Which States Can Canada Model To Increase iGaming Revenue?
Canada’s regulated iGaming industry has expanded rapidly in recent years, but still has significant room to grow. This is especially true when compared to the top-performing U.S. states that have turned online gambling into a major tax generator. As Canadian provinces evaluate ways to increase market revenue and optimize long-term returns, the most instructive examples lie south of the border.
States like New Jersey, Pennsylvania, and Michigan have spent years refining frameworks that balance consumer protection, taxation, operator competition, and responsible gaming measures. By examining the successful regulatory and taxation models in these states, Canada can identify which policies are driving strong financial performance and adapt similar approaches to strengthen its own ecosystem.
What Makes a Strong iGaming Model?
Certain U.S. states stand out for their high-performing status in iGaming revenue. These jurisdictions have crafted legislation that achieves two key goals:
- Encourages legal participation through accessible, competitive markets.
- Maximizes provincial or state revenue through effective taxation and licensing.
For Canada, the question becomes: Which of these frameworks are compatible with the Canadian context, and how can they be adapted to enhance provincial earnings?
New Jersey: The Pioneer and Revenue Benchmark
New Jersey’s long-term regulatory stability and competitive market structure have fueled sustained growth, making it a leading model for revenue expansion.
1. Market Maturity and Regulatory Stability
New Jersey launched regulated iGaming in 2013, giving it one of the longest-running programs in North America. The state’s success rests heavily on stable regulations, clear licensing structures, and a consistent commitment to enforcement. Canada could benefit from adopting long-term regulatory stability, allowing operators to invest confidently in local infrastructure, marketing, and innovation.
2. Competitive Licensing Model
New Jersey allows numerous brands to operate under partnerships with land-based casinos. This fosters the following:
- Strong competition
- Better consumer choice
- Higher operator investment
- Steady tax inflows driven by market diversity
A similar model across Canadian provinces, where more operators are active and incentivized to innovate, could significantly boost overall market turnover.
3. Effective Taxation Balance
New Jersey’s taxation rate is high enough to generate substantial revenue, yet not so high that it deters operator participation. Canada could adopt this balanced approach, especially in provinces where the current tax model is either too restrictive or not optimized for long-term returns.
Pennsylvania: High Taxes, High Revenue
Pennsylvania’s high-tax, high-demand model shows how strong consumer interest can drive iGaming revenue.
1. A Revenue Powerhouse
Pennsylvania is often cited as one of the highest-earning iGaming jurisdictions in the U.S. Its strategy differs from New Jersey as it imposes some of the highest tax rates in North America, especially on online slots. Despite the steep taxation, Pennsylvania remains one of the top markets because:
- Demand is strong
- Operator interest remains high
- Licensing fees contribute substantially to state revenue
2. Lessons for Canada
Canada can look to Pennsylvania as an example of strategic taxation. Provinces seeking rapid revenue growth could impose higher taxes on specific verticals, such as online slots, while maintaining moderate tax rates on table games or sports betting.
Additionally, upfront licensing fees in Pennsylvania generate a quick injection of government revenue. A similar model could help Canadian provinces finance regulatory development and responsible gaming programs.
Michigan: A Model of Modernization and Interstate Play
Michigan has a collaborative, player-focused model that shows how unified regulation and strong safeguards can enable trust, participation, and long-term revenue growth.
1. Strong Collaboration Between State and Tribal Operators
Michigan offers a unique blueprint for Canada due to its diverse operator structure. The state successfully integrated commercial casinos and tribal gaming entities into a unified iGaming system. This model could guide provinces like British Columbia or Saskatchewan, where First Nations gaming partnerships are an essential part of the future regulatory landscape.
2. Emphasis on Player Protections
Michigan’s focus on identity verification, responsible gaming tools, and comprehensive compliance oversight has created trust that contributes to high participation levels. Higher player confidence often equals higher long-term revenue. Canada, which already emphasizes responsible gaming, can build on Michigan’s approach by standardizing tools and transparency across all provinces.
3. Interstate Cooperation
Michigan is one of the states participating in multistate online poker compacts, which expand liquidity pools and increase overall revenue. While Canada cannot replicate interstate agreements directly, provinces could still explore interprovincial shared liquidity models, especially for poker and other peer-to-peer games.
Delaware: Small Market, Big Lessons
Delaware’s centralized, streamlined system highlights how smaller areas can gain stability and efficiency through unified control and shared infrastructure.
1. Centralized Model
Delaware operates under a state-controlled monopoly system, offering limited operator choice but generating predictable revenue. For smaller Canadian provinces with population constraints, such as Prince Edward Island or New Brunswick, which is a centralized or single-operator model may provide the following:
- Lower regulatory overhead
- More predictable revenue
- Better alignment with smaller markets
2. Unified Technology Approach
Delaware uses shared technology providers to streamline operations and reduce costs. Canada could replicate a shared infrastructure model between provinces to reduce duplication of effort and encourage interoperability.
What Canada Can Learn Across All Models
Canada can strengthen its iGaming framework by drawing lessons from each U.S. model in the following key areas:
1. Encouraging More Competition
The strongest U.S. revenue performers maintain healthy operator competition. Where appropriate, Canadian provinces could open licensing to more brands, ensuring responsible oversight while stimulating revenue growth.
2. Optimizing Tax Rates
Canada’s current tax structures vary drastically by province. A U.S.-style approach, balancing competitive operator margins with strong government returns, could boost revenue without pushing players to offshore sites.
3. Strengthening Cross-Province Consistency
A more consistent Canadian framework could improve consumer confidence and reduce regulatory fragmentation. The U.S. shows that clearer rules lead to higher participation.
4. Investing in Responsible Gaming and Player Trust
Every successful U.S. state places a strong emphasis on transparency and responsible gaming tools. As Canada expands, enhancing these systems will support sustainable revenue growth.
Where Can Canada Go From Here?
As Canada continues to refine its iGaming sector, the future ahead is bright. Online platforms already operating under regulated provincial models, such as BetMGM’s online casino Ontario product, demonstrate the potential of a well-managed, competitive market. Strengthening and scaling these policies nationwide could position Canada as one of the most successful iGaming jurisdictions in the world.
Emulating the U.S.
By studying New Jersey’s competitive framework, Pennsylvania’s strategic taxation model, Michigan’s collaborative and modernized structure, and Delaware’s centralized system, Canada can craft a regulatory blueprint tailored to its own geography, population, and political landscape. Each of these U.S. states offers proven strategies that could improve Canadian provincial earnings, strengthen consumer protection, and encourage long-term industry growth.
