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News Conference: OLG’s Expansion Plans

published by Mark DaSilva on Mon, 03/12/2012 - 12:44

To ensure success in the gaming market, operators must make the transition into the 21st century, and the Ontario Lottery and Gaming Corporation is doing just that.  At 10:45am Monday March 12, 2012, a joint press conference took place between OLG chairman Paul Godfrey and Ontario Finance Minister Dwight Duncan to discuss the future of gambling in Ontario.  

OLG has been under review for the past year. Execs want to modernize the OLG’s business plan and begin future expansion into the gambling market, particularly in regards to easier accessibility and online gambling.  At the conference, Godfrey repeatedly stressed that with the review they had done over the past year they had come to the conclusion that staying the course and ‘doing nothing’ is not an option anymore.  The world has changed over the last two decades he said, and to be competitive their business structure would have to change as well.

This process has been underway since August 2010 when OLG first announced its intentions to expand into the world of internet gaming.  Essentially, what they have decided to do is play ‘catch up’ with the rest of the country as British Columbia, Quebec, and the Atlantic Provinces have all had their own gaming commissions establish legitimate online gambling sites - the revenue from which is then used to help pay for services provided by their respective provincial governments.  When questions were asked at the press conference about what the venture into online gaming would mean, the board responded by saying that the relevant policies needed to do this would be implemented by the end of this year so the site could be fully operational sometime in 2013.  

They mentioned that online gambling in Ontario is already worth $500 million but because no regulation from the government has happened yet, all the money goes to offshore providers and investors.  What they’re looking to do then is bring that chunk of change home and reap some of the profits from it; by 2017, Godfrey said that an additional $1.3 billion can be accumulated to help pay for health and education in Ontario.

Duncan also highlighted that online gaming prohibition simply does not work; it’s been tried before and that’s where criminal activity in gambling comes into play.  By regulating more of OLG’s expansion plans Ontario will be providing service to a market that exists despite the concerns surrounding it, and ensuring more money is coming back to the province.  Gambling is a big part of the world today and ignoring it is simply not good business.

They also discussed how their current operations would have to be tuned up to accommodate the new strategy.  As a means of creating easier accessibility, they would like to ‘move to where the people are’. As such, having slots setup at racetracks far outside the greater populated areas is not good enough anymore.  Now, they are looking to setup slot machines in big box retail locations and expand lottery ticket terminals to have more than just one location in each grocery store.  The theory is if there are more booths, the OLG will have a greater reach to customers who may not see just one booth in the store.  

There’s also an argument to be made that expanding operations into big box stores can generate more interest in online gambling.  It’s almost an advertisement in itself with the repeated messaging of how much gambling is a part of the world nowadays made through increased lottery sales and slots. Seeing more acceptance of gambling within the community can stimulate a gambler’s interest into looking to play online as well.

They also acknowledged that some of their casino locations including ones by the U.S. border may need to be closed due to their lack of foot traffic; instead, they are now looking to establish a new casino within the GTA and another somewhere else within Ontario - but the specific locations are yet to be determined.  Nevertheless, talk of a casino somewhere within the GTA has been underway for years as the potential boost to the economy from easy accessibility plus money from the tourist industry could help pay off a large chunk of Toronto and Ontario’s deficit.

To sum up, change is clearly underway.  OLG has been pushing for an expansion of their operations for years as they have realized the potential size of the gambling market in Ontario alone.    These changes are the beginning of a greater acceptance of gambling in Ontario. By continuing to push for expansion into bigger cities and the online world, OLG will see its markets grow and Ontario will have more money in its collective bank account.