LIQUOR & GAMING AUTHORITY OF MANITOBA
MANITOBA GAMING MARKET ASSESSMENT
Key Findings Report
Final
SUBMITTED BY: HLT ADVISORY INC.
DATE: JANUARY 12TH, 2016

 Liquor & Gaming Authority of Manitoba
Manitoba Gaming Market Assessment
Key Findings Report (Final)

TABLE OF CONTENTS
1. INTRODUCTION............................................................................................. 2
1.1 Background ....................................................................................................2
1.2 Organization of the Report ...............................................................................2
2. METHODOLOGY ............................................................................................. 3
2.1 Methodology ...................................................................................................3
3. MACRO GAMING TRENDS .............................................................................. 5
3.1 The Canadian Gaming Industry ........................................................................5
3.2 The Manitoba Gaming Industry ........................................................................6
3.3 Total Gaming Market Performance: Current Performance....................................9
3.4 Gaming Market Performance: Casino Style and VLT Gaming ............................. 10
3.5 Total Gaming Market Performance: Future Outlook .......................................... 13
3.6 Conclusions .................................................................................................. 14
4. GAMING MARKET AREAS ............................................................................. 16
4.1 Casino & Non-Casino Market Areas ................................................................. 16
4.2 Socio-Economic Profile................................................................................... 17
4.3 Gaming Supply Performance .......................................................................... 18
5. POTENTIAL SIZE OF MARKET ...................................................................... 19
5.1 Potential Size of Market: Casino Style Gaming ................................................. 20
5.2 Potential Size of Market: Total Gaming ............................................................ 21
6. MARKET OPPORTUNITY............................................................................... 22
6.1 Supply Base Adequacy ................................................................................... 22
6.2 Conclusions .................................................................................................. 24

1

 Liquor & Gaming Authority of Manitoba
Manitoba Gaming Market Assessment
Key Findings Report (Final)

1.

Introduction

HLT Advisory Inc. (“HLT”) was retained by the Assembly of Manitoba Chiefs (“AMC”) and
the Province of Manitoba (the “Province”) through the Liquor & Gaming Authority of
Manitoba (“LGA”) to conduct an independent assessment of the potential market for
additional First Nation gaming facilities in Manitoba. This report (“Key Findings Report”)
summarizes the results of the market assessment.

1.1

BACKGROUND

This report is an update to a market assessment conducted by HLT for both parties (AMC
and the Province) in 2007 (base data used to complete the 2007 report was mainly from
2005). Whereas the focus on the 2007 report was on casino style gaming (defined in
2007 as casinos and large VLT sites), this updated assessment is on casino style (casinos,
gaming devices in non-gaming specific facilities and large VLTs) and all VLT gaming.
A Joint Steering Committee Working Group comprising of representatives from AMC, the
Province, Manitoba Liquor & Lotteries (“MBLL”) and LGA was formed to oversee HLT’s
market assessment.

1.2

ORGANIZATION OF THE REPORT

This document represents the Key Findings of the market assessment. The detailed
analyses undertaken to arrive at these Key Findings are contained in a separate document
entitled Manitoba Gaming Market Assessment. This separate document contains the
following sections:
•
•
•

•
•
•

Section 1 – Introduction introduces the study and outlines the scope of work
undertaken.
Section 2 – Methodology describes the methodology used to undertake the
province wide assessment.
Section 3 - Macro Gaming Trends identifies and assesses key trends that have
and are impacting the performance of the Manitoba gaming market with a focus on
casino, casino style and VLT gaming. Relevant comparison jurisdictions (mainly
other Western Canada provinces) are used to assess Manitoba’s performance.
Section 4 - Gaming Market Areas contains the results of the analysis used to
delineate the province into gaming market areas.
Section 5 - Potential Size of Market focuses on estimating the potential size of
the defined gaming market areas.
Section 6 - Market Opportunity assesses gaming facility opportunities in light
of total market potential estimated in the previous section and existing activity
levels (both performance and supply).

The remainder of this Key Findings Report is organized under these same section
headings.

2

 Liquor & Gaming Authority of Manitoba
Manitoba Gaming Market Assessment
Key Findings Report (Final)

2.

Methodology

This section summarizes the methodology used to complete the gaming market
assessment. This methodology has been developed by HLT and is continually refined
based on work experience in all Canadian provinces and numerous international
jurisdictions. A key component of this experience includes analyzing extensive gaming
facility player card data from various Canadian provinces. Casino player card data from
Manitoba casinos was not available to be used to complete this assessment.

2.1

METHODOLOGY

Exhibit 1 depicts the various components of HLT’s market assessment methodology used
to assess the Manitoba gaming market for casino and VLT gaming. It represents a
refinement of the methodology used to complete the 2007 report.
Exhibit 1

3

 Liquor & Gaming Authority of Manitoba
Manitoba Gaming Market Assessment
Key Findings Report (Final)

The methodology contains five core components and numerous data/information inputs:

•

Macro Gaming Trends identifies key trends that are impacting the current and
future outlook for the Manitoba gaming market (with a focus on casino style and
VLT gaming)

•

Distribution of Existing Gaming Win estimates the current distribution of
casino and VLT gaming win within Manitoba (by defined gaming market areas)
based on the location of existing gaming supply and typical consumer visitation
patterns (typical distances that customers travel to visit a gaming facility).

•

Current Size of Gaming Markets and Supply Availability measures the
current size (total gaming win and gaming win per adult) of the defined gaming
market areas.

•

Potential Size (and Distribution) of Markets are estimated based on the
experience of comparable markets in terms of similar socio-economic profiles.
Supply based factors are also assessed to further understand market performance
differences. Estimates of market potential does not imply that this potential can be
fully captured by existing and/or new facilities (or gaming supply). For example,
some of this potential may be too dispersed (i.e. located in rural areas) for a
facility to fully capture. Additionally, some of this potential may also be embedded
in segments of the population who do not include gaming as one of their
entertainment options for socio-economic or other reasons.

•

Market Opportunity (Distribution of) further assesses the market potential
estimate and identifies market opportunities. Factors considered include
captured/uncaptured win, incremental growth/cannibalization (or market share)
and existing supply base adequacy. Financial viability of facilities was also
considered.

4

 Liquor & Gaming Authority of Manitoba
Manitoba Gaming Market Assessment
Key Findings Report (Final)

3.

Macro Gaming Trends

This section of the report identifies trends that have been impacting and likely will
continue to impact the future performance of the entire Manitoba gaming industry and
specifically its “casino style” (i.e. casinos, EGD Other - electronic gaming devices in noncasino gaming facilities and large VLT sites) and VLT components.

3.1

THE CANADIAN GAMING INDUSTRY

The Canadian gaming industry (all forms of legal gaming) is a large mature entertainment
industry (see Exhibit 2). Historic growth has been influenced by the amount and type of
increases/decreases in gaming supply - growth trends were greatly impacted by timing of
new supply increases or reductions in existing supply levels. The economic recession
(2008-2010) has to a large extent, hid the shift from supply to demand driven growth.
Future growth will likely be more dependent upon providing consumers with gaming
activity that they demand as opposed to simple increases in the supply of existing gaming
activities.
Exhibit 2

Under a demand driven growth phase, growth is not certain. Since 2009, the Canadian
gaming industry has experienced three years of growth and three years of declines. The
industry today (2014) is smaller than it was in 2009 (historic high). When final 2015
numbers are available, the industry will show growth but not yet fully rebound to its
historic high (HLT estimate).

5

 Liquor & Gaming Authority of Manitoba
Manitoba Gaming Market Assessment
Key Findings Report (Final)

3.2

THE MANITOBA GAMING INDUSTRY

Manitoba’s gaming industry (all forms of legal gaming) growth trends mirrors that of
Canada as a whole – a large mature entertainment industry that is now in a demand
phase. The industry has not yet fully rebounded to its historic high achieved in 2011 (see
Exhibit 3).
Exhibit 3

Manitoba’s gaming industry is dominated by its VLT and casino sectors. Both of these
sectors combined account for almost 80.0 percent of the total provincial industry (see
Exhibit 4).
Exhibit 4
Manitoba Gaming Industry Win Trends by Sector
$1.0

Pari-Mutuel

Bingo

Lottery

EGDs - VLTs

Casinos

EGD Other

Win ($Billion)

$0.8

$0.6

$0.4

$0.2

$0.0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E
Note: Win generated by casino, EGD-VLT, EGD-Other and traditional lotteries are reported on a March 31st fiscal year end and represents approximately 92% of the
total gaming win in Canada. All other sectors are generally reported on a calendar year end basis. For presentation purposes, fiscal and calendar year end data have
been combined. For instance, March 31st, 2014 data has combined with December 31st, 2013 data and labelled “2014".
Source: HLT Advisory Inc. based on most recent data available from Manitoba Liquor & Lotteries Corporation, Liquor & Gaming Authority of Manitoba, and HLT
estimates, subject to update as further information becomes available.

6

 Liquor & Gaming Authority of Manitoba
Manitoba Gaming Market Assessment
Key Findings Report (Final)

Since 2005 (see Exhibit 5), the performance of Manitoba’s casino and VLT sectors have
been impacted by many factors including VLT replacement programs (2005/2007 and
2013/2014), opening of new gaming facilities (Sand Hills, Shark’s Club) as well as various
enhancements to facilities and gaming supply (i.e., player club program, event centre at
Club Regent, parkade at McPhillips Street casino, expansion slots at South Beach, etc.).
Exhibit 5
Manitoba Casino, EGD-Other and VLT Win Trends
$0.5

Casinos

Increase Due
to VLT
Replacement

$0.4

Win ($Billion)

VLT

$0.3

EGD Other
Redistribution of VLTs from
low to Higher Performning
Sites

* Increased VLTs
in FN Locations
* Two New Games
Introduced

Gaming Supply Enhacemen/
New Games at Winnipeg
Casinos

TITO Machines
Instalation &
Replacement of E-Bingo
at Winnipeg Casinos

Online Club Rewards
Catalogue Lounched
for Winnipeg Casinos

$0.2

$0.1

VLT
Replacement &
Centralized
GMS Initiated
Q4 FY2013

South Beach
Casino Opened
in Scanterbury
May 2005

Sand Hills Casino
Opened in Carberry
Jun 2014

* Event Centre at Club
Regent
* New Parkade at
McPhillips

* Player Club Systerm
Implemented at Aseneska
Casino
* Slot Expansion at South
Beach Casino
* Enhanced Player Club Card
at Winnipeg Casinos

Shark's Club
Opened in Winnipeg
Jun 2013

$0.0
2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015E

Note: Win generated by casino, EGD-VLT, EGD-Other and traditional lotteries are reported on a March 31st fiscal year end and represents approximately 92% of the
total gaming win in Canada. All other sectors are generally reported on a calendar year end basis. For presentation purposes, fiscal and calendar year end data have
been combined. For instance, March 31st, 2014 data has combined with December 31st, 2013 data and labelled “2014".
Source: HLT Advisory Inc. based on most recent data available from Manitoba Liquor & Lotteries Corporation, Liquor & Gaming Authority of Manitoba, and HLT
estimates, subject to update as further information becomes available.

Comparing Manitoba’s growth to the rest of Canada since 2005, Manitoba’s combined
casino and EGD-Other sectors grew by approximately 60% (Exhibit 6). Only British
Columbia and Saskatchewan experienced higher growth.
Exhibit 6
Casino & EGD-Other Growth Trends - Canada
Index 2005=0%
120%
ATL CND

QC

ON

MB

SK

AB

BC

100%

Win Growth (Index 2005=0%)

80%

60%

40%

20%

0%

-20%
2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015E

Note: Win generated by casino, EGD-VLT, EGD-Other and traditional lotteries are reported on a March 31st fiscal year end and represents approximately 92% of the
total gaming win in Canada. All other sectors are generally reported on a calendar year end basis. For presentation purposes, fiscal and calendar year end data have
been combined. For instance, March 31st, 2014 data has combined with December 31st, 2013 data and labelled “2014".
Source: HLT Advisory Inc. based on most recent data available from various provincial government agency/corporation annual reports and HLT estimates, subject to
update as further information becomes available.

7

 Liquor & Gaming Authority of Manitoba
Manitoba Gaming Market Assessment
Key Findings Report (Final)

In terms of VLT’s, Manitoba is the only province that experienced growth since 2005 (just
over 10% - see Exhibit 7). Over the past ten years, all provinces including Manitoba have
reduced their number of VLT sites. Manitoba is the only province that increased its
number of machines (by approximately 700).
Exhibit 7
VLT Growth Trends - Canada
Index 2005=0%
30.0%
ATL CND

QC

MB

SK

AB

Win Growth (Index 2005=0%)

20.0%

10.0%

0.0%

-10.0%

-20.0%

-30.0%
2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015E

Note: Win generated by casino, EGD-VLT, EGD-Other and traditional lotteries are reported on a March 31st fiscal year end and represents approximately 92% of the
total gaming win in Canada. All other sectors are generally reported on a calendar year end basis. For presentation purposes, fiscal and calendar year end data have
been combined. For instance, March 31st, 2014 data has combined with December 31st, 2013 data and labelled “2014".
Source: HLT Advisory Inc. based on most recent data available from various provincial government agency/corporation annual reports and HLT estimates, subject to
update as further information becomes available.

Essentially, the available growth potential identified in the 2007 report has been captured
by changes/enhancements to the existing casino and VLT supply base.

8

 Liquor & Gaming Authority of Manitoba
Manitoba Gaming Market Assessment
Key Findings Report (Final)

3.3

TOTAL GAMING MARKET PERFORMANCE: CURRENT PERFORMANCE

To assess the market effectiveness or performance of gaming activities across the
provinces, gaming spending (or win) per adult as well as gaming win as a percent of
income can be used.
Manitoba currently has the third highest total gaming spend per adult in Canada ($719 per
adult), behind only Saskatchewan and Alberta (see Exhibit 8).
Exhibit 8

In terms of spending expressed as percetnage of income, Manitoba currenlty has the
second highest spending level in Canada (at 1.9%), just behind Saskatchewan (see Exhibit
9).
Exhibit 9
Total Gaming Win as % of Provincial Income
2014
3.00%

Win as % of Income

2.50%

2.0%

2.00%

1.50%

1.5%

1.9%

1.6%
1.4%
1.2%

1.2%

1.2%

NB

NS

1.2%

1.0%

1.00%

0.50%

0.00%
BC

AB

SK

MB

ON

QC

PEI

NFLD

Source: HLT Advisory Inc. based on Statistics Canada Small Area and Administrative Data Division (SAADD), Annual Estimates for Census Families and Individuals
(T1 Family File), various gaming provincial agencies/corporations annual gaming reports, Statistics Canada Annual Demographics and HLT estimates.
* 2014 based on calendar year 2013 income and FY2014 gaming win.

9

 Liquor & Gaming Authority of Manitoba
Manitoba Gaming Market Assessment
Key Findings Report (Final)

While the spend per adult suggests that the Manitoba market has excess demand that
could be captured, the spend as a percentage of income suggests that this excess demand
is very limited. For example if Manitoba achieved Saskatchewan’s spend per adult of
$874, total gaming win in the province would increase by approximately $155 million.
However, if Manitoba achieved Saskatchewan’s gaming spend of 2.0 percent of income,
total gaming spend in the province would only increase by approximatley $40 million.

3.4

GAMING MARKET PERFORMANCE: CASINO STYLE AND VLT GAMING

As noted in the 2007 report, while different gaming activities have different levels of
customer appeal, there is a degree of market overlap among all activities. Specifically,
some VLT players are also casino (slot) players and vice versa. In terms of facilities, the
attraction of a gaming facility containing 5 EGDs (electronic gaming devices) is different
than a gaming facility containing 500 EGDs. At some point however, when a smaller
facility increases in size, its attraction draw will approach that of the larger facility. When
facilities are of the same “quality” (and operate under similar operating policies),
regardless of size, the market overlap can be more pronounced.
The issue of market overlap between gaming activities and facilities exist (in varying
degrees) in Manitoba’s casino, EGD Other and VLT sectors. It also exists in:
•

Nova Scotia (casinos and VLT sites – especially larger VLT sites containing more
than 15 machines);

•

New Brunswick (casino and VLT sites –especially larger VLT sites containing 25
machines);

•

Ontario (slot facilities at racetracks, charity casinos and commercial casinos);

•

Alberta (casinos and VLT sites – especially larger VLT sites containing more than
15 machines); and

•

British Columbia (community gaming centers or slots at bingo halls and casinos).

Given the overlap between casino and EGD gaming (i.e., EGD-Other and EGD-VLTs), it is
necessary to assess these sectors individually and combined.

10

 Liquor & Gaming Authority of Manitoba
Manitoba Gaming Market Assessment
Key Findings Report (Final)

Manitoba currently has the third highest spend in total casino, EGD Other and VLT
spending in Canada behind only Saskatchewan and Alberta (see Exhibit 10). Between
2005 and 2014, Manitoba increased its spending from $503 to $569 per adult (or by $66
per adult). Over this same period, Saskatchewan increased its spending per adult by $86,
while Alberta decreased by $23 per adult.
Exhibit 10

Manitoba currently has the highest VLT spend in Canada at $310 per adult (see Exhibit
11).
Exhibit 11

11

 Liquor & Gaming Authority of Manitoba
Manitoba Gaming Market Assessment
Key Findings Report (Final)

In terms of casino style gaming (casinos, EGD Other and large VLT sites – sites with 20
plus machines), Manitoba currently has the second highest spend in Canada, behind only
Alberta (approximately $72 behind Alberta) (see Exhibit 12).
Exhibit 12

Discounting table gaming, the gap between Manitoba and Alberta decreases to
approximately $30 (see Exhibit 13).
Exhibit 13

12

 Liquor & Gaming Authority of Manitoba
Manitoba Gaming Market Assessment
Key Findings Report (Final)

3.5

TOTAL GAMING MARKET PERFORMANCE: FUTURE OUTLOOK

The Canadian gaming industry, as well as Manitoba’s, is in a demand driven growth phase.
Future growth in a demand growth phase is less certain than under a supply growth
phase.
A key emerging trend of the demand growth phase is that spending on all forms of
gaming is not keeping pace with population and income growth. Exhibits 14 show
Manitoba’s total gaming win per adult and total adult population growth. Win per adult has
declined (approximately 7% since 2011), while the total adult population has increased
(approximately 6% since 2011). This trend is also evident in the entire Canadian gaming
industry as shown in Exhibit 15.
Exhibit 14

Exhibit 15

Manitoba Total Gaming Win/Adult

Canada Total Gaming Win/Adult

$1,000

1,250

$1,000

40,000
Total Win/Adult

Total Win/Adult

Adult Population
Adult Population

1,000

$764
$730

$719

$800

$635
750

Win/Adult ($)

$600

$400

500

$200

250

$0

$600

2006

2007

2008

2009

2010

2011

2012

2013

2014

$569

$585

$581

$586

$588

$567

$567

$559

24,000
$547

$536

$400

16,000

$200

8,000

0
2005

32,000

$726

$0

2015

0
2005

Source: HLT Advisory Inc. based on various provincial government agency/corporation annual reports and adult population numbers based on Statistics
Canada Demographic 2013. Numbers are subject to update as further information becomes available.

Adult Population (000's)

$783

$771

$705

Win/Adult ($)

$751
$683

Adult Population (000's)

$779

$800

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015E

Source: HLT Advisory Inc. based on various provincial government agency/corporation annual reports and adult population numbers based on Statistics
Canada Demographic 2014. Numbers are subject to update as further information becomes available.

Gaming win as a percent of income, in both Manitoba and Canada, are also not keeping
pace with income growth (see Exhibits 16 and 17).
Exhibit 16

Exhibit 17
Canadian Gaming Win as % of Income

Manitoba Gaming Win as % of Provincial Income
3.0%

3.0%

$50.0

2.4%

$1,500

Gaming Win as % of Income

Gaming Win as % of Income

Total Income

Total Income

2.32%

2.29%

2.31%

2.23%

2.28%

2.24%

$40.0

2.4%

$30.0

1.8%

$1,200

2.24%
2.13%

Win % of Income

1.2%

$20.0

0.6%

$10.0

0.0%

$0.0
2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Income ($Billions)

1.86%

Win % of Income

1.91%

1.7%

$900
1.6%

1.6%

1.5%

1.5%

1.5%

1.4%

1.4%

1.3%

1.2%

$600

0.6%

$300

0.0%

$0
2005

2015E

Source: Source: HLT Advisory Inc. based on Statistics Canada Small Area and Administrative Data Division (SAADD), Annual Estimates for Census Families and
Individuals (T1 Family File), various gaming provincial agencies/corporations annual gaming reports, Statistics Canada Annual Demographics and HLT estimates.
2015E based on calendar year 2014 income estimate and 2015 gaming win estimate. 2014 income estimated based on historic income growth by province.

1.8%

Income ($Billions)

1.98%
1.8%

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015E

Source: Source: HLT Advisory Inc. based on Statistics Canada Small Area and Administrative Data Division (SAADD), Annual Estimates for Census Families and
Individuals (T1 Family File), various gaming provincial agencies/corporations annual gaming reports, Statistics Canada Annual Demographics and HLT estimates.
2015E based on calendar year 2014 income estimate and 2015 gaming win estimate. 2014 income estimated based on historic income growth by province.

One interpretation of this trend is that the current mix of gaming products including
facilities (or delivery format) are not as appealing as they once were. Some strategic
directions that are being investigated and implemented in many provinces to address this
trend include:
•

existing facility enhancements (e.g. addition of non-gaming amenities);

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 Liquor & Gaming Authority of Manitoba
Manitoba Gaming Market Assessment
Key Findings Report (Final)

•

new facility locations (or relocation of existing facilities);

•

introduction of new and/or enhanced products (e.g. enhanced Lotto Max and 649
lottery products); and

•

new delivery formats (internet).

These strategic directions all involve considerable investment. The return of investment of
these strategic directions will be considerably lower than investments made under a supply
growth phase.

3.6

CONCLUSIONS

Canada’s gaming industry is a large entertainment industry that is mature (essentially the
industry has been flat over the past five years). Manitoba’s recent industry growth trend
mirrors Canada’s as a whole.
•

Mature characteristics include demand growth phase (“giving customers what they
want” as oppose to simple supply increases) and investment decisions have higher
risks as growth is not certain.

•

An emerging trend in this growth phase is that gaming expenditures are not
keeping pace with both adult population and income growth (challenge facing the
industry – is the current mix of products and facilities/delivery channels losing its
appeal?). Future growth is not certain.

It is becoming increasingly difficult to continue to asses the Canadian gaming industry
from a sector perspective due to overlapping consumer appeal between products and the
introduction/growth of new delivery channels. This difficulty increases for those provinces
like Manitoba that have both casino (including EGD Other) and VLT gaming.
•

Given the current economic climate, those provinces with both casino (including
EGD Other) and VLT gaming are grappling with finding a balance between “giving
customers what they want” and “profit maximization”. This is impacting casinos
(including EGD Other facilities) as they have higher investment requirements and
lower operating margins as compared to VLT gaming.

Over the past ten years, Manitoba’s total gaming industry (specifically casino style and VLT
activities) performance has increased and currently Alberta and Saskatchewan represent
the two most comparable markets. Manitoba and the other two Prairie provinces
represent three of the most penetrated gaming markets in North America.
•

While Manitoba has the third highest expenditure level (as measured by win per
adult) in casino, EGD Other and VLT gaming combined in Canada, it has the
highest expenditure level in VLTs and the second highest expenditure level in
casino style gaming (casinos, EGD Other and large VLT sites). This implies that
there is limited growth available in the province.

14

 Liquor & Gaming Authority of Manitoba
Manitoba Gaming Market Assessment
Key Findings Report (Final)

Since 2005, the Manitoba casino, EGD Other and VLT sectors grew by approximately $133
million. This growth was driven by:
•

Operational improvements/enhancements of casinos (e.g. introduction of a player
card program and addition of an entertainment centre at MBLL Winnipeg casinos).

•

The expansion of South Beach First Nation Casino (e.g. additional slot machines
and hotel).

•

The addition of the Sand Hill First Nation casino and the Shark’s Club (EGD Other)
facility.

•

The introduction of almost 700 additional VLTs (619 machines at First Nation sites
and 81 machines at non-First Nation sites) and the increase in size (i.e. number of
VLT machines per site) of VLT sites.

Future province wide market growth, as evident by the experience of comparable markets,
is not certain and will likely not result from the simple expansion of the existing supply
base.

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 Liquor & Gaming Authority of Manitoba
Manitoba Gaming Market Assessment
Key Findings Report (Final)

4.

Gaming Market Areas

This section of the report first delineates the province into gaming market areas and
assesses these market areas in terms of various socio-economic factors and the
performance of the existing supply base (i.e. facilities and gaming devices). Second, the
performance of the existing supply base is estimated from a geographic perspective (i.e.
where customers reside and where they spend their gaming dollars).

4.1

CASINO & NON-CASINO MARKET AREAS

The fundamental assumption underpinning the delineation of market areas (both casino &
non-casino areas) is centered on the typical distance customers are willing to travel to visit
a casino style facility (or the geographic area from where a casino style facility generates
the majority of its business from). For existing casinos and EGD Other facilities, HLT
assumed a 60 minute drive time to approximate their market areas. For VLT sites, HLT
assumed that VLT sites generate all of their business from their immediate local markets.
One exception was made where a number of VLT sites were located close to a neighboring
province.
Seven gaming markets in total were defined (see Exhibit 18):
•

Three casino market areas – labelled Winnipeg, Sand Hill and Aseneskak.
Note: Winnipeg includes the two MBLL casinos, South Beach and the Shark’s Club.

•

Four non-casino market areas – labelled Southwest, Parkland, Interlake and North.
Exhibit 18

16

 Liquor & Gaming Authority of Manitoba
Manitoba Gaming Market Assessment
Key Findings Report (Final)

4.2

SOCIO-ECONOMIC PROFILE

The current adult population in the Province is estimated at 998,322 (see Exhibit 19), with
almost 90% residing within the three defined casino markets, while the remaining 10%
reside in the non-casino markets.
Exhibit 19
2015 - Adult Population by Age Group by Market Area
Age Group
18-29

30-39

40-49

50-59

60-69

Casino Mark ets
Winnipeg
Sand Hills
Aseneskak
Total Casino Markets

171,533
19,056
3,904
194,493

138,395
14,614
2,590
155,599

129,485
13,492
2,824
145,801

143,098
15,113
3,479
161,690

Non-Casino Mark ets
Manitoba Southwest
Parklands
Interlake
Manitoba North
Non-Casino Markets

3,197
5,207
3,344
11,970
23,718

2,653
3,988
1,969
7,729
16,339

2,629
4,602
2,207
6,820
16,258

218,211

171,938

162,059

Total Manitoba

Adults Under 50
Total
%

Adults Over 50
Total
%

70-79

80+

Total

107,610
12,044
2,664
122,318

59,577
7,384
1,079
68,040

41,012
5,321
471
46,804

790,710
87,024
17,011
894,745

439,413
47,162
9,318
495,893

55.6%
54.2%
54.8%
55.4%

351,297
39,862
7,693
398,852

44.4%
45.8%
45.2%
44.6%

3,956
6,357
2,858
5,474
18,645

3,561
5,669
2,225
3,089
14,543

2,032
3,618
1,352
1,331
8,332

1,640
2,859
878
366
5,742

19,668
32,300
14,832
36,778
103,577

8,479
13,797
7,520
26,519
56,315

43.1%
42.7%
50.7%
72.1%
54.4%

11,189
18,503
7,312
10,259
47,262

56.9%
57.3%
49.3%
27.9%
45.6%

180,335

136,861

76,372

52,546

998,322

552,208

55.3%

446,114

44.7%

Source: HLT Advisory Inc. based on data from the National Household Survey (2011) and Anysite 2015 estimates and projections.

Other key demographic characteristics of the defined Manitoba market areas include:
• Modest population growth expected over the next decade, with the majority of the
population growth concentrated in the Winnipeg and Sand Hills (Brandon) areas.
• The main urban areas of the province as well as the North, have a much younger
population base than the southern rural areas (50 plus age groups are consider
core gaming demographic segments).
• Significant Aboriginal population is found in the northern areas of the province
(Aseneskak, Interlake and the North defined market areas). Aboriginal population
is a key gaming market segment in the Prairie Provinces.
• Total income in the province has risen steadily with the average income estimated
at $40,725. Winnipeg and Manitoba Southwest have higher average incomes, and
Interlake and the North have lower average incomes.

17

 Liquor & Gaming Authority of Manitoba
Manitoba Gaming Market Assessment
Key Findings Report (Final)

4.3

GAMING SUPPLY PERFORMANCE

There are currently (end of FY2015) 6 casino/EGD Other sites containing 3,572 electronic
machines and 132 tables, 107 large VLT sites containing 3,473 VLTs and 396 regular VLT
sites containing 2,869 VLTs in the province (see Exhibits 20 and 21). Approximately 90%
of the casino gaming supply is located within the defined Winnipeg market (approximately
60% of the VLT device supply is also in the Winnipeg market). The defined Manitoba
North market is the largest non-casino market area, in terms of total VLT supply, with 517
devices.
Exhibit 20

Exhibit 21

FY2015 - Distribution of Gaming Sites by Market Area
Casinos
& EGDOther
Casino Markets
Winnipeg
Sand Hills
Aseneskak
Total Casino Markets
Non-Casino Mark ets
Manitoba Southwest
Parklands
Interlake
Manitoba North
Total Non-Casino Markets
Total Manitoba

FY2015 - Distribution of Gaming Devices by Market Area

VLT Sites
Large
20+

Regular
<20

Total
VLTs

Slot

4
1
1
6

59
12
6
77

238
59
16
313

297
71
22
390

Casino Mark ets
Winnipeg
Sand Hills
Aseneskak
Total Casino Markets

n.a.
n.a.
n.a.
n.a.
n.a.

4
6
9
11
30

19
29
18
17
83

23
35
27
28
113

Non-Casino Mark ets
Manitoba Southwest
Parklands
Interlake
Manitoba North
Non-Casino Markets

6

107

396

503

Total Manitoba

Table

VLTs (Opened Sites Only)
Large
Regular
Total
20+
<20
VLTs

3,100
300
172
3,572

121
5
6
132

1,975
389
200
2,564

1,805
309
154
2,268

3,780
698
354
4,832

n.a.
n.a.
n.a.
n.a.
n.a.

n.a.
n.a.
n.a.
n.a.
n.a.

110
190
230
379
909

113
213
137
138
601

223
403
367
517
1,510

3,572

132

3,473

2,869

6,342

Source: HLT Advisory Inc. b ased on Manitob a Liquor & Lotteries Corporation
data.
n.a.: not applicab le

Source: HLT Advisory Inc. b ased on Manitob a Liquor & Lotteries Corporation
data.
n.a.: not applicab le

The supply base generated total casino, EGD Other and VLT win of $581.1 million in
FY2015 (approximately 80% of total gaming win is generated in Winnipeg – Exhibit 22).
Exhibit 22
FY2015 - Gaming Supply Performance by Market Area
(Total Win -$000)
Casino & EGD-Other Win
Slot
Casino Markets
Winnipeg
Sand Hills
Aseneskak
Total Casino Markets

$219,263
$6,918
$7,107
$233,289

Non-Casino Markets
Manitoba Southwest
Parklands
Interlake
Manitoba North
Non-Casino Markets

n.a.
n.a.
n.a.
n.a.
n.a.

Total Manitoba

$233,289

Table

VLT Win (Opened Sites Only)

Total
Casino

Large
20+

$28,500 $247,763 $129,261
$364
$7,282 $19,531
$374
$7,481 $11,275
$29,238 $262,527 $160,068

n.a.
n.a.
n.a.
n.a.
n.a.

n.a.
n.a.
n.a.
n.a.
n.a.

$2,891
$5,359
$8,396
$20,897
$37,543

Regular
<20

Total
VLTs

$81,654 $210,915
$9,941 $29,473
$5,735 $17,010
$97,330 $257,398

$4,426
$9,043
$4,930
$5,230
$23,628

Total
$458,679
$36,755
$24,491
$519,925

$7,317
$14,402
$13,326
$26,127
$61,172

$7,317
$14,402
$13,326
$26,127
$61,172

$29,238 $262,527 $197,612 $120,958 $318,569

$581,096

Source: HLT Advisory Inc. based on Manitob a Liquor & Lotteries Corporation data.
n.a.: not applicable

18

 Liquor & Gaming Authority of Manitoba
Manitoba Gaming Market Assessment
Key Findings Report (Final)

5.

Potential Size of Market

This section of the report summarizes the market potential estimates for each defined
casino and non-casino market areas. These estimates were arrived at using comparable
markets and take into consideration the macro gaming trends discussed in Section 3.
Comparison markets for each defined Manitoba gaming market area was selected based
on a number of key variables:
•

Total population and total income.

•

Availably (and access to) casino and VLT gaming.

•

Percentage of population over age 50.

•

Percentage of Aboriginal and visible minorities populations.

•

Average income per adult.

Potential size of the market estimates are provided for both “casino style gaming”
(defined for the purposes of this report as casinos, EGD Other and large VLT sites) and
“total gaming” (defined for the purposes of this report as casino, EGD Other and all VLT
gaming regardless of size of sites). A “Low” and a “High” range was also estimated.
It is important to note that estimates of market potential do not imply that this potential
can be fully captured by existing and/or new facilities (or gaming supply). For example
some of this potential may be too dispersed (i.e. located in rural areas) for a facility to
fully capture it. Additionally, some of this potential may also be embedded in segments of
the population who do not include gaming as one of their entertainment options for socioeconomic or other reasons.

19

 Liquor & Gaming Authority of Manitoba
Manitoba Gaming Market Assessment
Key Findings Report (Final)

5.1

POTENTIAL SIZE OF MARKET: CASINO STYLE GAMING

Exhibits 23 and 24 summarize the market potential estimates for casino style gaming. The
low-end of the range equals the current market performance. Future year increases
(decreases) are based solely on population changes. The low-end assumes that current
spending levels can be maintained in the future. The high-end of the range assumes a
slight increase in spending for Winnipeg, Sand Hill, Manitoba Southwest and Parklands.
No increases were estimated for Aseneskak, Interlake and Manitoba North as these market
areas have already achieved higher spending levels than all comparison markets.
Exhibit 23
Win Potential for Casino Style Gaming - Based on 2015 Win/Adult Levels (Low-End)
2015
2020
2025
Market
Total
Available
Total
Adult
Area Win
Win/
Adult
Win/
Potential Potential
Potential
Adult
Win/
Population ($000)
Adult ($) Population Adult ($) ($000)
($000) Population Adult ($) ($000)

Available
Potential
($000)

Casino Markets
Winnipeg
Sand Hills
Aseneskak
Total Casino Markets

790,710
87,024
17,011
894,745

$360,233
$29,832
$13,127
$403,192

$456
$343
$772
$451

834,210
90,483
16,802
941,495

$456
$343
$772
$450

$380,051
$31,017
$12,966
$424,034

$19,818
$1,186
n.a.
$21,004

872,757
94,144
16,485
983,386

$456
$343
$772
$450

$397,612
$32,272
$12,721
$442,606

$37,379
$2,441
n.a.
$39,820

Non-Casino Mark ets
Manitoba Southwest
Parklands
Interlake
Manitoba North
Total Non-Casino Market

19,668
32,300
14,832
36,778
103,577

$4,160
$7,002
$9,734
$24,858
$45,754

$212
$217
$656
$676
$442

19,080
31,221
14,735
37,889
102,924

$212
$217
$656
$676
$448

$4,035
$6,768
$9,670
$25,609
$46,083

n.a.
n.a.
n.a.
$751
$751

18,650
29,868
14,490
39,324
102,332

$212
$217
$656
$676
$454

$3,944
$6,475
$9,509
$26,580
$46,509

n.a.
n.a.
n.a.
$1,721
$1,721

Total Manitoba

998,322

$448,946

$450 1,044,419

$450

$470,117

$21,755 1,085,718

$450

$489,115

$41,541

Source: HLT Advisory Inc. b ased on data from Manitob a Liquor & Lotteries Corporation, the National Household Survey (2011), Anysite 2015 estimates
and projections and HLT estimates.
n.a.: not applicab le - no potential availab le.

Exhibit 24
Win Potential for Casino Style Gaming - Based on Potential Win/Adult Levels (High-End)
2015
Market
Adult
Area Win
Win/
Population ($000)
Adult ($)

2015 Potential
Total
Available
Win/
Potential Potential
Adult ($)
($000)
($000)

2020 Potential
Total
Increase in
Adult
Win/
Potential Potential
Population Adult ($)
($000)
($000)

Available
Potential
($000)

2025 Potential
Total
Increase in
Adult
Win/
Potential Potential
Population Adult ($) ($000)
($000)

Available
Potential
($000)

Casino Mark ets
Winnipeg
Sand Hills
Aseneskak
Total Casino Markets

790,710
87,024
17,011
894,745

$360,233
$29,832
$13,127
$403,192

$456
$343
$772
$451

$475
$400
$772
$473

$375,587
$34,810
$13,127
$423,524

$15,354
$4,978
n.a.
$20,332

834,210
90,483
16,802
941,495

$475
$400
$772
$473

$396,250
$36,193
$12,966
$445,409

$20,663
$1,384
n.a.
$22,046

$36,016
$6,362
n.a.
$42,378

872,757
94,144
16,485
983,386

$475
$400
$772
$473

$414,559
$37,658
$12,721
$464,938

$38,972
$2,848
n.a.
$41,820

$54,326
$7,826
n.a.
$62,152

Non-Casino Mark ets
Manitoba Southwest
Parklands
Interlake
Manitoba North
Total Non-Casino Market

19,668
32,300
14,832
36,778
103,577

$4,160
$7,002
$9,734
$24,858
$45,754

$212
$217
$656
$676
$442

$275
$275
$656
$676
$472

$5,409
$8,883
$9,734
$24,858
$48,883

$1,249
$1,880
n.a.
n.a.
$3,129

19,080
31,221
14,735
37,889
102,924

$275
$275
$656
$676
$477

$5,247
$8,586
$9,670
$25,609
$49,112

n.a.
n.a.
n.a.
$751
$751

$1,087
$1,584
n.a.
$751
$3,422

18,650
29,868
14,490
39,324
102,332

$275
$275
$656
$676
$483

$5,129
$8,214
$9,509
$26,580
$49,432

n.a.
n.a.
n.a.
$1,721
$1,721

$969
$1,212
n.a.
$1,721
$3,902

Total Manitoba

998,322

$448,946

$450

$473

$472,407

$23,461

1,044,419

$473

$494,521

$22,797

$45,800

1,085,718

$474

$514,370

$43,542

$66,054

Source: HLT Advisory Inc. b ased on data from Manitob a Liquor & Lotteries Corporation, the National Household Survey (2011), Anysite 2015 estimates and projections and HLT estimates.
n.a.: not applicab le - no potential availab le.

In total, under the low-end of the market potential estimate, the current win level is
projected to increase by approximately $41 million over the next ten years (2025). Under
the high-end, the current win level is projected to increase by approximately $66 million.
The majority of this increase is estimated to be concentrated in the defined Winnipeg
market area.

20

 Liquor & Gaming Authority of Manitoba
Manitoba Gaming Market Assessment
Key Findings Report (Final)

5.2

POTENTIAL SIZE OF MARKET: TOTAL GAMING

Exhibits 25 and 26 summarize the market potential estimates for total gaming. The lowend of the range equals the current market performance. Future year increases
(decreases) are based solely on population changes. The low-end assumes that current
spending levels can be maintained in the future. The high-end of the range assumes a
slight increase in spending for Winnipeg, Sand Hill, Manitoba Southwest and Parklands.
No increases were estimated for Aseneskak, Interlake and Manitoba North as these market
areas already achieve higher spending levels than all comparison markets.
Exhibit 23
Win Potential for Total Gaming - Based on 2015 Win/Adult Levels (Low-End)
2015
2020
2025
Market
Total
Available
Total
Adult
Area Win
Win/
Adult
Win/
Potential Potential
Potential
Adult
Win/
Population ($000)
Adult ($) Population Adult ($) ($000)
($000) Population Adult ($) ($000)

Available
Potential
($000)

Casino Markets
Winnipeg
Sand Hills
Aseneskak
Total Casino Markets

790,710
87,024
17,011
894,745

$443,031
$40,051
$18,575
$501,657

$560
$460
$1,092
$561

834,210
90,483
16,802
941,495

$560
$460
$1,092
$560

$467,404
$41,643
$18,347
$527,393

$24,373
$1,592
n.a.
$25,965

872,757
94,144
16,485
983,386

$560
$460
$1,092
$560

$489,002
$43,328
$18,000
$550,330

$45,970
$3,277
n.a.
$49,247

Non-Casino Mark ets
Manitoba Southwest
Parklands
Interlake
Manitoba North
Total Non-Casino Market

19,668
32,300
14,832
36,778
103,577

$8,724
$16,330
$14,812
$30,404
$70,270

$444
$506
$999
$827
$678

19,080
31,221
14,735
37,889
102,924

$444
$506
$999
$827
$683

$8,464
$15,784
$14,715
$31,322
$70,286

n.a.
n.a.
n.a.
$918
$918

18,650
29,868
14,490
39,324
102,332

$444
$506
$999
$827
$688

$8,273
$15,101
$14,471
$32,509
$70,353

n.a.
n.a.
n.a.
$2,105
$2,105

Total Manitoba

998,322

$571,927

$573 1,044,419

$572

$597,679

$26,883 1,085,718

$572

$620,683

$51,353

Source: HLT Advisory Inc. b ased on data from Manitob a Liquor & Lotteries Corporation, the National Household Survey (2011), Anysite 2015 estimates
and projections and HLT estimates.
n.a.: not applicab le - no potential availab le.

Exhibit 23
Win Potential for Total Gaming - Based on Potential Win/Adult Levels (High-End)
2015 Existing
Market
Adult
Area Win
Win/
Population ($000)
Adult ($)
Casino Mark ets
Winnipeg
Sand Hills
Aseneskak
Total Casino Markets

790,710
87,024
17,011
894,745

$443,031
$40,051
$18,575
$501,657

$560
$460
$1,092
$561

Non-Casino Mark ets
Manitoba Southwest
Parklands
Interlake
Manitoba North
Total Non-Casino Market

19,668
32,300
14,832
36,778
103,577

$8,724
$16,330
$14,812
$30,404
$70,270

Total Manitoba

998,322

$571,927

2015 Potential
Total
Available
Win/
Potential Potential
Adult ($)
($000)
($000)

2020 Potential
Total
Increase in
Adult
Win/
Potential Potential
Population Adult ($)
($000)
($000)

Available
Potential
($000)

2025 Potential
Total
Increase in Available
Adult
Win/
Potential Potential Potential
Population Adult ($) ($000)
($000)
($000)

$600
$525
$1,092
$602

$474,426
$45,688
$18,575
$538,689

$31,395
$5,637
n.a.
$37,032

834,210
90,483
16,802
941,495

$600
$525
$1,092
$602

$500,526
$47,504
$18,347
$566,376

$26,100
$1,816
n.a.
$27,916

$57,495
$7,453
n.a.
$64,948

872,757
94,144
16,485
983,386

$600
$525
$1,092
$601

$523,654
$49,426
$18,000
$591,080

$49,228
$3,738
n.a.
$52,966

$80,623
$9,375
n.a.
$89,998

$444
$506
$999
$827
$678

$550
$550
$999
$827
$712

$10,817
$17,765
$14,812
$30,404
$73,798

$2,093
$1,435
n.a.
n.a.
$3,528

19,080
31,221
14,735
37,889
102,924

$550
$550
$999
$827
$716

$10,494
$17,172
$14,715
$31,322
$73,703

n.a.
n.a.
n.a.
$918
$918

$1,770
$842
n.a.
$918
$3,530

18,650
29,868
14,490
39,324
102,332

$550
$550
$999
$827
$720

$10,257
$16,428
$14,471
$32,509
$73,665

n.a.
n.a.
n.a.
$2,105
$2,105

$1,533
$98
n.a.
$2,105
$3,736

$573

$614

$612,487

$40,560

1,044,419

$613

$640,079

$28,834

$68,477

1,085,718

$612

$664,745

$55,072

$93,734

Source: HLT Advisory Inc. b ased on data from Manitob a Liquor & Lotteries Corporation, the National Household Survey (2011), Anysite 2015 estimates and projections and HLT estimates.
n.a.: not applicab le - no potential availab le.

In total, under the low-end of the market potential estimate, the current win level is
projected to increase by approximately $51 million over the next ten years (2025). Under
the high-end, the current win level is projected to increase by approximately $94 million.
The majority of this increase is estimated to be concentrated in the defined Winnipeg
market area.

21

 Liquor & Gaming Authority of Manitoba
Manitoba Gaming Market Assessment
Key Findings Report (Final)

6.

Market Opportunity

This section of the report summarizes the results of the market opportunity assessment
component of the methodology. Factors considered include captured/uncaptured win,
incremental growth/cannibalization (or market share) and existing supply base adequacy.
Financial viability of facilities was also considered. The overriding consideration of the
opportunity assessment was the existing supply base adequacy (both number of sites and
gaming devices and location).

6.1

SUPPLY BASE ADEQUACY

To assess the adequacy of the existing supply (both gaming facilities and gaming devices)
to accommodate the market potential estimates, HLT consider the distribution and
performance of sites and devices at both the provincial and the defined market areas (as
well as within each market area). With regard to the current distribution of sites/machines,
HLT concludes that concludes that the existing supply base is highly accessible (i.e. people
who want to game have multiple opportunities).
Exhibits 24 and 25 summarizes the performance (on a win per device per day level) of the
existing supply base (electronic gaming devices or slots and VLT machines) for both casino
style and total gaming under the low-end and high-end range of the estimate market size
potential.
Exhibit 24
EGD Supply Performance - Low-End Gaming Potential Estimates
Current
Supply
Casino Style Gaming
Casino Mark ets
Winnipeg
Sand Hills
Aseneskak
Total Casino Markets
Non-Casino Mark ets
Manitoba Southwest
Parklands
Interlake
Manitoba North
Total Non-Casino Market

5,075
689
372
6,136

110
190
230
379
909

Market Area Potential
2015*

2020

2025

$348,525 $380,051 $397,612
$26,449 $31,017 $32,272
$18,383 $12,966 $12,721
$393,357 $424,034 $442,606

$2,891
$5,359
$8,396
$20,897
$37,543

$4,035
$6,768
$9,670
$25,609
$46,083

Win/Day/ Device ($)**
2015

2020

2025

$188
$105
$135
$176

$205
$123
$95
$189

$215
$128
$94
$198

$3,944
$6,475
$9,509
$26,580
$46,509

$72
$77
$100
$151
$113

$101
$98
$115
$185
$139

$98
$93
$113
$192
$140

Total Manitoba

7,045

$430,900 $470,117 $489,115

$168

$183

$190

Total Gaming
Casino Mark ets
Winnipeg
Sand Hills
Aseneskak
Total Casino Markets

6,880
998
526
8,404

$430,179 $467,404 $489,002
$36,390 $41,643 $43,328
$24,117 $18,347 $18,000
$490,686 $527,393 $550,330

$171
$100
$126
$160

$186
$114
$96
$172

$195
$119
$94
$179

Non-Casino Mark ets
Manitoba Southwest
Parklands
Interlake
Manitoba North
Total Non-Casino Market

223
403
367
517
1,510

$8,273
$15,101
$14,471
$32,509
$70,353

$90
$98
$99
$138
$111

$104
$107
$110
$166
$128

$102
$103
$108
$172
$128

Total Manitoba

9,914

$551,858 $597,679 $620,683

$153

$165

$172

$7,317
$14,402
$13,326
$26,127
$61,172

$8,464
$15,784
$14,715
$31,322
$70,286

* Represents FY2015 EGD performance only. Excludes win from table games at casinos and EGDother facilities.
** Assumes all potential to be captured by existing EGD supply. Tables games were not considered.
Source: HLT Advisory Inc. based on data from Manitoba Liquor & Lotteries Corporation and HLT
estimates.

22

 Liquor & Gaming Authority of Manitoba
Manitoba Gaming Market Assessment
Key Findings Report (Final)

Exhibit 31
EGD Supply Performance - High-End Gaming Potential Estimates
Market Area Potential
Current
Supply
Casino Style Gaming
Casino Mark ets
Winnipeg
Sand Hills
Aseneskak
Total Casino Markets

2015
Actual*

2015
Potential

2020

Win/Day/ Device ($)**

2025

2020

2025

$188
$105
$135
$176

$203
$138
$97
$189

$214
$144
$95
$199

$224
$150
$94
$208

$5,129
$8,214
$9,509
$26,580
$49,432

$72
$77
$100
$151
$113

$135
$128
$116
$180
$147

$131
$124
$115
$185
$148

$128
$118
$113
$192
$149

Total Manitoba

7,045 $430,900 $472,407 $494,521 $514,370

$168

$184

$192

$200

Total Gaming
Casino Mark ets
Winnipeg
Sand Hills
Aseneskak
Total Casino Markets

6,880 $430,179 $474,426 $500,526 $523,654
998 $36,390 $45,688 $47,504 $49,426
526 $24,117 $18,575 $18,347 $18,000
8,404 $490,686 $538,689 $566,376 $591,080

$171
$100
$126
$160

$189
$125
$97
$176

$199
$130
$96
$185

$209
$136
$94
$193

Non-Casino Mark ets
Manitoba Southwest
Parklands
Interlake
Manitoba North
Total Non-Casino Market

223
403
367
517
1,510

$10,257
$16,428
$14,471
$32,509
$73,665

$90
$98
$99
$138
$111

$133
$121
$111
$161
$134

$129
$117
$110
$166
$134

$126
$112
$108
$172
$134

Total Manitoba

9,914 $551,858 $612,487 $640,079 $664,745

$153

$169

$177

$184

Non-Casino Mark ets
Manitoba Southwest
Parklands
Interlake
Manitoba North
Total Non-Casino Market

5,075 $348,525 $375,587 $396,250 $414,559
689 $26,449 $34,810 $36,193 $37,658
372 $18,383 $13,127 $12,966 $12,721
6,136 $393,357 $423,524 $445,409 $464,938

2015
2015
Actual* Potential

110
190
230
379
909

$2,891
$5,359
$8,396
$20,897
$37,543

$7,317
$14,402
$13,326
$26,127
$61,172

$5,409
$8,883
$9,734
$24,858
$48,883

$10,817
$17,765
$14,812
$30,404
$73,798

$5,247
$8,586
$9,670
$25,609
$49,112

$10,494
$17,172
$14,715
$31,322
$73,703

* Represents FY2015 EGD performance only. Excludes win from table games at casinos and EGD-other facilities.
** Assumes all potential to be captured by existing EGD supply. Tables games were not considered.
Source: HLT Advisory Inc. based on data from Manitoba Liquor & Lotteries Corporation and HLT estimates.

The current supply of casino style gaming electronic devices performs at $168 win per
device per day level, and all electronic gaming devices at $153.
•

If the 2025 low-end potential is realized by the existing supply base, the win per
device per day amount would increase to $190 for casino style gaming and $172
for all electronic gaming devices.

•

If the 2025 high-end potential is realized by the existing supply base, the win per
device per day amount would increase to $200 for casino style gaming and $172
for all electronic gaming devices.

Manitoba’s current electronic gaming device performance level is the lowest in Canada.
Western Canada achieves performance levels ranging from approximately $225 to $275
per device per day, with higher performing facilities/sites exceeding $300 per device per
day.

23

 Liquor & Gaming Authority of Manitoba
Manitoba Gaming Market Assessment
Key Findings Report (Final)

6.2

CONCLUSIONS

Canada’s gaming industry is a large entertainment industry that is mature (essentially the
industry has been flat over the past five years). Manitoba’s recent industry growth trend
mirrors the national level.
•

Mature characteristics include demand growth phase (“giving customers what they
want” as oppose to simple supply increases) and investment decisions have higher
risks as growth is not certain.

•

An emerging trend in this growth phase is that gaming expenditures are not
keeping pace with both adult population and income growth (challenge facing the
industry – is the current mix of products and facilities/delivery channels losing its
appeal?). Future growth is not certain.

Further, it is becoming increasingly difficult to continue to assess the Canadian gaming
industry from a sector perspective due to overlapping consumer appeal between products
and the introduction/growth of new delivery channels.
•

Those provinces (like Manitoba) with both casino (including EGD Other) and VLT
gaming are grappling with (or will be in the near future) finding a balance between
“giving customers what they want” and “profit maximization”. This impacts casinos
(including EGD Other facilities) as they have higher investment requirements and
lower operating margins as compared to VLT gaming.

Over the past ten years, Manitoba’s total gaming industry (specifically casino style and VLT
activities) performance has increased. Manitoba and the other two Prairie provinces (the
most comparable markets to Manitoba) represent three of the most penetrated gaming
markets in North America. This implies that there is limited growth available in the
province.
Since 2005, the Manitoba casino, EGD Other and VLT sectors grew by approximately $133
million. This growth was driven by:
•

Operational improvements/enhancements of casinos (e.g. introduction of a player
card program and addition of an entertainment centre at MBLL Winnipeg casinos).

•

The expansion of South Beach First Nation Casino (e.g. additional slot machines
and hotel).

•

The addition of the Sand Hill First Nation casino and the Shark’s Club (EGD Other)
facility.

•

The introduction of almost 700 additional VLTs (619 machines at First Nation sites
and 81 machines at non-First Nation sites) and the increase in size (i.e. number of
VLT machines per site) of VLT sites.

24

 Liquor & Gaming Authority of Manitoba
Manitoba Gaming Market Assessment
Key Findings Report (Final)

The report estimates current (2015) and future (2025) market potential for casino style
and total gaming (as defined in this report: casino, EGD Other and all VLTs combined). It
is important to note that estimates of market potential do not imply that this potential can
be fully captured by existing and/or new facilities (or new gaming supply). For example,
some of this potential may be too dispersed (i.e. located in rural areas) for a facility to
fully capture it. Additionally, some of this potential may also be embedded in segments of
the population who do not include gaming as one of their entertainment options for socioeconomic or other reasons.
Currently and looking forward, total gaming (as defined in this report) growth potential in
the Province is limited and is mainly concentrated in the defined Winnipeg market area:
•

Currently (2015), HLT estimates that the market potential available for total
gaming ranges from no market available (“Low” scenario) to up to $41 million
available (“High” scenario).

•

In the future (2025), HLT estimates that the market potential available for total
gaming ranges from $51 million market available (“Low” scenario) to up to $94
million available (“High” scenario).

An assessment of the provincial electronic gaming device supply base (i.e. VLTs and slot
machines) in terms of location, amount (both sites and number of machines) and
performance (win per device compared to all other provinces) concludes that the existing
supply base:
•

is highly accessible (i.e. people who want to game have multiple opportunities);
and,

•

has the capacity to accommodate all of the current and future identified market
potential available (“High” scenario) – the performance of Manitoba’s supply based
would still be one of the lowest in Canada.

Given this supply situation, a key question facing Manitoba (regardless of who operates
the supply base or who “owns” the revenue stream) is why isn’t the existing supply base
generating more revenue? Based on the experience of other jurisdictions (e.g. British
Columbia Lottery Corporation, Alberta Gaming and Liquor Commission and Manitoba
Liquor and Lotteries), there are no easy answers to this question. Areas (beside age of
devices) that HLT are aware of that are being further studied/accessed include:
•

Site characteristics (e.g. location of specific sites, ingress/egress, parking, etc.)

•

Facility format (e.g. number and types of gaming devices and activities present)

•

Scope and quality of facilities (e.g. amount/availability of non-gaming amenities,
overall quality/aesthetics of buildings)

In short, investment decisions focussed on maintaining existing business volumes let alone
growth are increasing in risk. Based on the experience of other mature gaming markets,
changes to the supply base (i.e. relocated facilities/sites, new facilities/sites, additional
devices per facility/site) will lead to a redistribution of existing business (i.e. existing
market share distribution will be impacted) and may capture incremental business (i.e.
increase to revenue generated in the province).

25

 Liquor & Gaming Authority of Manitoba
Manitoba Gaming Market Assessment
Key Findings Report (Final)

In other words, if the overall provincial strategy of all industry stakeholders is to maximize
revenue/profit, these same stakeholders have to accept that a new facility or new gaming
device will capture a significant portion of its business from existing facilities/devices and
profit levels of the entire supply base (both new and existing) will be impacted.

26