Ontario will join British Columbia and other jurisdictions by cashing in on Internet gambling.
Finance Minister Dwight Duncan announced Tuesday that Ontario will spent the next 18 months looking at how to implement the program, which will launch in 2012.
Within five years, the cash-strapped government could rake in about $100-million annually from online gambling, government officials said.
Canadians spend nearly $1-billion a year at unregulated gambling sites, and Ontario's troubled lottery and gaming corporation wants a piece of the pie.
"Across Canada and around the world, online commerce is part of our everyday lives and OLG is excited to start the consultation process for online gambling and growing its marketplace in the future," OLG chairman Paul Godfrey said.
Facing years of red ink, the governing Liberals are eager to find new revenue streams to eliminate Ontario's massive deficit and fund expensive promises ahead of the 2011 election, such as full-day kindergarten for four- and five-year-olds.
Mr. Duncan recently scrapped potentially lucrative plans to merge four of Ontario's biggest Crown corporations into a so-called SuperCorp and sell off a stake to private investors, and is now headed for a showdown with public-sector unions over planned wage freezes.
Experts say online gambling costs little to set up, but the social costs — particularly among Internet-savvy youth — can be devastating.
British Columbia became the first jurisdiction in North America to offer legal, casino-style gaming online when it launched the revamped PlayNow.com site last month. Quebec is expected to follow suit.
The Atlantic Lottery Corp.'s website, in operation for six years, has five interactive games including Hold'em Poker.
The United States is expected to end its four-year ban on Internet gambling this fall, and many European countries also offer online gambling.
But the launch of B.C.'s online casino was marred by a glitch that forced the province's lottery corporation to shut it down almost as soon as it was running.
Dozens of gamblers were able to place bets with other users' money and, in some cases, were able to see the other person's account balance and personal information.
The embattled B.C. Lottery Corp. didn't reveal the privacy breach until five days later. The province's privacy watchdog is now investigating.
OLG is promising secure transactions and data privacy when its online gambling program is launched.