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For more details on OLG’s procurement process for the modernization of lottery and gaming, including Gaming Zone maps, visit: http://about.olg.ca/modernization-project-status-rfp/
In July 2010, OLG was asked by the Ontario government to complete a comprehensive, strategic review of the lottery distribution network and land-based gaming sites. The review resulted in a report to government called Modernizing Lottery and Gaming in Ontario. In March 2012, OLG announced its modernization plan.
OLG is engaging the private sector to help build a new model for lottery and gaming in Ontario. OLG’s modernization will expand private sector participation in the industry, which will ensure greater efficiencies because:
- Service providers will be able to focus on delivering certain day-to-day operations, while OLG maintains control and accountability
- Most capital costs of expanding, improving and maintaining gaming facilities will be taken on by the private sector, not the government
Through modernization, OLG will:
- Become more customer focused
- Expand the regulated role of the private sector in the day-to-day operations of lottery and gaming
- Renew its role in the conduct and management of lottery and gaming
Under section 207 (1) (a) of the Criminal Code of Canada, only OLG (as an agent of the Province) is permitted to conduct and manage gaming in Ontario. That is why OLG will continue its conduct and manage role and will remain the ‘operating mind’ behind the delivery of gaming and lottery in Ontario.
As service providers take over certain day-to-day operations of lottery and gaming, OLG will continue to:
- Conduct and manage lottery and gaming
- Require compliance with applicable regulations set out by the Alcohol and Gaming Commission of Ontario (AGCO)
- Be the owner of key player information
- Uphold the standards of its Responsible Gambling program through the service provider, including the self-exclusion program
- Distribute Municipality Contribution Agreement payments to host communities
Once modernization is fully implemented, it will provide additional revenue to the Province to support vital services Ontarians rely on, like health care and education. At the same time, Ontario will continue to be a North American leader in responsible gambling, supporting the research, prevention and treatment of problem gambling.
OLG’s Gaming Procurement Process
Modernization is a significant transformation of a government agency. The plan is ambitious and complex, and modernization is continuing.
OLG’s modernization procurement process will lead to long-term contracts with service providers. OLG needs to ensure proper due diligence in order to select service providers from among the best and most qualified proponents.
Since its initial launch, modernization has evolved in response to further consultation with industry experts through the Request for Information (RFI) and Request for Pre-Qualification (RFPQ) processes, collaboration with municipalities across Ontario and public policy adjustments.
OLG has made significant progress by:
- Completing an RFI process for lottery and land-based gaming
- Completing an RFPQ process for lottery and land-based gaming
- Successfully procuring a service provider for iGaming and launching PlayOLG
- Launching the revitalization of charitable gaming
- Launching the Request for Proposals (RFP) process for gaming and for lottery — all while continuing to deliver consistent annual revenue to government and communities
On September 9, 2015, OLG announced it had selected Ontario Gaming East LP as the service provider for the East Gaming Bundle. OLG expects the service provider to take over certain day-to-day operations of OLG Casino Thousand Islands and OLG Slots at Kawartha Downs in early 2016.
What is a Request for Pre-Qualification (RFPQ)?
RFPQs help OLG determine the skills and abilities of potential service providers.
Interested proponents must also be registered with the AGCO or have submitted an application for registration.
The RFPQ process results in OLG identifying qualified proponents eligible to receive the RFP documents—the next step in OLG’s procurement process.
What is a Request for Proposal (RFP)?
In the RFP stage, pre-qualified proponents are invited to bid on a specific product or service through a competitive and transparent procurement process. RFPs are only distributed to the proponents that are pre-qualified during the RFPQ stage.
What are Gaming Zones?
In order to effectively manage the gaming market in Ontario, OLG identified Gaming Zones where existing or new gaming facilities would be permitted, subject to municipal and provincial government approvals.
Gaming Zones are geographic areas where qualified service providers will be permitted to operate a single gaming facility. The location and design of these Gaming Zones is intended to ensure a sustainable and efficient gaming market in Ontario.
The boundaries of Gaming Zones across the province were determined by a gravity model—a business tool commonly used for modeling supply and demand within a given geographic area. The model looked at a number of factors to determine where there is customer demand for a gaming facility, including:
- Proximity of a Gaming Zone relative to other Gaming Zones and gaming facilities
- Proximity of a Gaming Zone to current and potential customers
- Distance a customer is willing to travel to reach a gaming site
Within each Gaming Zone, service providers will be permitted to operate and possibly expand the existing facility, establish a new facility if one does not currently exist, or relocate the existing facility within the boundaries of the Gaming Zone, all subject to approvals.
Only one gaming facility is permitted within each Gaming Zone.
What are Gaming Bundles?
To enable OLG to more effectively manage the gaming market in Ontario, OLG grouped some Gaming Zones into Gaming Bundles—each representing a separate bidding opportunity.
As a result, for some gaming RFPQs, potential proponents have been asked to demonstrate their ability to operate multiple facilities in a given region or geographic area of the province.
Gaming Bundles are intended to create opportunities for service providers to be more efficient by operating multiple facilities in a given region.
There are currently seven Gaming Bundles in Ontario: Ottawa Area, East Gaming Bundle, North Gaming Bundle, Southwest Gaming Bundle, West GTA Gaming Bundle, Central Gaming Bundle, GTA Gaming Bundle.
What are the next steps for the remaining Gaming Bundles?
OLG expects to release RFPs for additional Gaming Bundles in the coming months.
Interested proponents who pre-qualified through the RFPQ process will be invited to participate in the RFP stage of the procurement process. The successful service provider for the applicable Gaming Bundle will be selected from this group.
Communities and OLG’s Modernization
Municipal and community choice is an important element of OLG’s modernization. OLG will only locate gaming facilities where there is support to do so from the municipal council or the council of the band of a First Nation. OLG has always been clear that it will respect the decision of a municipality or council of the band regarding hosting a new gaming site or expanding an existing one.
When it comes to gaming facilities, OLG’s approach to potential and current host municipalities and host reserves across Ontario has been consistent.
The municipal council or council of the band must pass a resolution confirming their interest in hosting a gaming facility.
Where a municipal council or council of the band has included conditions as part of its resolution for gaming in its community, such as restrictions on the movement or expansion of a gaming site, OLG will ensure service providers are aware of such conditions during the RFP phase of the procurement process.
OLG then works with the municipal council or the council of the band and the selected service provider to determine the location of a new gaming site, if one is proposed and permitted.
As has always been the case, adding table games at a gaming site that currently has none, relocating a current gaming site or building a new gaming site can only occur where there is municipal or band council consent and a viable business case put forth by a service provider, which is subsequently approved by OLG.
Any new gaming site, introduction of table games at a gaming site that currently has none, or the proposed relocation of an existing gaming site, is subject to final approval from the Ontario government.
Horse Racing Integration
OLG is working with the horse racing industry and the Ontario government to build the foundation for a sustainable horse racing industry in Ontario.
Horse racing integration is part of modernization and is included in OLG’s mandate from the Ontario government.
OLG is working with the horse racing industry to:
- Create a business model for integration that is focused on stability
- Provide advice to the government and support legislative changes
- Partner with the industry to optimize branding and build public awareness about horse racing
- Develop, review and assess new horse-themed lottery and gaming products
OLG is also providing provincial support by sharing its expertise and helping to direct the industry to adopt a Responsible Gambling program and has hired a senior vice president to lead horse racing integration.
Ensuring a strong future for horse racing is a priority for OLG and a key part of modernization. Representatives from the horse racing industry, the Government of Ontario and Crown agencies are working together in support of a sustainable industry.
OLG has also included horse racing criteria into the RFPs for the North and Southwest Gaming Bundles.
Future of OLG Gaming Sites at Racetracks
OLG continues to work closely with racetracks to finalize lease agreements.
OLG has recently finalized two long-term leases with Woodbine Entertainment Group for Woodbine Racetrack. Woodbine is the largest racetrack in Ontario with the busiest gaming floor in the province.
OLG’s Conduct and Manage Role
OLG will continue its role in the conduct and management of gaming in Ontario.
To fulfill this role, OLG will retain control over lottery and gaming, but will expect service providers to deliver many of the services related to the day-to-day operation of lottery and gaming.
World’s Best Responsible Gambling Program
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 was ranked number one in the world by the World Lottery Association in 2014.
OLG will also require service providers to follow the Responsible Gambling Standards that OLG has developed.
Ensuring a Competitive Procurement Process
OLG is following the Ontario government’s procurement guidelines to ensure that its procurement process is fair and competitive.
OLG has engaged an impartial Fairness Monitor throughout the process to provide oversight on the integrity and fairness of its procurement process.
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For more information contact:
OLG Media Line