OLG wants private firm to run lotteries

yorkregion.com
Sept. 8, 2014
By Keith Leslie

Ontario is one step closer to picking a private company to modernize and run the day-to-day operations of the province's $1.3-billion-a-year lottery business.

Ontario Lottery and Gaming Corp. issued requests for proposals (RFP) Monday to pre-qualified service providers seeking bids on plans to update the technology used to sell lottery tickets and expand sales beyond convenience and grocery stores.

"Are there any other places that we can be like some big box stores," wondered OLG spokesman Tony Bitonti.

"We're also looking at multi-lane channels, so instead of waiting for one cashier that has a lottery terminal, why not have it on PIN pads like debit machines?"

The RFP is the second phase in the process after OLG announced in 2012 that it would seek private sector partners to invest in modernizing the lottery agency in exchange for a slice of the profits.

The agency refused Monday to identify any of the pre-qualified bidders.

"I don't even know who's on the shortlist," said Bitonti.

Bell Media did not immediately respond to questions asking if it was among the pre-qualified applicants for the lottery business, while Canada's other telecommunications giant, Rogers, declined comment.

The pre-approved companies can get up to $750,000 from OLG to cover some of the costs associated with preparing and submitting their bids, which includes $100,000 to reimburse the non-refundable application fee to the Alcohol and Gaming Commission of Ontario.

"This amount represents significantly less than one per cent of the additional profit OLG expects to generate as a result of modernizing the lottery," said Bitonti.

OLG plans to roll out "I-Gaming" this fall, which will include on-line purchases of Lotto 6-49 and Lotto Max tickets, but Bitonti said it would likely be up to the successful bidder for the lottery business to develop a mobile app and pay for other technology upgrades.

"If you have the technology, if you have the wherewithal, come do it for us and we'll take a portion of the revenue and you'll get a cut of it, and we'll be able to give the province more money after all this is said and done," he said.

The Progressive Conservatives criticized the Liberals for not consulting the public on its plans for OLG, and said the government is trying to increase revenues without addressing its over-spending problem.

The New Democrats said they were worried about the increase in gambling addictions, especially among young people, which could get worse as technology makes it easier to spend money on wagering.

"This government is so desperate to come up with new revenue opportunities, they're banking on hitting the jackpot on people who can swipe and tap their smartphones," said NDP finance critic Catherine Fife.

OLG turns over about $2 billion a year to the provincial government, and is its largest single source of non-tax revenue.

Bitonti estimated an investment of $500 million would be needed to upgrade the computer terminals used to sell lottery tickets and update fibre optic cables that link them, an amount that he said would be too much for the government to bear.

"They won't go for that," he said.

OLG's request for proposals asked for companies to run the "specific day-to-day operations of the lottery business in Ontario," but the province would retain ownership.