Canada has ushered in a new era for legal sports betting - a milestone years in the making that required federal lawmakers to alter the country's Criminal Code. According to a new report, the vast majority of people didn't notice.
Just one in five, or 19 per cent, of the 1,000 Canadians recently polled by audit and consulting firm Deloitte Canada say they were aware that single-event sports betting is now legal. The change this past summer brought Canada closer in line with rules in the United States, where the sports betting industry has boomed in recent years. The move ended the long-standing requirement to spread bets across multiple games and matches, and gave provinces the authority to regulate new types of betting.
The "awareness gap" highlighted by Deloitte is especially troublesome for the private sportsbooks preparing to launch in Ontario on April 4. Canada's most populous province has led the way in embracing private competition by allowing an unlimited number of companies to apply to compete against its own lottery corporation. That has seen a number of major foreign-owned sportsbooks invest in ad campaigns targeting Ontario sports fans.
"Curiously, bettors' voices have largely been absent from conversations about this important evolution of the Canadian sports, entertainment, and gaming sectors," Deloitte wrote in its report.
Last year, the Big Four accounting firm predicted Canada's legal betting industry could handle $28 billion in annual wagers, five years post-legalization. Deloitte found almost 38 per cent of respondents to its recent online survey either made a sports bet over the previous year, or were interested in placing one in the future.
"Those who said they were unlikely to do so cited a lack of information and an uncertainty about how betting would work under the new rules," Deloitte's report said. "Broadly, there is a need for an education and awareness campaign now that legislation has passed."
The firm's survey found half of bettors are looking for a trusted brand when shopping for a bookmaker, 41.7 per cent want fast payouts of winnings, and 34.8 per cent are looking for the best odds.
However, Deloitte stresses that Canadian bettors are not a homogenous group, advising sportsbooks against a "one-size-fits-all approach to promoting single-event betting." The report breaks consumers into three categories: ardent, casual, and potential bettors.
These findings suggest we should be prepared to witness some churn as Ontario's sports-betting market becomes the first in Canada to embrace a competitive marketplace," Deloitte said.Deloitte Canada report on sports betting
The "potential" category, who placed no sports bets over the last 12 months, but say they are open to doing so, was found to be the largest group, at 58.5 per cent. The majority identified as female (57 per cent) and 25-64 years old, with a slightly lower income than the other two categories. Potential bettors need more information, and will choose sportsbooks that make the experience easy to understand, according to the report.
The "casual" category was found to account for 33 per cent of the sports betting market. They tend to wager less than $50 on average for a single bet, and waged less than $1,000 over the past 12 months. The majority (58.2 per cent) identify as male, with 51 per cent aged 44 or younger. Casual bettors are defined as "sports fans first, bettors second," who don't want betting to interfere with their normal sports experience. Deloitte says casual bettors may favour competitive odds, in addition to variety and fast payouts.
The "ardent" category is the smallest, at 8.5 per cent. They tend to wager more than $50 on the average single bet, and spent more than $1,000 on sports betting over the past 12 months. Most identify as male (56.3 per cent), were aged 44 or younger (68.9 per cent), and have slightly higher incomes than the other two groups. Deloitte says the ardent crowd is eager to bet on many sports through multiple channels, and will be drawn to platforms with lots of options, quick payouts and VIP rewards.
Celebrity sports betting endorsements impress few bettors
For companies like Australia's PointsBet Holdings (PBH.AX), establishing early brand loyalty in Ontario is high on its list of priorities as it spends on advertising that's "as authentically Canadian as poutine." The company recently invested in an ad campaign with the Trailer Park Boys and former NHL stars, adding to the long list of celebrities and athletes endorsing companies in the industry.
However, Deloitte found just 9.4 per cent of respondents said they would pick a sportsbook due to the endorsement of a current or former professional athlete. Nearly 13 per cent say prior use of a brand would affect where they might wager in the future.
"These findings suggest we should be prepared to witness some churn as Ontario's sports betting market becomes the first in Canada to embrace a competitive marketplace," Deloitte said. "They also serve as an early indication that Canadian lottery organizations in provinces and territories that follow Ontario's lead may, too, experience initial customer fluctuation and turnover."
Jason Robins, the CEO of Boston-based sports betting giant DraftKings (DKNG), has suggested Ontario's market will be highly competitive, due in part to the large and well-established gray market in the province. He has tempered investor expectations for DraftKings in the Canadian market as the company sets its sights on Ontario.
"There's been a grey market there for many years, which a lot of the operators we will be competing with have already been operating in, and have already had time to build customer bases," he said on a Feb. 18 post-earnings conference call with analysts. "We are not projecting the same level of market share in Ontario, or in Canada in general, that we are projecting in the U.S., just because we don't have that early-mover advantage."
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.