Ontario Lottery and Gaming Granted $500 Million Government Loan
When Ontario Lottery and Gaming (OLG) was in dire straits, aid came from Queen’s Park. Aid was given toward the gambling agency’s functioning during a time of shutdowns and decreased revenue. Gambling venues such as racetracks and slot machine locations were closed to the public and the gaming industry was in desperate need of an influx of cash.
The Ontario Financing Authority said that the loan was given to make sure that OLG was able to meet its obligations as far as its contracts are concerned. The line of credit was given with the condition that it would provide temporary relief and would need to be paid back, once the gambling agency’s head was above water once again.
The Effects of the Closures
The gambling industry in Ontario is an important part of the province’s revenue and also accounts for approximately 17,600 jobs. In order to cut costs, operators in the private sector have taken to laying off thousands of their employees. The private sector’s focus was to make sure that financial losses were kept to a minimum. However, OLG refused to take this approach to safeguard its workforce and continues providing the standard of living they deserve even during trying times.
As part of its contingency for recovery, a line of credit was built into OLG’s plan to maintain its position and to meet its contractual agreements. The closure of its operations reduced its revenue stream by 50%. Financial obligations continued as per usual with casino operators, as well as stakeholders like those in the horse racing industry and Ontario First Nations.
Furthermore, the credit line of up to $500 million would be used to cover shortfalls in revenue and to tide the gambling agency over until casinos can open their doors once again. The use of the funds will be tightly controlled and will need approval from the board of directors. Re-payment terms were set up by the OFA and OLG is determined to pay it back as soon as is possible.
The Function of the Ontario Finacial Authority
In March this year, finance minister Rod Phillips warned that tough times were ahead. Even though the gambling agency generated revenue of $2.3 billion for the province last year, projections showed that the return would be in the region of $809 million for the fiscal year between 2020 and 2021.
The funds generated by OLG and its operations are important to Ontario as it pumps money back into the province. These funds are used to benefit the residents of Ontario and seeing to their priorities such as education, health care and the needs of local schools.
The loan granted by the OFA is in line with its function: to provide relief in times of need, making sure that an important part of the economy is not crippled. The aim is to get OLG’s casino operations up and running as soon as they can. The government has the utmost faith in OLG regarding the repayment of the loan as soon as safety regulations are loosened and, in time, lifted completely. The OFA is also confident that the reopening of gambling locations will be done safely and responsibly.
The Search for a New President at OLG
Shortly before the closure of all casino operations, the acting president and CEO, Stephen Rigby announced he’d be stepping down. Rigby spent five years at the head of the table and it took OLG months to find the new face of the gambling agency. Recruitment started in March and the process was slow, but they kept up the hope of finding a suitable replacement sooner rather than later. On October 22, OLG selected A. Duncan Hannay to be the new president and CEO. He started the new role just four days later. He has his work cut out for him as he’ll immediately have to deal with damage control and figuring out a positive way forward. The spokesperson for OLG had said during that new leadership would need to work with the existing (and outgoing) CEO to ensure that the transition is smooth.
Rigby faced scrutiny as his luxurious office renovations were revealed and triggered outrage from Premier Doug Ford, who said that wasting taxpayers’ money was something that he would not tolerate. The board of directors at OLG defended Rigby, stating that this was never the case.
On the bright side for OLG, the online gambling industry has gotten a huge boost in the past year, so that greatly helped offset the losses they otherwise would have incurred. Plus, it introduced many players to the world of Canadian online casinos for the first time and will for sure have many fans who choose to play in the comfort of their own home rather than having to head to a brick-and-mortar casino. Those who want to make the switch should read our online casino reviews.