Ontarians are spending $400 million every year on off-shore gaming sites and the government wants a piece of the action.
This fall, in a bid to attract the under-45 crowd, the Ontario Lottery and Gaming Corp. is launching its own Internet gaming site — playolg.ca.
Online gaming isn’t the only wildcard as OLG shuffles its deck in a bid to modernize the province’s gambling empire and generate more money to help pay down Ontario’s massive $12- billion deficit, but it’s the biggest roll of the dice.
The site will allow Ontarians to play interactive casino-style games against the house or each other and buy lottery tickets using their computers or smart phones. The plan will generate about $100 million in net profit to the province every year.
The move has drawn criticism from politicians such as Ontario NDP Leader Andrea Horwath, who said Ontarians already have enough gaming opportunities.
“Now we have ‘click your mouse, lose your house’ kind of gaming and I don’t know if that’s necessary,” she said.
And what will sanctioned online gaming mean for convenience store owners, whose businesses sell 70% of all lottery tickets in this province?
“The jury is out on what the future looks like,” said Dave Bryans, chief executive of the Ontario Convenience Stores Association.
The association is watching how iGaming unfolds in provinces such as British Columbia, where so far it’s only made up about 2% of the lottery pie.
Lottery ticket sales are important for variety store owners who count on the foot traffic to boost their bottom line, said Bryans. In the convenience sector there are only three types of foot traffic generators — tobacco, lottery and gas — and they’re all under threat, he added.
“I’m not saying it’s all doom and gloom — we have to reinvent ourselves and that is working with your partners like lottery,” he said.
It’s why the association has its own committee on modernizing gaming to work with the OLG on changes and negotiate a future for variety store owners, even though Bryans said the stores sell more lottery tickets than anyone and that won’t change.
“The future is sort of mysterious but we have to understand that we are the biggest deliverer of lottery sales to this government and we’ll continue to be and let’s see where we go with all of them together,” he said.
B Still up in the air is how many racetracks will close, what the new funding model for harness racing will look like and where exactly casinos in each of the new 29 gaming zones will go.
“There’s so many wildcards,” said Stan Sadinsky, a retired Queens University law professor and former chair of the OLG and Ontario Racing Commission.
Racetrack operators such as the Western Fair in London expect some of those answers as soon as next week.
“The government realizes there’s tremendous urgency,” said Hugh Mitchell, chief executive of Western Fair, one of the places waiting to hear which tracks the government will support and how much money there will be for purses and operating expenses.
B Up in the air still are what kind of deals the government is inking with private operators.
It’s those private deals that are angering politicians such as MPP Monte McNaughton, the Tory critic for economic development.
“There’s deals happening across Ontario under a veil of secrecy,” said the Lambton-Kent-Middlesex MPP. “The Legislature’s been shut down and we haven’t been able to ask questions. We know deals are happening but we don’t know what the details are."
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QMI spoke with Rod Phillips, president and chief executive of the Ontario Lottery and Gaming Corp. (OLG)
Q. Why a casino in Toronto now when the OLG has resisted that for so long?
A. This goes back to work the provincial government asked the OLG to do in 2011, which was to look critically at what OLG was doing in lottery and in gaming and come back with recommendations around how the agency should operate in the future. On the gaming side, we had a business model that was focused along the borders. Ten years ago, OLG would’ve earned $800 million of profit from those border facilities. This year that number will be less than $100 million. One of the areas that’s clearly underserved is the GTA. If you go to our Woodbine facility on a Thursday, Friday or Saturday night, you would see people lined up two or three deep to get access to one of our slot machines. It is all in that context that a GTA facility makes sense.
Q. What will a Toronto casino mean for the OLG’s bottom line?
A. At the end of our modernization . . . the gaming component is in the neighbourhood of $700 million . The Toronto casino is certainly a really important part of that — not half of it, but the single biggest portion of that.
Q. One criticism is that the government shouldn’t be in the gaming business and it should be privatized. What’s your response?
A. (Under the) Criminal Code of Canada, only provincial governments can conduct and manage lottery and gaming in this country. Were that law to change, then I think you would have a whole different set of options. But we’ve taken a step in a direction that I think many people think OLG should have, which is the people who are directly involved in the delivery of gaming . . . can work effectively in the private sector so they’re going to be transferred over to private operators. OLG will go from 8,000 employees to fewer than 1,000. Really what we’ll be responsible for is that oversight.
Q. Will commercial leases and deals made with places such as Western Fair, Woodbine and Mohawk be made public?
A. Typically, commercial agreements that the government does are things that are not made public. There are certainly circumstances where they are, but at this stage we still have the leases to finalize.
Q. Some critics say the OLG has bullied municipalities into accepting a casino — that if they oppose it, you’d widen the gaming zone to include neighbouring municipalities. How do you respond?
A. There’s 37 communities that have indicated they want to host a facility. Some of these are locations that have historically shown a different preference, places like North Bay, Peterborough, Kingston, that 10 or 12 years ago voted against a facility. I think the proof is otherwise. I think municipalities are interested. We have other municipalities (that) are not identified in gaming zones (that) said they would be interested in being included, so that sounds to me like people wanting to have a relationship.
Q. OLG is launching a new gaming site this fall. What will entice people to gamble there instead of offshore sites?
A. We had eight million people play the lottery last year — 2.7 million people come to our facilities, our slots and casino facilities. People like the fact that they have confidence in the OLG brand, that they’re going to get paid. It’s also because they know that the money from that all goes to good causes, principally health care and community infrastructure. Clearly there’s a demand and people want the chance to be able to play and game online. If anything, OLG has lagged on that regard. Those who don’t play should like the fact that we’re going to make sure it’s done in a responsible way, in an age-controlled environment where there’s a clear concern for the small portion of people who do have a problem with gambling.