OLG Concedes to OAG’s Criticism of Modernization Plan but Justifies Position

In a letter addressed to the Ontario Auditor General, the Ontario Lottery and Gaming Corporation (OLG) through Philip J. Olsson, a Chair member of the OLG Board of Directors, acknowledged as true the fundamental findings of AOG Bonnie Lysyk, that the OLG Modernization Plan is ambitious.Still, the OLG letter raised key issues in order to stress the importance of continuing with the modernization plan despite the flaws cited by the OAG.

Justifications about the Modernization Plans
The first item gave emphasis to the importance of reform particularly in the lottery and gaming business, since those sectors are important sources of financial benefit to the province and its constituencies. The crown corporation maintains that the plans are still relevant as they are aligned with the Finance Minister’s undertaking to maximize the value of government assets.
Accordingly, the plan took into consideration that land-based lottery and gaming, the service providers, stakeholders, vendors including charities have been financially affected by the challenges brought on by rigid competition. The development of the plan considered the location in which the gaming positions are installed, and were regarded as sub-optimal since such locations are quite remote from the province’s densely populated communities. The result of which is the decreasing customer base and limited distribution channels available to the lottery business.
The letter also stated that reform is necessary in order to bring the OLG into the realms of Internet-based gaming. Up to this date, the province of Ontario continues to lag behind other Canadian jurisdiction in competing against the unregulated online gambling facilities that include Ontario as part of their online betting market.
The OLG asserts that the plan to modernize with regard to this aspect is still valid and relevant since it is in line with the provincial government’s quest for stable sources of non-tax revenue. Moreover, customers are seeking convenience in technology, in distribution channels and the product offerings.
The letter emphasized that substantial reforms are vital in order to address the current changes; otherwise, the nearly CA$2 billion non-tax revenues, which the OLG annually contributes to the government coffers will eventually erode. The crown corporation stressed that Ontario’s lottery and gaming businesses require around CA$1 billion for maintenance alone.
Rebuttal of Findings about Lack of Stakeholder Consultation and Community Engagement
The OLG response went on to refute the findings that the plan was not based on sound business research and stakeholder consultations. The letter went on to claim that the corporation had worked with external business consultants and had received advice and reports from other Canadian provinces, as well as conducted stakeholder consultations with more than 50 groups and individuals coming from across the province of Ontario. The government’s scrapping of the “Slots-at-Racetrack Program” and OLG’s lack of authority precluded the corporation from holding stakeholder consultations on specific decisions, albeit part of OLG’s modernization plan.
With regard to land-based gaming, the OLG disclosed that 40 communities in Ontario expressed interest in hosting a gaming facility (casino), as gathered through council resolutions and public consultations.

 

The overall gist of the OLG’s response to the Auditor General’s report is that the Ontario crown corporation will remain committed to its modernization initiatives. The letter also made it known that the provincial government has communicated its continuing support for the revised plan.

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