Written by , Ryerson University; , Mount Royal University; , Mount Royal University; , Brock University. Photo credit: Shutterstock. Originally published in The Conversation.
Single-event sports betting was recently approved by the Senate of Canada via Bill C-218, which is big news for the Canadian sport industry.
The passage of this bill, almost 10 years in the making, will dramatically change the sports landscape in this country given that annual betting by Canadians is already estimated to surpass US$10 billion a year through offshore betting websites and illegal gambling operations.
The influence of this bill — and related activities that will include sport marketing and media partnerships and related activation — will be enormous for an industry that has been severely and negatively impacted by COVID-19.
Many industry insiders representing professional sport teams and leagues are already planning for what they describe as being one of, if not the most, transformational sport disruptions in the modern-day industry. Experts note that the potential for this market is large, given it could be a US$4 billion revenue opportunity.
A plethora of sport betting operators will now enter the Canadian market, including DraftKings, FanDuel and PointsBet. That will contribute significantly to the economy through a variety of means, including new revenue via individual consumer betting as well as realized revenue through sport marketing partnerships with professional teams and leagues.
These new revenue streams are going to be difficult to ignore, but are fraught with big and unknown impacts.
The Canadian sport industry:
Today, the global sport industry is estimated to be valued at approximately US$529 billion. It has been well acknowledged that it has been severely impacted by COVID-19, especially when it comes to loss of fan-related revenue, including venue attendance and ticketing.
In Canada, for example, the Raptors had to play in Florida due to international border restrictions due to COVID-19 and the costs have been detrimental.
In the United States and Canada, the sport industry is estimated to be valued at approximately US$80 billion, with Canada making up a tenth of this market size.
Single-game betting offers a new means of engaging the fan-sport property entertainment experience, which is why so many sport teams, media partners and related sport sponsors are actively going “all in” with the opportunity for involvement around this highly engaged consumer segment.
This new market can be compared to Big Tobacco sponsorship money which was formally extinguished through previous federal legislation. It held a new and rather unwieldy power as one of most influential sport funding partners in Canada during the 1970s and 1980s.
And despite the single-betting bill taking 10 years to pass, stakeholders and the government are still trying to regulate the the effects of the new sport betting industry.
It means sorting out what will be best practice strategies that can draw comparisons to Wild West when unmoderated.
So what are the impacts of single-game betting to the industry and society, and how will it be regulated?
The government recently announced they are implementing a watchdog type agency and policy to monitor the industry for a number of concerns which, in the bill’s current form, include amendments to prohibit match-fixing and changes to the Criminal Code to allow First Nations lottery considerations.
What has not been considered, however, is how responsible betting will be moderated, managed and communicated. To date, there is no evidence of a national, independent or arms-length conversation on responsible betting. We know that related addictions could rise, especially with recent Canadian evidence showing that sport fans and bettors seem to be at a higher risk of problem gambling than non-sport fans.
What is the appropriate role and place of key stakeholders in this space, new and current, and how will this new category be defined as a sport marketing vehicle? The exchange of related sports data for betting purposes remains unclear.
One concern is the lack of a comparable mechanism to the U.S. National Council on Problem Gambling — of which theScore, a leading Canadian player in the global sport betting scene, is a member. Another concern is the lack of diversity in the sports betting industry. The industry is already loaded with traditional male profiles — a comprehensive diversity strategy could attract young, bright talent.
What does it mean for Canadian sport?
The jury is very much still out on the impact of the now legal, single-game sport betting industry in our country.
But this change will be monumental in size and value, with the potential to significantly impact the sport industry in a way we haven’t seen in decades.
The industry needs to take immediate steps to ensure it is open, transparent and considerate of responsible betting. It must also lead with a diverse culture, and have strong considerations for an authentic and sustained footprint in an industry desperately posed to return to sport after COVID-19.