July 23, 2014

Province ‘inept’ on horse-racing file: Sudbury council

The Ontario Lottery and Gaming Corp. “has failed the people of Ontario miserably,” a city councillor said Tuesday.

“They’ve left us in a mess. A disgraceful mess,” Terry Kett said.

The discussion, to do with Coun. Claude Berthiaume’s motion for a casino to go only at Sudbury Downs, quickly got heated. Several times Mayor Marianne Matichuk reminded councillors to avoid politicking.

Berthiaume explained he was asking council to “throw a lifeline” by approving the motion.

Gaming and horse racing are entwined, the Ward 3 councillor said, and there is “a crisis in the horse-racing industry in this city.”

Approximately two years ago the province ordered the OLG to put a stop to the Slots at Racetracks program. Slots at Racetracks was a revenue-sharing agreement in which Ontario’s 17 racetracks received a certain percentage of revenue from slot machines set up on site.

In place of slot machines, full-fledged casinos were to be built in interested municipalities. This “modernization,” as it was called upon introduction, has yet to materialize.

When Kathleen Wynne took the reins from Dalton McGuinty, she pledged $500 million over five years to help keep horse racing going.

Sudbury Downs doesn’t have a deal yet. The race season is supposed to begin May 24.

According to Sudbury CAO Doug Nadorozny, the OLG said a request for proposals for the northern bundle of casinos (including Sudbury) is set to come out in weeks.

However, he continued, they’ve said that many times.

Coun. Frances Caldarelli has “a lot of sympathy” for Sudbury Downs.

“What this provincial government did, I just haven’t seen anything so inept in many years,” she continued. “They have done a lousy job. There’s no doubt about that. They’ve come and told us they’re going to do all these things. They’ve kept none of their commitments, but we’re expected to keep ours. That’s what’s difficult to swallow.

“Casinos are really on the way down. I don’t think they’re a rising force. Nobody knows quite what to do. As much as I sympathize with the people out at the track … and I think that’s a good place for a casino, I don’t think this is our problem to solve. It’s a problem the OLG really needs to resolve themselves.”

Kett said he couldn’t support Berthiaume’s motion.

“As soon as we do that, we can’t go back. We’re restricted. That’s where we want the casino.

“An OHL arena, or hotel, or convention centre, won’t happen at Sudbury Downs … So for that reason only, I won’t support it.”

Council put off making a decision until it can get the OLG, Sudbury Downs and the Ontario Racing Commission together to provide some answers.

“I was hoping we’d pass this motion and we’d put Sudbury Downs as the area to have the casino,” Berthiaume said after the meeting.

“I don’t think we can split the harness racing and the casino. It has to be together in order for Sudbury Downs to survive. Of course, the industry’s already there. People are already working there, at the slots, right now. We have harness racing. To save their jobs, that’s why I was hoping we would pass this motion tonight. But now we’ll see what happens.”

(OHRIA)

Auditor General Report Released

A 2012 plan to modernize the Ontario Lottery and Gaming Corporation (OLG) and generate higher profits for the province was “overly ambitious” and “overly optimistic,” Auditor General Bonnie Lysyk said in a Special Report released today.

The Ontario Lottery and Gaming Corporation’s Modernization Plan Special Report also found that the “abrupt cancellation” of a program that gave the horse-racing industry a share of slot-machine revenues at racetracks has had a significant impact on the industry.

“OLG developed its Modernization Plan without sufficiently consulting such stakeholders as municipalities and the horse-racing industry,” Lysyk said. “The profit estimates should have been more realistic, and the abrupt impact on the horse-racing industry could have been mitigated had more people been consulted beforehand.”

Lysyk also noted that the Modernization Plan anticipated that OLG could complete significant downsizing, restructuring and privatization within 18 months, a timeline she described as “overly ambitious.”

The Legislative Assembly’s Standing Committee on Public Accounts passed a seven-part motion asking the Auditor General to look at various aspects of the Modernization Plan, including the cancelling of the Slots At Racetracks Program. The Modernization Plan was approved by Cabinet and made public in 2012.

The Modernization Plan, Lysyk found, presented an “ambitious best-case scenario,” including a significant number of changes designed to raise OLG profits by a total of $4.6 billion between 2013 and 2018. Delays, policy changes and the lack of several municipal approvals resulted in OLG having to dramatically reduce its profit projections.

For example:

  • As of March 31, 2014, OLG lowered its original projection of an additional $4.6 billion in gaming profits between 2013 and 2018 by 48%, or about $2.2 billion. Lysyk estimates the reduction could be “as much as $2.8 billion,” or about 60% less than forecast.
  • The Modernization Plan depended on and assumed agreement from municipalities for construction of casinos within their borders. However, large Ontario municipalities identified as potential sites for the new casinos, such as Toronto and Ottawa, rejected OLG’s proposals, which significantly lowered net profit projections.
  • The government was fully aware that cancellation of the Slots At Racetracks Program, which provided $347 million to racetrack operators and horse owners, horse breeders and others involved in horse racing in 2012, would have a significant impact on Ontario’s horse-racing industry. Nonetheless, the program was cancelled with one year’s notice, as allowed by existing agreements. Initially, there was no plan to provide any transition and support funding for the industry. After an outcry from the horse-racing industry and affected communities, the government introduced new transition and support funding.
  • The Modernization Plan’s projections for jobs related to the gaming industry were overstated and highly dependent on a new GTA casino; there will likely be a net loss of gaming jobs in the province instead of the projected gains. In addition, the initial projection that the private sector would spend $3.2 billion in capital investment has been reduced to only about $940 million, most of which would be realized from the sale of OLG’s existing gaming assets.
  • A succession of Board and executive management changes since 2005, including the appointment of five Board chairs and seven Chief Executive Officers, as well as shifting reporting responsibilities among multiple ministries and ministers, have undoubtedly impacted OLG.The Report also noted that OLG’s procurement processes so far have been “fair, open and transparent” and that OLG has taken many steps to prevent and mitigate problem gambling.

To read the full report click here Auditor General Report - OLG Modernization Plan.

(Standardbred Canada)

OLG Releases Remaining Gaming RFPQS

On Thursday, December 12, the Ontario Lottery and Gaming Corporation launched the remaining Requests for Pre-Qualification (RFPQs) for gaming.

The contents of the OLG’s release appear below


OLG RELEASES REMAINING GAMING RFPQS


December 12, 2013

TORONTO – The Ontario Lottery and Gaming Corporation (OLG) continues its modernization of the province’s lottery and gaming industry with the launch of the remaining Requests for Pre-Qualification (RFPQs) for gaming. OLG is also issuing a Request for Information (RFI) for a potential privately-funded, multi-purpose entertainment centre in Niagara Falls.

Gaming RFPQs

The RFPQs include up to 10 Gaming Zones grouped into three Gaming Bundles:

    • GTA Gaming Bundle– Gaming Zones C2 (OLG Slots at Woodbine Racetrack); C3 (OLG Slots at Ajax Downs); and potentially C8 (Great Blue Heron Casino);

 

    • Central Gaming Bundle – Gaming Zones C5 (OLG Slots at Georgian Downs); C6 (Casino Rama); and C7 (proposed new gaming site in Collingwood or Wasaga Beach); and

 

  • West GTA Gaming Bundle – Gaming Zones C4 (OLG Slots at Mohawk Racetrack); SW1 (OLG Slots at Grand River Raceway); SW2 (OLG Casino Brantford); and SW9 (OLG Slots at Flamboro Downs).

 

“These Gaming Bundles represent unique opportunities for service providers to leverage the success of our existing gaming sites, with their established customer bases and experienced employees,” said Rod Phillips, President and CEO, OLG. “This will also be an opportunity for a service provider to develop a new facility in Collingwood or Wasaga Beach.”

The RFPQ process enables OLG to create a list of qualified service providers who are then eligible to receive the Request for Proposal (RFP) documents for specific Gaming Bundles. OLG has been releasing RFPQs for the modernization of gaming in stages. The release of these RFPQs follows the RFPQs for Gaming Bundles in Southwestern Ontario, Ottawa Area, Ontario East and Ontario North.

OLG has done its due diligence in reviewing the responses to gaming RFPQs that have closed and is currently considering service providers who will be eligible to receive the RFP documents. OLG will begin the RFP process for gaming in the coming months by releasing RFP documents to selected service providers.

As part of the RFP process, pre-qualified service providers will, in some cases, be able to propose the construction of a new gaming site anywhere within an OLG-defined geographic Gaming Zone, where there is municipal support.

“It is important to understand the complexity of the decision making about moving a site—or building a new one. Not only does there need to be demonstrated customer interest and a compelling business case that results in increased revenue for the Government of Ontario, there also needs to be a willing municipal host,” said Phillips. “And where there is a slots at racetrack facility, a proposal has to make sense for the horse racing industry. Any new site or relocation of an existing site is subject to final approval from the Ontario government.”

As part of modernization, OLG is continuing to work with the Ontario government and the horse racing sector to integrate horse racing into the provincial gaming strategy. This work includes the development of competitive, customer-appealing products to help grow a sustainable horseracing industry in Ontario for the long-term. OLG is also providing its expertise in marketing and Responsible Gambling.

“Ensuring a vibrant horse racing industry is a critical consideration as OLG modernizes gaming,” said Phillips. “This change is a positive move for Ontario’s horse racing industry because, for the first time, all of the stakeholders are fully engaged in the effort to integrate horse racing into a provincial gaming strategy.”

Modernization will enable OLG to provide additional revenues to the Province to help fund the operation of hospitals and other provincial priorities. At the same time, it could help create jobs in the industry across Ontario and trigger private sector investment.

While the new gaming model includes securing qualified service providers for the day-to-day operation of gaming, OLG will continue to conduct and manage lottery and gaming in Ontario.

OLG will continue to work within the Province’s overall problem gambling strategy to contribute to the prevention and mitigation of problem gambling through its Responsible Gambling program, which is recognized internationally by the World Lottery Association’s certification program. OLG will also require service providers to follow the Responsible Gambling Standards that OLG has developed.

Interested service providers are required to submit proposals for an entire Gaming Bundle as set out in the RFPQ, not for individual Gaming Zones or gaming sites contained within the bundle. This means that service providers are being asked to demonstrate their ability to operate all facilities in a Gaming Bundle.

Service providers interested in the GTA, West GTA and Central Gaming Bundles must respond to the RFPQs by March 13, 2014.

 

OLG is also launching a RFI to help gauge interest in the marketplace for developing and financing a potential Niagara entertainment centre. It is anticipated that the potential multi-purpose entertainment centre would be similar to, or larger in size and scale, than facilities at Caesars Windsor and Casino Rama.

Parties interested in the potential Niagara entertainment centre must respond to the RFI by March 3, 2014.

The RFI, as well as each of the RFPQs released today, will be available on MERXTM (www.merx.com/olg). MERXTM charges a small fee to download this material.

The following are also available in the media section at OLG.ca:

    • OLG Backgrounder that provides more details regarding the GTA Gaming Bundle

 

    • OLG Backgrounder that provides more details regarding the RFPQs and OLG’s procurement process

 

    • OLG Maps of Gaming Bundles

 

    • Summaries of the RFPQ for each Gaming Bundle announced today

 

  • OLG Backgrounder that provides more details on a potential Niagara entertainment centre

(Standardbred Canada)

Ministry of Agriculture and Food: Letter from Minister Wynne

Posted by Updates

Sept. 10, 2013

Dear John, Elmer & John:

Thank you for briefing me on the feedback you have received from horse racing and wagering stakeholders on your Draft Plan “Toward a Sustainable Future” released in June 2013. In anticipation of your pending Final Report, I want to ask you to please provide me with a comprehensive Five Year Plan, to be effective April 1, 2014 to March 31, 2019. 

Specifically, the Five Year Plan is to incorporate the principles you have previously laid out. I would ask that you present your most comprehensive advice regarding the distribution of the proposed minimum of 800 race days for each of the three breeds by category of racing (i.e. premier, signature, grassroots), including identifying at which tracks these races should be run, their recommended competitive purse levels, and the stable support required for the breeding sector to maximize the economic benefit to Ontario.

I also ask that you recommend a revised governance structure to accomplish the Five Year Plan, including the role of the Ontario Racing Commission and industry associations.

Finally, I require that you establish the specific amount of recommended government investment required during the Five Year Plan to achieve a vibrant, sustainable horse racing industry that is accountable, transparent, customer-focused and of net benefit to the taxpayers of Ontario. This amount should include any necessary re-profiling of the existing Pari-Mutuel Tax Reduction revenues flowing to the racing industry.

I want to reiterate that I require specific recommendations on how to best achieve the integration of gaming and horse racing in Ontario.

I appreciate your collective efforts in the preparation of your reports to date, and your commitment to helping the industry move forward to a sustainable future. We are now in the home stretch. I look forward to seeing you at the finish line.

 Sincerely,

Kathleen Wynne
Minister of Agriculture and Food

Vaughan Chamber To Host Roundtable On Proposed Casino

Go to vaughanchamber.ca for more information.

ByAdam Martin-Robbins

You won’t know for a while yet which company, if any, hopes to build a casino in Vaughan. In the meantime, those who are interested in bringing such a facility to the city and those opposed are working hard to make their case about the potential benefits and costs of such a facility.  

The Vaughan Chamber of Commerce is hosting a roundtable — Wednesday, Sept. 25 — with Mayor Maurizio Bevilacqua, who voted in favour of the city becoming a willing host for a casino, and Rod Phillips, president and CEO of Ontario Lottery and Gaming Corp. (OLG) serving as guest speakers.  

The event, dubbed Building Tomorrow Together, is billed as an information session. It takes place at Bellagio Boutique Event Venue, 8540 Jane St., starting at 7:30 a.m.

Mr. Bevilacqua insists the aim is to discuss all sides of the issue, not solely to trumpet the benefits of bringing a casino to Vaughan.  

“In my case, I understand both sides of the issue,” he said. “I understand how people can be excited by the economic opportunities and I can also understand how people can be disenchanted by some of the social issues that may be associated with a gaming complex.

“That is the spectrum of opinion that exists on this issue. But what people appreciate is a municipal government that engages and, in a very transparent way, promotes an open debate about the issue.”

The members of No Casino Vaughan, on the other hand, are hoping to convince a couple of councillors who voted in favour of hosting a casino  in May, to change their minds.

Mario Racco, co-chairperson of the opposition group, has asked to be granted two hours at a committee of the whole meeting in October to present two studies, along with some other data showing the negative impacts casinos have on communities.

“We want to have the same opportunity to present our case (as the casino proponents and OLG had),” he said.

His group continues to circulate a petition with the aim of amassing thousands of signatures, which it intends to file with the city and at Queen’s Park.

OLG, meanwhile, is getting ready for the launch later this fall of the next phase in a complex and multi-year procurement process, according to Tony Bitonti, a spokesperson for the crown corporation.

That phase, known as the request for pre-qualifications, will determine the company, or companies, that will be invited to bid on operating gambling facilities in the 14 gaming zones across central Ontario — including Vaughan — and parts of southwestern Ontario.

That phase is already under way for 15 other zones across parts of southwestern, eastern and northern Ontario.

During this stage, interested companies submit their qualifications — such as experience in operating gaming facilities, experience in site development as well as financial information — to OLG, Mr. Bitonti said.

Companies that successfully pass through the pre-qualification stage will be invited to participate in the next phase, known as the request for proposal. The companies chosen to run Ontario’s casinos and other gaming facilities will come from this group.

(Vaughan Citizen)

OLG’s Phillips Responds To OHRIA’s Concerns

Ontario Lottery & Gaming Corp. President & CEO Rod Phillips responded to the concerns raised by the Ontario Horse Racing Industry Association recently with a letter dated Monday, June 3rd.

Phillips’ letter appears below:


Re: OHRIA Sounds Alarm Over RFPQ, Sole Bundle Operators

OLG will be working closely with the Horse Racing Industry Transition Panel to integrate horse racing into Ontario’s gaming strategy so I’m glad there is attention being paid to the issue. I’m writing to clarify a few issues that have been raised recently.

OLG’s modernization of gaming is an opportunity to bring private sector expertise into our business. OLG’s procurement process was designed very carefully to ensure that it is fair and competitive.

In fact, OLG’s procurement process presents an opportunity for racetracks. Racetrack owners/operators may compete in this public procurement on the same basis as other vendors. Another option is for owners/operators to join with a larger consortium or group to become a partner in a gaming facility. This would mean generating additional revenue (beyond rent) from a facility on racetrack property.

OLG is grouping some of its gaming zones into gaming bundles. The bundles are designed to make the day-to-day operation of the businesses more efficient for service providers. As we know, customers tend to be drawn from geographic areas–and they often visit a number of facilities in the same region. So bundling will allow easier cross-marketing and cooperation between groups of facilities.

It’s important to note that Gaming Bundles will not mean the merging of current or proposed facilities, or Gaming Zones. There will be just one facility in each Gaming Zone.

As part of modernization, OLG is working with the government to ensure that horse racing is integrated with the provincial gaming strategy to ensure future revenue streams for the industry.

OLG is moving forward with approved government policy to help make Ontario’s lottery and gaming industry a long-term success.

When the modernization of lottery and gaming is complete, additional revenue will be available to help fund provincial priorities such as hospitals and municipal infrastructure. In addition, a modern OLG will help create thousands of jobs and drive more than $3 billion in capital investments across Ontario.

Sincerely,

Rod Phillips
President and CEO

Last-Minute Talks Avert Strike At Woodbine Slots

Last minute talks on Sunday night averted a strike by Woodbine Racetrack’s OLG slots parlour workers.

Details are available in The Toronto Star story here.

Wynne Fires Paul Godfrey, Entire OLG Board Goes Too

Paul Godfrey has been relieved of his duties as Chair of the Ontario Lottery and Gaming Corporation, as of Thursday, May 16th.

The entire OLG Board of Directors subsequently tendered their resignations in sympathy later the same day.

Premier Wynne’s decision can  only be seen as a godsend for Ontario horse racing.  OLG’s avowed ”modernization strategy”  has already ravaged the industry by deliberately leaving racing participants completely out of the mix with the abrupt cancellation of the Slots At Racetracks Program.

Read more details on the OLG shakeup here in The Globe & Mail.

OLG Executive Wages Soar–The Globe & Mail

The Globe & Mail reports that executive salaries at the Ontario Lottery & Gaming Corp. are markedly out of line with compensation at other Crown agencies. OLG executive salaries, it seems,  have increased nearly 50% in the last two years.

OLG also consistently racks up more expenditures to operate its casinos and lotteries than any other province.

Read the full story in the Globe & Mail here.

Ottawa Life: OLG Greed Responsible For Slaughter of Ontario’s Race Horses

“Horses are very expensive to keep. They are part of a business. They must earn money for their owners. So some horses are being put down. Yes, destroyed.”

Ottawa Life columnist Candace Vetter lays the blame for the devastation in Ontario’s standardbred industry squarely at the feet of the OLG.

Those of us with rural roots will find her comments particularly poignant. Read the full story here.