In a last-minute lobbying effort ahead of the launch of Ontario’s private market for online gambling and sports wagers, one of Canada’s largest casino companies is urging the province to scrap those plans and instead let casinos take control of legal online betting.

Great Canadian Gaming, which operates 12 casinos in the province including in Woodbine and Pickering, commissioned a report late last year that it recently shared with the government. It said online sites would “cannibalize” the profits of brick and mortar casinos and predicts about 2,600 lost casino jobs and $2.8 billion less in tax revenue over five years if Ontario opens up the market as planned.

Critics, including owners of igaming companies and at least one other Canadian casino operator, disagree with those findings and argue that an open market for online gaming will attract new tech and innovation jobs to Canada.

In a power point presentation obtained by the Star, Great Canadian said the government should grant casinos an exclusive right to take bets online for at least two years and crack down on unregulated sites and the consumers who gamble with them.

Tony Rodio, CEO of Great Canadian, said in a statement that the company supports online gaming “in principle” but that the province should take the concerns raised in the report seriously, particularly after the casino business was hit hard by multiple, drawn-out pandemic-related shutdowns.

“The Ontario government needs to take the time to get this right,” he added, saying the company wants to work with the government to find a solution that supports the casino industry’s recovery.

But other Canadian players in the igaming space say Great Canadian’s report comes too late in the process and is founded on a false argument, as the market is already overrun by foreign-owned grey market gaming companies.

“We don’t see any compelling reason for there to be another day of delay,” said Benjie Levy, president and chief operating officer of theScore, which is now owned by Penn National, and plans to launch its sports betting app in the new market. “There should not be another Super Bowl or March Madness where we are dealing with the grey market.”

TheScore offers sports betting in four U.S. states and Levy says online gambling there has not cannibalized casino revenue but has been an “additive” to the traditional market. “We’re not seeing job losses and we’re seeing the market in totality grow.”

Levy said theScore hired 200 new employees in Toronto last year and plans to hire 200 more this year to support its Ontario launch.

Local and international players have already spent time and money on compliance and legal costs, software development and preparing applications to participate in the new market, which was widely expected to launch in the first quarter of this year.

Dustin Gouker, vice-president, North America at Catena Media, which operates a portfolio of websites that cover legal betting, said the Great Canadian report is late and “seems like crying over spilled milk.”

Gouker doesn’t expect the report to delay the regulated market but added, “when you throw out a big number and people in government believe the number is real, there’s a possibility that everything could slow down or even shut down in the short term.”

The Ontario Lottery and Gaming Corp. is currently the province’s only option for legal online and sports betting. But scores of gambling companies that are unregulated here, such as Bet365 and PokerStars, still operate essentially unimpeded.

The Great Canadian report, prepared by gambling consultancy HLT Advisory, comes almost three years after Ontario announced plans for a regulated market, which was followed by many months of consultations and the creation of a new government subsidiary last year.

The government has said the new regime, which was set to launch last year but has already been delayed in part by bureaucracy, could regulate grey market operators to ensure responsible gaming standards and capture missed tax revenues.

Natasha Krstajic, press secretary to Attorney General Doug Downey, said Tuesday the government “recently learned” about the Great Canadian report.

She said the new market will, “complement existing land-based (casino) gaming activity by providing a new opportunity for Ontario’s land-based operators to expand into igaming to diversify revenue sources and cross-promote between online and land-based sites.”

Krstajic said the government held multiple roundtable meetings, circulated discussion papers and asked for input from all interested parties, including casino operators.

She did not comment specifically on whether the report would delay the government’s plans but said various government departments are working to prepare for the launch and “its timing will be announced soon.”

The report was first covered by the CBC and attracted support from Jerry Dias, national president of Unifor, which represents thousands of Ontario casino employees.

It said the overall legal market would grow under the new regime but the province would collect less tax revenue as the share of gambling revenues shifts more toward online and away from casinos. The tax rate for online betting is expected to be in the range of 20 per cent while casinos pay about 55 per cent.

Great Canadian did not respond to specific questions about the timing of its report, which landed on the eve of the market’s launch, or whether it is prepared to compete in the online market with its own igaming product.

Last year was tumultuous for the company, which was sold to U.S. private equity fund Apollo Global Management in September and faced a scandal over its COVID-19 vaccine-queue-jumping CEO, who resigned prior to the sale closing.

In the power point presentation, Great Canadian said it recognized that it is “late to the engagement” on online gaming but said its new owners are experienced and engaged on this topic.

Apollo and Brookfield Asset Management, which has a 50 per cent interest in Great Canadian’s GTA-area casino properties, declined to comment for this story.

Great Canadian does not appear to have the public support of Ontario’s other major casino operators, which have been working on their own online plans, according to industry sources. At least one, Mohegan Gaming & Entertainment, which runs two casinos in Niagara Falls, said it welcomes the open market.

“The future of gaming in Ontario is bright with potential opportunities to expand legal offerings to include igaming and sports betting. We are excited about these initiatives,” said spokesperson Jennifer Ballester.

Gateway Casinos and Caesars Windsor would not comment on the Great Canadian report and Hard Rock did not reply to requests for comment.

Paul Burns, CEO of the Canadian Gaming Association, said the issue of cannibalization of casino profits is hotly debated and that it can be difficult to compare markets.

On top of tax revenue, Burns said the regulated market will bring new economic benefits to the province, with international investment and local spending by players such as theScore and Rivalry Ltd.

Torstar Corp., which owns this newspaper, has also said it plans to launch an online casino and sports betting site.

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