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Are Casinos "Fickle Businesses"?

Published: March 1, 2013 8:46 am ET

Last Comment: March 1, 2013 12:15 pm ET | 6 Comment(s) | Jump to Comments

As the Ontario government looks to expand gaming through the modernization strategy of the Ontario Lottery & Gaming Corp., doubts continue to be cast on just how financially lucrative this strategy will be for both the government and the host municipalities.

The city of Niagara Falls recently found out that Fallsview Casino will pay nearly $3 million less in taxes to each the municipality and Niagara Region this year. That news comes as a result of the Municipal Property Assessment Corporation (MPAC) cutting in half Fallsview Casino’s 2012 property assessment - from $564 million to $278 million. With the property reducing in value, the amount of taxes owes on the property also decreases.

As a result, the Fallsview Business Improvement Association is looking for the casino to contribute the local BIA improvement fund in the same way that the casino in Windsor does - to the tune of $340,000 annually.

Coun. Wayne gates noted that the recent media attention to the MPAC assessment has created some buzz in the public.

“There’s not a lot of people in the city of Niagara Falls (that) are happy with the fact that (Fallsview Casino’s) assessment is going down in half when a lot of their homes are going up,” Gates told the Niagara Falls Review. “It makes absolutely no sense.”

“The casino hasn’t been a good corporate citizen of this community for a long time, Gates continued. “The OLG originally came into Niagara Falls to create good-paying jobs...give a boost to our tourist sector...and all they’ve done in the last 10 years is, as we found out, they don’t lay anybody off, they just walk you out the door.”

In writing for Canadian Business and Macleans, James Cowan notes that the mirage of casino glitz and glitter quickly fades.

"Casinos are fickle businesses. Economic growth spurred by casinos is either short-term or non-existent, according to a study commissioned by the Canadian Gaming Association."

As Ontario's government looks to saturate the province with online gaming, smartphone lottery tickets purchases and a total of 29 casinos, Cowan's position is that the proliferation will not create added revenue -- as was the case in New Jersey.

"But the supply of gamblers isn’t growing, so added competition divides the market into tinier bits. This oversupply is evident on the operators’ balance sheets: Caesars last quarter reported a $20.2-million drop in its Atlantic City revenue alone, and a total operations loss of $221 million."

Cowan also raised the point of Revel, whose losses spurred a Chapter 11 bankruptcy filing last week.

"Christie backed the construction of Revel, a $2.6-billion luxury casino in Atlantic City. Open last April, the facility lost $46 million in its first six months of operations," noted Cowan. "It’s further proof of how fickle and unpredictable casino patrons can be.

March 1, 2013 - 12:15 pmIf the OLG can predict that

Norm Brunet SAID...

If the OLG can predict that modernization will bring in 1.5 billion $ to the coffers then why were they not able to predict the losses that are now happening at casinos away from racetracks ?
Fact is, it is a guesstimate and a very poor one at that. Regardless of if I am a horseman or not I am still an Ontario taxpayer and these casinos will be built partially with taxpayer money. The casino business is saturated and this plan is sure to fail at our expense.

March 1, 2013 - 11:01 amHow convenient the property

How convenient the property tax was slashed in half for the Fallsview Casino. Yet another sign of the corruption going on in Ontario. If the property value goes down for the casino...why not the properties nearby? We can't afford to wait for an election and hope things will be rectified. I think we need to ask an MPP to approach the integrity commission and we need to lobby for a class action suit against OLG and the Ontario Liberals. I'll contribute, how about you? Enough is enough!

March 1, 2013 - 10:33 am"The only thing of

Lynne Magee SAID...

"The only thing of significance that will change in the Ontario landscape with this new plan are the beneficiaries. Namely the friends and associates of Paul Godfrey: Larry Tannenbaum and the U.S. Casino operators brought in to "run" things."

Can we get that printed many times over in big bold letters?

This shows just how negatively these casinos impact municipalities. On the other hand, the slots-at-racetracks do amazingly well. Go figure.

March 1, 2013 - 10:27 amTotally agree Bernie. The

Randy Young SAID...

Totally agree Bernie. The Liberals (and that includes the Kathleen Wynne-led Liberals) are apparently oblivious to logic. They seem to have all caught the same disease, and its affecting their brain cells .. or else, none have the guts to stand up to Godfrey, Tannenbaum or the big U.S. Casino operators.

March 1, 2013 - 10:14 amBack in my day if you weren*t

Dave Nicol SAID...

Back in my day if you weren*t a whiz kid you went to work in your teens to help with the cost of raising your siblings! I always vote in every election at all levels. It is my hope the people I elect are higher educated than I and use their knowledge to make life better for we the taxpayers. Unfortunately waste, greed and corruption as in personal gain are becoming the norm to some of those we elect. We*ve all heard the term A BIRD IN THE HAND as in the profitable SARP program compared to pie in the sky casinos which if anyone takes the time to research the huge losses incurred in most of them you*d run not walk away from them! We the horseracing industry supply tens of thousands of jobs and reinvest most of the money earned back in to the Ontario economy providing jobs for others, not to mention the share of PROFITS going to the racetrack municipality, as in more than 4 million annually to my City of Hamilton! Will a new casino without horseracing provide the same? I doubt it! Value for money indeed!

March 1, 2013 - 9:38 amA Casino in Toronto, or

A Casino in Toronto, or anywhere else in Ontario will never be a vacation destination. Only places like Las Vegas and Monte Carlo retain that sort of status. Atlantic City was briefly a destination until other Casinos began popping up all over the map.I used to know a lot of people who went there but not any more.
New Casinos will simply cannabalize the existing ones. A Casino in Toronto will simply save its patrons from having to drive to Niagara Falls or Rama for an outing. What OLG does not take into account is that the Ontario gambling pie is finite regardless of how you slice it. The only thing of significance that will change in the Ontario landscape with this new plan are the beneficiaries. Namely the friends and associates of Paul Godfrey: Larry Tannenbaum and the U.S. Casino operators brought in to "run" things.
The biggest losers will be Rural Ontario and the taxpayers of Ontario. Hopefully there will be an election before its too late to turn back.


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