BACKGROUNDER – GAMING REQUEST FOR PRE-QUALIFICATION

OLG is continuing its procurement process to modernize lottery and gaming in Ontario by issuing its fourth Request for Pre-Qualification (RFPQ) for Gaming Zones, grouped into a Gaming Bundle, in Southwestern Ontario. The Southwest Gaming Bundle includes the following:

Gaming Zone Current OLG Gaming Site Municipalities Included:
Zone SW3 OLG Slots at Woodstock Racetrack City of Woodstock, Oxford County (townships of East Zorra- Tavistock, South-West Oxford, Norwich)
Zone SW4 OLG Slots at Western Fair District City of London, Middlesex County (Townships of Middlesex Centre, Thames Centre, Strathroy-Cardoc), City of St. Thomas, Elgin County (Municipality of Central Elgin, Township of Southwold)
Zone SW5 OLG Slots at Clinton Raceway Township of Goderich, Township of Ashfield-Colborne-Wawanosh, Municipality of Central Huron, Municipality of Bluewater, Municipality of Huron East
Zone SW6 OLG Slots at Dresden Raceway Parts or all of the Municipality of Chatham-Kent
Zone SW7 OLG Slots at Hanover Raceway Bruce County (Brockton, South Bruce), Grey County (Hanover, West Grey)
Zone SW8 OLG Casino Point Edward Parts or all of Point Edward and Sarnia
For more details on OLG’s procurement process for the modernization of lottery and gaming, including Gaming Zone maps, visit:http://corporate.olg.ca/modernizing-lottery-and-gaming-in-ontario-project-status/ Interested service providers are required to submit proposals for the entire Southwest Gaming Bundle, not for individual Gaming Zones or gaming sites contained within the bundle. Interested service providers must respond to this RFPQ by August 8, 2013. The RFPQ is available on MERX.TM (http://www.merx.com/olg). What is a Request for Pre-Qualification (RFPQ)? A Request for Pre-Qualification (RFPQ) will help OLG determine the skills and abilities of potential service providers. Interested service providers are asked to submit information on their financial and technical attributes and capabilities, including proof of successful experience with similar projects. In addition, service providers must also provide information on business and other relationships that they have had with First Nations and First Nations communities. Interested service providers must also have submitted an application for registration with the Alcohol and Gaming Commission of Ontario (AGCO). The RFPQ process will result in OLG’s procurement department having the ability to identify qualified service providers eligible to receive the Request for Proposal (RFP) documents—the next step in OLG’s procurement process. What are Gaming Zones? In order to effectively manage the gaming market in Ontario, OLG identified 29 Gaming Zones where existing or new gaming facilities would be permitted, with municipal and other approvals. Gaming Zones are geographic areas where qualified service providers will be permitted to operate a single gaming facility. The design of these Gaming Zones is intended to manage competition between facilities and ensure a sustainable and efficient gaming market in Ontario. The boundaries of OLG’s 29 zones 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 maximum customer demand for a gaming facility, including:
  • Proximity of a gaming site to other gaming facilities;
  • Proximity of a gaming site to current and potential customers; and
  • Distance a customer is willing to travel to reach a gaming site.
Within each Gaming Zone, service providers will be permitted to operate 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 will be permitted in each zone. What are Gaming Bundles? To enable OLG to more effectively manage the gaming market in Ontario, OLG is grouping some of the 29 Gaming Zones into Gaming Bundles—each representing a separate bidding opportunity. As a result, for some gaming RFPQs, including the Southwest Gaming Bundle released today, service providers are being 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 qualified service providers to be more efficient by operating multiple facilities in a given region. Gaming Bundles will not result in the merging of current or proposed facilities, or of proposed Gaming Zones. The composition of gaming zones and bundles are subject to change up to the date of RFPQ release. Gaming Bundles—Impact on Municipalities Nothing has changed for municipalities included in the Southwest Gaming Bundle. The rules around existing and new sites, as well as the potential for service providers to move existing sites have not changed. Relocating or establishing a new gaming site is a three-step process that involves the participation of the host municipality, the service provider, OLG and the Ontario government:
  • Step 1 is initial approval from a municipality to consider becoming a gaming site host;
  • Step 2 is for OLG to select a service provider through a fair and competitive procurement process; and
  • Step 3 is for the host municipality to work with the service provider and OLG to agree on a plan for a commercially viable facility that is located at a site acceptable to the municipality. In the end, final approval must come from the Ontario government.
Host municipalities have control over zoning matters and can indicate conditions of their approval, such as where a gaming site may or may not be located. Gaming Bundles will not affect the Municipality Contribution Agreement or hosting fee agreements OLG has negotiated with host municipalities. OLG’s Conduct and Manage Role OLG will continue its role in the conduct, management and oversight, and remain the “operating mind” behind the delivery of gaming in Ontario. To fulfill this role, OLG will retain control over lottery and gaming, but will expect the service provider to deliver many of the services related to the operation of lottery and gaming. 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 the service provider to follow the Responsible Gambling Standards that OLG has developed. Background In March 2012, OLG delivered a report to the Minister of Finance, outlining a proposal to modernize lottery and gaming in Ontario. The report contained three key recommendations:
  • Become more customer-focused;
  • Select qualified service providers for specific day-to-day operations of Lottery and Gaming; and
  • Renew OLG’s role in the conduct, management and oversight of Lottery and Gaming.
In May 2012, OLG initiated a fair and competitive procurement process by releasing two Requests for Information (RFIs)—one for gaming and one for lottery—to solicit feedback from potential service providers. On November 30, 2012, OLG issued its first three RFPQs for nine gaming sites—one each for the Ottawa Area, Ontario East and Ontario North. Those three RFPQs closed in March 2013, and OLG is now undertaking its due diligence in evaluating the submissions to select service providers who will be eligible to receive the Request for Proposal (RFP) documents for each Gaming Bundle. On May 13, the Ontario Government announced that it has asked the Horse Racing Transition Panel to bring forward a long-term plan to implement recommendations from its final report. As part of modernization, OLG will work with the government to ensure that horse racing will be integrated with the provincial gaming strategy to ensure future revenue streams for the industry. On May 17, 2013, the government announced a a new and equitable formula to determine the fee municipalities receive for hosting an OLG gaming facility. The new formula will provide more money for host municipalities and will be fair and consistent for all municipalities across the province. What are the next steps? Once the RFPQ for the Southwest Gaming Bundle closes, OLG will evaluate the submissions it receives. Interested service providers who are prequalified through the RFPQ process will be invited to participate in the RFP stage of the procurement process. The successful service provider for gaming facilities in the Gaming Zones that make up the Southwest Gaming Bundle will be selected from this group. OLG will issue RFPQs for the remainder of the Gaming Zones, some in Gaming Bundles, in the coming months. Details pertaining to upcoming RFPQs, including the composition and number of additional Gaming Bundles are still being finalized. Ensuring a Competitive Procurement Process OLG is following the Ontario government’s procurement guidelines to ensure that the process is fair and competitive. OLG has engaged an impartial Fairness Monitor and an Independent Fairness Advisor throughout the process to provide oversight on the integrity and fairness of procurement.

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OLG GAMING ZONES MAP