The science behind OLG’s gaming zones

As part of its Modernization Plan, OLG identified 29 Gaming Zones where there are existing gaming facilities and where there could be new facilities. These Zones are geographic areas where regulated private-sector providers will be allowed to operate a single gaming facility, subject to approvals. The Gaming Zones will help ensure that 29 gaming facilities are located in areas of the province that will bring gaming entertainment closer to customers, while ensuring the facilities do not compete directly with each other. The Gaming Zones are not simply lines on a map, but are the result of a study to determine the best areas for gaming inOntario. OLG looked at characteristics (age, gender, income, etc.) of its customers and OLG Winners’ Circle data and analyzed this information using a gravity model to determine the Gaming Zones. Originally developed by Dr. David Huff at theUniversityofTexasin the 1970s, the gravity model is a common approach used by retailers throughout the world to determine the optimal placement of stores. The model predicts the probability a customer will visit a particular site given its attractiveness, the travel distance to the site and the distance and attractiveness of competing sites. The final boundaries of the Gaming Zones may change as a result of local needs or information OLG receives during its procurement process. OLG first introduced the concept of Gaming Zones in a June, 7, 2012 news release. Gaming Zone maps can be found here.