Coolbet has announced to leave the legal sports betting market of Ontario. It is now up to other operators to either follow suit or stick around for a while. In all fairness, it has been just one year since Ontario legalized the betting market. It does need time to settle down. That is now stopping Coolbet, with the operator all set to shut down its operations effective April 03, 2023.
It follows the closure of NitroCasino in the last days of December 2022. The reason being cited for leaving the 1-year-old legal sports betting market in Ontario is the market is overcrowded, with over 70 sites operating in the region. This does not include the Government-run Ontario Lottery & Gaming sportsbook and online casino.
There is simply no argument that the conditions were a lot different when Coolbet made its debut. A handful of operators were a part of the first wave to set up their ventures. Now the number has increased, the profit margin is estimated to have declined, and more players are expected to enter from April 2023, the month when the legal market completes one year.
A statement issued by Coolbet reads that the focus is purely on profitability and investing capital in regions that have higher returns. The statement further reads that Coolber did not see any near-term path to profitability, and hence, it decided to close the doors of sports betting.
Ontario is the only region to have private ventures operating sports betting and online casinos in Canada. Other provinces continue to rely on the government’s corporations.
Nothing wrong, to be honest; however, it is indeed a tough task to survive when the market is flooded with players who are offering nearly the same services.
Fortunately for Ontario, not every operator shares the page with Coolbet. Other operators like NorthStar Bets and bwin have reportedly confirmed to renew their yearly licenses.
William Woodhams, the Chief Executive Officer of Fitzdares, has expressed happiness with the result they have generated over a year, adding that the belief was always that the market would settle & some brands may just not be able to afford a fight for they are too similar.
FanDuel is another operator that is less likely to leave the province. It has long-term partnerships, and significant war chests left to roll out in the market. It is worth noting that FanDuel is just one of the players with this intent. There are other operators who are more than willing to extend the limits of their attempts to earn a larger share of the market.
A $100,000 renewal fee proves to be a lot, especially when Ontario is already taking away nearly 20% of revenue generated by Canadian sports betting sites that have been legalized in the region. They are also tasked with proving to investors that there is a potential to generate profit in the long term. If they are unable to showcase a greener bottom line on the table, then the shutters are definitely coming down.
There is another reason why new operators are leaving soon. Customers have decided to stick to the platforms where they have spent the maximum time when the entire market is in the gray area.