Atlantic Canadian Provinces Mull Adding Online Casino To Lottery Sites

Dreamstime/Gerald Zaffuts

The Atlantic Lottery Corporation (ALC), serving four Canadian provinces, is looking to roll out online casino products in two more of those.

ALC introduced online casino gaming to New Brunswick as a pilot project in August. Prince Edward Island (PEI) agreed to move forward with a similar plan in December, and ALC says it expects Nova Scotia to do likewise. Officials for the final Atlantic province, Newfoundland and Labrador, are still officially on the fence about the concept.

Under Canadian law, almost all forms of gambling are legal in principle, but can only be offered by provincial lottery corporations. In practice, then, the available forms of gambling depend on what the provinces choose to allow their lotteries to offer.

There are five such corporations. The three largest provinces – Ontario, Quebec and British Columbia – each have their own. All three of these offer online casino games already. Manitoba has an arrangement with the BC Lottery allowing its residents to use the latter’s PlayNow casino, despite being with the other Prairie provinces for general lottery purposes.

The remaining provinces and territories are served by two other corporations: the Western Canada Lottery Corporation (WCLC), and ALC. These had trailed behind the others for iGaming until this year. That may have been due in part to the greater number of parties involved in making the decision.

Like ALC, WCLC elected this year to start taking things province-by-province. In October, it introduced online casino products for Alberta. That means that Saskatchewan and the territories are now in the same boat as PEI, Nova Scotia and Newfoundland, in deciding whether they want to follow suit.

Everyone’s doing the Pandemic Shuffle

In much the same way as their peers south of the border, Canadian politicians are rapidly reconsidering and re-prioritizing their stances on gambling as a result of the COVID-19 pandemic.

Canadian casinos shut down around the same time in the spring as their American counterparts, and stayed closed longer. Of the Maritime provinces, only PEI reopened its one casino over the summer. New Brunswick waited until September, and Nova Scotia until October. Newfoundland does not have a provincially approved casino.

Other sorts of retail gambling revenues – even sales of lottery tickets – have fallen in most places. Conversely, online casinos and poker rooms have enjoyed a huge upswing as people seek out new ways of entertaining themselves from home. In the US, states with legal online casinos like New Jersey presented a night-and-day contrast with those which lack an online option. Those latter saw their gambling revenue drop close to zero during the shutdown.

Seeing that difference has sparked a response in Canada at both the federal and provincial level. Finally, the Liberal government has joined the opposition parties in seeking to legalize single-game sports wagering. In Ontario, Doug Ford’s government is pushing to end the lottery’s monopoly on iGaming. The expansion of the multi-provincial lottery corporations into the online casino space is itself a part of this larger trend.

New Brunswick faces criticism for high stakes play

The New Brunswick pilot project currently features 44 games, supplied by IGT and a handful of other companies. Mixed in with a variety of slots are a few table games, including blackjack, roulette, pai-gow, and three-card poker. It appears that its preliminary results are encouraging enough that its neighbors are now tempted.

At the same time, the inevitable pushback has also begun. In particular, the province is facing criticism for the high stakes limits it has set for the games. For most of the slots on offer, the maximum bet per spin is between $40 and $80, with one game, Spartacus, Gladiator of Rome, featuring a maximum of $100. Some of the table games are even higher, with IGT’s Blackjack allowing a bet of up to $500 per hand.

Critics have pointed out that ALC has imposed a maximum wager of $2.50 per spin on its video lottery terminals in the province. If such a limit is necessary for VLTs, they argue, then surely online gambling carries even greater risks, and warrants at least as strict a limit.

The lottery has countered by pointing out that it has to compete with illegal offshore sites, where limits are higher still. Unfortunately, this is a dilemma that every jurisdiction legalizing online gambling faces.

There is a fine line to tread. On the one hand, one of the major arguments for legalization is that it makes it possible to offer people a safer way to gamble. On the other, many of the same policies that make the product safer end up frustrating some users. This can unfortunately drive them back to the illegal sites. New Brunswick may end up finding that the sweet spot is somewhat less than the current limits, yet higher than the cap on its VLTs.

The road forward

ALC has been attempting to convince the provinces to allow online casino products for nearly a decade. As mentioned, PEI has stepped forward as the next in line, with its cabinet having approved the idea on December 22.

PEI is a very small province, however, with a population of just over 150,000. ALC says that it expects online casino products to turn a net profit of around $750,000 a year in the province in the first year of operation, after deducting expenses. If all four provinces got on board, then it estimates net revenue would ultimately exceed $10 million per year.

Nova Scotia is the real prize, with about 40% of the region’s total population. ALC seems confident that its gaming regulator will eventually approve online casino. The Nova Scotia Gaming Corporation itself has been more reserved, telling the CBC only that it is “evaluating” the possibility.

Newfoundland seems a step further away. As it doesn’t have a casino in the first place, its lottery revenues have been the least affected, though it acknowledges a decline. On the subject of online casino games, its Minister of Finance Siobahn Coady said only that the government “hasn’t made a decision.”

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