Posted: May 21, 2022, 7:51 a.m.
Last update: May 21, 2022, 7:51 a.m.
One of the largest online gaming companies has finally launched in Canada’s largest province. DraftKings officially went live in Ontario on Wednesday, six weeks after the games went live online.
The Boston-based online gaming company has become the 17th licensed operator in Ontario. It has licenses for sports betting and online casino applications.
Co-Founder, President and CEO Jason Robins said the expansion into Canada marks an important milestone for DraftKings.
“We look forward to providing passionate Ontario fans with the most entertaining and responsible gaming experience possible,” Robins said in a statement announcing the launch.
Besides Canada, DraftKings offers sports betting in 18 US states. Its online casino apps, which now include Golden Nugget Online Gaming (GNOG), are available in eight states.
DraftKings executives not worried about late start
The late launch of DraftKings in Ontario differs, for the most part, from its strategy in the United States. Typically, the operator started taking bets on the first possible day in states where operators launched simultaneously – such as Arizona, Louisiana, Michigan and New York. It was also the first to go live in Indiana and New Jersey.
Company executives, speaking on the company’s second-quarter conference call with stock analysts earlier this month, said the six-week delay is not expected to impact the company’s ability to gain market share in Ontario.
The province’s launch, combined with the recent shutdown of GNOG, is expected to bring in up to $150 million in revenue this year, DraftKings chief financial officer Jason Park said on the May 6 call. However, the start-up in Ontario and the completion of the acquisition of GNOG are also expected to result in more than $70 million in losses before interest, taxes, depreciation and amortization.
Robins deferred to analysts’ questions about the breakdown of the impact on Ontario’s bottom line, saying “it’s best to manage the two together” at this point. He also said that despite expected losses, the company is still performing better than it had expected earlier this year.
So (it’s) great to see that some of the cost savings that we identify are able to effectively fund new state or – in this case, province – launches as well as the absorption of an acquisition,” said Robins. “So we’ll continue to look at ways to try to neutralize the impact of new state launches by identifying other cost savings across the business.”
The company expects the next launches of its online sports betting application to take place in Maryland, Ohio and Puerto Rico. The day before DraftKings launches in Ontario, the Ohio Casino Control Board said it expects sports betting to launch there on or around January 1, 2023.
DraftKings stopped DFS this week in Ontario
Although DraftKings did not start at the same time as its major US competitors, such as FanDuel, Caesars Sportsbook and BetMGM, the company had a presence in Ontario as a daily gray market fantasy sports operator. This should help it make up for lost time as it seeks to gain market share in the province.
In the days leading up to the launch of its mobile sports betting and casino apps, the company sent out a notice to its fantasy sports customers earlier this week that neither paid nor free fantasy contests would be available in the province for the moment.
As part of Ontario’s move to regulate online gambling operators, provincial officials have encouraged gray market operators to transition into its new legal market.
