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Is the growth of the online casino market a danger for the land-based casinos in Canada?

By Joseph Peters

October 28th, 2021

BURLINGTON, ON

 

 

Canada features a diverse landscape in land-based casinos, ranging from small gambling halls in the midst of endless plains to skyline-defining complexes such as the Niagara Fallsview casino or the Montréal Casino.

Over the last few years, this diversity has grown with the rise of online casinos. These casinos offer players an unrivaled number of games, ease of access, and welcome bonuses. This has given rise to an explosive growth, that could lead to a combined 5-billion-dollar market by 2030. But does this growth rival the classical brick-and-mortar casinos or is the growth in gambling more than a zero-sum game?

The growth

Since the introduction of online casinos, Canada has seen a steady growth in its online casinos. The Kahnawake Mohawk Territory near Montréal was one of the first licenses for online casinos and is still a respected party among different licenses. Online casinos aren’t allowed to offer their services from Canada, but Canadians are free to play at offshore casinos.

Mohawk Territory Casino just outside Montreal

These offshore casinos have seen tremendous growth over the last few years. The COVID-19 virus undoubtedly helped, because as land-based casinos were struggling, profits for game developers such as Evolution rose by about 90% – a trend that slowed down, but still shows an impressive 51% growth over the first half of 2021.

Other reports foresee a similar growth. The Canadian sports betting industry is estimated at around 2.2 billion dollars for 2030, with the iGaming (online casinos) industry growing even more, with a projected total revenue of $2.4 billion. This means the average adult Canadian will spend $60 a year on sports betting and $75 a year on online gambling.

The benefits of online casinos mentioned above combined with the availability and the coronavirus means that more and more Canadian players are also visiting online casinos. These new players are often overwhelmed with the different options, welcome bonuses, and online-only games. A good gambling guide can help these new casino players capitalize on all the benefits of online casinos.

The threats and opportunities for local casinos

Although this growth of online gaming poses a threat to land-based casinos, it also provides opportunities. When brick-and-mortar casinos are open for business as usual, they can also incorporate online casinos to diversify their business. Nevertheless, local casinos need to step up their game to match the online casinos’ benefits.

First of all, online casinos are open and accessible 24 hours a day, 7 days a week. Even to someone living right above a brick-and-mortar casino that never closes, pulling out a smartphone to play live roulette is more convenient. To combat this, land-based casinos need to focus on offering an unforgettable experience that players can never get on screen.

Offer an unmatched in-person experience when a player visits a casino.

A second benefit for online casinos is scalability. Online casinos can ‘effortlessly’ offer thousands of games without ever running out of physical space. Although brick-and-mortar casinos don’t have that advantage, they can (and have started to) implement some of the same one-to-many games. Offering blackjack where players share the same cards and make decisions on a console gives physical casinos a similar offering. These consoles could even offer an online version of the casino – merging the brand and reliability of the brick-and-mortar casino with the flexibility of an online casino.

Finally, online casinos are able to operate on better margins for players. Online slots, for example, often have a house edge under 5% – compared to around 12% for physical slots. Although shrinking the house edge may be an obvious solution, online casinos will always have the advantage here. The solution here is to offer an unmatched in-person experience when a player visits a casino.

Bonuses for new and existing players

One of the trickiest advantages of online casinos is the welcome bonus and other bonuses for existing players. These bonuses can sometimes double a player’s first deposit, giving them twice the money to play with. Although casinos have always offered comps, they can’t match the bonuses online casinos give out.

Especially players looking for a new online casino can really get a head start using these welcome bonuses. These bonuses can consist of free spins and/or bonus money that can be used to play the games. Similar bonuses exist for existing players, too.

Playing from home

Another advantage of online casinos is a logistic one. Players can play anywhere and at any time. Using a mobile website, players can use small breaks in the day (toilet breaks, waiting for the bus) to play their favorite games. In contrast, a physical casino requires a trip to the casino, parking, going around, and going back home.

Physical casinos will always be at a disadvantage. It can only serve those players that live close enough to the casino to make the trip worthwhile. Other players will flock to their online counterparts by default.

More game options

Even when land-based casinos use online casinos as an inspiration to broaden their offering of games, it will be impossible to truly compete with online casinos. These online casinos often partner with twenty or more game developers. Not only does it give players the chance to pick their favorite roulette version, it also allows for more competition, creating bigger and better games.

One example is the introduction of roulette games with huge multipliers. A usual roulette game offers the largest win of 36x a player’s bet. Online roulette versions can skyrocket this multiplier to 500x or even higher multipliers. Although the technology may be copied, it takes the scalability of hundreds of players to truly make this work.

 

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