Estonia-headquartered bookmaker Coolbet is set to exit Ontario’s regulated sports betting and iGaming market as of 3 April.
Coolbet was among the first set of operators to launch in Ontario’s regulated online gambling market in April last year, after being acquired by B2B iGaming supplier GAN between 2020 and 2021.
GAN said at the time of the acquisition that the deal would help position the business as a full-service B2B supplier for real-money gambling in North America, and a vertically integrated B2C competitor in selected international markets.
What happens next?
Now, Coolbet has instructed its Ontarian customers to withdraw funds from their accounts ahead of its planned closure in the market from 3 April.
It has become one of the first operators to withdraw from the market.
As of tomorrow (21 March), the operator will no longer accept deposits from the province, while its online casino and sportsbook will be closed by the end of Wednesday 22 March.
Any bets that cannot be settled because their outcomes remain unknown at that point will be voided and refunded.
Bonus funds, meanwhile, will be “fully unlocked from wagering requirements” on 23 March, according to a blog post on Coolbet’s website.
By 3 April, Coolbet’s website and mobile app in Ontario will be disabled, although customers will still be able to contact customer support with any queries.
In the meantime, Coolbet is directing customers to play with Wildz, a customer-facing brand operated by Malta-based iGaming platform supplier Rootz.
Wildz has been licensed in the Ontario market since January this year.
What went wrong for Coolbet?
Speaking last week on the Gaming News Canada podcast, former head of North America for Coolbet, Kris Abbott (now country manager for Canada at Kaizen Gaming), offered his two cents on what went wrong for the brand in Ontario.
“The cost of operating here hit them hard a bit because their model is built on slow, steady growth,” he said.
“From a business perspective, their strategy was low-vig sports betting, which in this market is dangerous, and they never had big marketing budgets.”
Still, the brand had been able to carve itself out a strong niche in the market and was highly regarded by its regular users.
“I was proud of what we were able to do at the time and after I left, I saw some really cool stuff that they were doing this year, knowing that they only had a fraction of the money to work with that some other operators do,” Abbott continued.
RIP coolbet in Ontario pic.twitter.com/eY264rjwOi
— Plus EV Analytics (@PlusEVAnalytics) March 16, 2023
However, Coolbet faced difficulties not only because of external market conditions, but also because of its internal structure under GAN’s ownership, Abbott suggested.
“When [GAN] did the acquisition in late 2020, the stock price was at $27. Today, it’s under $1.40,” he pointed out.
“When those things start happening, and shareholders get restless, I feel like you start managing quarter to quarter, and that’s really tough to do in our industry.
“The product itself, there’s nothing wrong with it. In fact, I think casino-wise they have one of the best. I think there’s other factors at play for why they made this decision.”
Coolbet’s withdrawal from the market – placing it among the first licensed operators in Ontario to pull out – may indicate tougher market conditions than originally anticipated by many operators.
Abbott suggested: “I think a lot of operators clearly thought that Ontario was going to be a land of milk and honey, and it’s a challenging market largely because of the competition.
“I think there will be plenty of companies in the market that reevaluate their stance,” he concluded.
More trouble for GAN
Coolbet’s Nasdaq-listed owner GAN has struggled on the public markets in the past two years.
s in the business are trading down 76% over the past year, selling for as little as $1.32 at the time of writing. That is a far cry from the firm’s all-time high share price of over $30, recorded in 2021.
GAN’s latest published financial results, covering Q3 2022, showed a net loss of $6.9m during the quarter amid a $1.7m (7.9%) year-on-year reduction in group B2C revenue.
The business said it had grown its number of active customers by 31% year-on-year during the same period, but that the growth was driven primarily by an increase in customer numbers in Latin American markets.
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