Ontario unveils gambling industry overhaul
Published Monday, March 12, 2012 11:08PM EDT
Ontario's cash-strapped government plans to generate an additional $1.3 billion annually from the gambling industry by building a casino in the Toronto area and expanding to the web.
At a press conference Monday morning, Ontario Finance Minister Dwight Duncan said the changes will bring the province's lottery and gaming corporation up-to-date.
"We're bringing OLG into the 21st century and putting it on a strong footing going forward," he said.
The new plan comes as the McGuinty government examines ways to balance its books and manage a massive deficit ahead of the provincial budget.
Among the recommendations unveiled Monday, key proposals already approved for implementation include:
- more retail locations at convenience stores, big box stores and supermarkets
- expanding private sector gaming at existing and new casinos, so that 100 per cent of the province's 6,000 casino workers will be employed by the private sector within a year-and-a-half
- trimming the workforce on the OLG payroll, while increasing its oversight
This model results in a larger profit from lottery and gaming operations, OLG chairman Paul Godfrey told reporters, noting that the government will see its direct involvement shrink at the same time.
"If we do not do anything at all, if we stand still, the OLG's revenues will erode," Godfrey said. "Standing still is not an option."
In order to "modernize" the industry, "underperforming" gaming facilities will either be closed or relocated. Slot machines will find homes beyond the confines of racetracks, and a new casino may be built in the Greater Toronto Area.
Pressed to indicate where in the Toronto area a casino might be located, Godfrey said it's too soon to say.
"Where we go from here is to discuss it," Godfrey said, acknowledging that any new casinos would be subject to municipal approval.
"Some municipalities may not want it. I personally can't understand that, but I would hope there would be a lot of competition," he said before inviting OLG president and CEO Rod Phillips to comment.
"It has become a very popular feature because of the tourist impact, because of the economic impact," Phillips said, noting that Toronto's Woodbine racetrack facility has contributed $175 million to the city's bottom line.
But the NDP criticized the plan and raised concerns over how the province was seeking to raise revenues.
"We know the majority of people that play whatever sort of gambling, they lose," said NDP MP Rosario Marchese.
"And (the Liberals) want to balance the budget on the backs of desperate families who want to try to become millionaires. In my view, that's not the way to raise money."
Internet gambling opportunities are also in the pipe, with the relevant policies expected to be in place this year in anticipation of launching online gambling by 2013.
OLG has said online gambling is worth about $500 million in Ontario, but all that money currently goes to offshore betting sites.
The agency recently sent out proposal requests for help setting up and running online games such as video poker and video slots, as well as lottery ticket sales.
Other regions, including British Columbia, have encountered problems when they introduced online gaming. B.C. launched its online casino PlayNow.com in mid-2010, but was forced back to the drawing board after it was compromised by a combination of server software glitches, website "performance issues" and high traffic volume.
Asked if he's concerned whether those who can least afford it might be the most likely to spend more as opportunities to gamble increase, Duncan pointed to the province's "aggressive" responsible gambling programs.
"Prohibition doesn't work," the finance minister said, reciting a list of jurisdictions where casinos are thriving already.
"We're in this we want so we want to make sure we're running it well and the return to taxpayers is solid."
According to the report, Ontario ranks second-last among all provinces in terms of net gaming profit per adult. Gambler's average annual outlay in Ontario is pegged at approximately $460, or fifth-most in Canada.
In 2011, the OLG generated more than $3.3 billion in lottery and bingo revenue while the province's casinos took in another $3.3 billion. Just under $2 billion went to provincial coffers.
Based on forecasts for the next six years, the OLG expects to generate an additional $1.3 billion annually by 2017 if it implements the recommendations.
The corporation also expects the changes will lead to the creation of 2,300 new jobs in the gambling sector, as well as an additional 4,000 jobs in the related hospitality industry.