The casino contracts that the Ontario government awarded through Ontario Lottery and Gaming Corporation (OLG) for the Greater Toronto Area to Great Canadian Gaming last autumn—even after it became known that the company was the subject of money-laundering investigations—have become an election issue.
Last week a Global News investigative piece revealed that the opposition PC (Progressive Conservative) Party was repeatedly lobbied by a Toronto hedge fund that held a large share in Great Canadian to mute its criticism of the casino company. Which the party did.
Now some financial experts are saying the government of Kathleen Wynne’s deal with Great Canadian was too favorable to the British-Columbia based firm.
Meanwhile calls for stock market regulators in Ontario and British Columbia to investigate the government’s handling of the contract have been made by both investors and investment funds.
Mayor Steve Parish of Ajax is also complaining that Great Canadian moved its casino out of his city to another location in a process that “smelled of backroom deals.” He hopes the deals will be invalidated.
Parish declared, “This should be scrutinized by the regulators for the stock exchanges, by the Ontario legislature, by everyone with oversight for gaming. There needs to be a thorough investigation. If there is nothing to hide, just show us.”
Global News obtained emails and conducted several interviews with party members that showed after several members of the PC attacked the Toronto casino deals last October that intense lobbying began. BloombergSen, the Toronto hedge fund, and a heavy contributor to both the Liberal and PC parties, lobbied the party and PC member Victor Fedeli’s “corrupt gaming strategy” complaints became muted.
The PC originally criticized the Toronto deal after BC Attorney General David Eby launched a review of money laundering in Vancouver casinos hard upon an audit of Great Canadian’s River Rock Casino that unearthed large numbers of suspicious cash transactions.
In October former PC party president Rick Dykstra tried to stir his party to go after the government’s “Corrupt gaming strategy,” citing Eby’s investigation. “We should be going after these guys in the house,” he wrote, to Patrick Brown, the PC party leader. “We show their process is corrupt and we can call their whole strategy into question.”
Several days later the PC’s finance critic Victor Fedeli noted, “Internal government documents reveal a $500-million money-laundering investigation in B.C.,” and pointing to the finance minister Charles Sousa asked, “Did the minister know his hand-picked casino operator is linked to a money-laundering investigation?”
Sousa responded that the OLG’s contract process was transparent and not influenced by politics. However, Fedeli’s questioning faded away and ceased entirely after November 2.
One party insider interviewed by Global News admitted “But it did peter out. I don’t really know why, we just left it.”
Top PC party leaders did not comment for the story. The newly elected party leader Doug Ford did say he would review the files if elected premier.
“I just want to make sure we get the details first before we promise anything,” said Ford. “But again, we’ll have a very highly qualified person looking into it.”
The history of the affair shows that, despite the ongoing investigations in BC and Ontario that Great Canadian was awarded casino contracts for southern Ontario.
BloombergSen greatly increased its investments in Great Canadian Gaming in 2017, eventually acquiring nearly 14 percent by the end of last year. Great Canadian’s stock prices increased 40 percent in May as word spread of how profitable the Toronto properties were to the company, compared to how much it paid for them. It is estimated that the company could pay off its $158 million investment within half a year. It shares are currently estimated to be worth about $420.5 million.
One stock analyst has compared Great Canadian’s good fortune to “hitting the lottery.”
Sousa, whom Global asked to interview for its story, declined, but did release a statement: “While we cannot comment on emails we have not seen, any attempt to discredit a fair and independent selection process for political gain is irresponsible and potentially harmful to hard working communities and businesses in this province.”
Great Canadian, which was also asked to comment for the story, including allegations of money laundering, issued this statement: “Our company has a culture of integrity and transparency, founded on our strict compliance with the robust regulatory requirements in the many jurisdictions where our facilities are located.”
