BCLC Warns of Industry Impact Caused by Grey Market Operators

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Grey Market. Image Credit: Shutterstock

The British Columbia Lottery Corporation (BCLC) has posted its three-year service plan but has noted concern about competition from grey market operators. 

The BCLC has recently published its three-year service plan in time for the release of the provincial budget. In the assessment, the Crown corporation predicts a seven per cent revenue growth over the 2022-2023 fiscal period through its PlayNow online platform. However, the company has been concerned about competition from grey market operators.

Last summer, the federal government decriminalised wagering on single-game sporting events. This has been a long-awaited change, allowing provinces to offer single-game sports betting. However, the BCLC currently views the change as both good and flawed due to the emergence of grey market competition.

Potential Trouble on the Horizon

According to the service plan, while the BCLC predicts continued growth, the online gaming sites that operate illegally in British Columbia threaten its revenue streams. The corporation stated that those sites that are categorised as part of the grey market have paid for significant sponsorships and advertising in the province and across the country.

In the report, the BCLC commented that due to the increased marketing efforts from grey market providers, it is becoming increasingly costly for PlayNow to compete for sponsorship and advertising opportunities. Subsequently, this makes it harder for the corporation to expand its brand presence and attract new players to the only regulated local gaming platform that reinvests its profits back into the province.

The BCLC specifically mentioned Ontario, where the local Alcohol and Gaming Commission initiated an open and regulated iGaming market for online operators. The BCLC noted that, while preparing to enter Ontario’s new market, certain operators have entered into national partnerships with sports leagues and media companies, which causes more difficulties for the Crown corporation when it comes to marketing on its home turf.

Additionally, the BCLC forecasted a 2022-23 fall in lottery revenue by approximately seven per cent, as it is currently changing 3,500 lottery terminals across the province. For the 2020-21 financial year, the BCLC recorded a net income of CA$430 million. The company is hopeful of boosting this amount to CA$1.225 billion for the current fiscal year and CA$1.452 billion for the next while limiting the negative impact that grey market operators have on its profit margins.

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