As revenues rise, Manitoba Liquor and Lotteries wants to try its luck with online gaming expansion
Manitoba Liquor and Lotteries plans to roll the dice to expand its presence in online gambling, as the crown corporation’s revenue rebounds from a year marked by pandemic shutdowns.
AT a hearing in the legislative committee on Tuesday where he presented the company’s report for the 2020-21 fiscal year, Chairman and CEO Manny Atwal said its financial situation was improving.
So far in fiscal 2021-22, alcohol sales are up, cannabis revenues are expected to double as dozens of new stores have opened, and casino profits are rising as these venues are open for much of the year, he said.
The company’s net profit is expected to reach $570 million for the fiscal year ending in March, Atwal estimated, a notable increase from $425 million in 2020-21 but still down from $606 million. pre-pandemic dollars reported in 2019-20.
One of the ways Liquor & Lotteries hopes to rebound financially is through the continued growth of online gaming.
It expects revenue of $50 million to $60 million this fiscal year alone through PlayNow.com, its online gaming platform.
Despite this significant growth, the Manitoba company faces competition from international players.
Atwal called PlayNow Manitoba the only legal gambling site, but added “we also understand that many of our customers have moved to illegal or gray market sites.”
Liquor & Lotteries estimates that the overall gaming market in Manitoba is worth between $75 million and $150 million in revenue per year.
Gambling site needs exposure: CEO
PlayNow could take a bigger share of that market with greater brand awareness, he said.
“I know this group has heard of it, but I’m pretty sure most of you don’t know much about it,” Atwal told the committee, which has members from the ruling Progressive Conservatives as well. than the NDP and the Liberals.
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“That’s our challenge — we need to get Manitobans to know more about it.
As for alcohol, Atwal suspects Manitobans are “essentially at pre-pandemic drinking levels,” saying the panic buying of the start of the pandemic is behind us.
However, the trend of consumers visiting liquor stores less frequently but buying more products continues. Liquor & Lotteries is also seeing more and more people turning to “refreshing drinks” – such as hard seltzer products – rather than beer and wine.
Customers are also spending more per product.
“Instead of spending $20 on a bottle of spirits, they will spend $23 on a bottle of spirits,” Atwal said.
Alcohol sales reached $886 million in fiscal year 2020-21, an increase of 11% over the previous year.
Meanwhile, cannabis revenues have grown from $51.5 million in 2019-20 to $80.2 million in the last fiscal year.
Atwal predicts a similar spike for 2021-22, as the number of cannabis stores could double in a year, from around 70 to 140 locations. Manitoba Liquor, Gaming and Cannabis Authority currently lists 135 stores on its website.
The cannabis market in Manitoba is starting to approach market saturation, Atwal said, with that point likely between 170 and 200 stores.
Liquor store robberies and burglaries plunge
The company boss also said the thousands of thefts Manitoba liquor stores saw in 2019 were a thing of the past, following new security measures.
He reported a 98% decrease in thefts and an almost 100% drop in robberies after installing controlled entrances to all liquor stores in Winnipeg and some rural communities.
After public calls to add security measures in more places, controlled entrances have been installed at liquor stores in Flin Flon and The Pas, and will soon be added in Thompson, Atwal said.
For its employees, the Manitoba Liquor and Lotteries Corporation will make working from home a permanent measure, even after the pandemic is over, Atwal said.
He said Liquor & Lotteries’ hybrid working model will allow company staff to work off-site and on-site for the long term, and will also allow the company to sell real estate, such as the former distribution center. from Buffalo Place in Winnipeg.
“This will allow us to divest multiple properties, achieve one-time net income benefits and reduce long-term occupancy costs, thereby improving profitability for the province.”