Shuffling the Deck: Ontario raises its gambling stakes, Part 1

QMI Agency file photo

QMI Agency file photo

Kelly Pedro, QMI Agency

, Last Updated: 5:05 PM ET

LONDON, ONT. - When Ontario’s first casino opened here in 1994, the provincial government was deep in the red and looking for a way out. It found its gold mine in the form of gambling-starved American tourists, who leveraged a weak Canadian dollar and open borders to test their luck here.

“People paid $50 to valet park but they didn’t have a car — they just wanted to jump the cue,” said Tony Bitonti, spokesperson for the Ontario Lottery and Gaming Corp. (OLG).

Today there are no line-ups to get into the expansive Caesars Windsor casino that overlooks the Detroit River.

A smattering of people slide their player’s cards into slot machines over two floors and seats at table games are open.

It’s not empty in here, but the excitement is muted — a far cry from what’s played across the television screen boasting a Vegas-style experience.

The first year the casino opened it made $418 million in gross revenue, peaking at $835 million in 2000 before bottoming out at $227 million last year.

Over the years, as the U.S. dollar weakened, the province became saturated with casinos, and casinos have sprouted in border states that have opened their doors to gambling as well. After 9/11, passport regulations tightened borders and the appeal of cross-border gambling waned.

In 2001, gaming facilities on U.S. borders were turning a staggering $800 million in profits. Ten years later, that number dropped to $100 million.

In what’s sure to become an election issue, the province is desperately trying to find its gambling groove again — mostly with the under-45 crowd that shuns slot machines for less chancier blackjack and poker tables.

Hoping to hit the jackpot again, the Ontario government, through the Ontario Lottery and Gaming Corp. (OLG), is shuffling its deck, hoping to squeeze more out of its gambling empire.

“Modernizing the OLG is about looking at our business model and saying, ‘if we started from scratch today would we have those facilities there?’ ” Bitonti said.

The changes would add five new gaming facilities to the province in addition to the 24 that exist — a move that has drawn sharp criticism from the Opposition Tories, who say the government should fold its hand when it comes to its gambling empire.

“The only role for government is to be the toughest regulator on the industry that it can possibly be,” said MPP Monte McNaughton of Lambton-Kent-Middlesex, the PC economic development critic.

And though OLG has said it is shifting away from operating casinos, McNaughton doesn’t buy it.

“I don’t think anyone believes that the Liberals and OLG are going to spend the next five years expanding the gaming empire in Ontario to turn around and hand over the keys,” he said.

Bitonti said the changes are aimed at generating more revenue for the province to pay for health care and education. The OLG already adds $2 billion in revenue to Ontario’s $126-billion budget.

To generate $1.3 billion more in net profits, OLG is betting on a casino resort in the Greater Toronto Area (GTA) that will not only bring slots and table games to what the OLG sees as an under-serviced market, but become a premiere site for conventions and entertainment.

Standing in line to cash in their chips are the Ontario government and municipalities that would host those new gaming facilities, said Stanley Sadinsky, a retired law professor at Queens University and former chair of OLG and the Ontario Racing Commission.

“If it all works as government intends it to work, government will maximize revenue,” he said, adding bingo hall operators also stand to win if they become slot machine sites, as well as new host municipalities that would share in the profits.

Another big winner?

New casino operators, he said.

In places like London, the Western Fair District would be “very aggressive” getting itself and its private partner qualified to bid on the Southwestern Ontario bundle made up of six zones — Hanover, Clinton, Sarnia, Woodstock, Dresden and London — said Hugh Mitchell, chief executive officer of the Western Fair District.

The changes, said Bitonti, are the biggest of a Crown agency in the history of Ontario.

kelly.pedro@sunmedia.ca

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GREATER TORONTO AREA (GTA) CASINO RESORT

PRO

The Ontario Lottery and Gaming Corp. (OLG) says if a casino resort opened in downtown Toronto it would:

- Create 12,000 full- and part-time jobs

- Generate between $50 million and $100 million in hosting fees

- Generate between $10 million and $27 million in property tax revenue

- Create $2 billion in private investment

- Be a game changer for the local economy, drawing people from around the world to the site, which also would be a convention centre

 

CON

Critics say a casino resort in downtown Toronto would:

- Lead to more problem gamblers and petty crime

- Cannibalize local businesses

- Cause worse traffic and parking headaches

- Its construction would become another tax burden

 

GAMBLING CHANGES

The Liberal plan:

- Create 29 gaming zones bundled for private operators to bid and build a casino in each zone. Some zones, such as London and the Waterloo Region, call for both slots and table games. OLG would oversee and regulate the industry

- Move some facilities to more densely populated areas

- Have private operator build new casino resort in the GTA, preferably downtown Toronto

- Launch online gaming site — playolg.ca — in the fall, allowing Ontarians to play the lottery or gamble online

- Cut the horse-racing industry’s $345 million take from slot revenue at racetracks as of March 31. Horse racing would continue at some of the 14 tracks but others would close

 

The PC plan:

- Get government out of the gambling business and instead become a tough regulator

- Regulate existing online gaming sites

- Wind down OLG, privatize lotteries, casino assets and slot operations and give horse-racing industry first crack at buying gaming operations

- If casinos are miracle solution, add table games to racetrack slots that have proven existence and community support

- Have local referendum so communities can decide for themselves if they want a casino

 


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