For the first time in its 30-year history, the license to operate the slot machines and blackjack tables at Caesars Windsor in Windsor, Ontario is up for grabs.
With millions of tourists visiting the property annually, the Ontario Lottery and Gaming Corp. (OLG) is in the final stages of reviewing offers for this highly lucrative opportunity.
While the selection process is meant to be confidential, it is believed three large casino companies are the finalists for the coveted license. The current operator, Caesars Entertainment., faces challenges from two formidable contenders: Bally’s Corp. and Mohegan Gaming and Entertainment.
Bally’s Corp., based in Rhode Island, has emerged as a strong competitor. It was built from casinos and a brand that Caesars sold, making it a natural candidate to take over the operations at Caesars Windsor. Mohegan Gaming and Entertainment, an tribal-owned company, already operates two successful casinos in Niagara Falls, Ontario, and aims to expand its footprint in the region.
While the OLG prohibits public statements regarding the selection process, support for Caesars Windsor is prevalent among city leaders, including the mayor, tourism executives, and union officials. They believe that Caesars has done an exceptional job running the casino and providing quality jobs to the community. However, the decision ultimately lies with the OLG, which is expected to announce the new license holder by the fall of this year, with the transition taking place in 2025.
Caesars Windsor plays a vital role in the economy of Windsor, Ontario, providing more than 2,000 jobs and anchoring the tourism industry. The casino has been instrumental in revitalizing the downtown area and attracting millions of visitors each year. Its impact is felt not only in terms of job creation but also in the significant contributions it makes to the local economy.
In 2022, the Windsor region welcomed 4.4 million visitors, injecting $669 million into the local economy. The casino has consistently invested in its business to attract and retain customers, even in the face of growing competition from online gambling and new casinos in neighboring Detroit. The casino’s success has prompted the OLG to license 30 properties since 1994.
Caesars Windsor is not only a significant employer in the region but also a major revenue generator for both the company and the government. While specific financial details for the property are not publicly disclosed, Caesars’ overall financial results demonstrate the profitability of its managed casinos, including Caesars Windsor.
According to the company’s financial reports, the seven managed casinos, including Caesars Windsor, earned $83 million in the first nine months of 2023, with a 34 percent profit margin.
Caesars’ overall revenues for all gambling activities increased by 9 percent to $8.7 billion in the same period. For the Ontario government, gambling is a substantial source of revenue, with the OLG generating $4.2 billion from its 30 casinos in 2022. The city of Windsor also benefits, receiving a quarterly payment that amounts to 2.5 percent of its annual budget.
The OLG’s decision to put the contract for Caesars Windsor out to tender marked a significant shift in how the province licenses casinos. The goal is to increase the province’s revenue while encouraging operators to invest in their facilities. The OLG now requires operators to guarantee a predetermined annual payment, with the companies keeping 70 percent of revenues above this threshold.
However, controversy has surrounded the OLG’s handling of the licensing process. The provincial auditor-general criticized the agency for allowing casino operators to reduce their guaranteed payments after pandemic restrictions were lifted. The OLG also faced scrutiny for its decision to award the Niagara Falls casinos to Mohegan in 2018, despite Caesars offering to invest significantly more in the properties.
In response to the auditor-general’s review, the OLG committed to holding operators accountable for their payment guarantees and placing a greater emphasis on investment in casinos during the license renewal process. The ongoing negotiations for the new operator of Caesars Windsor will test the OLG’s ability to balance financial commitments and the casino’s role in rejuvenating Windsor’s downtown.
Whoever secures the license to operate Caesars Windsor will face the challenge of maintaining its competitiveness and continuing to contribute to the revitalization of Windsor’s downtown area. Suggestions from various stakeholders include reintroducing the popular buffet-style dining room, expanding the sports betting facility, and encouraging development in the vacant blocks surrounding the casino complex.
