Welcome Guest
Log In | Register )
You last visited July 8, 2020, 5:20 pm
All times shown are
Eastern Time (GMT-5:00)

Ontario Lottery may be sold off

Dec 21, 2009, 8:22 am

Share this news story on Facebook
Tweet this news story on Twitter
Ontario Lottery and Gaming CorporationOntario Lottery and Gaming Corporation: Ontario Lottery may be sold off

The Liberal government will sign a $200,000 deal with two investment banks within days to do "preliminary research" on privatizing all or part of the problem-prone Ontario Lottery and Gaming Corporation, the Toronto Star has learned.

While Bay Street has been tantalized by millions in lucrative commissions from the possible sale of the Liquor Control Board of Ontario, Hydro One, and Ontario Power Generation, informed sources say the provincial lottery monopoly is the main public asset in play.

Premier Dalton McGuinty is "displeased" by the performance of the troubled gambling agency, which makes it an easy target for sale to alleviate some of the province's record $24.7 billion deficit.

"Don't underestimate the frustration of the man in the corner office," an insider said Thursday.

"There has been a great deal of talk about privatizing the lottery corporation and certain gaming operations for some time," said a second well-placed source. "There has been support at senior levels for doing so."

The lottery corporation contributes $1.8 billion a year to provincial coffers and has a book value of $3.4 billion — including $2.4 billion in property, facilities and equipment.

Another plugged-in source said last month's appointment of mover-and-shaker Paul Godfrey was a major signal to potential investors that OLG could be sold off.

"He's a dealmaker — he knows his way around deals," said the source, pointing out the corporation's casinos in Niagara Falls, Windsor and Rama, its racetrack slots and its lottery operations could easily be parcelled off with the province retaining its regulatory role.

The Liberals see Godfrey, the Progressive Conservative former chair of the old Metropolitan Toronto level of government and president and CEO of the National Post, as the best pitchman they could find for OLG.

"If all we want is a revenue stream (from gambling proceeds) then why can't we let someone else run it? It's painfully evident that the model created 10 to 15 years ago has had its day," said a Liberal.

A senior government official confirmed that a small contract would soon be signed with CIBC World Markets and Goldman Sachs to research the value of Crown assets.

The official said no formal meetings have yet been held and played down frenzied reports in the financial press as excitement builds on Bay Street over the possibility of cashing in on any sales.

"There's not going to be a fire sale. We're not doing anything in a hurry," the government official said, stressing neither CIBC World Markets nor Goldman Sachs has an inside track on handling the deal if or when Queen's Park sells an asset.

"This has been spun out of control" by Bay Street, added a senior energy industry executive.

OLG is probably the most politically palatable asset the province could liquidate.

Plagued by scandal, such as $198 million in suspicious lotto wins by convenience store owners and other insiders, the agency has been run by provincial bureaucrats since Aug. 31 after McGuinty's government sacked OLG chief executive Kelly McDougald.

McDougald, who was fired in part because of outrage over OLG executives' expense accounts, is seeking $8.85 million in a wrongful dismissal suit.

Unlike the LCBO, the lucrative 610-store liquor monopoly, the gaming corporation does not employ thousands of unionized workers in almost every Ontario community.

Warren Thomas, president of the Ontario Public Service Employees Union (OPSEU), sent McGuinty a signal on Thursday of the potential aggravation that privatizing the booze giant could cause.

"Slaughtering the goose that annually lays golden eggs for the public purse is a half-baked strategy that should be put to rest for good," said Thomas, whose union represents more than 6,000 LCBO employees.

Toronto Star

We'd love to see your comments here!  Register for a FREE membership — it takes just a few moments — and you'll be able to post comments here and on any of our forums. If you're already a member, you can Log In to post a comment.

1 comment. Last comment 11 years ago by rdgrnr.
Page 1 of 1
rdgrnr's avatar - walt
Way back up in them dadgum hills, son!
United States
Member #73902
April 28, 2009
14903 Posts
Posted: December 22, 2009, 12:50 am - IP Logged

I think this is a wise move by Ontario, facing up to the fact that they're incompetent. Shake it up. Get rid of the dead wood. Investigate the "lucky" convenience store people and do something about it. Get that money back, prosecute 'em, throw 'em in jail where they belong. Get confidence back in the system. Make bold moves, find out what the players want for a change.

Now, if only Tennessee would do something like this...







"The only thing necessary for evil to triumph is for good men to do nothing"

                                                                                            --Edmund Burke