Ontario’s online sports betting will transform when private operators enter the sports betting industry on April 4, 2022. Private operators are expected to attract more sports bettors with competitive odds and welcome bonuses. Based on similar markets, Ontario sports betting’s commercial relaunch could generate $10 billion in handle and over $152 million in tax revenue in its first year.
Ontario Sports Betting Revenue And Tax Projections
Ontario’s sports betting handle should begin with rapid growth like New York’s did when it launched mobile sports betting. But New York’s financial center seems to encourage larger wagers on average than what we expect from Ontario. However, Ontario shouldn’t be as small per capita as Michigan, which gained access to mobile sports betting in January 2021.
Although Ontario has room for under or overestimations, $10 billion in handle seems like a reasonable middle ground.
Based on comparable American markets, Ontario sportsbooks should hold about 7.6% of its handle. Ontario sportsbooks should keep around $762 million in revenue.
Ontario will tax sportsbooks — not sports bettors — at a 20% tax rate. So, Ontario could generate around $152 million in its first year of privatized sports betting.
How Ontario Compares To Major American Markets
Our Ontario projections were based on per capita sports betting rates from two states: New York and Michigan. Ontario’s population is about 14.6 million which falls between New York’s 19.5 million and Michigan’s 10 million. New York’s first four weeks of mobile sports betting generated just under $2 billion in handle.
With figures for the Super Bowl and March Madness yet to come, New York will continue to shatter expectations. If New York averaged $2 billion per month, it could break $24 billion in handle in its first full year.
Privatized sports betting in Ontario isn’t expected to be that dramatic. But it should perform better per capita than Michigan.
Mobile sports betting in Michigan launched in January 2021, 10 months after retail sports betting went live. Retail sports betting’s launch coincided with the 2020 COVID shutdowns, so it underperformed. Once mobile sports betting became available, most of Michigan’s handle, sportsbook revenue, and sports betting tax revenue came from mobile sports betting.
In its first year with mobile sports betting Michigan sportsbooks collected $3.7 billion in handle — just over twice what New York sports bettors spent at their sportsbooks in the first three weeks.
Ontario’s mature base of bettors should speed growth at the beginning of the province’s private sportsbook launch. But it doesn’t have the commodity traders turned sports bettors that likely drive New York’s large betting handle.
However, Ontario sports betting doesn’t need to be New York to be successful. It just has to draw bettors away from the gray market and into the newly legal and taxable market.