Like a 90-yard play that methodically works its way up field, Canada is closing in an official sports-betting as Bill C-218 passed another legislative obstacle last week.
At the most recent Senate committee hearing, a representative from the Canadian Gaming Association suggested that without any amendments, the bill if passed into law this summer would allow the Canadian market to be up and running by Labor Day in early September.
The progress is now prompting analysts to guestimate the size of the potential pie and who is best positioned to take advantage.
In the wake of the news, the team at Macquarie was quick out of the blocks, suggesting the total addressable market (TAM) for Canadian online sports betting and gaming would be around US$4bn.
They break this down by using the same metrics as they have used previously for regulating US markets with what they say are conservative estimates for average spend per head of population of $50 for sports betting and $75.
In comparison, potential market participants DraftKings and MGM have both recently floated figures that are more optimistic on the TAM. During its first-quarter results, DraftKings suggested Canada might be worth between $5bn-$8bn while MGM also pegged the market at around $7bn.
“As Canada approaches legalization, industry stakeholders are positioning themselves for a potential push up north,” said the Macquarie team.
One operator which will is certain to be in the vanguard of the Canadian market as and when it opens is theScore. The company itself has estimated that the market will be worth between $3.8bn-$4bn.
Fight for the right
They won’t be alone. Aside from DraftKings and MGM, Flutter Entertainment and PointsBet have also signaled their intention to enter the Canadian market as soon as legislation allows.
Indeed, the latter announced last week a significant hire aimed squarely at the Canadian market with Nic Sulsky, formerly at fantasy sports operator Money Knife Fight, taking up the role of chief commercial officer for PointsBet’s Canadian operations.
“The hire marks PointsBet’s first in Canada and represents the company’s inaugural step toward its strategy of building a Canadian leadership team for the potential Canadian marketplace – one that understands the unique Canadian sports landscape and Canadian fans,” the company said in a press release.
In terms of new markets, Canada is likely to be very competitive from the off. “In our view, Canada’s population, household income, and sports culture (six NHL teams, one NBA team, one MLB team, and its own football league) make the country an attractive market for US operators,” said the Macquarie team in their note.
In a previous note in March looking specifically at Score Media and Gaming, Macquarie said in sports news and content app, which is number three in North America in terms of the monthly average user and number one in Canada with around 3.8m users.
The team also noted that in the US market to date they had already seen “the power of brands, social media, and captive databases, all of which we believe blends to create a unique opportunity for theScore.”
Share of voice
Aubrey Levy, vice president of content and marketing at theScore, says the company is built for maintaining the right player experience, whether that is in the US where it is already up and running in five states and Canada where he says, the company has “got lucky” with an unforeseen legislative initiative.
“We are already built for this,” he says. “We don’t have the largest microphone – we aren’t ESPN. But we have a good product that has been built for users. We know the playbook exists. So, when we look at the market, we are the only true joint (media and sports-betting) operator. We believe betting is a fan experience. We have so much advantage.”
“(In Canada) we have the brand, and we can bring our differentiated offering,” he adds. “That is an area where regionalism plays to our favour.”
More Senate hearings are due on the bill this coming week which theScore said in a statement meant that the country was now “one important step closer to legalizing single-event sports betting in Canada.”
“Following committee, we are optimistic that Bill C-218 will be swiftly passed at third reading in the Senate, receive Royal Assent and become law,” the company added.
The take: The moves in Canada prove how much impact the liberalization in the US is having both near and far. That the country looks set to fully open up to sports betting and online gaming is, arguably, another effect of the striking down of PASPA. It will also be a very competitive market from the off with all the major US brands likely to view as an unexpected – if not entirely unexpected – opportunity. theScore is definitely uniquely positioned as the leading sports app to grab its share of the market. It has a brand name, and it already has an audience. The question now is whether it can convert them.
Scott Longley has been a journalist since the early noughties covering personal finance, sport, and the gambling industry. He has worked for a number of publications including Investor’s Week, Bloomberg Money, Football First, EGR, and GamblingCompliance.com. He now writes for online and print titles across a wide range of sectors.