The Ontario government says a planned overhaul of gambling in the province will mean $1.3 billion in new revenue annually.

Ontario Lottery and Gaming Corp. (OLG) plans to expand the sale of lottery tickets, close or relocate gaming facilities that are "underperforming," move gambling online, and build a new casino in the Greater Toronto Area.

Finance Minister Dwight Duncan made the announcement on Monday.

"With its new business strategy, OLG will increase its revenues by more than $1 billion a year," he said. "It will also create more than 2,300 net new jobs in the gaming industry and nearly 4,000 additional jobs in the hospitality and retail sectors by 2017-18."

The agency said the recommendations would bring in an extra $4.6 billion in revenue combined over the first six years, before consistently bringing in the $1.3 billion annually.

Toronto casino key to plan

OLG chairman Paul Godfrey said the question of a casino in the GTA has been raised repeatedly over the years and "it's time to answer that question."

"We are prepared to move forward immediately on discussions with municipal leaders to bring one new world-class gaming entertainment centre to the GTA," he said. "This facility is key to OLG's plans to unlock greater funding for health care and education."

The Toronto casino would account for about 40 per cent of the $1.3 billion.

Godfrey said OLG would not make a move to build a casino in Toronto or anywhere else in Ontario until it knew the stance of the local government.

"We are looking across all Ontario," Godfrey said. "And there'll be gaming zones developments where these kind of facilities will be looked at, but always in consultation with the municipal council. If a municipal council says to us they don't want it, they won't get it."

Casino critic warns of harm

Toronto Coun. Adam Vaughan told CBC's Ontario Today that the province is overlooking the issue of how a casino would affect the livability of adjacent neighbourhoods.

"The impact that urban casinos have on neighbourhoods and communities that surround them are pretty close to devastating," Vaughan said.

Vaughan argued that by focusing only on maximizing revenue streams from a casino, the province is ignoring the effects on local businesses and communities.

He said that what goes into urban casinos often comes out of the local economy.

"Small restaurants and bars and entertainment facilities that are part of our fabric of urban life.… they lose and one big multi-national takes over and takes most of the money out of the province and of the country," he said.

Vaughan also warned of potential social problems that could stem from a city casino.

"Suicide rates around casinos are higher, there is a transformation of the hotel sector to sort of serve folks that only go to casinos and don't experience the rest of the city," he said.

"You also get a significant increase in street crime, prostitution, break and enters, smash and grabs from cars and you get a series of other problems that emanate from it.… I don't think they pay for themselves in an urban setting."

Border casinos struggling

Godfrey said looking at new gambling locations and shutting down others is necessary, partially because border casinos are struggling to attract U.S. crowds.

"The profit from OLG's border facilities has plummeted from $800 million in 2001 to approximately $100 million in 2011," he said.

Godfrey said that out of respect for employees any potential closures would not be discussed on Monday.

The plan will see multiple-lane sales at supermarkets and big box stores instead of selling tickets at just one lottery checkout, and slot machines would expand beyond horse-racing tracks.

OLG also wants to expand private sector involvement by having private operators run all its facilities and help pay for the expansion. In the next 12 to 18 months, they expect all employees at gambling establishments to be private-sector workers.

Duncan also said a "socially responsible and secure internet gaming site" run by OLG will be online by 2013, to help counter money lost to increased competition through offshore gambling sites.

Asked by reporters about the morality of increasing gambling revenues, Duncan and Godfrey noted that Ontario spends $50 million annually on problem gambling. OLG plans to expand its support, including using facial recognition technology on all gambling sites.

With files from The Canadian Press