Kathleen Wynne says Ontario must forge ahead with a plan to expand its lottery system and contract out its operation because the province needs the money. The Premier has previously said she dislikes gambling, but now, staring down an $11.9-billion deficit, she contends that personal qualms must be put aside in the pursuit of cash for the treasury.
“What we need to do is make sure that we’re maximizing that revenue stream. We’re doing it in the best way possible and making the industry as modern as possible,” she said Monday. “That has nothing to do with anyone’s moral stance on gaming or their personal perspective.”
The Globe and Mail revealed this week that the government plans to contract out its lottery by the end of the year and has already launched the bidding process. Several companies are said to be interested, including Camelot Group PLC, which is owned by the Ontario Teachers’ Pension Plan.
The Liberals are betting a private company will do a better job of getting more people to buy lottery tickets and boost profits.
Rod Phillips, CEO of the Ont-ario Lottery and Gaming Corp., said the overhaul of the system will replace a costly and aging closed network of “blue box” machines that cost $10,000 each. As it is envisioned, the new system will allow consumers to buy tickets from their smartphones and computers or in the checkout at big-box stores, rather than going to a dedicated kiosk, he said. The existing network of 10,000 stores where tickets are sold, however, will still be maintained, but using less-expensive hardware.
“We want to make tickets available in a safe, secure way where customers want them to be – but they will still be available in convenience stores,” he said.
The Progressive Conservatives want the government to go even further in its privatization efforts. The Tories argue Queen’s Park could turn over its lottery and casino assets to private companies and instead earn revenue by taxing the industry.
“We don’t think it’s the government’s role to decide how many pit bosses there are, how many slot machines there should be,” said MPP Monte McNaughton in an interview. “The role for government is to be the tough regulator.”
The New Democrats, meanwhile, want to keep the province’s past approach to gambling: They oppose contracting out the lottery, fearing that it is the first step toward selling off a valuable asset. The party is also against expanded gambling on ethical grounds.
“It seems to me that the entire transformation or the modernization of the gaming system in Ontario has been set out in order to attract more young people into gambling,” NDP Leader Andrea Horwath told The Globe. “I would rather spend our time trying to find jobs for young people and get them into the work force sooner, than hitch our hopes on getting them to gamble so we can get more revenues into the province.”
Dave Bryans, CEO of the Ontario Convenience Stores Association, said that while some small store operators may see privatization as a threat, most will see it as an opportunity for more business. B.C. has had online lotteries for the past two years but convenience stores haven’t felt much of a pinch – only about 2 per cent of the lottery business in that province shifted to the Internet, Mr. Bryans said.
“Yes, there is going to be challenges and there is going to be nervousness,” he said. “But so far we haven’t seen it as a threat.”
He said the lottery business isn’t growing and younger consumers – the 20- to 35-year-old set – generally don’t play.
Ontario government has failed to update antiquated lottery machines, which could be used for other purposes as well, such as to buy transit tickets, Mr. Bryans said.
Convenience stores are the biggest seller of lottery tickets, making up about $1.7-billion in sales in Ontario, he said.
“It’s our biggest traffic generator. When you get a $50-million pot, people actually run into our store to buy lottery tickets and then buy other incremental items, such as chips, pop and water.”