Toronto should get half of casino hosting fees before approving project: report
Marlene Leung, CTV Toronto
Published Monday, April 8, 2013 7:31AM EDT
Last Updated Monday, April 8, 2013 4:40PM EDT
Toronto should get half of the hosting fees generated from any casino built in the city before it approves the controversial project, a new report recommends.
A 50-50 split in casino hosting fees between the city and the province was one of the conditions laid out in a report issued by City Manager Joe Pennachetti on Monday. The report said the city should get half, but requires a minimum of $100 million a year.
But it’s not clear how much the city will actually gain from hosting fees. The Ontario Lottery and Gaming Corporation had previously estimated that the city would gain between $50 to $100 million a year. However, Premier Kathleen Wynne has said that she doesn’t want OLG to cut Toronto a special deal for hosting a casino.
In a March meeting, she asked the OLG to use a “consistent formula” to calculate hosting fees for all the municipalities it was considering for its project.
After Monday’s report, the OLG released a statement saying it was reviewing the proposal and the Municipality Contribution Agreement act to ensure that the “principles of fairness and equal treatment” govern the hosting fee formula, which “will be the same for all host communities across the Province.”
OLG President and CEO Rod Phillips said the final proposal must be approved by the city, the developer, the OLG and the province. “We are working with the Ministry of Finance and will report to the minister this month,” he said.
Pennachetti’s report listed a number of conditions Toronto should present to the province and the OLG before approving any casino project – a proposal that has been controversial in recent months.
Another major condition laid out in the report includes a requirement that the casino be part of a larger entertainment and convention centre complex, as opposed to a standalone gambling facility.
The report is meant to be informative and does not offer an opinion on whether the city should approve a casino. It outlined the pros and cons of building a casino in Toronto’s downtown core or expanding the gaming facility at the Woodbine Race Track.
In addition to the conditions suggested, the report also found the following:
- The construction and operation of a casino in downtown Toronto would generate between 6,200 and 7,000 construction-related jobs, and would increase GDP between $1.5 to $1.75 billion over three years.
- An additional 10,070 full-time jobs would be created, as well as around $935 million a year in GDP-related to operations.
- The city would stand to gain between $111 to $148 million in hosting fees from a downtown casino.
At a news conference following the report’s release, Toronto Mayor Rob Ford reiterated his support for a gaming complex, calling it a “golden opportunity” that will create thousands of jobs, attract tourists, and generate millions in revenue.
Ford said Toronto must become a top convention destination given the city’s size.
“We need a new, bigger, full-service convention and exhibition facility to achieve that,” he said.
Ford said the city stands to gain $150 million annually, pegging revenue estimates at the higher end of the range outlined in the city report.
Toronto is not asking for a special deal, Ford said, but rather its “fair share.”
“After talking to Premier Wynne, she said she’s waiting for a funding formula and I’m sure it will be in and around that number.”
The revenues could be used to pay for rapid transit infrastructure, he said.
Ford also said that if council denies Toronto a casino, the OLG will likely build it in the GTA.
“The fact is, if they build a casino on our doorstep, which they will, the province won’t benefit as much, Toronto won’t benefit at all.”
Several councillors said Monday the numbers in the report just don’t add up.
Coun. Mike Layton said Pennachetti’s report put forth unrealistic expectations to which the province and the OLG will not agree. “So essentially, we have a report here that says ‘No’ to a casino,” he said.
Coun. Adam Vaughan said it was time to let go of the project and move on. “The numbers are ridiculous and the whole project is a fantasy,” he said.
A number of major gaming companies have expressed an interest in building a casino in Toronto, including MGM Resorts International, Onex, Caesars and Wynn Resorts.
In March, MGM and Cadillac Fairview unveiled their vision for a massive gaming and entertainment complex to be located at Exhibition Place. The complex would include high-end restaurants, a 1,200-room hotel and a permanent theatre for Cirque du Soleil.
Ford’s letter also addressed concerns that a casino might increase crime by pointing to the Woodbine Race Track, located in northern Etobicoke.
Woodbine is one of the most profitable slots-only casinos in North America, generating over $600 million in gaming revenue. Police have reported no increase in crime related to Woodbine race track, he said.
The proposed casino has been a divisive issue: while Ford and a number of councillors have spoken out in favour of the project, community groups, activists and other politicians are against it.
Last week CUPE local 79, a union representing around 20,000 city workers, voiced concerns about the added strain a casino would bring to the city’s infrastructure.
"We've seen no convincing arguments to prove a casino will provide a net benefit for Toronto communities,” CUPE Local 79 President Tim Maguire said in a statement.
A local anti-casino group dubbed “No Casino Toronto” also staunchly opposes the casino, arguing that it will increase traffic and gridlock, as well as cause higher crime and problem-gambling. The group also argues that a casino is not a sound source of revenue.
City council is expected to vote on the issue as early as May.
With files from Karolyn Coorsh and The Canadian Press