US-Canada Trade War Hits Gaming Industry
Amid escalating trade disputes between Canada and the US, the Alberta government has imposed a restriction on acquiring slot machines and video lottery terminals (VLTs) from American suppliers. The Alberta Gaming, Liquor and Cannabis Commission (AGLC) issued a directive on March 6 stating that gaming equipment can only be purchased from businesses with operational support within the province or from countries that have a free trade agreement with Canada.
LISTEN TO THIS ARTICLE:Effective immediately, this measure halts the purchase of gaming terminals from US manufacturers. The decision is expected to have significant financial repercussions for major gaming companies based in Las Vegas, which may experience substantial losses in revenue due to the ban.
Related: Online Gambling Linked to Fentanyl Trafficking in CanadaThe restriction follows a recent policy from the White House announcing a 25% tariff on goods imported from Canada into the US. Although the tariff's implementation has been postponed until April, Alberta's action raises concerns that other key gaming provinces, such as British Columbia and Ontario, might implement similar prohibitions.
Canada's gaming industry differs from the American model in its regulatory structure. While casinos in the US are largely operated by private businesses or corporations, gaming in Canada is government-controlled.
US lotteries are managed at the state level, whereas in Canada, provincial governments oversee gaming operations. The AGLC's directive directly impacts major gaming equipment suppliers, including International Game Technology (IGT), Light & Wonder, Aristocrat Gaming, and Konami Gaming, all of which rely heavily on Canadian sales.
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A Significant Impact
According to industry research from Eilers & Krejcik, Alberta is responsible for roughly 4% of total sales generated by leading gaming equipment manufacturers. The province has a strong presence in the gambling sector, with significant gaming operations in Edmonton and Calgary, as well as a government-run lottery system.
In 2023, approximately 15,000 slot machines and VLTs were sold across Canada, representing 16% of total combined sales in the US and Canadian markets. Alberta alone is estimated to purchase 4,000 new gaming terminals each year, making it a key player in the industry.
The AGLC's most recent annual report highlights the financial scale of Alberta's gambling industry, revealing that the province's 14,400 slot machines generated CAD1.3 billion in revenue. Meanwhile, the 6,000 lottery terminals contributed an additional CAD557 million. With such a substantial market, any disruption in the province's gaming equipment purchases could have widespread effects on suppliers that depend on Canadian sales.
Market analysis from Eilers & Krejcik shows that IGT, Light & Wonder, and Aristocrat account for 83% of gaming equipment sales across Canada. If additional provinces follow Alberta's lead in restricting purchases from US companies, the economic impact could be even greater, as Canada represents 16% of the total slot machine and VLT sales in North America.
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