After two years of away games, theScore is set to launch its Canadian-developed sports betting platform on home turf.
When theScore launched as a Canadian television network in the 1990s, it was the jeans-and-tee shirt channel to TSN and Sportsnet’s jacket-and-tie affairs.
“We talked about sports the way you talk about sports with your buddy. It was no bullshit, it was unfiltered, and it was honest,” recalled Benjie Levy, president and chief operating officer of Score Media and Gaming Inc., and the son of company chairman and chief executive officer John Levy, in an interview with BetaKit. “The key themes for us were being honest and authentic about sports.”
It’s an ethos the company hung onto after it spun out from the TV channel, which was sold to Rogers Communications in 2012, and became a digital media company.
“We’ve been waiting for this forever. It’s an overnight success 25 years in the making.”
– Benjie Levy
Today, theScore is betting that its decades-long history with Ontario sports fans will give it a home-field advantage as the province opens up single-game sports betting to licensed private operators on April 4. The move, which will create the fifth-largest sports betting market in the U.S. and Canada, comes less than a year after the federal government passed legislation to legalize single-event sports betting.
The company is also touting its unique platform, developed in Toronto and honed in four U.S. markets over the past two years, that integrates betting capabilities with the company’s existing sports media app.
“When we turn this on on April 4th, [Ontario users] are going to see a product that’s two and a half years evolved. We’re pretty excited to unveil that, especially given that Ontario’s our backyard,” Levy said.
“We have a lot of sports fans who use theScore in the U.S., but they use us because we’re a great app. In Ontario, the connection is deeper. The sports fans in their early to mid-30s [that are] are hardcore users of our app are the kids who grew up watching our television network.”
Home team advantage
The Ontario launch comes after a blockbuster year for the company. TheScore closed a $186.3 million USD initial public offering on the NASDAQ exchange in March 2021, and funnelled the funds toward quickly scaling its team, investing in its technology, and expanding its operations. A month later, it reported a “record” $81.6 million USD in handle — the amount of money wagered by bettors — on theScore Bet in its second-quarter results in April 2021, a 491 percent year-over-year increase.
The company was acquired in August by U.S.-based gaming giant Penn National Gaming Inc. in a US$2-billion cash and stock deal that allows theScore to operate as a standalone entity. Weeks later, it announced it would lease an 80,000-square-foot space in the future Waterfront Innovation Centre in downtown Toronto, which will house its rapidly growing team. TheScore’s Toronto ranks are closing in on 600 people, a 40 percent increase year-over-year, and Levy said the company expects to continue hiring significantly in the next two years.
“We’ve been able to grow with homegrown talent, which is absolutely fantastic,” he said. “We are going toe-to-toe with the big tech heavyweights in terms of hiring product and engineering.”
The company has continued to evolve theScore Bet ahead of the launch. According to Belinda Alzner, Toronto-based director of product for theScore Bet, moving seamlessly between the media and betting experience has always been a unique proposition, though it has significantly evolved from the first version. Alzner was on the team that first launched the product in New Jersey, theScore’s first market. Her team recently released a synched bet slip that allows the user to build their bet in either media or bet mode, and move back and forth between both as they research their picks.
“People use sports media and data to make informed betting decisions; it’s a real differentiator to look at what the team’s records have been, how players perform [while the betting slip is open], and make educated decisions,” she said.
The app also has a feature called bet mode that allows users to turn on all the betting experiences at once, including its dedicated bet section, faster data, and the ability to share favourite teams across the entire ecosystem.
“There’s also [an integration] of all the different market offerings, that’s really expanded and you can get a taste for the breadth and depth of the things that people can bet on in theScore,” she added.
The team has also had to adjust the app to each jurisdiction based on what bettors are allowed to place wagers on, such as game outcomes, spreads, first half or quarter points, total rebounds and assists.
In Ontario, the team had specific compliance considerations around responsible gaming. TheScore became the first operator in Ontario to receive its Gaming Laboratories international GLI-33 certification in December, a requirement for operating in the province. It also received the RG Check accreditation from the Responsible Gaming Council in January. The accreditation isn’t mandatory but the company said it demonstrated its commitment to responsible gaming.
Race for the pennant
Ontario is expected to be a profit behemoth for sports betting operators. The province is the fifth-largest market by adult population in U.S. and Canada, at 11.9 million adults, and could generate $570 CAD million in gross gambling revenue in 2022, rising to $904 million CAD in 2026, according to an analysis by specialized research firm Eilers & Krejcik Gaming and The Parleh, a sports betting media company. The province would account for about half of Canadian sports betting revenue in the next four years.
TheScore will face fierce competition for a share of those profits from the Ontario Lottery and Gaming Corp., which was named the official Canadian sports betting partner of the NHL, and 14 other private operators that have received iGaming licenses from the Alcohol and Gaming Commission of Ontario, including DraftKings, FanDuel, PointsBet, Rivalry, BetMGM and sports-betting heavyweight Bet365. The Eilers & Krejcik report estimated Bet365 is “likely one of the largest players, if not the largest player, in terms of Ontario online sports betting market share.”
According to the AGCO, 30 operators have applied for a license. “We’ve been working closely with all that have applied to join the market. Not every operator will be ready to launch their services on day one. Some are more ready than others,” said commission spokesperson Raymond Kahnert in an email to BetaKit. “This means Ontario’s new gaming market will steadily expand in the weeks and months following April 4th.”
Ahead of the launch date, the AGCO has sought to encourage grey market operators — companies that operate offshore sports betting websites — to receive a license, promising a smooth transition from the grey to white markets, and cautioning that those who continue to operate in the unregulated market could risk having a future application turned down.
Another 41 companies have registered as suppliers and the commission has certified more than 700 games for use in Ontario.
Levy’s not sweating the competition.
“We’ve been waiting for this forever,” he said. “It’s an overnight success 25 years in the making.”
The past four years have seen significant changes to sports betting in both the United States and Canada. Down south, a 2018 Supreme Court ruling overturned the federal Professional and Amateur Sports Protection Act (PASPA) that essentially limited sports betting to a handful of states for 25 years. The ruling allowed individual states — including New Jersey, which had sought to set up sports gambling for years and had challenged the law — to decide whether or not to allow residents to bet on sports.
Gambling had always been a part of how theScore talked about sports, given its importance to fans, Levy said. The fall of PASPA marked a “big decision point” for the company: it had to decide whether to continue as a media company and take advertising dollars from betting operators, affiliate itself with one, or become an operator itself. The company went all-in.
theScore will face fierce competition for a share of the $570 million in gross gambling revenue expected to be generated in Ontario this year.
TheScore Bet launched in New Jersey in early 2020 when the state opened up sports betting, and has since expanded to Colorado, Indiana and Iowa as those states legalized.
All the while, the company’s home turf was off-limits. Until recently, Canada only allowed sports betting in the form of a parlay — bettors had to wager on a slate of games, and get every bet right to win. As a result, Canadians poured their money into grey market operators with offshore headquarters.
That changed in August 2021, when Bill C-218 received royal assent. The private member’s bill, put forward by Kevin Waugh, the Conservative MP for Saskatoon-Grasswood, amended the criminal code to allow for single-event sports betting.
“Parlay betting delivers about $500 million in revenue nationally each year in this country, but that is a mere pittance compared to what single-event betting brings offshore and to the criminal enterprises in this country,” Waugh said in the house of commons in November 2020, when his bill was introduced. “Legalization of single-event betting is something that, for many years, governments along with Indigenous groups in Canada have been calling for.”
According to the Eilers & Krejcik report, single-event sports betting in Canada could generate $1.2 billion in gross gaming revenue in 2022, rising to $1.8 billion by 2026.
Since the C-218 received royal assent, all ten provinces have authorized single-event sports betting, though it’s not yet operational in Nova Scotia and Saskatchewan. Ontario is the only province to open the door to private operators.
TheScore hasn’t commented on which jurisdictions it thinks it could launch in next, but in its third-quarter 2021 results, released in July, John Levy said the company continue to work through the licensing process in additional U.S. states, with an expectation that it would “at least double the number of markets in which we are live in the next twelve months.”
With its new ownership, Benjie Levy said he sees more integration coming. He expects theScore to leverage its technology to bridge digital and physical gaming properties in the States.
“As we start to think about, ‘what does that omnichannel customer experience look like?’ Ontario is a piece of that, but [Penn] operates in 20-plus states with physical properties and digital platforms. Thinking about what that consumer journey is and how our technology will help power that is a big piece of our story.”