Ontario’s state-run gambling monopoly has run into trouble for having previously overestimated its online gambling revenue forecasts. The Ontario Lottery and Gaming Corporation said earlier this week that its programme of reforms would increase annual revenues by C$889 million by the year 2021-2022. This is 30% lower than the C$1.26 billion that the gaming corporation had initially projected.
The OLG had contributed C$2.2 billion to the provincial coffers in 2015-16 and was the largest non-tax contributor to the government. However, this amount was C$500 million short of its 2012 estimate when it launched its modernization programme.
Late last year, OLD cancelled its plan to privatize its C$3.8 billion lottery operations. It says that lottery profits can be increased once their management is modernized but it did not go into details of how the additional C$209 million profits can be achieved. The province’s auditor general was skeptical about what he called the province’s optimistic growth projections.
Ontario’s auditor general also criticized the OLG’s estimates for its PlayOLG gambling site that was launched in early 2015. The gambling site fell far short of its projected profits of C$100 million by turning in only C$15 million in profits. The online business’ mobile app is on its way and while this will indeed boost profits, the auditor general doesn’t think that PlayOLG will touch its latest profit estimate of C$25 million.
OLG generated online revenues of C$49 million in 2016 and this is expected to grow to C$53 million the next year and C$70 million the following year, a growth projection of 32% over three years. However, the gambling industry has slowed down by September last year and it now seems likely that these optimistic figures will not be achieved.
The auditor general pointed out that the OLG doesn’t seem to have correctly estimated the reach that the gray market has.
New Jersey Online Gambling Peaks in December
New Jersey’s Division of Gaming Enforcement released figures that showed the licensed operators earned revenues amounting to $18.4 million from their online operations this December. This was 31% higher than the previous year and also exceeded by $1 million the revenue record set in July.
Casino games showed a 35% increase whereas poker went up by 6%. The Golden Nugget’s online site was a major contributor to this performance, sending previous market leader Borgata to the second place. Caesars Interactive New Jersey saw an 18% surge in its business this December. This was the first time since 2006 that the casino revenues showed a year-on-year increase, albeit a small one.
Will Brexit Affect the UK Gambling Market?
The United Kingdom has a well-established online gambling industry and some of the largest companies in the business are based here. Britons spent more than £3.6 billion on online gambling in 2015, making this one of the best markets in the industry. However, the industry is jittery about the Brexit effect and will be looking for ways to deal with it. For starters, it seems that the UK gambling market will close itself to companies operating from outside. Companies that are not licensed by the UKGC will most likely not be able to reach this market.
Gibraltar will most likely be affected the most by Brexit. Some of the biggest UK-based operators have moved here and 10% of the territory’s workforce is employed by the gaming industry. However, since it has opted to remain in the EU, it is unlikely that Britons will be permitted to gamble at Gibraltar-licensed sites. In other words, companies that wish to operate here will have to get the necessary licenses and comply with the tougher tax laws.