iGaming has grown considerably in recent years. Driven by innovations in web technology and a changing regulatory landscape, online casinos and sportsbooks are more popular than ever.
To understand how the landscape may change moving forward, investors should assess how the industry has evolved in recent years.
Online casinos: A historical perspective
For most of its history, Canada’s iGaming market has remained largely unregulated. That changed in 2022 when the Alcohol and Gaming Commission of Ontario created the iGO. Equal parts regulator and iGaming market, iGO enforces iGaming regulations on both a regional and provincial basis while giving operators easy access to consumers.
With iGO, AGCO has laid a strong foundation for the future of Canada’s iGaming market. Not only is Ontario now one of the largest iGaming markets in North America, but iGO has also displaced unregulated iGaming. In the year since its creation, iGO has delivered over C$1.4 billion in gaming revenue from C$35.6 billion in total wagers.
As of September 2023, iGO comprised over 71 websites and works with 47 operators. The market’s 943,000 active players each spent an average of roughly C$191 per month. Casinos remain the most popular iGaming category, with sports betting and pay-to-play poker a distant second and third.
A changing digital landscape
The technology acceleration brought on by the global pandemic has paved the way for significant transformations in how organizations conduct their business and how consumers engage with the digital world.
“A key driver behind iGaming’s rise is the changing behavior of consumers who are increasingly drawn to digital experiences,” reads a piece published by NYCE International. “The convenience of accessing diverse gambling options from the comfort of one’s home or mobile device has significantly contributed to the industry’s growth.”
In response, iGaming operators have begun leveraging this new landscape, developing strategies to enhance user experience and increase their market share.
Online casinos began working with well-known entertainment brands to integrate popular culture into their platform, which has helped generate unprecedented growth in the iGaming space, noted gambling expert Henry Thompson. Other operators turned to the video games industry for inspiration, incorporating things like leaderboards, interactive storylines and additional reward systems.
Globally, the outlook for iGaming is promising. Valued at US$53.7 billion in 2019, iGaming is expected to grow at a CAGR of 11.5 percent through 2027, according to Grand View Research.
The evolution of iGaming has been heavily influenced by innovations in technology and advancements in regulations. All indications are that these trends will continue to play a vital role in the future of iGaming.
Immersive experiences
Streaming video in the form of live dealer games is becoming increasingly common in online casinos. Things aren’t likely to stop with video streaming, either. Although both technologies are still in their infancy where iGaming is concerned, virtual reality and augmented reality have the potential to revolutionize the gaming experience.
Artificial intelligence
Artificial intelligence can streamline customer support, especially with the help of generative AI programs like ChatGPT. This is only the tip of the iceberg for AI application in iGaming. Coupled with machine learning, AI allows operators to more easily create and deliver personalized gaming experiences. From an operational perspective, AI can also help online casinos provide fairer and more balanced games while protecting customers and preventing fraud.
Social gaming
Social gaming has been called the future of iGaming, and it’s not difficult to see why. Blending iGaming with a sense of connection and community through avenues such as online casinos has the potential to make the experience considerably more satisfying and comfortable for users. Social iGaming can also improve ease of use through features such as social login.
Blockchain
The increased security offered by cryptocurrency is attractive for operators and gamblers alike. Blockchain technology also enables faster transactions and greater freedom.
Potential leaders in Canada’s iGaming sector
Ontario is already a significant market for iGaming, and if other provinces follow suit, Canada could become one of the most important iGaming markets in the world. Operators that have emerged as leaders within the current market could be well placed to take advantage of potential.
We’ve profiled a few such companies below.
NorthStar Gaming Holdings (TSXV:BET)
NorthStar is an innovative iGaming operator that leverages artificial intelligence to help deliver personalized sports betting. The company is on track to become one of Canada’s biggest iGaming operators, with triple-digit revenue growth in Q3 2023 compared to the same period in 2022. The company leverages artificial intelligence for personalized sports betting, and tier-one partnerships with sports betting and technology providers such as Playtech and Kambi to ensure best-of-breed entertainment and betting experience for customers.
NorthStar also recently announced a strategic partnership with in-venue technology provider BettorView to deliver its services to restaurants and bars across Ontario.
Jackpot Digital (TSXV:JJ)
Jackpot Digital technically isn’t an iGaming provider – not exclusively, at least. The company designs and manufactures digital touchscreens for casinos. Recognizing the growing potential of iGaming and the advantages offered by its pre-existing industry partnerships, Jackpot established a public subsidiary in 2021 that marked its foray into the iGaming space.
FansUnite Entertainment (TSX:FANS,OTCQB:FUNFF)
A technology-focused sports and entertainment company targeting iGaming, FansUnite recently sold its Chameleon betting platform to increase its focus on its affiliate vertical through its subsidiaries BettingHero and American Affiliate.
In the company’s financial update released in December 2023, CEO Scott Burton reported a gross margin of 63 percent and adjusted EBITDA of C$1.1 million for the first nine months of 2023, an increase of C$2.3 million year-over-year. The company also completed a C$3.04 million private placement, including a significant investment from Tekkorp Capital.
Investor takeaway
Compared to conventional casinos, iGaming is still a relatively new industry. At the same time, it has experienced meteoric growth over the past several years. As technology continues to evolve, the revenue prospects for iGaming operators, both in Canada and internationally, will likely continue to increase. For anyone seeking to invest in this space, there’s no time like the present.
This INNSpired article is sponsored by NorthStar Gaming (TSXV:BET). This INNSpired article provides information which was sourced by the Investing News Network (INN) and approved by NorthStar Gamingin order to help investors learn more about the company. NorthStar Gaming is a client of INN. The company’s campaign fees pay for INN to create and update this INNSpired article.
This INNSpired article was written according to INN editorial standards to educate investors.
INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.
The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with NorthStar Gaming and seek advice from a qualified investment advisor.
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