OLG Gaming Payments to Host Communities Decline as Online Betting Takes Off Last month, Ontario Lottery and Gaming Corporation (OLG) made its fourth quarter (January 1–March 31) payment of $51,438 to Cavan Monaghan for hosting Shorelines Slots at Kawartha Downs. This brings the revenue for OLG’s fiscal year to the municipality to $286,388. Last year, this quarterly payment was significantly higher, at$72,868 and the annual payment to themunicipalitywas$324,499, representing a decline of more than 13% over last year’s payments.
Gaming revenue payments to the City of Peterborough also fell at a slightly lower rate of 9.4%.Payments to host communities are based on a formula consistently applied across all gaming sites in Ontario using a graduated scale of gaming revenue at the hosted site.
The downward trend in host community revenue is not unexpected, as competition for gaming revenue continues to intensify across the province. Three years ago, online gambling and sports betting was legalized in Ontario and since then online betting has taken off. The regulator for the online gaming market is iGaming, whose mission is “To conduct and manage Ontario’s safe, efficient and legal world-class internet gaming market.”
In its 2024 annual report, iGaming indicated that while the online market was only in its second year of operation, it has exceeded the regulator’s expectations for growth and economic development, having generated nearly 15,000 full-time jobs and contributed almost $2.7 billion to the province’s GDP during the 2023-2024 fiscal year. The report also noted that the regulator expects to see more innovation and investment in the online gaming market as it continues to evolve and grow. The market is already substantial. There are currently 49 operators running 84 gaming websites in the province.
During the 2023-2024 fiscal year, Ontario residents wagered $63.3 billion which generated $2.2billion in gaming revenue for iGaming. The online platform operators received $1.7 billion of this revenue. After expenses iGaming earned a profit of$176 million and sent the province a dividend of $149 million, which becomes part of the provincial budget revenue. Gaming revenue in Ontario is expected to rise to $2.5 billion in the 2024-2025 fiscal year and $2.6 billion the following year, representing a 6% compound annual growth rate.
In addition to online gambling options, there are also more and larger casino facilities in the province. The Alcohol and Gaming Commission of Ontario (AGCO)reports that over the last nine years, service providers have invested more than $2.5 billion across the province which has led to the development and opening of seven new casinos, one large scale resort development, numerous gaming floor expansions and new non-gaming amenities.
The appeal of this non-tax revenue for the province is compelling, and the province is incentivized to obtain as much gambling revenue as residents are willing to provide. As a result, while betting in Ontario is on the rise, it is likely that revenue for host communities like Cavan Monaghan will continue to fall.