One final detail in Greater Toronto casino bid needs to be decided

Great Canadian Gaming and Brookfield Asset Management won the bid for a Toronto casino, but neighboring cities are still clamoring over their piece of the gambling revenue pie.

Earlier this month Caesars was dealt another blow when Ontario Lottery and Gaming (OLG) gave the Greater Toronto Area (GTA) casino bundle to local companies Great Canadian Gaming and Brookfield Asset Management.

As part of the agreement the two Canadian based companies will acquire OLG Slots at Woodbine near Toronto's airport, OLG Slots at Ajax Downs in Ajax, Ontario (a suburb in the eastern part of the GTA) and the Great Blue Heron Casino located in the native Mississaugas of Scugog Island First Nation, just outside of Port Perry (about 90 minutes from Toronto City Hall and about 50 minutes from Ajax Downs). Only Great Blue Heron currently has casino games that aren't slots.

A spokesperson for the Brookfield and Great Canadian consortium, which goes by the name Ontario Gaming GTA LP (OGGLP) stated after the announcement what its plans included:

"This development and modernization will include integrated property expansions that will enhance the gaming offerings to service the GTA market. It will also include leading world-class amenities consisting of state-of-the-art conference facilities, hotels and premier entertainment venues."

In announcing the deal Ontario Finance Minister Charles Sousa said he was extremely excited at the prospect:

"That's what has been the purpose of the whole revitalization and modernization of the product of the OLG," he said. "(It's) a huge investment coming into the community, a lot more jobs being created and more entertainment and destination opportunities for the region."

Toronto casino Great Canadian GamingThe revitalization and modernization Sousa is referring to began five years ago when OLG created a gambling modernization plan for the province that included a substantial casino in Toronto, subject to council approval. It also called for a casino at Woodbine racetrack and an additional smaller casino in Durham Region where Ajax Downs is located. Almost immediately after the announcement was made casino companies flocked to Toronto to try and win the bid for what they believed would be a cash cow. MGM, Caesars and Oxford Properties hired lobbyists and spent millions on their bids trying to convince Toronto council why they believed they should win the bid. While the companies were willing to run casinos at Woodbine and in Durham if need be, they saw downtown Toronto as the Holy Grail that would generate maximum revenue. MGM proposed a casino at Exhibition Grounds while Caesars and Oxford favored the Toronto Convention Centre which is situated next to the Rogers Centre a d CN Tower.

Despite valiant bids including promises of thousands of high paying jobs, hefty hosting fees to the city and promises to help rebuild and pay for a new transportation structure to alleviate traffic concerns, Toronto council voted against a casino at both Woodbine and any downtown venue. Council stated concerns about traffic, social issues a casino could bring and their belief that a casino is a bad use of valuable land. The late Mayor Rob Ford also expressed his support for a casino and because he was reviled by the majority left leaning Toronto council and several on council likely voted against it simply because Ford supported it. Someone associated with the MGM bid stated his disgust to me after the decision, calling the whole process a waste of time and money, since council never seriously considered hosting a downtown casino and they should have been forthcoming from the outset.

In 2015, things changed when the new Toronto mayor John Tory asked for a casino at Woodbine to be put back on the table. Tory argued that Woodbine already had slots and a racetrack so the stated social concerns with a downtown casino just weren't relevant at Woodbine:

"My support for taking this proposition to the next stage arises out of a profound determination that I have to see more jobs become available in the northwest corner of the city, an area that has been starved for jobs and opportunity for a long, long time," Tory said before council voted.

Many of the old councillors that were opposed to any gambling either quit or lost in the last Toronto municipal election so the newly formed council approved gambling expansion at Woodbine by a 25-19 margin. Per OLG guidelines the number of slot machines at Woodbine would increase to 5,000 and 120 table games, as well as poker, would be added.

OLG also upped the anti by including all GTA regions as part of a "gambling bundle" for any operator who wins the bid to build and run the casinos. This includes the casino at Great Blue Heron and a Durham Region casino at a site to be determined, which would be a significant size, albeit much smaller than the one at Woodbine. MGM indicated they had no interest in getting back into the picture nor did Las Vegas Sands, who expressed some interest previously. Caesars, however, did make a bid, but with much less gusto than they did for a downtown Toronto casino and casino operators Genting, Penn National and Mohegan Sun made bids also. But earlier this month OLG announced that the offer was going to the combined bid of Great Canadian Gaming, which runs smaller casinos in Western Canada, and Brookfield Asset Management, which has significant resources and also owns and runs a casino in the Bahamas.

There is some question as to whether Great Blue Heron could survive with the new casinos, but since it is a fair distance from Woodbine and Pickering/Ajax it can probably work with some restructuring. But the real sticking point now and the final detail that has to be determined is in Durham Region.

While the announcement indicated that Brookfield and Great Canadian acquired the slots at Ajax Downs (which also runs a quarter horse racetrack), there has been a lot of infighting between Ajax and Pickering. Both cities want a casino and both cities have already received approval by a vote of the residents to host one. In its modernization plan OLG indicated that the Durham casino would be placed in either Pickering, Ajax or Whitby, but Whitby agreed to not oppose Ajax in exchange for a percentage of Ajax Downs revenues. Ajax, however, apparently refused to extend the same offer to Pickering, so council in that city set out a grand plan for a major resort casino on a portion of land near the Ajax/Pickering border with something they called Durham Live. The site outlines the plan:

Durham Live is a once in a lifetime opportunity to develop a world class, iconic destination, right here in Pickering. Durham Live will provide a unique blend of entertainment, recreational, cultural, tourist and commercial venues. It will be designed to deliver excitement, energy and entertainment for young and old alike, a place where we can be proud to invite the world - all just down the street at Church and Bayly, in Pickering.

When complete, we will invite the world to Pickering. As Durham Live will be fully integrated and act as the central hub for all regional tourism, it will revitalize and energize the regional tourist industry.

With a budget of over 1.3 billion dollars to construct, Durham Live will provide Pickering with much needed cultural facilities such as a convention centre, performing arts center and the entertainment and recreational facilities residents want. There will be no need to take the train to downtown Toronto. Toronto will be taking the train to come to Pickering!

Ajax, on the other hand, believes it only makes sense to expand their existing slots casino which has been extremely successful and they have the land and means to do so. They have also indicated that if they lose the bid, the racetrack may have no option but to shut down. Traffic concerns could be an issue with either plan although a new highway, which was recently built, might alleviate that fear for local residents. In any case, it will be up to the consortium along with the host city to address any infrastructure issues that arise. Toronto is expected to receive at least $20 million per year in hosting fees for allowing the Woodbine expansion, so the hosting fee to Ajax or Pickering will be significant also.

I spoke with David Pickles, a regional councillor for Pickering who stated why he believed Pickering is the better option for a casino:

"The selection of the Great Canadian and Brookfield consortium as the casino operators is another welcome milestone in in the realization of the Durham Live project in Pickering. I believe Durham Live with a casino, convention centre, hotels and recreation and entertainment facilities is the best choice and the best location for Durham Region. I initiated the process for Pickering to be a willing host for the gaming and entertainment node and we look forward to moving forward with the new casino operators to make Durham Live a great benefit to Pickering and Durham residents along with business and to be a major destination for visitors to the area."

Ajax Mayor Steve Parish indicated why he believes the consortium should keep the casino in Ajax:

"For more than a decade, the Slots at Ajax Downs has been one of the most high-performing and profitable gaming facilities in the province. The proven track record, local amenities and transportation network all contribute to the site's continued success. This location presents a tremendous opportunity to expand, create additional high quality jobs and stimulate the local economy. Revenues from OLG Slots at Ajax Downs has allowed the Town to strategically invest in infrastructure, and community and neighbourhood initiatives. As an experienced host community with a strong relationship with OLG, the Town looks forward to working with the new operator Ontario Gaming GTA LP to ensure the site continues to be a popular destination for gaming, horse racing and entertainment."

One thing is certain. The new casinos will be successful and the consortium will be happy regardless of which location they choose. With a population over 5.9 million people, according to the 2016 census, The Greater Toronto area is the fourth largest metropolitan city in North America behind only New York, Mexico City and Los Angeles. And Toronto residents love to gamble. Thousands flock to casinos in Niagara Falls and Orillia each week and flights to Las Vegas from Toronto are always filled. Politicians in the GTA hope many of those people will choose to stay in Toronto to spend their gambling dollars and the Ontario government obviously hopes that the new casinos will not only convince travellers to the U.S. to stay home, but also that American tourists will come to Toronto where they can enjoy tourist activities and also gamble at world class resort casinos.

Read insights from Hartley Henderson every week here at OSGA and check out Hartley's RUMOR MILL!

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