OLG seeking bids from private companies to run lottery business

Ontario is one step closer to picking a private company to modernize and run the day-to-day operations of the province's $3.3-billion-a-year lottery business.

Ontario Lottery and Gaming Corp. issued requests for proposals (RFP) Monday to pre-qualified service providers seeking bids on plans to update the technology used to sell lottery tickets and expand sales beyond convenience and grocery stores.

"Are there any other places that we can be, like some big box stores?" wondered OLG spokesman Tony Bitonti.

"We're also looking at multi-lane channels, so instead of waiting for one cashier that has a lottery terminal, why not have it on PIN pads like debit machines?"

The RFP is the second phase in the process after OLG announced in 2012 that it would seek private sector partners to invest in modernizing the lottery agency in exchange for a slice of the profits.

The agency refused Monday to identify any of the pre-qualified bidders.

"I don't even know who's on the shortlist," said Bitonti.

Bell Media did not immediately respond to questions asking if it was among the pre-qualified applicants for the lottery business, while Canada's other telecommunications giant, Rogers, declined comment.

OLG plans to roll out "I-Gaming" this fall, which will include on-line purchases of Lotto 6-49 and Lotto Max tickets, but Bitonti said it would likely be up to the successful bidder for the lottery business to develop a mobile app and pay for other technology upgrades.

"If you have the technology, if you have the wherewithal, come do it for us and we'll take a portion of the revenue and you'll get a cut of it, and we'll be able to give the province more money after all this is said and done," he said.

OLG turns over about $2 billion a year to the provincial government and is its largest single source of non-tax revenue.

Bitonti estimated an investment of $500 million would be needed to upgrade the computer terminals used to sell lottery tickets and update fibre optic cables that link them, an amount that he said would be too much for the government to bear.

"They won't go for that," he said.

OLG's request for proposals asked for companies to run the "specific day-to-day operations of the lottery business in Ontario," but the province would retain ownership.