Friday, December 18, 2009

Ontario to Privatize Slots?

It is being reported that the Ontario government is shopping around its lottery arm - the "OLGC" - for a potential sale to private investors. The OLGC is a partner at the reacetracks and slots program. They run the slots, the tracks and purses get their cut.

Jeff Gural, among others in racing, have long complained that the slots train might some day come to an end. Usually politics trumps everything, however. For example, there is little chance in privatizing the liquor control board because of unions, and racing and the people it employs (especially in rural ridings) also has political clout. But if the OLGC is privatized one would think that can change.

It will be interesting to see how this plays out. There is a good deal of political capital behind slots at racetracks (Conservative MP's, Woodbine Entertainment to name but two) and one would have to think there will be built in protections for racetracks if this comes about. We'll see.

1 comment:

Cangamble said...

The repercussions here are enormous.
First off, I believe that the track owns the slots facilities and leases it to the OLG the way it stands now.
So if one large company buys the rights to slots operations at the tracks, I guess they would have the same type of deal. But what happens to the recent deal signed by Fort Erie, where they are getting money in lieu of slots from the government?
And what happens down the road if a similar deal is needed.
It seems the track will have more clout when it comes to future slots deals, because they can always threaten to close down and sell the place.
However, it could be very dangerous for tracks having two competitive business going more than today. As we know, if someone loses $100 at the track, that person churned around $500 on average and the track and horsemen wind up with around $45 each from the $100 lost.
That same person who loses $100 on slots, means $1000 was churned on average. The track gets around $10 and the horsemen get around $10.
The way it is now, the OLG doesn't get in the way so much when it comes to trying to entice slot players from becoming horse bettors, but with a profit oriented company coming into the picture, there will be total incentive by them to keep slot players away from betting the ponies.
I think it probably makes sense for the individual tracks to buy the rights to the slots, instead of a large corporation taking over the whole thing.