The Auditor General of Ontario has found Ontario Lottery and Gaming Corporation (OLG) to be making good progress in competing with the province’s array of commercial online casino operators.
As part of Shelley Spence’s first annual report as Auditor General that was published this week, the office followed up on a 2022 review of OLG’s operations, when it made several recommendations to ensure OLG could continue to grow after the province opened its doors to private operators in April 2022.
The new report found that as of Nov. 15, 2024, OLG has fully implemented or begun to implement 70% of the recommendations. Notably, the report stated that OLG has followed through on developing a comprehensive strategy to introduce new iGaming products amid the influx of regulated competitors.
The report noted that in a sample of three months between Feb. 1, 2024 and April 30, 2024, OLG launched 80 new games or about six new games per week, many of which “with new features to drive engagement.” In line with other 2022 recommendations, OLG also formed a new team in June 2023 to assess the potential expansion of live games and, as of June 2024, is considering whether or not to join a national network to offer these games in collaboration with other provinces.
The efforts to improve its online casino offerings appear to be paying dividends as it competes with 51 licensed commercial operators. The lottery’s full-year report, published in mid-October, posted total gross gaming revenue of $630 million, up 12% from $561 million last year even amid the saturation of competition. By combining OLG’s FY reporting with iGaming Ontario (iGO)’s $3 billion in posted GGR for the year, OLG would appear to hold down around a 21% share of Ontario’s regulated market, a figure roughly supported by H2 Gambling Capital data shown to Canadian Gaming Business.
OLG reports to the provincial Ministry of Tourism, Culture and Gaming and pays significantly more of its revenues to the province than commercial operators do, so it’s understandable why the province wants to see it keep pace with private operators.
Casinos push back on some land-based recommendations
However, OLG’s online casino, sports betting and online lottery sales make up just 13.4% of its total revenue. Retail lottery sales and land-based gaming remain by far the crown corp.’s biggest moneymakers.
The Auditor General’s report suggested that some casinos had pushed back against some of its 2022 recommendations. Notably, a call for OLG to publicly announce game payout data casino-by-casino, as well as for OLG’s iGaming site, has not been fulfilled because casinos argued “it would put them at a competitive disadvantage with online gaming and each other.”
A recommendation that OLG should include a requirement to transfer the costs of non-gaming related payments for First Nations gaming partners to casino operators also met with pushback. OLG informed the Auditor General’s office that it attempted to negotiate this for existing contracts to no avail, as casinos “wanted some form of financial value in exchange.” However, the RFP for a new operator for Casino Windsor, currently run under Caesars branding, includes a contractual commitment to share 1.7% of aggregate gross revenues with First Nations. The OLG plans to incorporate that into all new casino operator agreements.
In line with another recommendation, the report added that OLG has committed to evaluating whether operator partners should be used in the future if they fail to meet revenue and capital investment commitments outlined in their existing contracts.
Other recommendations completed or in progress cover topics such as responsible gambling, anti money laundering and reporting. OLG is waiting for iGO to launch its in-the-works centralized self-exclusion platform, which will also encompass OLG’s online gaming, before moving forward on some related recommendations.