As revenues improve, Manitoba Liquor & Lotteries wants to try luck with online gaming expansion

Manitoba Liquor & Lotteries plans to roll the dice on expanding its online gambling presence, as the Crown corporation'srevenues rebound followinga year marked by pandemic shutdowns.

At a legislative committee hearing on Tuesdaywhere hepresented the corporation's report for the 2020-21 fiscal year, president and CEO Manny Atwal saiditsfinancial situation is improving.

In the 2021-22 fiscal year so far,liquor sales are up, cannabis revenues shoulddouble because dozens of new stores have opened, and casinoprofits are risingbecause those venues have beenopen for much of the year, he said.

The corporation's net income is expected to hit $570 million for the fiscal year ending this March,Atwal estimated, a notable increase from $425 millionin 2020-21but still down from the pre-pandemic $606 million reported in 2019-20.

One wayLiquor &Lotteries hopes to bounce back financiallyis with the continued growth of online gaming.

It expects revenues of $50-$60 million this fiscal year alone through PlayNow.com, its online gaming platform.

Despite that significant growth, Manitoba's venture facescompetition frominternational players.

AtwalcalledPlayNow Manitoba's only legal gaming site, but added "we also understand that many of our customers moved to illegal or grey-market sites."

Liquor &Lotteries estimates the overall gaming market in Manitoba is worth $75 million to $150 million in revenue annually.

Gaming site needs exposure: CEO

PlayNowcould take a larger share of that market with strongerbrand awareness, he said.

"I know this group has heard ofit, but I'm pretty sure most of you don't know much about it," Atwal told the committee, which has members from the governing Progressive Conservatives as well as the NDP and Liberals.

"That's our challenge we need to get Manitobans to know more about it."

As for liquor, Atwal suspects Manitobansare "essentially at pre-pandemic consumption levels," saying the panic buying of the early pandemic is behind us.

However, the consumer trend of visiting liquor stores less frequently but buying more product is continuing. Liquor & Lotteries also sees more people turning to "refreshment beverages" such ashard seltzer products rather than beer and wine.

Customers are spending more per product, too.

"Instead of spending $20 on a bottle of spirit, they'll spend $23on a bottle of spirit," Atwal said.

Liquor sales hit $886 million in the 2020-21 fiscal year, an increase of11per cent from the year before.

Meanwhile, cannabis revenues jumped from $51.5 million in 2019-20 to $80.2 million in the last fiscal year.

Atwal anticipates a similar spike for 2021-22, because the number of cannabis stores could double in a year from around 70 to 140 locations. The Liquor, Gaming and Cannabis Authority of Manitoba currently lists 135 stores on its website.

Manitoba's cannabis market is starting to approachmarket saturation, Atwal said, with that point likely somewhere between 170 to 200 stores.

Liquor storethefts, robberies plunge

The corporation's boss also said the thousands of theftsManitoba liquor stores saw in 2019 area thing of the past, following new security measures.

He reported a 98 per centdecrease in thefts and a nearly100 per cent dropin robberies after controlled entrances were installed at all Liquor Mart locations in Winnipeg and in some rural communities.

After public calls to add the security measures in more locations,controlled entrances wereinstalled at Liquor Marts in Flin Flon and The Pas, and will soon be added in Thompson, Atwal said.

For its employees, Manitoba Liquor & Lotterieswill make working from home a permanent measure, even after the pandemic subsides, Atwal said.

He said Liquor & Lotteries'hybrid working model will allowcorporate staff to work off-site and on-site in the long term, and will also let the corporationsell some real estate, such as the old distribution centre onBuffalo Placein Winnipeg.

"This is going to allow us to divest of multiple properties, achieve one-time net income benefits, plus reduce long-term occupancy costs, thereby improving profitability for the province."