OLG releases remaining gaming RFPQs

TORONTO, Dec. 12, 2013 /CNW/ - The Ontario Lottery and Gaming Corporation (OLG) continues its modernization of the province's lottery and gaming industry with the launch of the remaining Requests for Pre-Qualification (RFPQs) for gaming. OLG is also issuing a Request for Information (RFI) for a potential privately-funded, multi-purpose entertainment centre in Niagara Falls.

Gaming RFPQs

The RFPQs include up to 10 Gaming Zones grouped into three Gaming Bundles:

  • GTA Gaming Bundle - Gaming Zones C2 (OLG Slots at Woodbine Racetrack); C3 (OLG Slots at Ajax Downs); and potentially C8 (Great Blue Heron Casino);
  • Central Gaming Bundle - Gaming Zones C5 (OLG Slots at Georgian Downs); C6 (Casino Rama); and C7 (proposed new gaming site in Collingwood or Wasaga Beach); and
  • West GTA Gaming Bundle - Gaming Zones C4 (OLG Slots at Mohawk Racetrack); SW1 (OLG Slots at Grand River Raceway); SW2 (OLG Casino Brantford); and SW9 (OLG Slots at Flamboro Downs).

"These Gaming Bundles represent unique opportunities for service providers to leverage the success of our existing gaming sites, with their established customer bases and experienced employees," said Rod Phillips, President and CEO, OLG. "This will also be an opportunity for a service provider to develop a new facility in Collingwood or Wasaga Beach."

The RFPQ process enables OLG to create a list of qualified service providers who are then eligible to receive the Request for Proposal (RFP) documents for specific Gaming Bundles. OLG has been releasing RFPQs for the modernization of gaming in stages. The release of these RFPQs follows the RFPQs for Gaming Bundles in Southwestern Ontario, Ottawa Area, Ontario East and Ontario North.

OLG has done its due diligence in reviewing the responses to gaming RFPQs that have closed and is currently considering service providers who will be eligible to receive the RFP documents. OLG will begin the RFP process for gaming in the coming months by releasing RFP documents to selected service providers.

As part of the RFP process, pre-qualified service providers will, in some cases, be able to propose the construction of a new gaming site anywhere within an OLG-defined geographic Gaming Zone, where there is municipal support.

"It is important to understand the complexity of the decision making about moving a site—or building a new one. Not only does there need to be demonstrated customer interest and a compelling business case that results in increased revenue for the Government of Ontario, there also needs to be a willing municipal host," said Phillips. "And where there is a slots at racetrack facility, a proposal has to make sense for the horse racing industry. Any new site or relocation of an existing site is subject to final approval from the Ontario government."

As part of modernization, OLG is continuing to work with the Ontario government and the horse racing sector to integrate horse racing into the provincial gaming strategy. This work includes the development of competitive, customer-appealing products to help grow a sustainable horseracing industry in Ontario for the long-term. OLG is also providing its expertise in marketing and Responsible Gambling.

"Ensuring a vibrant horse racing industry is a critical consideration as OLG modernizes gaming," said Phillips. "This change is a positive move for Ontario's horse racing industry because, for the first time, all of the stakeholders are fully engaged in the effort to integrate horse racing into a provincial gaming strategy."

Modernization will enable OLG to provide additional revenues to the Province to help fund the operation of hospitals and other provincial priorities. At the same time, it could help create jobs in the industry across Ontario and trigger private sector investment.

While the new gaming model includes securing qualified service providers for the day-to-day operation of gaming, OLG will continue to conduct and manage lottery and gaming in Ontario.

OLG will continue to work within the Province's overall problem gambling strategy to contribute to the prevention and mitigation of problem gambling through its Responsible Gambling program, which is recognized internationally by the World Lottery Association's certification program. OLG will also require service providers to follow the Responsible Gambling Standards that OLG has developed.

Interested service providers are required to submit proposals for an entire Gaming Bundle as set out in the RFPQ, not for individual Gaming Zones or gaming sites contained within the bundle. This means that service providers are being asked to demonstrate their ability to operate all facilities in a Gaming Bundle.

Service providers interested in the GTA, West GTA and Central Gaming Bundles must respond to the RFPQs by March 13, 2014.

Niagara Falls Entertainment Centre RFI

OLG is also launching a RFI to help gauge interest in the marketplace for developing and financing a potential Niagara entertainment centre. It is anticipated that the potential multi-purpose entertainment centre would be similar to, or larger in size and scale, than facilities at Caesars Windsor and Casino Rama.

Parties interested in the potential Niagara entertainment centre must respond to the RFI by March 3, 2014.

The RFI, as well as each of the RFPQs released today, will be available on MERX™ (www.merx.com/olg). MERX™ charges a small fee to download this material.

The following are also available in the media section at www.OLG.ca:

  • OLG Backgrounder that provides more details regarding the GTA Gaming Bundle
  • OLG Backgrounder that provides more details regarding the RFPQs and OLG's procurement process
  • OLG Maps of Gaming Bundles
  • Summaries of the RFPQ for each Gaming Bundle announced today
  • OLG Backgrounder that provides more details on a potential Niagara entertainment centre

OLG is a provincial agency responsible for province-wide lottery games and gaming facilities. Since 1975, OLG has provided nearly $38 billion to the Province and the people of Ontario. OLG's annual payments to the Province have helped support health care; education, research, prevention and treatment of problem gambling; amateur sport through the QUEST FOR GOLD program; and local and provincial charities.

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Backgrounder
Gaming Request for Pre-Qualification

OLG is continuing its procurement process to modernize lottery and gaming in Ontario by issuing the remaining gaming Requests for Pre-Qualification (RFPQs), consisting of 10 Gaming Zones grouped into three Gaming Bundles.

Gaming
Bundle
Gaming
Zone
Current OLG Gaming
Site
Current Host Community
GTA C2 OLG Slots at Woodbine
Racetrack
City of Toronto
C3 OLG Slots at Ajax Downs Town of Ajax
C8 Great Blue Heron Casino
(potentially)
Mississaugas of Scugog Island
First Nation (Baagwating
Community Association)
Central C5 OLG Slots at Georgian
Downs
Town of Innisfil
C6 Casino Rama Chippewas of Rama First Nation
Reserve
C7 No Current Gaming
Facility
No Current Host Municipality
(Town of Collingwood and Town
of Wasaga Beach are willing
hosts)
West GTA C4 OLG Slots at Mohawk
Racetrack
Town of Milton
SW1 OLG Slots at Grand River
Raceway
Township of Centre-Wellington
SW2 OLG Casino Brantford City of Brantford
SW9 OLG Slots at Flamboro
Downs
City of Hamilton

For more details on OLG's procurement process for the modernization of lottery and gaming, including Gaming Zone maps, visit: http://www.olg.ca/about/modernizing_lottery_and_gaming_project_status.jsp

Interested service providers must respond to these RFPQs by March 13, 2014. The RFPQs are available on MERX™ (http://www.merx.com/olg).

OLG's Gaming RFPQ Process

With the launch of the RFPQ process for the GTA, GTA West and Central Gaming Bundles, OLG is now in procurement for up to 25 Gaming Zones.

Following OLG's procurement process, and at such time and on such terms as OLG may determine, following consultation with the Mississaugas of Scugog Island First Nation, the Great Blue Heron Casino in Gaming Zone C8 may become part of the GTA Gaming Bundle. This would represent the 25th zone.

No municipality in the GTA has expressed an interest in hosting a new gaming facility. The service provider for the GTA Gaming Bundle will be responsible for the day-to-day operations of gaming facilities in the bundle for approximately 22 years. If at some point during that time a GTA municipality expresses an interest in becoming a host for a gaming site, the service provider for the GTA bundle would have a right of first opportunity to become the service provider for that new gaming site.

In Gaming Zones SW10, SW11 and SW12, which include Casino Niagara, Fallsview Casino Resort and Caesars Windsor respectively, there are currently long-term contracts in place with service providers.

On November 30, 2012, OLG issued its first three RFPQs for nine gaming sites—one each for the Ottawa Area, Ontario East and Ontario North. Those three RFPQs closed in March 2013. Another RFPQ for the Southwest Gaming Bundle, which includes six sites, was issued on May 29, 2013. That RFPQ closed on August 8, 2013.

OLG has done its due diligence in reviewing the responses to gaming RFPQs that have closed and is currently considering service providers who will be eligible to receive the Request for Proposal (RFP) documents for each of these Gaming Bundles. OLG expects to begin the RFP process in the coming months.

What are the next steps for the GTA, GTA West and Central Gaming Bundles?

Once the RFPQs close, OLG will evaluate the submissions it receives for each.

Interested service providers who are pre-qualified through the RFPQ process will be invited to participate in the RFP stage of the procurement process. The successful service provider(s) will be selected from this group.

What is a Request for Pre-Qualification (RFPQ)?

The RFPQs will help OLG determine the skills and abilities of potential service providers.

Interested service providers are asked to submit information on their financial and technical attributes and capabilities, including proof of successful experience with similar projects. In addition, service providers must also provide information on business and other relationships that they have had with First Nations and First Nations communities.

Interested service providers must also have submitted an application for registration with the Alcohol and Gaming Commission of Ontario (AGCO).

The RFPQ process will result in OLG identifying qualified service providers eligible to receive the RFP documents—the next step in OLG's procurement process.

What are Gaming Zones?

In order to effectively manage the gaming market in Ontario, OLG identified Gaming Zones where existing or new gaming facilities would be permitted, with municipal and other approvals.

Gaming Zones are geographic areas where qualified service providers will be permitted to operate a single gaming facility. The design of these Gaming Zones is intended to manage competition between facilities and ensure a sustainable and efficient gaming market in Ontario.

The boundaries of Gaming Zones across the province were determined by a gravity model—a business tool commonly used for modeling supply and demand within a given geographic area. The model looked at a number of factors to determine where there is maximum customer demand for a gaming facility, including:

  • Proximity of a gaming site to other gaming facilities;
  • Proximity of a gaming site to current and potential customers; and
  • Distance a customer is willing to travel to reach a gaming site.

Within each Gaming Zone, service providers will be permitted to operate and possibly expand the existing facility, establish a new facility if one does not currently exist, or relocate the existing facility within the boundaries of the Gaming Zone, all subject to approvals.

Only one gaming facility will be permitted in each zone.

What are Gaming Bundles?

To enable OLG to more effectively manage the gaming market in Ontario, OLG grouped some Gaming Zones into Gaming Bundles—each representing a separate bidding opportunity.

As a result, for some gaming RFPQs, including the GTA, West GTA and Central Gaming Bundles released today, service providers are being asked to demonstrate their ability to operate multiple facilities in a given region or geographic area of the province.

Gaming Bundles are intended to create opportunities for service providers to be more efficient by operating multiple facilities in a given region. Gaming Bundles will not result in the merging of current or proposed facilities, or of proposed Gaming Zones.

Municipal Choice and OLG's Modernization

Municipal choice is an important element of OLG's modernization. OLG will only locate gaming facilities where there is municipal support to do so. OLG has always been clear that it will respect a municipality's decision regarding hosting an existing casino, a new casino or expanding an existing one.

When it comes to gaming facilities, OLG's approach to potential and current host municipalities across Ontario has been consistent. That approach has three steps:

The first step is for municipalities to pass a resolution confirming their interest in hosting a gaming facility.

The second step is for OLG to choose a service provider through a fair and competitive procurement process.

Where a municipality has included conditions as part of its resolution for gaming in its community, such as restrictions on the movement or expansion of a gaming site, OLG will ensure service providers are aware of such conditions during the RFP phase of the procurement process.

The third step is for OLG to work with the municipality and the selected service provider to determine the location of a new site, if one is proposed.

As has always been the case, expansion of gaming offerings at a current facility, relocation of a current gaming site or planned development of a new gaming site can only occur where there is municipal consent, customer interest and a viable business case put forth by a service provider, which is subsequently approved by OLG.

Any new facility or the proposed relocation of an existing gaming site is subject to final approval from the Ontario government.

Future of OLG Gaming Sites at Racetracks

OLG has signed lease agreements with the site holder for its gaming facilities at Flamboro Downs and Georgian Downs.

OLG has also reached lease agreements in principle with racetrack site holders for its 12 remaining gaming sites. Leases range from three-to-five years in duration. Although these lease agreements have not been finalized, OLG anticipates that it will sign agreements with respect to each of these sites in the near future.

It is important to understand the complexity of decision making about moving a site—or building a new one. Not only does there need to be demonstrated customer interest and a compelling business case that results in increased revenue for the Government of Ontario, there also needs to be a willing municipal host and a proposal that makes sense for the horse racing industry.

Any new site or relocation of an existing site is subject to final approval from the Ontario government.

Integrating Horse Racing into the Provincial Gaming Strategy

On October 11, 2013, the Horse Racing Industry Transition Panel presented its final report to the Ontario government. On the same day, the government unveiled its five-year plan for Ontario's horse racing sector.

Ensuring a vibrant horseracing industry is a critical consideration as OLG modernizes gaming. This change is a positive move for Ontario's horse racing industry because, for the first time, all of the stakeholders are fully engaged in the effort to integrate horse racing into a provincial gaming strategy.

Maintaining successful slot facilities at race tracks is just one component of integration. New games, new pari-mutuel products, new marketing approaches are all part of what OLG and the industry are working on today—all with the objective of encouraging a vibrant and sustainable racing industry in Ontario for the long-term.

OLG will also provide expertise in marketing and Responsible Gambling.

OLG's Modernization

Modernization will enable OLG to provide additional revenues to the Province to help fund the operation of hospitals and other provincial priorities.

To achieve this, OLG is focusing on three priorities:

  • Becoming more customer focused—being where our customers want us to be, offering products and services in their areas or in the ways they want to buy them;
  • Selecting qualified service providers for the specific day-to-day operation of lottery and gaming; and
  • Renewing OLG's role in the conduct and management of lottery and gaming in the province.

OLG will be responsible for market management and providing a gold standard for its Responsible Gambling program for the people of Ontario.

Since its inception, OLG's modernization has continued to evolve. Part of that evolution is the work OLG is doing with the Ontario government and the horse racing industry to integrate horse racing into Ontario's gaming strategy.

OLG's Conduct and Manage Role

OLG will continue its role in the conduct and management of gaming in Ontario.

To fulfill this role, OLG will retain control over lottery and gaming, but will expect the service provider to deliver many of the services related to the day-to-day operation of lottery and gaming.

OLG will continue to work within the Province's overall problem gambling strategy to contribute to the prevention and mitigation of problem gambling through its Responsible Gambling program, which is recognized internationally by the World Lottery Association's certification program. OLG will also require service providers to follow the Responsible Gambling Standards that OLG has developed.

Ensuring a Competitive Procurement Process

OLG is following the Ontario government's procurement guidelines to ensure that the process is fair and competitive.

OLG has engaged an impartial Fairness Monitor and an Independent Fairness Advisor throughout the process to provide oversight on the integrity and fairness of procurement.

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Backgrounder
GTA Gaming Bundle
Requests for Pre-Qualification

OLG has launched the Requests for Pre-Qualification (RFPQ) for the GTA Gaming Bundle—Gaming Zone C2 (OLG Slots at Woodbine Racetrack); Gaming Zone C3 (OLG Slots at Ajax Downs), and potentially Gaming Zone C8 (Great Blue Heron Casino).

OLG's business analysis determined that GTA customers are best served by having a single service provider manage all gaming operations in the GTA. Included in this group are OLG Slots at Woodbine Racetrack and Ajax Downs, and potentially, the Great Blue Heron Casino. A single service provider will help manage the regional market to maximize returns to the Province.

The service provider will be responsible for the day-to-day operations of gaming facilities in the bundle for approximately 22 years. If a GTA municipality expresses an interest in becoming a host for a gaming site over that 22 year period, the service provider for the GTA bundle would have a right of first opportunity to become the service provider for a new gaming site.

Municipal approval is essential for any expansion or new development. Any new facility or relocation of an existing site is subject to final approval from the Ontario government.

Horse Racing Integration

Ensuring a vibrant horse racing industry is a critical consideration as OLG modernizes gaming. This change is a positive move for Ontario's horse racing industry because, for the first time, all of the stakeholders are fully engaged in the effort to integrate horse racing into a provincial gaming strategy.

Maintaining successful slot facilities at racetracks is just one component of integration. New games, new pari-mutuel products, new marketing approaches are all part of what OLG and the industry are working on today—all with the objective of encouraging a vibrant and sustainable racing industry in Ontario for the long-term. OLG will also provide expertise in marketing and Responsible Gambling.

Gaming Zone C2 (OLG Slots at Woodbine Racetrack)

OLG Slots at Woodbine Racetrack currently generates 20 per cent of all slot revenue for Ontario's 24 gaming sites. In fact, it is one of the busiest gaming floors in North America.

Municipal approval is necessary for any expansion. On May 21, 2013, the City of Toronto decided against expansion of gaming at the Woodbine facility. OLG respects Council's decision and all pre-qualified service providers will be made aware of this condition during the Request for Proposal (RFP) process.

Gaming Zone C3 (OLG Slots at Ajax Downs)

OLG Slots at Ajax Downs provides an opportunity for a service provider to leverage the success of an existing site with its established customer base and experienced employees.

The official plan and municipal by-laws for the Town of Ajax, host of OLG Slots at Ajax Downs, currently permit only 800 Electronic Gaming Positions at the gaming site in Gaming Zone C3 and municipal approval for the introduction of Live Table Games is not yet in place.

Expansion of a current facility can only occur where there is municipal consent, customer interest and a viable business case.

Gaming Zone C8 (Great Blue Heron Casino)

OLG conducts and manages the slots operations at the Great Blue Heron Casino, while the Mississaugas of Scugog Island First Nation's charitable organization, the Baagwating Community Association, is licensed by the Alcohol and Gaming Commission of Ontario (AGCO) to conduct and manage the table games at the facility.

A service provider currently manages the day-to-day operations of the slots at the Great Blue Heron Casino on behalf of OLG. The same service provider has a separate agreement to operate table games on behalf of the Baagwating Community Association.

At such time and on such terms as OLG may determine, following consultation with the Mississaugas of Scugog Island First Nation, the Great Blue Heron Casino may become part of the GTA Gaming Bundle. At that time, the service provider for the GTA Gaming Bundle would become the service provider for the Great Blue Heron Casino. Further details will be provided to pre-qualified respondents during the RFP process.

Including the potential opportunity to manage the Great Blue Heron Casino in the GTA Gaming Bundle provides an opportunity for the selected service provider to effectively manage gaming in the GTA market.

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www.OLG.ca

 

Backgrounder
Niagara Entertainment Centre
Request for Information

OLG has issued a Request for Information (RFI) for a potential privately-funded multi-purpose entertainment centre in Niagara Falls.

The RFI will help OLG gauge interest in the marketplace for developing and financing a potential Niagara entertainment centre that is similar to, or larger in size and scale than, facilities at Caesars Windsor and Casino Rama.

Current Entertainment Centre Seat Capacity at Resort Casinos

Resort Casino Entertainment Centre Seat Capacity
Caesars Windsor 5,000
Casino Rama 5,000
Fallsview Casino
Resort/Casino Niagara
1,500

Entertainment has increasingly become a significant factor in driving visitors to casinos, building brand awareness and generating incremental gaming revenue.

Non-gaming amenities such as the potential entertainment venue envisioned for Niagara Falls are becoming core amenities for gaming customers. Large entertainment venues are becoming essential in an increasingly competitive entertainment environment, particularly in the Niagara marketplace.

A privately-funded entertainment venue in Niagara Falls could help:

  • Enhance the customer experience and grow the gaming business for OLG's gaming facilities in Niagara Falls;
  • Create jobs, economic development opportunities and increased tourism in and around Niagara Falls; and
  • Contribute to the value of OLG's Niagara Falls gaming assets and meet OLG's long-term business interest of increasing revenues to the Province in a responsible manner.

As part of the RFI, OLG is asking respondents to identify and/or recommend possible locations, as well as what factors OLG should consider with respect to a location (for example, connected or adjacent to a casino, parking, traffic, etc.). OLG will review responses to the RFI to determine next steps.

Interested parties must respond to the RFI by March 3, 2014. The RFI will be available on MERX™ (www.merx.com/olg). MERX™ charges a small fee to download this material.

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SOURCE: OLG

For further information:

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