Frequently Asked Questions

Modernizing Lottery and Gaming

What is Gaming Modernization?

Modernizing lottery and gaming is about improving the customer experience, creating jobs in the industry, and increasing revenue for its shareholder – the Province of Ontario.

To achieve this, OLG is focusing on three key priorities:

1. Becoming more customer-focused.

OLG needs to be where customers want them to be, providing the games they want to play.

2. Selecting qualified service providers for specific day-to-day operation of lottery and gaming.

OLG will be looking to the private sector to help build and grow the lottery and gaming industry in Ontario.

3. Renewing OLG’s role in the conduct, management and oversight of lottery and gaming.

OLG will become a leaner, more focused corporation, responsible for market management, oversight and important priorities like responsible gambling.

Why does OLG need to modernize?

OLG provides the largest source of non-tax revenue to the province, about $2 billion annually.

However, OLG’s current business model is not sustainable over the long term.

Advances in technology, changes to shopping patterns and demographics, and declining visits from the U.S. have all combined to threaten the industry and its contribution to the province.

Times have changed, and modernization is about bringing gaming in Ontario forward.

If OLG were to proceed on its current path, a minimum of $1 billion in public funds will be required to update its current services, and that would simply be an exercise in basic maintenance. It wouldn’t get OLG to where it needs to be.

For more information on why OLG needs to modernize, you can read the article Why Modernize? on the ModernOLG website.

How will OLG’s role change once the modernization is fully implemented?

OLG will continue its role in the conduct, management and oversight and remain the “operating mind” behind the delivery of lottery and gaming in Ontario.

OLG has learned from almost two decades of experience that the private sector can manage some of the day-to-day operations of a gaming facility and OLG can focus on things like managing the market, making sure key areas, like Responsible Gambling, are addressed directly. OLG will also continue to help Ontarians understand how revenue generated by gaming in Ontario benefits them.

How will modernization change lottery?

Eight million Ontarians play OLG lotteries every year, so this is a very popular form of entertainment. OLG’s plan will help make it easier and more convenient for people to buy lottery tickets in Ontario.

For more information on modernizing lottery in Ontario, you can read the article Making Lottery More Efficient and Accessible on the ModernOLG website.

What opportunities does modernization provide for communities hosting a gaming site?

Last year alone, OLG Gaming Centres gave back over $94 million to their communities. This helped fund things like college and university campuses, hospitals, community centres and charities.

Over the years, host municipalities have used revenue from OLG facilities to build infrastructure, invest in culture and create local jobs. For example:

  • In Ajax, the town used approximately $7.4 million in contributions from OLG Slots at Ajax Downs to help build a new state-of-the-art, LEED-certified (Leadership in Energy and Environmental Design) Operations Centre
  • In Innisfil, funds from OLG Slots at Georgian Downs were used by the Town to help build a $40 million recreation complex, in addition to other capital projects
  • The Town of Hanover used revenue it has received to invest in local culture – renovating its century-old theatre with new drapes, seats, air conditioning and more

Gaming facilities could also be a driver for municipal growth and development. The capital and economic opportunities created by a gaming centre could both facilitate and accelerate key community building initiatives.

Watch Community Stories to learn more about how this money has touched the lives of people across Ontario on the ModernOLG website.

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Financial and Economic Benefits

I’ve heard that casinos are at best a wash – that for every job created there is a job lost. Is OLG being too optimistic with its job projections for new gaming facilities, particularly in the GTA?

OLG’s projections continue to evolve as it learns more about what increased private sector involvement in a new gaming entertainment centre could mean.

For example, when OLG first announced it would modernize lottery and gaming in Ontario in March 2012, OLG projected it would lead to 2,300 new industry jobs, 4,000 service sector jobs, and $3 billion of capital investments across the province.

After initiating a Request for Information (RFI) process last spring, hearing from some of the interested private sector resort casino operators, and conducting further analysis, OLG is confident now that a facility in the GTA outside of downtown Toronto, for example, would lead to 9,700 direct full-time and part-time jobs and  3,000 construction jobs over a three-year period. It would also drive approximately $1.5 billion in capital investment. And that’s for the GTA facility alone.

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Impact on Local Businesses

Wouldn’t a large gaming facility have a detrimental effect on local businesses surrounding it?

OLG envisions gaming facilities that benefit both host municipalities and their local businesses. Gaming facilities make host municipalities more attractive commercially by enhancing them as destinations for meetings and conferences, as well as attracting additional tourism to the area.

Two separate studies that looked at the social and economic impacts of gambling demonstrated that the introduction of gambling often benefits businesses in the local area in terms of increased revenue, business starts, and overall employment, especially when a significant portion of its patron base is from outside the area.1, 2

Sources:
1Socio-Economic Impacts Associated With the Introduction of Casino Gambling: A Literature Review and Synthesis. By Rhys & Williams (2004). Alberta Gaming Research Institute.
www.uleth.ca/dspace/handle/10133/407

2The Social and Economic Impacts of Gambling. Williams, Rhym and Stevens (2011). Final Report Prepared for the Canadian Consortium of Gambling Research.
www.gamblingresearch.org/download.php?docid=11322

Do casinos cause property values in their vicinity to decrease?

A 2011 report3, which looked at the social and economic impact of gambling, found:

  • A total of seven studies have determined that new casinos have no impact on property, while six other studies have found new casino development to be associated with increases in property values

An earlier report in 20044 found that:

  • The presence of casinos drives up the price of both real estate and rental rates for personal and business accommodations in adjacent casino neighbourhoods

OLG envisions gaming facilities that are designed to be part of a host community, complementing its surroundings both visually and commercially.

Sources:
3The Social and Economic Impacts of Gambling. Williams, Rhym and Stevens (2011). Final Report Prepared for the Canadian Consortium of Gambling Research.
www.gamblingresearch.org/download.php?docid=11322

4Socio-Economic Impacts Associated With the Introduction of Casino Gambling: A Literature Review and Synthesis. By Rhys & Williams (2004). Alberta Gaming Research Institute.
www.uleth.ca/dspace/handle/10133/407

Isn’t the objective of a gaming entertainment centre to attract people to the casino, but also to ensure that they stay in the casino’s hotel, eat at the facility’s restaurants, and shop at the facility’s stores? How would that benefit local businesses, particularly in the GTA?

OLG envisions a facility that can drive traffic to the GTA in a way very few other attractions within the GTA are able to now. Rather than being the sole destination, a new facility would be one of the places visitors to the GTA could visit during their stay.

The facility would broaden capacity for conventions, business travel and tourism, which would drive business for all hotels in the GTA.

This has been the experience in Niagara Falls, where the Fallsview Casino Resort has 374 rooms and more than a dozen restaurants.5

Despite this, the Hilton Niagara Falls/Fallsview hotel, which is right across the street from the casino, underwent an expansion in 2009 that added more than 500 additional rooms and three new dining options.6

Sources:
5 http://www.fallsviewcasinoresort.com
6 http://www.niagarafallshilton.com/

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Role of Municipalities

Does OLG have guideline requirements for the public consultation process undertaken by a potential host municipality?

A municipal council is required to seek public input into the establishment of a proposed gaming site.

The municipal council must give OLG, in writing, a description of the steps it took to do so and a summary of the public input it received. In addition, the municipal council must pass a resolution supporting the establishment of the gaming site in the municipality and give a copy of the resolution to OLG. The purpose of this process is to ensure that every municipality is indeed a willing host to a gaming facility.

This is a legal requirement specified in the Ontario Lottery and Gaming Corporation Act, 1999 – Regulation 81/12.

Will municipalities have influence over where a casino gets built within their boundaries?

OLG has taken a consistent approach for every potential and current host municipality.

The approach has three basic steps:

  1. Confirm municipal interest in each Gaming Zone;
  2. Choose the private sector operator; and
  3. Work with the municipality and the private sector operator to determine the location.

OLG has been clear from the outset that it will only locate a gaming facility in communities that want one.

So, the first step is for a municipality to pass a resolution formally indicating that it is interested in the option of allowing the entire area of a Gaming Zone within its boundaries to be considered for a potential gaming activity.

As part of this resolution, the municipality may indicate conditions of its approval, such as where the gaming site may – or may not – be located. The conditions must be reasonable and commercially viable, consistent with OLG’s legal responsibilities under the Criminal Code of Canada, and align with the government’s policy direction.

The second step is for OLG to choose the private sector operator through a competitive and transparent process, which includes a Request for Pre-Qualification and a Request for Proposal.

The successful proponent would then need to work with the city on specifics about a gaming facility such as picking a preferred location – just as would happen with any major development.

Municipalities have a say in many of the aspects of any major development, including location, design, building height, density and more.

Before a new facility gets built, there needs to be consensus from three parties—the City, the private sector operator and OLG.

Once plans are finalized that are amenable to all three parties, the Minister of Finance must give his/her final approval.

Would OLG allow a municipality to delay a decision about a new gaming facility until 2014, when a referendum question could be added to the municipal election ballot?

OLG understands and appreciates that public input is a vital and necessary step for municipalities to determine if they are willing hosts for a new gaming facility.

The Ontario government passed a regulation to outline the process for municipalities to demonstrate their support for a gaming facility. The regulation does not require a municipality to hold a referendum to show that it is a willing host.

OLG is committed to meeting the Ontario government’s deadline for fully implementing the modernization of lottery and gaming by 2017-18.

It is a municipal decision how they choose to obtain public input into gaming.

OLG remains optimistic that interested City Councils will consider their options and make decisions in a timely manner.

Can a municipality’s consultation process include a referendum?

A municipality can seek public input in any manner it chooses, including a referendum or other forms of public consultation. However, a referendum is not required.

What municipal and/or provincial approvals are required before a new gaming facility can be built?

OLG will not impose a gaming facility on a municipality that doesn’t support one.
The Ontario Lottery and Gaming Corporation Act, 1999, requires that a municipal council seek public input into the establishment of a proposed gaming site.

The municipal council must give OLG, in writing, a description of the steps it took to do so and a summary of the public input it received. In addition, the municipal council must pass a resolution supporting the establishment of the gaming site in the municipality and give a copy of the resolution to OLG. The purpose of this process is to ensure that every municipality is indeed a willing host to a gaming facility.

As part of its resolution, a municipality may indicate conditions of its approval, such as where the gaming site may – or may not – be located. The conditions must be reasonable and commercially viable, consistent with OLG’s legal responsibilities under the Criminal Code of Canada, and align with the government’s policy direction.

The next step is for OLG to choose the private sector operator through a competitive and transparent process, which includes a Request for Pre-Qualification and a Request for Proposal.

The successful proponent would then need to work with the city on specifics about a gaming facility such as picking a preferred location – just as would happen with any major development.

Municipalities have a say in many of the aspects of any major development, including location, design, building height, density and more.

Before a new facility gets built, there needs to be consensus from three parties—the City, the private sector operator and OLG.

Once plans are finalized that are amenable to all three parties, the Minister of Finance must give his/her final approval.

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Infrastructure and Design

There’s been a lot of media coverage regarding large Las Vegas-based casino operators being very interested in building and operating a resort-style casino in the GTA and elsewhere in Ontario. Will there be opportunities for local developers to take part?

OLG is currently in the process of running a multi-stage, competitive and transparent procurement process for all of its Gaming Zones.

In May 2012, OLG initiated a Request for Information (RFI) process to better understand the level of interest and ability that exists in the market, as it relates to gaming operations. OLG was very pleased with the volume and quality of responses received. On November 30, 2012, OLG initiated the first wave of its Request for Pre-Qualification (RFPQ) process for gaming operations. These RFPQs closed on March 7 and 14, 2013.

OLG will be releasing the RFPQs for additional Gaming Zones, some in Gaming Bundles, over the coming months.

The RFPQ will be followed by a Request for Proposal (RFP) process.

These formal, fair and competitive procurement processes allow OLG to pre-qualify a sub section of the interested regulated private sector service providers against specific criteria, while ensuring the process is fair and transparent to all relevant stakeholders.

What assurances will there be that new gaming facilities would be designed with the best interests of their host communities in mind?

OLG envisions new gaming facilities that complement their surroundings both visually and commercially.

And while a service provider will propose the construction of the new gaming site, it must have a comprehensive business plan approved by OLG, the Minister of Finance and have requisite municipal support.

I’ve heard that a casino requires one parking spot for every slot machine, so it sounds like what OLG really envisions is one giant parking lot. What considerations are being given to parking and/or public transit accessibility, particularly with respect to potential gaming facilities in large urban centres?

As both OLG and private sector service providers begin refining their analysis, they will get a better idea about what the parking requirements may be.

It’s critical that a new gaming entertainment centre integrates well with a host community and also with local transit.

Gaming facilities could also be a driver for municipal growth and development. The capital and economic opportunities created by a gaming centre could both facilitate and accelerate key community building initiatives.

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Private Sector Operation and Procurement

How will OLG select a service provider for its current and/or potential new gaming sites? Will the OLG consider a franchise operation as a potential operator of a gaming facility site?

OLG is currently conducting a multi-staged fair and competitive procurement process to select regulated private sector service providers for its gaming sites.

OLG issued a Request for Information (RFI) for Land-based Gaming, which was open from May 17, 2012 to July 4, 2012. The RFI solicited input from industry experts about a number of things, including the viability of different locations for potential gaming facilities.

The RFI process was followed by the launch of OLG’s Request for Pre-Qualification (RFPQ) process on November 30, 2012, with three separate RFPQs, one each for the Ottawa Area, Ontario East Gaming Bundle and the Ontario North Gaming Bundle. These RFPQs closed in March 2013.

On May 29, 2013, OLG issued an RFPQ for the Southwest bundle. This RFPQ closed on August 8, 2013.

OLG will be releasing the RFPQs for additional Gaming Zones, some in Gaming Bundles, over the coming months.

The RFPQ process will enable OLG to pre-qualify potential service providers based on their ability to operate a gaming facility to OLG’s standards. OLG will then issue a Request for Proposal (RFP) to the pre-qualified vendors to make formal bids.

Once the RFP process is complete, OLG will select the vendors to become regulated service providers of gaming facilities.

OLG is following the Government of Ontario’s procurement guidelines to ensure that the process is fair, competitive and transparent. To that end, OLG has engaged an impartial Fairness Monitor and an Independent Fairness Advisor throughout the process to provide oversight on the integrity and fairness of the procurement process.

 

Will OLG have a role in operating a new casino or would it be solely up to the private sector?

OLG will continue its role in the conduct, management and oversight and remain the “operating mind” behind the delivery of gaming.

After operations are in place, OLG will continue its conduct and management and oversight role of the gaming business and will continue to hold responsibility for all critical decisions related to the operation of gaming, including:

  • Strategic Planning
  • Financial Management
  • Customer Management
  • Service Provider Management
  • Gaming Service/Product Offering
  • Information Technology
  • Risk Management
  • Market Management

OLG will also continue to prevent and mitigate the effects of problem gambling through its world renowned Responsible Gambling program.

How will a private sector service provider be compensated for running a gaming facility?

OLG expects to pay private sector service providers based on a combination of a base fee and a percentage of gaming revenue generated at a site.

The percentage of revenue provided to the service provider will vary based on the revenue generation potential and cost structure of the site, as well as asset ownership.

How will OLG ensure that a private sector service provider upholds Responsible Gambling standards?

As part of its conduct and management obligations, OLG will require service providers to follow its Responsible Gambling standards.

In addition to mandated compliance with new AGCO regulations, Operator Service Agreements will include detailed Responsible Gambling terms.

How will OLG ensure a service provider adheres to the same level of accountability that exists at OLG’s facilities today?

OLG will continue its role in the conduct, management and oversight, and remain the “operating mind” behind the delivery of gaming.

After operations are in place, OLG will continue its conduct, management and oversight role of the gaming business and will continue to hold responsibility for all critical decisions related to the operation of gaming, including:

  • Strategic Planning
  • Financial Management
  • Customer Management
  • Service Provider Management
  • Gaming Service/Product Offering
  • Information Technology
  • Risk Management
  • Market Management

OLG will also continue to prevent and mitigate the effects of problem gambling through its world renowned Responsible Gambling program.

How will OLG hold a private sector service provider accountable for casino revenue to ensure it does not hide revenue from the government?

OLG will continue its conduct, management oversight role of the gaming business and will continue to hold responsibility for all critical decisions related to the operation of gaming.

OLG expects to pay a service provider based on a combination of a base fee and a percentage of gaming revenue generated at the site. The percentage of revenue provided will vary based on the revenue generation potential and cost structure of the site, as well as asset ownership.

Operating agreements will be explicit in the roles and responsibilities of the service providers and OLG.

How did OLG determine where to put Gaming Zones?

To determine the 29 gaming zones across the province, OLG used a Gravity Model – a business tool commonly used for modeling supply and demand within a given geographic area. The Gravity Model looked at a number of factors to determine where there is maximum customer demand for a gaming facility. These factors included:

  • Proximity of a gaming site to other gaming facilities
  • Proximity of a gaming site to current and potential customers
  • Distance a customer is willing to travel to reach a gaming site

Using these factors, the Gravity Model identified specific geographic areas where gaming sites could be successfully established without competing with each other for customers. OLG then drew borders around these areas to form gaming zones.

It is important to note that the proposed gaming zones are not final. The geographic boundaries may be adjusted based on ongoing discussions with relevant stakeholders and municipalities, as well as information received through the Request for Information (RFI) process.

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Crime/Social Impacts

Wouldn’t a casino introduce additional criminal activity to its host municipality?

There is no clear evidence that gaming expansion results in an increase in crime rates.

A media report in 2012 trying to connect crime to the OLG Slots facility at Woodbine Racetrack actually found that fears related to loan sharking, prostitution, traffic flow and parking never materialized.

Two recent studies in Alberta found no significant statistical relationship between gambling and crime.1, 2

Over the past 18 years of casino gambling in Ontario, mayors in all 23 host municipalities have indicated to OLG that there is no correlation between gaming in their communities and crime rates.

In fact, some of these mayors have anecdotally indicated that the increased security presence resulting from casinos has helped lower levels of criminal activity.

In Windsor, data from the Canadian Centre for Justice Statistics, Statistics Canada, shows that incidents of crime went down approximately 30 per cent between 1998 and 2010. Casino Windsor (now Caesars Windsor) opened in 1994.

Sources:

1 The Social and Economic Impacts of Gambling. Williams, Rhym and Stevens (2011). Final Report Prepared for the Canadian Consortium of Gambling Research.
www.gamblingresearch.org/download.php?docid=11322

2 Socio-Economic Impacts Associated With the Introduction of Casino Gambling: A Literature Review and Synthesis. By Rhys & Williams (2004). Alberta Gaming Research Institute.
www.uleth.ca/dspace/handle/10133/407

Aren’t $6 of social costs created for every $1 generated by a casino?

Independent studies don’t support this assertion. A 2011 report, The Social and Economic Impacts of Gambling, which was presented to the Canadian Consortium of Gambling Research, determined that there is currently no reliable way of attaching a monetary value to the social costs of gambling.3

Furthermore, Earl Grinols’ 2003 study, which claimed that $6 of social costs are created for every $1 generated by a casino, failed to:

  • Consider the limitations of conclusions based on problem gamblers’ self-reported expenditures
  • Account for casinos’ benefits to their local economies

The study also painted an inaccurate portrayal of crime statistics, and didn’t take into account other mental health and addictions issues that could contribute to negative consequences suffered by problem gamblers.

Sources:

3 The Social and Economic Impacts of Gambling. Williams, Rhym and Stevens (2011). Final Report Prepared for the Canadian Consortium of Gambling Research. www.gamblingresearch.org/download.php?docid=11322

What are the anticipated social costs of putting a casino in a large urban centre in the GTA?

Gambling is an activity that always has the potential to result in problem behaviour for a small portion of the population.

Approximately 3.4 per cent of adults in Ontario have a severe or moderate gambling problem. Problem gambling rates are similar across other jurisdictions.

OLG does not want or need problem gamblers at its facilities.

Ontario spends more on Responsible Gambling programming than any other jurisdiction in North America, with over $50 million just last year alone. OLG has Responsible Gaming Resource Centres at all of its gaming sites, including staff from the Responsible Gambling Council at eight of these locations.

Don’t casinos attract lower educated patrons with smaller incomes? Aren’t they a tax on the poor?

OLG casinos attract a broad customer base and OLG does not target lower-income groups.

In fact, according to a Harris Decima market survey, nearly 50 per cent of OLG slot and casino players had household incomes of more than $75,000 in 2011.

By comparison, in the general population of Ontario, 39 per cent of the population makes over $75,000 a year.

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Responsible Gambling

Won’t expanding OLG’s casino business also expand problem gambling in Ontario?

Ontario dedicates more funding to Responsible Gambling than any other jurisdiction in North America – over $50 million last year alone. This is expected to increase once the modernization of lottery and gaming is completed.

Responsible Gambling is, and will continue to be, a key focus of OLG’s business. In fact, as lottery and gaming has evolved, it has become a central pillar.

Responsible Gambling is engrained in OLG’s corporate culture for all employees. In fact, OLG works with the Centre for Addiction and Mental Health to provide employee training that focuses on recognizing potential problem gambling behaviours and learning how to respond to them.

Last year, eight million Ontarians played the lottery at least once and 2.7 million paid a visit to one of OLG’s gaming facilities.

OLG provides a form of entertainment and wants customers to use only an affordable portion of their disposable income to play its games.

Gambling is an activity that always has the potential to result in problem behaviour for a small portion of the population. Approximately 3.4 per cent of adult Ontarians have a severe or moderate gambling problem.

OLG does not want or need problem gamblers at its facilities.

That’s why OLG seeks to prevent problem gambling from occurring in the first place, and to provide a bridge to assistance for those who need it.

How does OLG prevent people with gambling addictions from playing at its facilities?

All of OLG’s gaming sites have Responsible Gambling features, including:

  • Responsible Gaming Resource Centres at all sites, with staff from the Responsible Gambling Council at eight locations
  • Mandatory training for all front line and management staff
  • Facial recognition technology to support self-exclusion at all gaming sites

OLG is also currently exploring new design features to support its Responsible Gambling priorities, such as:

  • Encouraging all players to set time and money limits on slot machines
  • Using natural lighting
  • Placing ATMs in a way that is sensitive to Responsible Gambling concerns
  • Providing additional clocks at every OLG facility

OLG also offers a range of information and education tools to promote Responsible Gambling and to help players understand how games work.

Doesn’t being open for 24 hours increase the number of problem gamblers?

OLG’s casinos and slot facilities are part of a community’s tourism industry and are open to provide entertainment to local residents and visitors. These operating hours are standard within the gaming industry and are based upon customer demand for this form of entertainment.

As part of OLG’s Responsible Gambling initiatives, clocks are present on the gaming floor at every facility. OLG encourages all players to set a time and dollar limit on their play to ensure they are playing for entertainment purposes.

Isn’t OLG’s mandate to provide maximum dollars to the province? Are you really in the business of turning customers away?

OLG needs a sustainable player base, which means working to broaden its appeal to a large number of people – not a small number of problem players.

OLG provides a form of entertainment and wants customers to use only an affordable portion of their disposable income to play its games.

That’s why OLG seeks to prevent problem gambling from occurring in the first place, and to provide a bridge to assistance for those who need it. Through initiatives like knowyourlimit.ca, OLG educates players about the myths and facts of the games they play and how to manage their own play habits.

Aren’t 35 per cent of OLG’s casino and slot revenues actually generated by five per cent of gamblers?

The data is very limited for these types of studies.

OLG seeks to build a sustainable player base that spends only an affordable portion of its disposable income on gaming as a form of entertainment.

OLG is currently building a data analytics program. While it will not diagnose gambling problems, it will help players by telling them when their patterns of play have changed, and give them information and options to consider.

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