OLG modernization plan called “overly optimistic”

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(Update)

“Overly ambitious” and “overly optimistic”. Those are the two main criticisms levelled by the Ontario Auditor General in her report out Monday into the OLG’s modernization plan — that saw the cancellation of slot revenue sharing with the horse racing industry. Bonnie Lysyk released the special report after a lengthy investigation into the Ontario Lottery and Gaming Corporation.

The horse racing industry has been waiting for this report since the province suddenly stopped splitting slot machine revenue with race tracks last year. That change was part of a “modernization plan” that promised Ontarians a 4.6 billion dollar jump in gaming revenue and 2,300 net new gaming jobs by 2018.

But based on the Auditor General’s report, both of those figures were drastic overestimations. Her office predicts cancelling slot sharing will actually *cost* Ontario between 1,200 and 3,500 jobs when you factor in losses from the horse racing industry. Savings predictions were also off base. When it ended the “slots at racetracks” program, the OLG estimated 1.3 billion dollars in savings. The Auditor General says with higher than expected settlements and new funding support for racetracks, savings will be one quarter of that — $325 million. The OLG also significantly overestimated its overall profit increase.

Bonnie Lysyk: “Two years into the plan they’ve had to write down that financial projection by 48%. So they were very aggressive. They’re out in terms of the timeline. So they were very aggressive and overly optimistic on the whole plan.”

PC finance critic Vic Fedeli says: “I think the auditor said it best when she said absolutely everything would have to go right.”

The Auditor General says the OLG’s modernization plan took a best case scenario approach, assuming absolutely nothing would be denied or delayed. The Liberals don’t disagree, saying profit predictions were based on the creation of large-scale casinos in major cities.

Charles Sousa: “The host cities, for example Toronto and others that were being considered, that had shown an interest, haven’t come to fruition. So we make our changes to our projections.”

The report also says the OLG failed to consult with stakeholders in the racing community despite research that showed they would be significantly affected by the cuts. Bonnie Lysyk says discussion could have mitigated the harsh blow the industry took when slot revenue disappeared.