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OLG Estimates $50–$100 Million in Hosting Fees for a Downtown Casino

City launches online public consultation about a potential casino, with some new revenue figures included.

The City of Toronto has just launched its online consultation about the prospect of opening a casino in Toronto (the in-person consultations start next week). As part of that public consultation process, the City has put out a short primer on the various casino options [PDF], with a number of financial, health, social, and city-building factors detailed.

On page six of that primer, a new and important number: $50–$100 million. That’s how much the Ontario Lottery and Gaming Corporation now estimates the City of Toronto would make in annual hosting fees, if we decided to allow an “integrated entertainment complex” at Exhibition Place, the Port Lands, or in the convention centre area. (An earlier report from Ernst & Young estimated hosting fees as high as $168 million—though as we wrote at the time, the basis on which they did so was always unclear.)

It’s a substantial sum, but in the scheme of Toronto’s $9.4 billion operating budget, it’s hardly a deal-maker.

The now-cancelled vehicle registration tax brought in about $49 million a year, for instance, and newly elected mayor Rob Ford had no difficulty convincing councillors to cancel that in December 2010. Even for the fiscal conservatives on council, policy considerations were more important than the amount of money involved in that case. Similarly with a casino: while the amount of money is non-trivial, it also isn’t overwhelmingly large. There’s certainly recently political precedent for saying that other goals can outweigh it, and many councillors have indicated they will be arguing just that in March, when they make a decision on the matter.

There are other potential impacts on Toronto’s economy if we permit a casino: increased property taxes and some job creation are also discussed in the report. Those will weigh less heavily in council’s debate, however, since they are both harder to predict and would, to at least some extent, accompany any other development in the same parcels of land. It’s the hosting fees that make casinos distinct as a revenue-generating tool for the City, compared with other economic development options in the same areas.

Before council makes any decisions though, and informing their debate, the public will have a chance to weigh in. Residents can fill out an online survey anytime between now and January 25, and there are several public meetings taking place this month as well.


ONLINE CONSULTATION
Take the City’s survey.


PUBLIC MEETING SCHEDULE


Timeline for Casino Debate

November–December 2012

  • City held “significant and serious discussions” with the OLG regarding hosting fees and location options. Those discussions produced the number we now have—the $50–$100 million estimated hosting fee.

January 2013

  • Public consultations are held online and in meetings across the city.

February–March 2013

  • We get a final, exact number—the specific hosting fee the OLG would give to Toronto if council approved a casino.
  • Staff prepare a report for city council, summarizing the public consultations and including the results of discussions with the OLG. The report will also include staff’s recommendations regarding the preferred location of a potential casino, and how much revenue they think is enough to make the whole prospect of a casino worthwhile.
  • Once the report is issued, the matter will come back for discussion at the executive committee, and ultimately, to city council as a whole

Related Reading:

The City of Toronto’s report on a casino: [PDF]

Ernst & Young’s report: [PDF]

The Medical Officer of Health’s report on the impacts of gambling expansion: [PDF]

OLG’s modernization plan: [PDF]


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