Members of the New Democratic Party (NDP) expressed concerns about a possible financial meltdown ensued from Ontario Lottery and Gaming Corporation privatization by the foreign Great Canadian Gaming Corporation and Brookfield Business Partners.
Earlier this month Ontario Lottery and Gaming Corporation (OLG) already announced the names of the companies, which are among the winners in the privatization bidding, including Great Canadian Gaming Corporation (located in British Columbia) and Brookfield Business Partners L.P. (headquartered in Toronto). This rose some concerns regarding the financial efficiency of the deal, as the companies to take over the OLGās Greater Toronto Area casino facilities and slot machines are foreign, leading to a leakage of money from Ontarioās local treasury to foreign banks.
Last week, it emerged on the surface that the finance critic John Vanthof asked the Financial Accountability Office to give an accurate estimation of the possible financial risks caused by the privatization of the gaming sector in the Greater Toronto Area. In a written message to the financial accountability officer Stephen LeClair, Mr. Vanthof expressed his concerns, representing also the viewpoint of the New Democratic Party (NDP) on the matter.
It appears that not only Mr. Vanthof and the members of the NDP are concerned about the financial stability of the province. In an interview with Catherine Fife, a New Democratic member of the Legislative Assembly of Ontario, she explained that OLG is the governmentās main source of non-tax revenues and thus, it plays an important role in the economy, contributing with nearly $2 billion per annum. Prior to the privatization bidding, OLG promised to the winners a financial profit of at least $72-million per year, along with up to 70% of the gambling revenue.
Fife added that the privatization will increase also the unemployment rate, as many people are currently engaged in the gambling sector. This added even more fuel to the fire, pointing out to the Ontarioās residents, who will be the innocent victims of the privatization. It was explained that the revenues, which the province reaped from OLG were used to fund various services in the province, including health care and education.
Following the privatization of OLG, the private foreign companies will pocket a great amount of money from Ontario casino market, which will hurt its own peopleās interest. NDPās members urged locals to oppose the leakage of their money to foreign bank accounts.
The idea of OLGās privatization came in the wake of modernization, as the agency suffered a significant revenue decline and it could not manage to stay on top of the latest trends. The constantly-increasing online gambling in the USA also undermined the OLGās presence on the market, as the cutting-edge American gambling technologies seemed to be more attractive to the players.
Therefore, the company decided to give a chance for the further development of the industry by launching a takeover bidding for the privatization of some of its casino facilities and slot machines. Under the agreement, the companies to take over OLGās gaming properties are obliged to invest in the modernization of the gambling industry in Ontario.
