Canadian lotteries started offering iGaming products some time ago but they have failed to meet government expectations of revenue generation. You might ask, what’s the reason behind that? It’s actually quite simple. It’s because of the fundamental change brought about by mobile phone technology, internet search engines and ubiquitous wireless internet, especially in the world of information and entertainment consumption. This has led to a disruption in the iGaming business models employed by Canadian lotteries. Another important fact, the best Canadian online casino have been losing a lot of money to black market betting because of archaic prohibition laws prevalent in the country.

What is happening to the Canadian iGaming Industry?

A transition to everything online

There was a time when people needed to go to record stores to get some new music to listen to. However, that’s a thing of the past now. Anyone with a smartphone can stream the latest songs. There is no need to visit theaters to watch a movie, nor is there a need to rent DVDs, you can just stream them online. A smartphone can keep you abreast with the weather as well. No need for the daily weather report after the news. Most of the world’s best video games are also available on mobile platforms, you can keep your consoles and high-end PCs locked. Even camera technology in phones has improved so much that people don’t really need to buy a professional grade camera for good photos. You don’t need to turn on the TV for live sports either, most of the world’s top sports leagues stream their games online. If people want to gamble, they don’t need to go to their local convenience store, race track, casino or provincial lottery website as consumers can get these and many more entertainment industry products quickly and seamlessly on their smartphones. People don’t just live in an internet world; they live in a mobile world. We are digital nomads, carrying our world around. There was a time when you couldn’t leave home without your AMEX card, now you can’t leave home without your smartphone.

Disruptive Behaviour

Any lottery’s product that can be consumed on a mobile device needs to provide a competitive range of products to its consumers. Otherwise lotteries will face the reality of increasingly competitive iGaming products eroding consumers’ existing relationships with lottery operators.

Lotteries now face the reality of continuous disruption by new technologies and shifting consumer behavior. They need to alter their existing business models.

The need for variety

Lottery operators can’t just offer a small range of Internet-based iGaming products. Lotteries must provide consumers with the products that they want on their devices. If this is not carried out, consumers will just go somewhere else with their money. One option for governments and lotteries is to abandon their current efforts and convert their iGaming strategy to a license and taxation-based model. Several provinces are now reviewing this business model under their interpretations of the “Conduct and Manage” rules and regulations contained within sections s.206 and s.207 of the Canadian Criminal Code. One must remember that all provinces do not interpret the Canadian Criminal Code sections in a similar manner.

Technological Dilemma

New products and regulations have ensured that the current iGaming strategies in Canada need to be reviewed. Virtual Reality and Augmented Reality Casinos will soon be available for the iGaming industry. Wearable devices and enhanced vision systems will become integral to iGaming in the near future. New product categories such as live dealer, skill gaming, skill/chance hybrid games, proxy-play, in-game wagering, community games, social casino, fantasy sports, and e-Sports are already being delivered to Canadian consumers. 

A pending change to the Canadian Criminal Code might lead to the introduction of single outcome sports wagering and sports books to operate in Canada. Product innovation and technology in gaming is increasing consumers’ appetite for how, what, where and when they play is growing at the same pace. It’s high time that all lottery operators reset their iGaming business models.

Competition

The resets will lead to the introduction of new concepts, technologies, games, and state-of-the-art delivery systems in the Canadian market. While bringing these products in the market, rules should always be kept in mind, along with the regulatory bodies in accordance with responsible gaming initiatives.

If multiple iGaming suppliers are engaged under a license and taxation model or storefront model, it will lead to a shift in the burden of product innovation from the government and lottery operators to iGaming suppliers.

The importance of choice

In any free economy, consumers have the ability to choose a product that fulfills their needs. A free market never puts consumers in a position where they can only buy one type of product from one specific supplier and at one price point. 

The existing iGaming business model has repeatedly proven inadequate when it comes to offering Canadian consumers the products they desire on the delivery systems they wish to use. Nor has it been successful in adequately contributing to the provincial treasuries that support the economy. If the iGaming business models aren’t reset soon, it might become increasingly difficult and expensive to do it at a later stage.