Single-event wagering's decriminalization has had a major impact on the Canadian gambling industry, however, government documents indicate that it could be an issue for horse racing. These findings suggest that the introduction has arrived at a financially challenging time for the sector and the Canadian Pari-Mutuel Agency, which oversees betting on horse racing.
It should be explained, that fixed-odd betting on sports is not allowed in the country, but the pari-mutuel system, including its shifting odds and takeouts for taxes and industry finding, is legal. The agency is funded with 0.8% on each pari-mutuel bet placed on horse racing. Therefore, its business model is heavily reliant on gambling activity which has been in decline.
Effects Are Yet to be Determined
CPMA is an agency that operates within Agriculture and Agri-Food Canada, and the latter commented that impacts from the legalization of single-event wagering are not determined yet. AAFC explained it was difficult to tell the effect of single-game wagers on pari-mutuel horse racing. It mentioned that in the last FY, betting volume was higher than expected, but this year is lower than projected.
In the meantime, CPMA relies on money from betting on horse events to fund itself and has fixed costs to cover even as its gambling-originated revenue is going down. The latest findings discovered that the agency's revenues dropped by an average of 2.7% a year between 2002 and 2020, even before the sector was struck by the unprecedented situation of March 2020.
CPMA's latest fiscal reports for the year ended on March 31, 2022, display that the agency got around CA$8.1 million in revenue via pari-mutuel levy from a handle of slightly above CA$1 billion. However, provinces do not contribute an equal amount of revenue to the agency as around 70% of the levy comes from Ontario, which is currently the only province with a legal iGaming market.
Currently, Woodbine Entertainment is the only holder of a CPMA permit in Ontario but recently, the operator inked a partnership to launch its pari-mutuel wagering product with the private sportsbook bet365. Prior to that its brands HPIbet and Dark Horse app were the only digital platforms to offer online betting on its horse racing product. More operators are expected to join in the future.
However, Woodbine Entertainment's CEO Michael Copeland commented it is safe to assume that the introduction of single-event betting, with excluded horse racing, would hurt pari-mutuel wagering. He said that the group will have a good sense of the launch of pari-mutuel on private sportsbooks from six months to a year of running it and then it will asses its impact.
Setting New King's Plate Wagering Volume
Woodbine Entertainment was able to debut its pari-mutuel model with bet365 just in time for this year's King's Plate which is one of the biggest horse racing events on the continent. This year's running and its card as a whole on August 20, 2023, generated the largest handle in the history of Woodbine Racetrack. With a handle of CA$18,127,049.67, the track has broken its previous record from the 2019 edition.
Source: Zochodne, Geoff “Documents Show Sports Betting-Related Uncertainty for Canada's Horse Racing Sector” Covers, September 25, 2023
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