Today Sat Sun
It is forcast to be Chance of Rain at 11:00 PM EDT on April 18, 2014
Chance of Rain
12°/2°
It is forcast to be Partly Cloudy at 11:00 PM EDT on April 19, 2014
Partly Cloudy
12°/3°
It is forcast to be Partly Cloudy at 11:00 PM EDT on April 20, 2014
Partly Cloudy
16°/4°

5 Comments

news

City Staff: We’d Need to Over-Size a Casino to See Major Economic Benefits

A casino would need to be at least 30 per cent larger than planners recommend if it's to have the desired economic impact, according to staff's final report.

casino gambling addiction 1

This morning Toronto’s top civil servant released a long-awaited report on the prospect of allowing a new casino in Toronto. That report is an exercise in diplomacy—or hedging, depending on your point of view—and comes to no conclusions about whether we should permit a major gaming complex downtown. (The report does recommend expanded gaming at Woodbine.) But there are, lurking in the report’s details, many of the pieces of information councillors will need in order to make a decision.

The bottom line: the City’s planning department recommends that if council permits a new facility it should be “a scaled-back casino,” one that is less than half the size originally envisioned. City staff are further recommending that council only green-light a casino if we were to get a minimum of $100 million a year in hosting fees (that’s the share of the gaming revenue a municipality gets from the province in exchange for allowing a casino). Staff calculate that at that scaled-back size, and if the province were to consent to a 50-50 split of tax revenue with Toronto, we would get $111 million a year in hosting fees.

Two major snags: at that scaled-back size, a casino won’t be able to support an accompanying convention centre that staff says we need to make the whole thing make economic sense in the first place. Moreover, we also have no reason to believe the province will give Toronto a hosting fee that is anything like that large. As measured both by economic impact (in metrics like job creation) and direct money into the municipal government, the math on a casino is not adding up.

Here, step-by-step, are the key findings in the report—

“A standalone casino is not supported by staff.”

Both the municipal government and the developers who have been angling to build in Toronto have said from the outset that Toronto shouldn’t get just a straight-up casino, but rather a large facility that includes hotel and retail space, as well as other amenities.
 

“It is critical that a [downtown casino]…include the development of a top-rate convention and trade show infrastructure to improve Toronto’s competitiveness in attracting the largest class of events.”

City staff say, specifically, that Toronto would do best if a new downtown casino was part of a large convention centre complex. “A convention centre expansion is probably more important than a casino” Pennachetti told reporters at a briefing, emphasizing that the economic impact from a major new complex would come, in significant part, from convention facilities rather than the gaming floor. One indication of how important that convention centre is, in staff’s analysis: 46 per cent of the 10,000 new full-time jobs the entire venture would create are expected to be “spinoff from new convention delegates.”

In its report the City did not provide an economic impact analysis of just a convention complex without a casino; Pennachetti said he wasn’t aware of any developer who wanted to build one.
 

“City Planning has indicated that a new casino in the Toronto C1 zone should be appropriately sized to the unique urban context of the downtown area.

All those who want to build a casino in Toronto have also proposed huge complexes; the Ontario Lottery and Gaming Corporation’s own estimate once had the associated gaming floor at 250,000 square feet. This, say planning staff, is far too large. A scaled-back casino would have “an improved fit and compatibility within the overall diverse urban character of the downtown area.” It would also mitigate the impact on traffic and infrastructure, and on existing local businesses that would face new competition from the casino complex.

This is perhaps the biggest policy hurdle in the whole report. The City’s planning department has come to the conclusion that in order to fit into Toronto’s existing landscape, a gaming floor should be a maximum of 135,000 square feet. However, in order to support the kind of convention complex City staff think is crucial, a casino would need to be bigger—at least 175,000 square feet. Smaller than that, and the whole thing may just not get off the ground.

To summarize: in order to generate the economic impact staff thinks is desirable, we’d need to allow something much bigger than staff thinks is prudent. We cannot build a casino that is both an appropriate size for downtown and that will generate sufficient economic benefits.
 

“The City tabled terms with the OLG indicating Toronto receive a hosting fee from gaming revenues equivalent to the amount the Province receives through the OLG… [and] no less than an annual minimum of $100 million… City staff strongly advise that the revised municipal hosting fee formula must reflect the unique opportunity of a potential Toronto C1 casino.”

“Tabled terms” just means the City’s negotiating position. It does not reflect any agreement.

Effectively, the City is projecting a hosting fee—the amount of money Toronto would get each year in virtue of agreeing to a casino—based just on what it thinks we deserve, and not any deal it has reached with the province. City staff have estimated what they believe to be fair based on the premise that Toronto, because of its size and the lucrative nature of building here, represents a “unique opportunity” and therefore should be rewarded accordingly. This position has been explicitly rejected by the premier, who reiterated today that all municipalities needed to benefit from any casinos they might host equally.



Results of the Public Consultations on a Casino

Over the past few months the municipal government asked Torontonians to share their views about a casino. According to today’s report a total of 17,780 feedback forms were completed. The City also commissioned a poll with the following results:


To what extent do you support or oppose the possibility of a new casino in Toronto?

Strongly support: 16%

Somewhat support: 26%

Mixed feelings: 8%

Somewhat oppose: 14%

Strongly oppose: 36%

Don’t know: 1%

Poll taken: February 20–26, 2013
Sample size: 902
Margin of Error: +/-3.3%, at the confidence level of 95%
Methodology: Telephone survey
Conducted by: Environics

Also according to that poll, opposition to a casino is strongest among residents of the former municipality of Toronto (where a downtown casino would be located): 59 per cent are either somewhat or strongly opposed. In the former municipalities of North York, York, East York, Etobicoke, and Scarborough opposition ranges from 43-52 per cent.

Among those who filled out a feedback form opposition to a casino was higher: 71 per cent rejected the idea.



What’s Next

City council’s executive committee, comprised of Rob Ford’s closest allies, will hold a special meeting to discuss a casino on April 15-16; members of the public will be able to address the committee and share their views at that time. After that debate is concluded, the executive committee will issue a recommendation on whether to permit a casino in downtown Toronto; that recommendation will form the basis of a debate of full city council, expected to be called for early May.

Comments

  • JDHalperin

    My favourite part of the report:

    According to the poll, residents who were asked if “there is a minimum amount of annual revenue to the City of Toronto which might address or balance any concerns you may have about a new casino”: 40% would not support a casino for any amount; 32% would support a casino for amounts ranging from $0 to 150 million; 27% don’t know

    $0!!

  • rich1299

    I wouldn’t be opposed to an expansion of the casino at Woodbine and if a casino is supposed to bring in tourists and not just feed off the desperate in Toronto then Woodbine is as good a site as any downtown. Plus a casino at Woodbine would have what very few others have, horse racing. It also has lots of parking near major highways and is right beside a GO line where a station could be added to serve a Woodbine casino. But there’s no way, as I said when I filled out the feedback form, that I’d ever support a casino anywhere downtown or on the waterfront.

    I agree expanded convention space would be very good for the city even if its something the city funds, so long as the city maintains a financial interest in the expanded convention space instead of selling it off for pennies on the dollar. really the Front ST convention centre is absolutely hideous and could do with a major make-over that adds some character to it. People who attend conventions leave to for dinner and entertainment and support local businesses unlike those who go to casinos and wear diapers so they don;t even have to leave the floor to go to the bathroom. if they aren’t willing to use the bathrooms they won’t be leaving to support other businesses. Casinos are only good for casinos. Expanded convention space is good for many different businesses not just nearby but those that support conventions like table rentals, AV systems for the meetings, and caterers.

    • malna

      So there are no desperate people in the Woodbine area?

      Why would you not support a casino in Downtown Toronto, to the point where you filled out survey forms suggesting this?

      • rich1299

        There already is a casino at Woodbine for one thing that already is supporting many thousands of good jobs throughout the region and across south central Ontario associated with horse racing. Of course there are some residential areas close by but its the lowest density possible area in Toronto where a casino is possible and on three side its surrounded by industrial areas. More importantly there is no where near the number of neighbouring entertainment related business to be harmed by it and more than enough space for parking.

        Desperate people can get on a cheap bus to go to one of the numerous nearby casinos already. The reason Woodbine hasn’t been seriously considered by the OLG like the downtown area is because there are many magnitudes of more people within easy walking distance of a downtown casino. At least having to get on a bus requires them to think a little bit before they go gamble.

        I’m opposed to casinos in general, I’ve seen what gambling addiction does to people. A relative of mine was always telling us about how much he won at the Niagara one whenever we heard from him. We haven’t heard from him in a long time now but did from his wife, well now ex-wife, what he never told anyone was how much he was losing, in the the end he lost his wife, kids, job, house, car, and job and no one is sure where he is now, at least the last I heard, he’s a distant relative so we never heard very frequently from him to start with.

        But seriously what are the chances we will rid our province of casinos? They’re far more addicting to gov’ts who siphon the cash out of families who can’t afford it, a very large percentage of income casinos generate comes from gambling addicts. If we must have one in the GTA, and it appears we must, then Woodbine is probably the least harmful option.

  • tyrannosaurus_rek

    If expanded convention facilities would do so much good for the city, let’s forget about the casino completely and focus on integrated convention centres.