OLG seeks input on expansion of private-sector gaming

TORONTO, May 17, 2012 /CNW/ - The Ontario Lottery and Gaming Corporation (OLG) is today taking an important step forward in modernizing the province's lottery and gaming industry by issuing a Request for Information (RFI) for the expansion of private-sector gaming.

The OLG is seeking input from potential providers as it expands regulated private-sector gaming in Ontario.

"Issuing the RFI is the next step in modernizing our business," said Rod Phillips, OLG President and CEO. "This is the start of a process to engage private-sector companies which have the expertise of operating world-class gaming facilities."

The process will:

• Help determine the range of options available in the market and assess potential vendor interest, as well as risks.
• Outline 29 potential Gaming Zones where regulated private-sector providers will be allowed to operate a single gaming facility, subject to approvals.
• After the RFI closes, OLG will begin to determine how it will engage regulated private-sector providers.
• Once the requirements are determined, OLG may issue a Request for Pre-Qualifications (RFPQ), which would ask vendors interested in the Request for Proposals (RFP) to submit evidence they are qualified and would be compliant with OLG and Alcohol and Gaming Commission of Ontario requirements.
• Following the RFPQ process, OLG may then begin the RFP process as early as fall 2012.

OLG is engaging an independent fairness monitor to ensure the overall procurement process is carried out fairly and transparently.

"OLG is continuing conversations with municipalities across the province to gauge interest in participating in our modernization initiative and we will focus only on communities which are interested in having a facility," said Mr. Phillips.

OLG has provided $833 million to host municipalities in the last decade.  When the modernization initiative is finished in 2017-18, OLG expects that figure to have increased for each host municipality.

By modernizing lottery and gaming, OLG will in five years contribute an additional $1.3 billion a year to key public priorities and usher in $3 billion in private-sector capital investment in Ontario. In addition to 2,300 net new jobs in the lottery and gaming industry, the initiative would help create an estimated 4,000 jobs in the hospitality, hotel, restaurant, entertainment and retail industries.

While the new lottery and gaming model will include the expansion of regulated private-sector gaming, OLG will retain complete oversight of the sector, including responsible gaming.

OLG expects to issue a second RFI for the expansion of lotteries in the coming weeks.  Both RFIs will be available on MERX (www.merx.com). MERX charges a fee to download this type of material.

OLG Background documents on OLG's Modernization Procurement Process, OLG Gaming Zones , Gaming Zone Maps and a Summary of the Gaming RFI are also posted on 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 $34 billion for the benefit of the Province of Ontario. Gaming proceeds support Ontario's hospitals, amateur sport, recreational and cultural activities, communities, provincial priority programs such as health care and education, and local and provincial charities and non-profit organizations through the Ontario Trillium Foundation.

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Backgrounder

OLG's Procurement Process for Modernization Plan

OLG plans to engage regulated private-sector providers to expand lottery and gaming in Ontario. The process will begin with a multi-stage, competitive and transparent procurement process that includes a Request for Information (RFI) followed by a Request for Pre-Qualification (RFPQ) and a Request for Proposal (RFP).

Request for Information (RFI)

What is an RFI?

• An RFI is used as a first step in planning a complex change to how we purchase goods and services.
• The RFI is a commonly used information-gathering tool. There is no guarantee that any of the information gathered will be included in future planning.

What is the purpose of an RFI?

• The RFI will enable OLG to gather valuable information from potential regulated  providers.
• The RFI will pose a number of questions about elements of our business that will allow operation by regulated private-sector providers.
• The information gathered through the RFI will provide ideas to help inform decisions in the coming months.
• OLG will collect valuable data from potential vendors to help:
• determine the range of options;
• clarify business requirements;
• identify and assess project and procurement risks;
• determine project costs and/or price structures;
• and identify potential vendors.
• The RFI will be posted on the MERX tendering system (www.merx.com), a national electronic tendering website, where any interested vendor may access them for a small fee.

What happens after an RFI?

• When the RFI closes, we will review the information we receive. The information will help determine how to engage regulated private-sector providers.
• The findings will help OLG launch a Request for Pre-Qualification and then a Request for Proposal (RFP). These next two stages are more formal.

Request for Pre-Qualification (RFPQ)

What is an RFPQ?

• OLG will conduct a Request for Pre-Qualification (RFPQ) to determine the abilities of potential respondents.
• Interested vendors will be asked to submit information on their financial and technical capabilities, including proof of experience with similar projects.
• They must also have submitted an application for certification by the Alcohol and Gaming Commission of Ontario (AGCO).
• The RFPQ process will allow OLG to create a list of companies eligible to receive the RFP documents.
• The RFPQ will be posted on the MERX tendering system (www.merx.com), a national electronic tendering website, where any interested vendor may access them for a small fee. 

Request for Proposal (RFP)

What is an RFP?

• The RFP is an opportunity for pre-qualified vendors to bid on a specific product or service through a competitive and transparent procurement process.
• The RFP will only be distributed to pre-qualified vendors.

What is the purpose of an RFP?

• The RFP will identify the services within the new Gaming model and the new Lottery model that we want the private-sector vendors to bid on.
• It will ask potential private-sector providers to make formal bids on an opportunity to operate specific aspects of our business.
• Evaluation will be based on various criteria, not just price.
• The RFP will not be public. It will only be released to pre-qualified vendors.

What happens after the RFP closes?

• When the RFP process is complete, we will then select the vendors to become the regulated private sector providers for gaming and lottery.
• By then, in 2013, OLG will be able to announce its transformed business structure (within the conduct and manage framework) as well as the new regulated private sector providers.

OLG is committed to ensuring that its modernization is the result of a process that is, and is seen to be, fair and transparent to all relevant stakeholders.  Accordingly, OLG intends to structure the modernization process so that it includes various procedural safeguards such as the use of fairness monitors.

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Backgrounder

OLG Gaming Zones

To effectively manage the gaming market in Ontario, OLG identified 29 Gaming Zones where existing or new gaming facilities would be permitted following municipal and other approvals. The Gaming Zones are outlined in OLG's Request for Information (RFI) for Gaming, available on MERX ( www.merx.com )

Gaming Zones

What is a Gaming Zone?

Gaming Zones are geographic areas where regulated private-sector providers will be allowed to operate a single gaming facility, subject to approvals. The zones are defined for building purposes only, and will not affect operators' ability to market their offering — although some restrictions might apply to ensure the sustainability of the market.

How are Gaming zones selected?

Gaming zones are based on a business model that is designed to maximize revenue for the province. Factors such as proximity of a gaming location to other gaming facilities and residential areas were measured to determine the zones.

Why are Gaming Zones important?

The design of these zones is intended to manage competition between facilities and ensure a sustainable and efficient gaming market in Ontario. In each zone, OLG will define:

• Geographic boundaries where the regulated private-sector providers will be allowed to locate the gaming facility, if a new facility is being established, or if a proposal will be made to move an existing facility, subject to OLG, municipal and other approvals.
• Number of gaming positions, payouts, and betting limits.
• Types of games offered (i.e., slots, tables, sports books).
• Responsible gambling policies that will apply to all zones across Ontario.

Inside gaming zones, each operator will be allowed to establish a new facility (for new zones), operate the current facility, or relocate existing facilities within the boundaries of the zone, subject to relevant approvals, including:

• OLG's approval of business case.
• Municipal approval from the host municipality for the establishment and operation of a gaming facility in that municipality.
• Other approvals, such as from ministries and environmental agencies.

Note: The proposed zones for the location of OLG gaming facilities are not final. The geographic boundaries may be adjusted based on ongoing discussions with relevant stakeholders and information received through the Request for Information (RFI) process.

Gaming Zone maps are posted on www.OLG.ca.

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PDF available at: http://stream1.newswire.ca/media/2012/05/17/20120517_C8630_DOC_EN_13877.pdf

For further information:

OLG Media Relations, 1.888.946.6716, www.OLG.ca