HomePublicationsNewsletter ArchiveNewslettersVolume 18Issue 21Ontario Government Looks to Modernize Province's Gaming Industry

Earlier this year, the Government of Ontario, Canada announced plans to allow the Ontario Lottery and Gaming Corporation (OLG) to proceed with plans to modernize gambling in the province.  Of the many proposed measures, one of the central components of the modernization effort involves the privatization of gaming management at the province’s gambling facilities.

The OLG’s report, delivered to the Ontario Minister of Finance on March 12, 2012, outlined a proposal to modernize lottery and gaming in Ontario.The basis of the report emphasized creating a more customer-focused gaming model, expanding the privatization of lottery and gaming in the region, and renewing the OLG’s oversight role of these activities.  The OLG predicts that, by 2017, modernization efforts will create 2,300 new lottery and gaming industry jobs and an estimated 4,000 service sector jobs.  In addition, it projects $3 billion (CA) will be invested in private capital in the province while increasing net profit by an additional $1.3 billion (CA) annually.  The OLG reports that historically net profit to the province in each of the last seven years has ranged from $1.7 billion to $2.0 billion (CA). 

According to the report, the OLG’s current business model will not be sustainable unless changes are implemented. Advances in technology, aging demographics, and declining visits from the United States were noted as threats to Ontario’s gaming industry.

A push for privatization will be limited to managing, not owning, the gaming facility sites. Because unlike most U.S. jurisdictions, the Criminal Code of Canada does not allow for private sector ownership of gambling facilities. Currently, there are four casino resorts under private sector management in the Province, including Caesars Windsor Hotel and Casino located in Windsor, Ontario. Additional locations include Fallsview Casino, Casino Niagara, and Casino Rama.

One example of previous privatization efforts includes the hiring of Fallsview Management Company (FMC) and Caesars Entertainment to handle the day-to-day management of certain casino resort facilities.  FMC is contracted by the OLG and currently operates and manages two of Ontario’s four casino resort properties. The 4,500 workers employed by FMC work directly for the company rather than the OLG. This same model is also being utilized at several of the province’s other two gaming facilities, including Caesars Windsor Hotel and Casino. Other gaming venues, including the province’s other casino properties and casino employees are working for OLG but then they are considered to be public sector workers.

Notably, Requests for Information for modernizing land-based gaming in Ontario recently closed on July 4, 2012.  Requests for Information to modernizing lottery in Ontario close on August 2, 2012.

“Issuing the RFI is the next step in modernizing our business,” said Rod Phillips, OLG President and CEO. “This is the start of a process to engage private-sector companies which have the expertise of operating world-class gaming facilities.”

For more information please visit: http://www.olg.ca/index.jsp

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The Michigan Gaming Newsletter would like to thank Scott Nuyttens and Peter Stern for their contributions to this issue.

 

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