Canada: Gold Rush or Dead Zone?
Late last month Ladbrokes became the latest operator to unceremoniously exit the Canadian igaming market. The UK bookmaker joined Betfred, Matchbook and Skrill in a race to leave the Great White North as quickly as possible.
So what exactly is it about the Canada that’s sending these big name players back their home offices? Is Canada, a prosperous, well educated country of about 35 million a dead zone for online gambling?
Why Leave Canada?
With one of the highest standards of living on the planet, immigrants from every part of the globe flock to Canada in search of a better life. So why didn’t Ladbrokes, and the other operators, find the Canadian market to their liking?
As is so often the case, the company’s PR department offered only vague corporate speak when asked by Calvin Ayre reporter Becky Liggero about the departure saying, “We regularly review our ability to offer gambling facilities in different countries throughout the world.”
That “regular review” must have turned up some information about Canada’s new licensing scheme, a plan that comes down hard on black/grey market markets.
As part of the new plan, every operator serving the country that’s pulling 3% or more of their revenue from these markets must provide the government a written justification for their actions.
It’s a pretty safe bet that very few online casino operators would want to have that kind of conversation with gaming regulators anywhere in the world.
Another reason why operators are leaving Canada is that they’re not thrilled about potential competition from government-sanctioned lottery monopolies.
A number of proposals to allow these companies to enter the online gaming market are a potential threat that private operators just don’t want to deal with.
What’s Wrong with Canada?
The stream of operators heading out of Canada aren’t leaving because Canadians don’t like to gamble. Though the country is hardly a hotbed of gambling like other British holdings (Australia we’re looking at you) it’s always had a fairly robust gaming market for a country of its size, around 35 million.
Most years, according to PWC’s Global Gaming Outlook, Canada accounts for between 3%-5% of the world’s total gaming revenues.
Though much of that market is dominated by land-based casinos Canadian gaming revenues are expected to grow over the next few years as their economy, and that of their neighbor to the south, continue to improve.
Though private operators are beating a path out of Canada, they bigger problem for affiliates is that they’re taking one of the biggest payment processors in the world with them. Skrill’s departure from the Canadian market seriously impacts the flow of cash from player accounts into affiliate pockets.
Though it’s hardly end-times for Canadian-facing casino affiliates, the next couple of years could prove challenging.