Local Betting vs. International Sportsbooks: The Case of ALC
![Atlantic Lottery Corporation headquarters building with flags](https://betting-ca.com/wp-content/uploads/2024/12/1-1.png)
The gambling market in Atlantic Canada is at a crossroads. On one hand, regulated local operators like the Atlantic Lottery Corporation (ALC) strive to adopt innovative technologies and develop digital platforms to retain their audience and attract new players. On the other hand, unregulated international bookmakers are expanding their reach, enticing bettors with easy accessibility and a wide range of opportunities.
This clash created a unique situation where the competition is not only for profits but also for players’ trust. The ALC serves as an example of how local companies can withstand global competitors by implementing a digitalization strategy, raising awareness about the risks of illegal betting, and emphasizing responsible gaming.
Financial year-end results
ALC concluded the 2023-24 fiscal year with notable achievements in digital products, while facing challenges in the sports betting segment. Amidst increased competition from unregulated operators and shifts in player preferences, the company continues to solidify its position through infrastructure modernization and a digitalization strategy.
Here’s a breakdown of the numbers:
- ALC reported a 1% decrease in net income to $487 million.
- Total revenue increased to $872 million (up $28 million from the previous year).
- Expenses rose to $385 million, largely due to infrastructure upgrades, including up-to-date in-store lottery terminals.
- iLottery – revenue grew by 17% to $24.7 million, driven by the first full year of online lottery operations in Nova Scotia.
- iGames – revenue from einstants, table games, slots, and bingo grew by 26% to $126.2 million.
ALC’s steady growth is a testament to the success of its digitalization strategy. The company’s total revenue increased by $28 million, fuelled by significant growth in the online lottery (iLottery) and digital games (iGames) segments, which saw increases of 17% and 26%, respectively. The first full year of online lottery operations in Nova Scotia and the launch of new products were key factors in this success. Additionally, partnerships with major providers, including NeoGames, and the introduction of an online casino in Newfoundland and Labrador have contributed to the company’s profitability.
However, the sports betting industry encountered challenges. According to ALC reports, net revenue in betting decreased by 13.4% to $14.8 million, well below the fiscal year’s budget forecast. The company noted that 77% of all sports betting sales came from digital platforms, while retail sales decreased by 3%.
Why are unregulated operators successful?
Unregulated operators, often referred to as ‘gray’ or ‘unlicensed’ bookmakers, continue to capture a significant share of the market in the Atlantic provinces. Their success stems from a combination of economic, technological, and marketing advantages that make their platforms particularly appealing to players.
Legitimate operators, such as the Atlantic Lottery Corporation, are required to adhere to strict regulatory frameworks, limiting their flexibility in pricing and offerings. Conversely, ‘gray market’ platforms operate without such restrictions, providing more flexible terms for players.
Unlicensed operators invest heavily in developing user-friendly and intuitive interfaces. Features like instant deposits, minimal registration requirements, and lightning-fast performance are common for their platforms. They also prioritize mobile technology, making betting accessible anytime, anywhere. Convenient apps have become a key tool for attracting customers, especially younger demographics.
Unregulated platforms stand out by offering an extensive range of sports events, games, and unconventional betting options – such as wagers on entertainment or political outcomes – that are rarely available from licensed operators. Unlike ALC, these operators function on a global scale, providing access to a broader array of games and products.
Perhaps the local operator should consider adopting some of the technologies and strategies used by unlicensed bookmakers like 22Bet. The increase in digital revenue and the decline in retail sales indicate that betting has effectively transitioned to an online-first model. By adapting to these trends, ALC will have every opportunity to remain competitive.
How ALC can turn challenges into opportunities
Atlantic Lottery Corporation highlights a significant issue: approximately $200 million leaves the Atlantic region annually for unlicensed platforms. This deprives the local community of vital funds that could be invested in infrastructure, social programs, and other public needs. Furthermore, up to two-thirds of consumers are unaware that such operators lack proper licensing.
“Some Atlantic Canadians may not realize that Atlantic Lottery is the only legal provider of online gaming and sports-betting products in our region,”
stated Patrick Daigle, President and CEO of ALC.
![Patrick Daigle, President and CEO of Atlantic Lottery Corporation, speaking at an event](https://betting-ca.com/wp-content/uploads/2024/12/2-1024x665.png)
Patrick Daigle, President and CEO of ALC
Combating the proliferation of unregulated operators necessitates a multifaceted approach, encompassing heightened consumer awareness and enhancing the competitiveness of licensed products. Alternatively, authorities could consider granting licenses to international bookmakers. Ontario, which has authorized dozens of operators, offers a valuable case study. The province has demonstrated the potential for significant revenue generation while implementing robust advertising regulations to ensure player safety, particularly for young individuals – we mentioned this here. The Atlantic provinces could adopt a similar model, leveraging the resources and capabilities of the Atlantic Lottery to maximize benefits for local communities.
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