This week, the province of Ontario and its regulated market for iGaming, witnessed the launch of the first sports betting exchange, STX, in the digital sector. The platform earned its license from the Alcohol and Gaming Commission of Ontario to legally operate in the province earlier this year and is now up and running for users of legal age to place their sports wagers.
In April 2022, Ontario became the first Canadian province to open up its regulated market for gambling and sports betting to the private sector. The legal framework is overseen by AGCO and iGaming Ontario and it was introduced to take away the online gambling monopoly from the Ontario Lottery and Gaming Corporation and keep local bettors away from offshore websites.
First of Its Kind in Ontario
After its launch, Canada's most populous province marks the first regulated market where STX can offer its services. The platform is not a traditional sportsbook, as it is an exchange allowing users to determine the odds of a betting market. Via the STX app, players can place trades in the betting markets once both buyer and seller find a middle ground on their pricing.
One of the positives of a sports betting exchange is that it comes with lower fees than the ones of traditional sports betting platforms. For instance, instead of placing CA$110 to win CA$100 on a team to cover the spread of 3 points against another team, players can now just put CA$100 for the same bet and wait for another customer of the exchange to accept and match it.
Also, the exchange kicked off work in the province in collaboration with the U.S. Integrity monitory service to ensure user fairness and equal opportunity. It enables users to make transactions at any time of the day and every day of the week. The company also shared plans of eyeing a launch of an all-in-one sportsbook betting exchange outside of the province.
Its introduction to Ontario is the result of wagering exchanges looking at promising businesses in a competitive sports wagering sector. This April, Prophet Exchange generated more than U$10 million in funding. This is the first licensed peer-to-peer sports betting exchange in the U.S. and now the company wants to expand to new leading markets.
Q1 in Numbers
It remains to be seen how STX will perform in Ontario's highly competitive sector. Just this month, the province issued its report for the first quarter of the financial 2023-2024. For Q1, operators generated approximately CA$14 billion in wagering handle, which transformed into CA$545 million in gaming revenue. At the end of the quarter, there were 46 operators online, which ran 71 gaming websites
However, the majority of bets were placed under the iGaming category, which captured nearly CA$11.6 billion or 83% of total wagers. It delivered CA$392 million or 72% of the gaming revenue. Meanwhile, betting on sports, eSports, and novelty bets contributed CA$2 billion or 14% of the total gaming handle and CA$138 million or 25% of the proceeds.
Source: Byers, Justin “Ontario's First Sports Betting Exchange Goes Live” Covers, July 27, 2023