New hosting fee formula to benefit all OLG host municipalities

TORONTO, May 17, 2013 /CNW/ - OLG will use a new and equitable formula to determine the fee municipalities receive for hosting an OLG gaming facility. The new formula, which will be part of the Municipality Contribution Agreement (MCA), will provide more money for host municipalities and be the same across the province.

"OLG supports the local economies of our host communities across Ontario," said Rod Phillips, President and CEO. "In addition to hosting fees, OLG's current and future host communities benefit from local job creation, economic development, capital investments and property tax revenue."

Under the new MCA formula, host municipalities will receive:

  • 5.25% on the first $65 million of slot revenue;
  • 3.0% on the next $135 million of slot revenue;
  • 2.5% on the next $300 million of slot revenue;
  • 0.5% on slot revenue above $500 million; and
  • the new element, 4.0% on table game revenue.

The new formula will be applied to hosting fees retroactive to April 1, 2013.

In March 2013, at the request of the Premier of Ontario, OLG took a fresh look at its funding formula for host municipalities. OLG then presented the government with results of its review. The principles of fairness and equal treatment guided OLG's review of the formula and the determination of the new formula.

Based on the new formula and implementing OLG's modernization plan, OLG would expect to provide over $50 Million more annually to host municipalities by 2017-18.

OLG currently provides nearly $2 billion annually to the Ontario government to help fund provincial priorities. Modernization will enable OLG to increase that contribution to more than $3 billion.

More details on the new MCA and hosting fee formula, and how it could benefit host communities can be found in an OLG backgrounder available in the media section at www.OLG.ca.

OLG is a provincial agency responsible for province-wide lottery games and gaming facilities. Since 1975, OLG lotteries, Casinos, Slots, and Resort Casinos have generated more than $36 billion for the benefit of the Province of Ontario. Proceeds from OLG's operations help support Ontario's hospitals, amateur sport through the QUEST FOR GOLD program, recreational and cultural activities, communities, provincial priority programs such as health care and education, and local and provincial charities.

Backgrounder

New Municipality Contribution Agreement Hosting Fee Formula

In March 2013, at the request of the Premier of Ontario, OLG took a fresh look at its funding formula for host municipalities.

OLG will now use a new formula under the Municipality Contribution Agreement (MCA) to determine the fee municipalities receive for hosting an OLG gaming facility.

The formula is the same, but with the addition of 4% on table game revenue.

Under the existing MCA formula, host municipalities receive:

  • 5.25% on the first $65 million of slot revenue;
  • 3.0% on the next $135 million of slot revenue;
  • 2.5% on the next $300 million of slot revenue; and
  • 0.5% on slot revenue above $500 million.

Under the new MCA formula:

  • 5.25% on the first $65 million of slot revenue;
  • 3.0% on the next $135 million of slot revenue;
  • 2.5% on the next $300 million of slot revenue;
  • 0.5% on slot revenue above $500 million; and
  • 4.0% on table game revenue.

The new formula will be applied to hosting fees retroactive to April 1, 2013.

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