Ontario Looks to Privatize Lottery

Government seeks company to expand sales beyond c-stores and to younger customers.

September 10, 2014

TORONTO, Canada – Ontario’s government wants to sell lottery tickets at more stores and even via mobile phones, and will soon pick a private company that will help it do that.

According to an article in the Ottawa Citizen, the lottery is the heart of the Ontario Lottery and Gaming Corp.’s business, making about $850 million of the roughly $2 billion a year the OLG delivers to the provincial government. But it’s run using an outmoded network of 10,000 terminals, mainly in convenience stores, to an increasingly older customer base.

The government wants more people to play the lottery. Enticing younger people means convincing more and larger retailers that it’s worth selling tickets, plus making tickets available online. And that means replacing the whole sales system.

“OLG’s overall objective is to grow the total business by continuing to innovate and focus on traditional lottery retailers, as well as expanding new lottery sales options,” an OLG representative told the Ottawa Citizen. “Expansion will include multi-lane solutions for supermarket, drug stores and big box retailers, and will continue to build on the strengths of the convenience store channel.”

Upgrading Ontario’s sales system will be very expensive, so the OLG is seeking bids to take over day-to-day operations of the entire Ontario lottery system. The winner will have to invest in replacing the sales system, presumably for a long-term share of the proceeds. There’s a shortlist of pre-qualified bidders the government is keeping secret, but it’s high-end work requiring secure telecommunications expertise.

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