The Ontario Premier Doug Ford government in Canada has been warned over instituting the planned 20% tax rate in iGaming. From the report, the provinces could lose up to $2.2 billion or more in public revenues in the next five years.
The Canadian Broadcasting Corporation (CBC) reported that a special investigation that took place on January 11 revealed this and was organized by the HLT Advisory Incorporated. The Great Canadian Gaming Corporation, a local land-based casino operator, ordered this investigation. From this exercise, the Ontario Gaming Market was entitled to a loss of up to $439.5 million in annual tax revenues.
Significant Concern
The Chief Executive Officer for Great Canadian Gaming Corporation, Tony Rodio, expressed his worries about the planned “open license” by the Ford government. According to him, this could lead to cannibalism of revenue from the local-based casino operators by the rival online gaming firms. He warned that the tax rates would lead to an unleveled playing ground that retail operators would lose up to 2500 jobs. This is equivalent to 25%of the workforce.
Inaccurate Hypothesis
The senior Vice President for Draftkings, Jeffrey Haas, claimed that the findings from the investigation relied on assumptions. He asserted that CBC assumed that all the land-based casino players would shift to online gaming for greater entertainment. According to him, the ‘open license’ model would result in spending money on onshore domains instead of offshore services.
Jaas Said, “People who are playing in Canadian online casinos and online sportsbooks and online poker rooms will continue to do so, except they’re going to go from playing offshore to onshore and anybody who continues to walk into real casinos in order to play games there will continue to do so.”
Local Determination
Further, the CBC reported that Ontario spends $400 million every year on online gaming from the industry’s estimates, mostly with offshore domains. It gave an example of the United Kingdom’s 2005 experience of deregulation and the assessment of the Ontario gaming market. The ‘open license’ model for around 13.5 million people province is likely to result in the local IGaming operators getting a nice share from the overall casino market.
