Online Gambling to Be Legalized in Ontario, But at What Cost?

Online casinos in Ontario have a ton of untapped potential. The province’s tax revenue would increase significantly if the market were opened, and the advantages to businesses and consumers would be substantial. The government might lose millions of dollars in tax income if they decide to implement its internet gambling law, according to a research commissioned by Great Canadian Gaming, the largest casino operator in Ontario.

Loss of income due to internet gambling legislation

In order to facilitate the launch of new internet casinos in Ontario and across Canada, iGaming Ontario was created. The company oversees and runs the online gambling services provided by authorized providers. The CBC released the details of the HLT Advisory Inc. study Ontario Gaming Market Assessment earlier this week. More than two billion Canadian dollars will be lost over the next five years, as stated in the whitepaper.


Land-based casinos in Ontario, for example, must pay a tax of 55 percent on their net gaming revenue under the existing taxation legislation. However, the government has not yet decided how much money it will collect from internet gambling. The Ontario Gaming Market Assessment estimates the amount of tax income that may be collected from online gambling operations assuming a tax rate of 20%. If the proposed 20% tax rate is included in the final law, the province may lose over C$2 billion in income within five years, or around C$550 million per year. The whitepaper predicts that the losses will come from customers who migrate from brick-and-mortar establishments to virtual ones.


In other words, while the internet gambling business will bring in additional revenue for Ontario, the report warns that the government stands to lose out if gamblers switch their focus from brick-and-mortar casinos to online operators due to the latter’s lower tax rate.


Some doubt the veracity of the casino’s report.

However, iGaming companies are skeptical of the paper’s findings and suggestions because Great Canadian Gaming commissioned it. DraftKings’ Senior Vice President Jeffrey Haas predicts that after the law is enacted, not much will change in terms of gambling activities among Ontarians. Haas thinks gamblers who prefer playing at land-based venues will continue to do so; the only difference is that online gamblers who previously played on offshore sites like Party Casino Canada, would be encouraged to move onshore instead, which would be beneficial for the provincial government.

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