Ontario Lottery and Gaming Corporation officials announced they will hire a private operator within the next few weeks to manage operations for casino and slot machine services in the greater Toronto area. Unconfirmed bidders include Toronto-based property developers Brookfield Asset Management Malaysia-based Genting Group and Las Vegas-based Caesars Entertainment. Caesars is said to view the Toronto contract as a way to expand its international footprint according to Chief Executive Officer Mark Frissora’s long-term plan following bankruptcy restructuring in 2015-2016.
The chosen firm will manage operations at the Woodbine racetrack in Toronto, Ajax Downs and the Great Blue Heron Casino in Port Perry. The winning company will earn a minimum of $72 million annually for the 22-year contract, plus up to 70 per cent of gambling revenue. The deal also will allow the selected private operator to rebuild all three sites as full-fledged casino properties, and to add a fourth casino subject to local approval. In exchange, the OLG has asked bidding companies to present aggressive revenue-boosting goals.
Toronto’s gambling market has room to grow, with slots only available at two horseracing tracks and a rural casino an hour’s drive from downtown, OLG officials said. They added transferring the costs of upgrading and replacing aging casino buildings and equipment will help the province save money. Last year the OLG’s casinos in the greater Toronto area earned nearly $1 billion in revenue.
The Woodbine racetrack, located close to Toronto Pearson International Airport, Canada’s busiest, and nearby Highway 401, would be prime for development by the winning operator. Woodbine Entertainment spokesperson John Siscos said, “The OLG’s modernization plan is the catalyst for Woodbine Entertainment to unlock the value of the Woodbine lands to sustain horse racing on our 680-acre site and bring real economic development to Rexdale.”
Local MPP Shafiq Qaadri, whose riding includes Woodbine, stated, “I’m looking forward to the long-awaited day when we can inaugurate a ‘Vegas North’ right here in the riding, bringing tourism, concerts, conferences, activity and buzz.” He said the Toronto city council will determine if the new operator will be allowed to provide blackjack, roulette or other table games at Woodbine.
Woodbine officials said horseracing and gambling still will be available at the property. The initial phase of the project will include an expanded gaming area and integrated entertainment, hospitality and related amenities, expected to attract 12-15 million people a year. Ultimately the facility will offer new dining options, retail, office space, post-secondary education, recreation, health, wellness and housing.
Woodbine Entertainment Group Chief Executive Officer Jim Lawson said, “At the core of the project is the beauty of the horse. With over 2,000 Thoroughbred horses stabled on site, approximately 200 acres will continue be devoted to horseracing operations at the center of this unique development. The master plan sets out a detailed roadmap that will create thousands of new local jobs in the community, introduce new fans to the sport of horse racing and be a transformative project for the city of Toronto in the years to come.”
However, more than 400 Woodbine workers have been picketing the racetrack since mid-July, when they were locked out after failing to reach a collective agreement. Workers are concerned about their job future and government pensions after the racetrack is transferred to a private owner.
The OLG’s revenue has flattened in recent years due to increasing competition from internet gambling and casinos in the U.S. Also, the OLG has been faced with increasingly outdated buildings and equipment. To reverse revenue declines and boost profits, the OLG has sold nearly half its casinos and slot machines to the private sector over the past two years under a “modernization” process.
The Ontario government’s largest source of non-tax revenue, the OLG turned over $2.3 billion in profits to the province in the 2015-16 fiscal year. The agency forecasts providing an additional $900 million per year by 2021, once its outsourcing process is completed.
