Since 1975, OLG has provided popular lottery and gaming entertainment that benefits the Province, communities, and the people of Ontario.
However, over the past 30 years, demographics have changed, as have people’s shopping patterns. Global gaming options are more accessible — particularly online. At the same time, U.S. visitors have declined. All of these shifts have put the industry and its contribution to the province at risk in the long term.
Advances in Technology
The internet has opened a significant market for online gaming. Ontarians currently spend at least $400 million a year on gambling websites unregulated in Ontario, resulting in lost revenue for the Province.
The lottery system is largely paper-based in an increasingly paper-free economy. Lottery terminals are becoming outdated and will soon need to be replaced.
Changes to Shopping Patterns
OLG’s current terminal technology limits where lottery tickets can be sold and does not fully reflect current customer shopping patterns. The majority of Ontario adults under 45 frequent supermarkets, big box stores and large retail locations, but most lottery terminals are located in convenience stores.
OLG’s slot machine business is tied to racetrack sites, limiting options for new gaming locations, although racetracks are not necessarily near where customers live. About 88 percent of land-based gaming revenue is from slot machines, which have limited appeal to adults under the age of 45. Demand for slot machine gaming in current locations is not expected to grow and will plateau in the coming years.
Declining U.S. Visits
Over a 10-year period, the profits from gaming facilities close to the U.S. border have dropped from $800 million in 2001, to $100 million in 2011. Gaming revenues are also flattening, due to competition from casinos in NY State, Detroit, Buffalo, Cleveland, North Michigan, and Chicago.
Modernization will enable OLG to provide additional revenues to the Province to help fund the operation of hospitals and other provincial priorities.
As a result of modernization, OLG will:
- Become more customer-focused
- Expand the regulated private sector delivery of lottery and gaming
- Renew its role in the conduct and management of lottery and gaming.
Modernization will help to create jobs across Ontario and trigger private sector investment. The capital costs of expanding, improving or simply maintaining gaming facilities will no longer be carried by taxpayers. Ontario residents and visitors will have access to more innovative and fun games. In addition, the existing lottery distribution network will be expanded to include multi-lane sales at large retailers, accommodating a broader customer base.
Protecting the Public Interest
When public interests need to be protected, a government presence is important. Therefore, OLG will have set standards for access, integrity, security and Responsible Gambling.
Along with the Alcohol and Gaming Commission of Ontario (AGCO) and the Ontario Provincial Police, OLG will continue to ensure that all operations are fully compliant with the law—particularly in areas like money laundering, investigations, fraud and collusion.