From Boomers to Gen Z: Sports betting ad blitz heats up in Ontario

What do TikTok influencers and NHL stars who predate the internet have in common? They’re each being drawn into an advertising push from sports betting companies stuck on the sidelines of Ontario’s legal gambling industry. Targeting Boomers to Gen Z, marketing experts predict a surge in advertising aimed at driving new users to smartphone apps and websites when the province finally opens the market to private competition.

The decision by Canada’s most populous province to allow an unlimited number of operators to apply for a license to take bets has sparked interest from the biggest names in the gambling industry. Now, those companies, many of which are based outside Canada, are racing to align themselves with the players, characters, and culture of the nation’s largest sports market.

FanDuel, a sports betting and daily fantasy giant backed by Ireland-based Flutter Entertainment (FLTR.L), a company with a market capitalization well into the billions, has set up shop in Toronto. Score Media and Gaming, a fixture of Canada’s sports media landscape since the 1990s, was snapped up by U.S. casino giant Penn National Gaming (PENN) last year in a US$2 billion deal. American sportsbooks BetMGM and DraftKings (DKNG), have also dropped hints that they’re circling the market. (Yahoo Sports U.S. has a partnership with BetMGM in U.S. jurisdictions where single sports-betting is legal.)

Australia’s PointsBet Holdings (PBH.AX) is already starting to unveil its new Canadian identity. Last week, the company’s Toronto-based team announced separate partnerships with the NHL Alumni Association (NHLAA) and The Trailer Park Boys, a comedy series based on the uniquely Canadian exploits of main characters Ricky, Julian and Bubbles.

Nic Sulsky, chief commercial officer at PointsBet Canada, sees the pot and liquor-fuelled characters, along with NHL greats, as the ideal brand ambassadors to reach Ontario sports fans. A one-minute advertisement posted on The Trailer Park Boys YouTube channel on Monday features “the boys” getting bested on the ice by Paul Coffey and other retired hockey pros, before quitting to place bets on the PointsBet Canada app.

“The thing that Canadians love more than anything else is other Canadians,” Sulsky said. “We’re really dedicated to creating a brand that speaks with a genuine Canadian voice.”

Glenn Healy, president and executive director of the NHLAA, jokes that he received inquiries from “everyone” in the sports betting industry, prior to teaming up with PointsBet Canada.

“I just knew in my soul that it was right,” he said of the multi-year deal. “It’s a big brand. That brand deserves the best.”

PointsBet Canada declined to disclose the financial terms of its partnerships, citing competitive reasons.

Ontario had targeted the end of 2021 to launch its highly-anticipated market for private sportsbooks. It’s the final step in ending long-standing restrictions on sports betting that channeled billions in wagers to unlicensed and offshore websites. Currently, the only legal option to bet on single sporting events in Ontario is through a province-run PROLINE+ account. Sulsky says he expects the government will allow his company, and its rivals, to start taking bets in March.

Ontario’s online gambling market is expected to generate $989 million in gross revenue in its first year, hitting $1.86 billion by 2026. Those figures, from research firm Vixio GamblingCompliance, assumed a launch in late 2021 or early 2022, a full range of products, and an effective tax rate of 20 per cent. (Which is in-line with industry expectations.)

The opening salvos of advertising will be critical, according to marketing expert Tony Chapman. With a host of new sportsbooks expected to hit the market with generous sign-up offers, he says ties to trusted sports and entertainment figures, as well as the pro sports leagues, will help assure consumers that the new betting platforms are secure.

“Most fans won’t know where the platform originates,” he said. “They need to know that they’re not sending the money to some basement in Eastern Europe.”

John Yorke, CEO of the marketing agency Rain43, agrees that brand loyalty early on will be key as companies jockey for market share.

“Whatever platform they start on, it’s going to be hard to get them to switch,” he said.

In the U.S., the list of celebrities endorsing sports betting brands includes legendary athletes like Wayne Gretzky and Shaquille O'Neal, as well as Hollywood stars Jamie Foxx and Ben Affleck. In Canada, grey market betting brands are spending on star-power ads. Bet99, whose pay-to-play website is licensed by the Kahnawake Gaming Commission and authorities in Malta and the Netherlands, has launched TV and digital campaigns featuring former UFC fighter Georges St-Pierre.

Speaking prior to the announcement of PointsBet’s partnerships last week, Yorke suggested The Trailer Park Boys, as well as the cast of Letterkenney, a Canadian TV series set in a fictitious rural Ontario town, as spokespeople to reach a young, male sports fan demographic with disposable income to place bets. His standing list of “likeable Canadian” spokespeople also includes Will Arnett. Yorke worked with the Arrested Development actor on an ad campaign for Shaw Communications-owned (SJR-B.TO)(SJR) low-cost cellular carrier Freedom Mobile.

“Celebrity is the easiest way to make a brand likeable,” said Yorke, who also works with Team Canada 1972, owners of the legal rights to the iconic 1972 Team Canada Summit Series against the Soviet Union.

“Out of the older generation, Phil Esposito (who played in the 1972 series) would probably be the most authentic because he’s been involved with casinos, and he’s kind of slick. I put him at the top of my list of baby boom target guys. He’d be very trustworthy.”

For Chapman, an official sponsorship deal with Maple Leaf Sports & Entertainment (MLSE), owner of the NHL Leafs, NBA Raptors, CFL Argonauts, AHL Marlies and Major League Soccer's Toronto FC, is the holy grail.

“I don’t care what it costs,” he said. “I’d do that deal and bucket a fortune.”

Both Chapman and Yorke agree that small, niche sportsbooks should not be underestimated, even if they don’t grab a meaningful share of users when Ontario opens up the market. It’s a lesson learned from another product that's turned legal in recent years. The big cannabis companies that dominated Canada’s pot industry early on have lost significant ground against scores of smaller craft producers in the years since legalization.

“Being first to market doesn’t always win in the long run,” Yorke said. “Somebody could win by serving the Asian community. I would say the ethnic market in Ontario should not be overlooked.”

Toronto-based Rivalry (RVLY.V) is an esports betting company and sportsbook operating under an Isle of Man gaming license in 18 countries (not including Canada). Co-founder and CEO Steven Salz plans to bring the company’s social media, influencer-heavy marketing approach to Ontario, if he can secure a license from the province.

“We sponsor a hell of a lot of influencers. We’ve got 150 brand partners, 25-plus social media properties, and we do a ton of highly-produced YouTube content in multiple languages,” he said in an interview with Yahoo Finance Canada in October.

“In Ontario, we’ll work with relevant influencers on TikTok and Instagram that we know are extremely Toronto-centric personalities. It’s not going to be your Dad’s sportsbook... There’s no way our competitors will be working with these influencers, or would even comprehend how to integrate them into their brand.”

Salz declined to specify which influencers he plans to recruit, citing competitive reasons.

Chapman says he sees the role of celebrity spokespeople and internet influencers in sports evolving from “singing for your supper to owning the restaurant.” He points to actors and musicians like Jay-Z and Ashton Kutcher who parlayed their fame into business success through early investments in companies like Uber (UBER) and Airbnb (ABNB).

“Cash is going to race into gambling,” Chapman said. “And these [celebrities] are getting very sophisticated now at what they’re doing, as opposed to the old days of Michael Jordan advertising for Gatorade.”

Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.

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