The long-shot bid for a downtown Toronto casino resort appears to be all but dead, say city councillors of various stripes.
The OLG is now left scrambling to save the deal after it was told to formulate a new casino profit-sharing formula that would be equal for all. Toronto had been in line to receive extra fees for hosting a major downtown resort more complex than a standalone casino.
“If the patient was drowning before, the patient is basically in the bottom of the water now and weighted down,” Councillor Michael Thompson, the economic development committee chair, said Wednesday after Premier Kathleen Wynne decreed all cities will be subject to the same formula for hosting fees.
David Shiner, another undecided councillor, said: “I’ve always believed that Toronto should be getting $100-million-plus for permitting a casino in the city. If the revenues are small, the chances are slim that Toronto’s ever going to support a casino.”
Wynne met Paul Godfrey, chair of the Ontario Lottery and Gaming Corp., behind closed doors for almost an hour, amid concerns Toronto was being pledged an oversized slice of the pie if it hosts a big resort in the core.
“The premier indicated her desire to have the same formula for all the municipalities. We agreed that we would review the policy of the formula at this point in time and get back to the premier in due course,” Godfrey said. “We are prepared to comply with that.
“Nothing has been finalized,” he said, adding he doesn’t know if a standardized formula will mean more or less money for Toronto.
Indeed, Wynne emphasized any revamped casino-hosting formula could still result in $50 million to $100 million for Toronto if it's amended to also be more lucrative for other cities.
“There are all those hypotheticals out there. From my perspective, what is important is it be the same formula across the province,” she said Wednesday night at a Liberal fundraiser.
Wynne, who represents Don Valley West, declined to say whether she supports a new casino in her hometown.
“It's not for us to wade into that discussion. Municipalities have to decide.”
Mayor Rob Ford, for one, is hoping the review results in more than the $50 million to $100 million a year OLG had promised. Toronto should get a better deal than smaller cities that host stand-alone casinos, Ford suggested.
“To say that we’re the same as Hamilton or Ottawa is ridiculous,” Ford said. “I think we should (get a better deal), absolutely,” he said. “You can’t compare us to the second largest city, which is Ottawa,” with a fraction of the population, he said.
“But to look at a new funding formula, I have no problem with that. It could benefit us.”
That drew scoffs from Councillor Adam Vaughan, who has led the charge against a downtown casino.
“The goal of modernization of OLG is about helping the province deal with its deficit, and if they give all the money away to casino operators and to cities, the province at the end of the day is left with nothing,” he said.
“It means that the mayor’s ridiculous number of $200 million, the city manager’s report of $168 million and even OLG’s claim of $50 million to $100 million, all of it was fake. It’s just shiny baubles and clever catchphrases and pretty pictures trying to seduce us into saying yes to a casino.”
OLG said in January that Toronto stood to earn up to $100 million a yearToronto stood to earn up to $100 million a year in recognition of the size, scale and job opportunities promised by casino operators fighting to build a casino-anchored complex worth $2 billion to $3 billion. A city-commissioned consultant earlier forecast hosting fees of up to $168 million.
Smaller cities in the running for new casinos started complaining they stood to get a small fraction of Toronto’s take, prompting Wynne to change course even though Toronto held extensive public consultations using OLG’s hosting fee figures.
A government source told the Star the OLG was told to draft a common formula for all because their “fingers were on the scale” in order to sweeten the deal for Toronto.
Toronto city manager Joe Pennachetti was about to release a casino report with recommendations for council with a negotiated hosting fee. The report also has results of public consultations that used the $50 million to $100 million figure.
Pennachetti would not comment Thursday, leaving it uncertain if council will vote in May, after all.
The funding formula for host municipalities that was to take effect April 1 would give the host city 5.25% on the first $65 million in net slot revenues; 3% on the next $135 million; 2.5 per cent on the $300 million after that; and 0.5% on the remainder.
If Toronto passes, the focus will turn to other communities in the “gaming zone” — south Mississauga, Richmond Hill, Markham and Vaughan.
Mississauga councillors reacted coolly to the opportunity.
“I think it’s terrific that the premier’s ordering the OLG to treat everyone the same, that’s wonderful,” Councillor Jim Tovey said. “But, no, I don’t want a casino in Mississauga.”
Councillor Ron Starr said, “To me, Toronto, despite the opposition, would be the ideal host.
“It’s the hub of the GTA; that’s where you would want a major entertainment facility. I don’t think we’re available or ready here.”
With files from Paul Moloney, Robert Benzie and San Grewal