From Loto-Quebec:

The Government of Québec has authorized Loto-Québec’s Société des loteries vidéo du Québec (SLVQ) subsidiary to acquire video lottery (VLT) terminals and a centralized operation system in order to replace current equipment. The cost of replacing the 12,000 units and operating system is in the order of $265 million. A call for tenders will be launched before the end of the current fiscal year, with the first VLTs to be delivered in 2012 at the earliest.

The ageing of current equipment necessitated this decision. The useful life span of VLTs is approximately eight years. The VLTs now in use have exceeded this limit, which has led to a drop in technical efficiency throughout the network and increased need for maintenance and repairs.

The SLVQ states that the average time between breakdowns went from 615 days in 1996 to 243 days in 2009 and is forecast to suffer a further drop to 128 days in 2012. Moreover, the manufacturers no longer produce the models currently used in its network, and so spare parts needed to assure proper functioning are more and more scarce. If nothing is done, the SLVQ indicated that this scarcity would compel it to withdraw VLTs from the network by 2013 in order to repair defective units.

The SLVQ anticipates that such circumstances would lead to a loss of revenue as well as making the network more vulnerable to operational problems. In addition, withdrawing VLTs would encourage the reappearance of illegal machines. In order to safeguard the integrity of the video lottery network and the benefits that accrue to the government, the SLVQ must take steps now to replace its VLT inventory and central operating system.

Historical context
The video lottery network has considerably evolved since the beginning of the 1990s. At that time, before the government requested Loto-Québec to implement an integrated VLT network, there were more than 35,000 video poker machines in use throughout Québec, mostly managed by the underworld. Since the SLVQ was created in 1993, the gaming offering has been channelled and controlled and is restricted to licensed bars and brasserie-style establishments. Moreover, preventive and responsible gaming awareness measures have been implemented over the course of time, while a retailer code of responsible marketing has been drawn up.

In 2005, Loto-Québec began a major reconfiguration of the network, so that by March 2009, the number of sites offering VLTs had diminished by 36%¹. Today, the objectives of the SVLQ reconfiguration plan in the bar/brasserie/tavern network having been achieved, around 11,500 VLT units are operated in some 2,380 sites, which constitutes an offering that Loto-Québec considers optimal, i.e. one that does not encourage compulsive gambling and is sufficient to discourage clandestine network operators from re-appearing.

It is worth recalling that in 2008 2009, overall earnings generated by the VLT network were $670 M. This dividend, paid to the government, made possible the realization of significant state missions while delivering a broad range of public services.

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A subsidiary of Loto-Québec created in 1993, the Société des loteries vidéo du Québec received a mandate to commercialize and responsibly manage a network of around 11,500 VLTs in some 2,380 sites within establishments holding bar, brasserie or tavern operating permits and licensed by the Régie des alcools, des courses et des jeux. The SLVQ is also responsible for managing the Trois-Rivières and Québec City gaming halls.

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Tags: loto-quebec, video lottery, vlt