The inside story of how the OLG lost control of Ontario’s online gambling market
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Ontario is planning to allow private companies to offer online gambling to its residents. The province is following the lead of European countries and U.S. states like New Jersey. Sports media players such as Rogers Communications and Torstar Corp. are also interested in the sector. It is a paradigm shift from criminalizing online betting to decriminalizing it. Yaniv Spielberg, co-founder and chief strategy officer at Bragg Gaming Group, a Toronto-based gaming technology provider, explains.
The Ontario Lottery and Gaming Corp. (OLG) lost control of Ontario's online gambling market. The new division within the Alcohol and Game Commission ofOntario will be in charge. It will also manage the market for betting on single sporting events. The Star spoke to more than a dozen sources close to the gambling sector, the government and the OLG. They say the reasons for the change can be traced back to a privatization plan that didn't go exactly as planned. Some say it could be the beginning of the end for OLg. OLGs was largely cut out of control early in the province’s consultations on igaming, which began in 2019.
The OLG has been around for almost 50 years. It was created in 2012 to generate more revenue from gambling. The modernization didn't go as promised and the centrepiece of privatization took longer than expected. The AGCO introduced a more hands-off approach to regulation. Stephen Rigby, former national security adviser to then-Prime Minister Stephen Harper, was CEO for most of the casino privatization process. He became increasingly focused on compliance and relations with its casino partners grew adversarial. By 2016, the auditor general said the OLg had cut its initial projections of how much more profit modernization would bring into the province in six years by more than 65%.
AGCO took the lead on consultations with the industry and created a new subsidiary to manage the igaming market. The new division was officially established in July and will manage commercial agreements with online gambling operators. It is a small agency with a separate board from the AGCocoa. AGcoA is committed to working with OLG to reduce regulatory burdens in the casino sector. Private casino operators have positive relationships with AGCo.
The Ontario Lottery and Gaming Corp. is a government-owned company. It is not in the news often, but it is making money for the province. The organization is likely to come under renewed scrutiny later this year. Peter Deeb left his post earlier this month for "personal reasons". Peter Rigby was the CEO for five years. He was fired last year after the organization paid executive bonuses during the pandemic. An audit of the OLG's expenses is due in a few weeks. The ministry of finance will be published. In the last full year not affected by COVID-19, the profit margin remained flat at 27%.
