The Manitoba government's venture into the world of online gambling is generating a lot less money than expected.
As jurisdictions like Ontario prepare to join the Internet casino club, Manitoba is discovering the field is quite crowded, and is downgrading its revenue projections.
"It's a very, very competitive market and whether we entered it late or not, the fact is there are choices customers are always going to make in any sort of commerce, including e-commerce," Andrea Kowal, a spokesperson for Manitoba Liquor and Lotteries, said Wednesday.
"There are a lot of other sites out there that Manitobans can play on."
Manitoba launched its branch of Playnow.com a year ago. The website has been operated by British Columbia's lotteries agency for several years. The Manitoba government predicted the site would generate $1.5 million in net revenues in its first year, and grow to $17 million annually by 2018.
But in the six-month period that ended Sept. 30, the website netted the province only $300,000. Revenues were $1.8 million while expenses totalled $1.5 million.
Expectations for this year and next are being adjusted, Kowal said, but the numbers are not likely to be made public. Detailed financial results are normally released after the fact, in quarterly or annual reports.
Part of the problem so far, Kowal said, is that bingo games and lottery ticket sales were supposed to be offered when the site launched, but took longer than expected.
Still, she said, the number of people registered on the site has grown to about 9,000 from 4,000 in the last six months.
"We're still very positive about the product and ... it is something that is growing steadily."
British Columbia got into online gambling in 2010, and now gets about $30 million annually from Playnow.com. The Ontario government is preparing to launch some form of gambling website later this year.
The government-sanctioned sites compete with other sites that offer a wide array of games, odds, and payouts. The Manitoba government has said residents were already spending $37 million a year on out-of-province websites, so it only made sense to get a slice of that money via a regulated site.
Manitoba Liberal legislature member Jon Gerrard, who has been critical of expanded gambling, said Wednesday the NDP government was far too optimistic about its plan.
"Their revenue is down and their expenses are up," he said.
"This is another example of the NDP government trying to be entrepreneurial but not knowing how to run a business."