provincial orders by a COVID-19 spike, says iGaming will further damage the company’s brick-and-mortar operations. (Image: Great Canadian Gaming Corporation)

GCG is the largest operator of land-based casinos in Ontario, Canada’s most populated province and home to the nation’s Ottawa capital. The casino company recently contracted an independent gaming consultancy to conduct a probe into the impact iGaming will have on Ontario’s gaming industry.

The findings forecast that the province should expect to see its tax revenue from gaming decline by CA$550 million (US$438 million) a year. The review concluded that many traditional retail casino gamblers will migrate online once iGaming sites are up and running.

The drastic reduction in gaming taxes, the GCG-commissioned research concludes, is a result of Ontario levying a lesser tax rate on iGaming revenue than brick-and-mortar play.

Land-based casinos, such as the 14 properties owned and operated by GCG in Ontario, are subject to a 55 percent provincial tax on gross gaming revenue (GGR). The latest regulatory blueprint for iCasinos suggests a 20 percent tax.

Ontario’s casinos remain shuttered by COVID-19 through at least Jan. 26.

iGaming Firms Respond

Ontario is set to make history in Canada by becoming the first province to legalize and welcome commercial online casino operators. Interactive gaming firms were quick to reject the GCG report assumptions.

DraftKings, one of the iGaming applicants in Ontario that is expected to be among the first operators to launch online, says legal outlets will simply bring players currently gambling on offshore sites to a regulated environment.

People who are playing in online casinos and online sportsbooks and online poker rooms will continue to do so, except they’re going to go from playing offshore to onshore,” said Jeffrey Haas, senior vice president of DraftKings, to The Canadian Press. “Anybody who continues to walk into real casinos in order to play games there will continue to do so.”

Tony Rodio, a veteran global gaming industry executive who led the former Caesars Entertainment organization until its takeover by Eldorado Resorts, was appointed chief executive of GCG last fall. Rodio says Great Canadian Gaming doesn’t oppose iGaming but believes the current tax setup puts brick-and-mortar properties at a competitive disadvantage.

Rodio says the iGaming report “includes critical learnings” from other markets where iGaming was legalized. “While we support iGaming in principle, the Ontario government needs to take the time to get this right,” Rodio argues.

Limited Permits

Great Canadian Gaming is recommending that officials at the Ontario Lottery and Gaming Corporation go back to the drawing board. Specifically, GCG says the province allowing numerous iGaming applicants to receive licenses could result in a robust internet gaming market at the expense of land-based properties.

“If an open-license iGaming model is implemented … iGaming would capture a significant share of the total casino market,” the report states.

Ontario’s Ministry of Finance is amid its own review of iGaming’s potential impact on land-based casinos and gaming taxes, as well as society as a whole. The provincial office has not detailed a timeline for the findings’ release.