Stephen Rigby, OLG’s President and CEO, released the following statement to correct significant inaccuracies in a recently published opinion piece regarding the financial value of the GTA Bundle transaction:
Today, an opinion piece was published which materially and incorrectly assesses and undervalues the financial value of the GTA Bundle transaction. One of the main reasons for this incorrect financial assessment and valuation is that the opinion characterizes the transaction as a simple one-time asset sale with the asset sale purchase price being the only measure of financial value. This is not the case.
The purchase price paid by the Service Provider (Ontario Gaming GTA LP) to OLG is for the gaming assets used to operate the gaming sites in the bundle, such as, gaming equipment and gaming facility leases. This purchase price is only one minor component of the financial value of the transaction to OLG and the Province. In fact, in addition to receiving the purchase price for the gaming assets, OLG retains all future gaming revenue from the bundle and is no longer responsible for capital and operating costs. Ontario Gaming GTA LP is paid a fee to operate the gaming facilities in the bundle and to invest in its development and growth which will increase revenue to OLG and the Province.
Consequently, as was done in the opinion piece, using only the asset purchase price to calculate the estimated total value of the transaction is incorrect and results in a grossly understated financial value.
In fact, the transaction has been independently evaluated by the Financial Accountability Office of Ontario (FAO). The FAO estimated the total financial benefit to Ontario to be $34. 5 billion over 22 years.
In addition, there will be other economic benefits returned to the Province. The GTA Bundle is expected to create 3000 to 4000 new jobs as well as approximately $2 billion in capital investment in the region.
It is clear the GTA Bundle transaction creates substantial and lasting financial and economic value for OLG and the people of Ontario.
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For more information please call OLG media line at: 1-888-946-6716