Online and offline casinos operate under fundamentally different business models in Canada, shaped by distinct regulatory frameworks, cost structures, and player engagement strategies. Understanding these differences is essential for players seeking to recognize how casino operators generate revenue, manage costs, and comply with Canadian gaming laws. Both models coexist across Canadian provinces, though the regulatory approach and competitive landscape vary significantly by region.

Licensing and Regulation in Canada

Canada’s gambling landscape is exclusively regulated at the provincial level, with no federal licensing authority for commercial gambling operations. The Criminal Code of Canada grants provinces and territories exclusive jurisdiction over gaming activities within their borders, meaning each province establishes its own regulatory framework and licensing requirements.

Offline Casinos in Quebec

Quebec’s offline casino operations are controlled by Loto-Québec, a crown corporation established in 1969 and granted exclusive authority to conduct gaming in the province. Loto-Québec operates four physical casinos: Casino de Montréal, Casino de Charlevoix, Casino du Lac-Leamy, and Casino de Mont-Tremblant. The corporation also operates approximately 12,000 video lottery terminals across bars and restaurants, plus gaming halls in Quebec City and Trois-Rivières. In fiscal year 2024-25, Loto-Québec’s casino and gaming hall sector generated CAD $1.202 billion in revenue, representing the largest revenue stream for the crown corporation and underscoring the significance of physical gaming operations in Quebec’s regulated market.

Offline Casinos in Ontario

Ontario operates under a different model for offline casinos. The Ontario Lottery and Gaming Corporation (OLG) manages several land-based casinos and gaming venues across the province. However, Ontario has transitioned its online gaming to a competitive, multi-operator framework through iGaming Ontario (iGO), which differs fundamentally from Quebec’s monopoly approach.

Online Casinos in Canada

Online casino regulation varies significantly across provinces. Ontario implemented a regulated, competitive iGaming market in April 2022 through iGaming Ontario, which licenses private operators to provide digital gambling services. This structure has helped shape player expectations around the best Canadian online casino payouts. As of 2024-25, iGaming Ontario had licensed 49 operators running 84 gaming websites, generating CAD $3.2 billion in total gaming revenue. This represents a 32% increase from the previous fiscal year, with casino wagering alone reaching CAD $69.6 billion.

Quebec maintains its monopoly on legal online gaming through Loto-Québec’s EspaceJeux platform. This exclusive licensing model contrasts sharply with Ontario’s competitive approach, as Loto-Québec is the sole authorized provider of online casino games in Quebec. However, the Quebec Online Gaming Coalition has advocated for regulatory reform to introduce competition, citing evidence that approximately half of Quebec players use private, unregulated online casinos despite Loto-Québec’s monopoly.

Other provinces employ hybrid models. British Columbia operates through the BC Lottery Corporation’s PlayNow platform, while Alberta is transitioning from a government monopoly (PlayAlberta.ca) to a competitive regulated market following the passage of Bill 16 in May 2024. Alberta launched iGaming Alberta Corporation in June 2025 to oversee licensing of private operators, with market entry expected in 2026.

Regulatory Compliance and Licensing Costs

Operators seeking to offer online gambling in Canada must obtain provincial licenses and comply with strict operational standards. In Ontario, operators must apply to iGaming Ontario and register with the Alcohol and Gaming Commission of Ontario (AGCO). The licensing process includes background checks, technical audits, and ongoing compliance monitoring. Offline casinos, such as Loto-Québec’s physical properties, are subject to comprehensive provincial oversight but operate under the authority of the crown corporation rather than competing for licenses.

Responsible gambling is a core licensing requirement across all Canadian provinces. iGaming Ontario mandates that all licensed operators provide player-protection tools, including deposit limits, self-exclusion options, and account cooling-off periods. Offline casinos similarly implement responsible gaming programs. Loto-Québec, for instance, integrates responsible gaming messaging across its properties and has achieved Level 4 certification from the World Lottery Association for responsible gaming practices.

Revenue Models and Profit Structures

Offline and online casinos generate revenue through distinct mechanisms shaped by their operational environment and player base.

Offline Casino Revenue Streams

Offline casinos derive revenue from multiple sources beyond gaming. Table games—blackjack, roulette, baccarat, and poker—generate substantial revenue through rake fees and house edge. Slot machines represent another significant revenue stream, with players placing wagers on video slots and electronic gaming machines. Loto-Québec’s casino and gaming hall sector generated CAD $906.8 million in Q3 of fiscal 2024-25 alone, demonstrating the continued profitability of physical casino operations.

Beyond gaming, offline casinos monetize hospitality and entertainment. Loto-Québec’s physical casinos operate restaurants, bars, and entertainment venues that generate additional revenue streams. For example, Casino de Montréal hosts concerts and performances, diversifying income beyond gaming tables and machines. Hotel services, parking fees, and premium dining experiences contribute to overall profitability, allowing offline casinos to capture player spending across the entire customer experience.

Online Casino Revenue Streams

Online casinos operate on different economic principles. Revenue comes primarily from the house edge embedded in slot machines and table games, where the platform retains a percentage of all wagers (known as the return-to-player or RTP). Ontario’s 2024-25 data shows that casino gaming generated CAD $2.4 billion in revenue across the 49 licensed operators, representing 75% of total iGaming Ontario revenue.

Online casinos also monetize customer acquisition through promotional spending. Welcome bonuses, free spins, and deposit matches attract new players but reduce initial profitability margins. Operators offset these costs through player lifetime value, retention programs, and VIP loyalty structures. Unlike offline casinos, online operators benefit from minimal physical infrastructure costs and can scale operations across multiple jurisdictions, reducing per-player operational overhead.

Margin Comparison

Offline casinos typically operate with higher revenue-per-square-foot but carry substantial fixed costs. A physical casino requires continuous staffing, property maintenance, utilities, and security. These operational expenses limit scalability—adding capacity requires significant capital investment in new buildings or expansions.

Online casinos operate with lower cost-of-acquisition and higher scalability. A single technology platform can serve hundreds of thousands of players simultaneously with minimal incremental cost. However, online operators face intense competition in regulated markets like Ontario, where 49 operators compete for player attention. This competitive pressure can compress margins, requiring operators to invest heavily in marketing and player retention. Quebec’s monopoly model allows Loto-Québec to operate without competitive pressure on pricing, potentially supporting higher margins despite competition from unregulated offshore operators.

Operational Costs and Infrastructure

The infrastructure and staffing requirements of offline and online casinos differ fundamentally, driving divergent cost structures.

Offline Casino Operational Costs

Physical casinos require substantial capital and ongoing operational expenditures. Real estate represents the largest cost—Loto-Québec’s four casinos are located in prime urban locations in Montreal, Charlevoix, Hull, and Mont-Tremblant. Facility maintenance, utilities, and property taxes constitute recurring expenses. Loto-Québec employs approximately 5,000 people, with nearly 4,500 working directly in the four casinos. Staffing costs—including dealers, pit bosses, security personnel, hospitality staff, and management—represent a significant operational burden.

Security is another major expense. Offline casinos must maintain physical security infrastructure, surveillance systems, and on-site security personnel to prevent theft, fraud, and ensure player safety. Compliance with provincial gaming regulations requires additional administrative staff and regular audits.

Online Casino Operational Costs

Online operators incur different expenses. Software licensing and development represent core costs—operators must license gaming content from providers such as Bragg Gaming, Light & Wonder, and Inspired Entertainment. Payment processing fees consume a portion of revenue, as operators must maintain secure, compliant payment infrastructure supporting multiple deposit and withdrawal methods.

Customer acquisition costs are typically higher for online operators in competitive markets. Ontario’s iGaming Ontario data indicates that as of March 2025, the average revenue per active player account was approximately CAD $278 monthly. To build a customer base of this magnitude, operators must invest significantly in marketing, affiliate partnerships, and promotional campaigns.

Customer support operations require 24/7 staffing but operate more efficiently at scale than physical casino services. A single online support team can assist tens of thousands of players across multiple properties.

Scalability and Cost Efficiency

Online casinos achieve superior cost efficiency through scalability. Once developed, a platform can serve additional players with minimal incremental cost. Scaling an offline casino requires building new physical locations or expanding existing properties—a capital-intensive, time-consuming process.

However, online operators in competitive markets like Ontario cannot simply raise prices to improve margins. Price competition and regulatory restrictions on promotional advertising create pressure to operate on narrower margins. Offline casinos, particularly monopoly operators like Loto-Québec, face no such competitive pressure, allowing higher profitability per-dollar-wagered.

Player Experience and Engagement

Offline and online casinos create fundamentally different player experiences shaped by their operational environment.

Social Immersion and Community (Offline)

Physical casinos offer social engagement that online platforms cannot replicate. Players interact with dealers, other players, and hospitality staff, creating a communal gaming environment. The sensory experience—the sound of slot machines, the energy of table games, live entertainment, and premium dining—contributes to player engagement and loyalty. Loto-Québec’s casinos deliberately cultivate this experience through entertainment programming, special events, and themed gaming areas.

Offline casinos build loyalty through in-person relationships and physical loyalty programs. Players develop familiarity with staff and return to the same location, creating habitual engagement patterns. This social component supports extended player sessions and higher spending.

Convenience and Accessibility (Online)

Online casinos offer accessibility offline venues cannot match. Players gamble 24/7 from home, work, or mobile devices without travel time or costs. Ontario’s iGaming Ontario market demonstrates strong mobile adoption—most play occurs on smartphones and tablets rather than desktop computers. This convenience is particularly valuable for players in regions without nearby physical casinos.

Online casinos also offer greater game variety. Ontario players can access thousands of games across 84 regulated websites, compared to the limited game selection available at any single physical casino. This variety supports player retention and spending across broader demographics.

Responsible Gaming Integration

Both offline and online casinos integrate responsible gaming protections, though implementation differs. Offline casinos employ trained staff to identify problem gambling signs and distribute self-exclusion information. Players can request to be added to provincial self-exclusion lists, banning them from all regulated casinos in the province.

Online casinos implement digital safeguards. iGaming Ontario mandates deposit limits, session time limits, account suspension, and self-exclusion tools directly within player accounts. These digital tools provide real-time control without requiring staff intervention. However, research on responsible gambling effectiveness shows that online tools require player initiation and may be less effective for players experiencing harm.

Canadian Market Data and Growth (2024-2025)

Canada’s online and offline casino markets demonstrate distinct growth trajectories shaped by regulatory environment and player behavior.

Quebec Offline Market Performance

Quebec’s offline casino market showed resilience in 2024-25. Loto-Québec reported total revenues of CAD $2.993 billion for fiscal year 2024-25, with casinos and gaming halls generating CAD $1.202 billion. This represented a slight increase from the previous year despite a brief labour disruption in 2023-24. Net income for the year reached CAD $1.518 billion, which Loto-Québec reinvests into provincial government services and responsible gaming initiatives.

Casino and gaming hall revenue is on track for record performance, driven by increased foot traffic during seasonal periods and new gaming offerings. Loto-Québec has expanded its regional gaming hall presence to serve populations outside Montreal and Charlevoix, contributing to growth in the gaming establishment sector.

Ontario Online Market Performance

Ontario’s regulated iGaming market continues rapid expansion. iGaming Ontario reported CAD $3.2 billion in total gaming revenue for fiscal 2024-25, a 32% increase from the previous year. Total wagering reached CAD $82.7 billion across all gaming types, up 31% year-over-year. Casino gaming dominated, generating CAD $2.4 billion in revenue from CAD $69.6 billion in wagers—a 36% increase in revenue compared to the prior year.

As of March 2025, Ontario’s iGaming market supported approximately 1.1 million active player accounts, with an average revenue per account of CAD $278 monthly. The number of licensed operators increased to 49, offering 84 gaming websites. This competitive, multi-operator approach has generated significant tax revenues for Ontario; iGaming Ontario paid the province CAD $149 million in dividends during fiscal 2023-24 and contributed an estimated CAD $1.24 billion in combined federal, provincial, and municipal gaming and tax revenues.

Market Trends and Provincial Expansion

Several provincial trends are reshaping the Canadian online casino landscape. Alberta is transitioning to a competitive market similar to Ontario’s, with private operators expected to launch in 2026 under iGaming Alberta Corporation oversight. This shift will increase competition and potentially generate new tax revenues for the province.

Quebec remains unique in maintaining a government monopoly on legal online gaming. However, approximately 50% of Quebec online players use unregulated, offshore casinos, according to Loto-Québec management. The Quebec Online Gaming Coalition continues advocating for regulatory reform to introduce competition and capture tax revenue currently flowing to unregulated operators.

Canada’s projected iGaming market is expected to generate nearly CAD $4 billion by the end of 2025, reflecting sustained growth across regulated provincial markets and continued migration.