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ONTARIO, Canada -- Ontario's government is expected to sign a $200,000 deal with two investment banks to do "preliminary research" on privatizing all or part of the problem-prone Ontario Lottery and Gaming Corp. (OLG), according to several media reports.
Premier Dalton McGuinty is "displeased" by the performance of the troubled gambling agency, making it an easy target to sell to alleviate some of the province's record $24.7 billion deficit, according to Lotterypost.com.
"There has been a great deal of talk about privatizing the lottery corporation and certain gaming operations for some time," said an inside source quoted in the report. "There has been support at senior levels for doing so."
The lottery corporation contributes $1.8 billion a year to provincial coffers and has a book value of $3.4 billion -- including $2.4 billion in property, facilities and equipment.
A senior government official confirmed that a small contract would soon be signed with CIBC World Markets and Goldman Sachs to research the value of Crown assets. The official said no formal meetings have been held and played down frenzied reports in the financial press as excitement builds over the possibility of cashing in on any sales.
"There's not going to be a fire sale. We're not doing anything in a hurry," the government official said, stressing neither CIBC World Markets nor Goldman Sachs has an inside track on handling the deal if, or when, an asset is sold.
The Ontario Lottery has been plagued by scandal, such as the $198 million in suspicious lottery wins by convenience store owners and other insiders, the report stated.