Ontario Lottery and Gaming Corporation has a lot riding on Gananoque.
Casino Thousand Islands, just outside the tourist town, is the agency’s first foray in a plan to hand the province’s casinos over to a private operator. The goal is to boost revenue from gambling while letting the private market handle the costs of renovating and expanding casinos.
If all goes well in the region, OLG will get out of the business of running casinos directly throughout the province and hopes to boost the annual dividend it takes from casinos and lotteries from $2 billion to $3 billion.
Great Canadian Gaming, based in Vancouver, took over operations of Casino Thousand Islands and the slot machines at Kawartha Downs on Jan. 11. They have been re-branded as Shorelines Casino Thousand Islands and Shorelines Kawartha Downs. The company is also opening a new casino in Belleville, after that city’s council voted in favour on Jan. 25.
According to Chuck Keeling, vice-president of stakeholder relations and responsible gaming at Great Canadian Gaming, the process has been “complex” but he says he’s convinced the company will more than recoup the $50 million in planned investments.
“I don’t want to be flippant, but it’s money that counts in business … we’re very confident, very enthusiastic to be in all three markets,” he says, referring to the three Ontario municipalities where his company will now operate gaming sites.
There’s reason to be skeptical: Ontario’s casinos have had ongoing financial problems, and last year Caesars Windsor laid off more than 75 staff. Gananoque, just a short drive away from the U.S. border, faces the possibility of new casinos in New York state competing for American dollars.
Keeling says he isn’t worried, that American tourists aren’t a core part of the market they’re trying to attract.
“We’ve got no reason to believe we won’t see some kind of uptick to our business in the summer. It can only help, but it’s not something we think is core to the business case,” he says. Under OLG’s management, Casino Thousand Islands, which opened in 2012, was already one of the province’s most valuable before being privatized, despite years of a higher Canadian dollar keeping American tourists at bay.
While the new casino in Belleville is the immediate priority, Great Canadian Gaming plans to spend $13 million to refresh Shorelines Casino Thousand Islands. The company has also committed to keeping the permanent staff at the current pay and positions for a minimum of a year (though nine contract workers were let go shortly after the takeover).
It’s part of a broader modernization plan that’s been underway in fits and starts at Ontario Lottery and Gaming for four years.
Starting in 2012, OLG proposed to break with precedent and locate casinos closer to major cities across the province. That included a proposal to build one in downtown Toronto that was defeated by council against the wishes of then-Mayor Rob Ford. In eastern Ontario, that meant a contentious regional fight against a possible competitor in downtown Kingston. Locals, including opposition MPPs, accused OLG of making plans in secret to open a casino in Kingston that would have cannibalized the customer base of the existing casinos.
OLG chair Paul Godfrey was fired in May 2013 when it became clear the Toronto casino plan wasn’t going anywhere, leading the provincial New Democrats to charge the province’s plans were “in shambles.” However, for Gananoque the fight only came to an end more than a year later when two-thirds of voters in Kingston turned down a casino.
Gananoque Mayor Erika Demchuk welcomes the new money Great Canadian has committed to spend, especially since it almost didn’t happen at all.
“When the modernization plan started to happen… we all banded together and fought hard to say we didn’t want to lose our casino,” she says. “It’s very important money to the town.”
While larger cities like Kingston, Ottawa and Toronto fought against plans to have casinos relocated closer to their downtowns, Demchuk says she never faced any political pressure to oppose the casino—though she concedes that may be in part because the casino isn’t located in Gananoque’s historic downtown.
OLG spokesperson Tony Bitonti says the modernization plan has adapted to local concerns as communities have made their opposition clear—and the agency is happy to rely on communities where they’re welcome.
“It’s up to municipalities whether they want to host a casino or not. Gananoque and the Township [Leeds and the Thousand Islands] love it because they get a lot of revenue from it, so they put up their hand,” Bitonti says.
OLG may prefer friendlier relationships with municipalities to the acrimonious alternative, but it comes at a real-world cost: the gaming regulator’s contribution to the provincial budget in 2015 was lower than 2014’s projections had hoped.
Mayor Demchuk says her town’s experience with the casino has been favourable, despite critics’ concerns that casinos increase the rate of gambling addictions.
“Like every community, there’s been a few hiccups. We all hear stories about people who got in over their heads. But overall it’s been a very positive experience,” Demchuk says.
Bitonti says the change in ownership won’t alter OLG’s public mandate to keep gaming from becoming a free-for-all in the province.
“We’ll have ownership of the customer information, we’ll maintain our own responsible gaming standards, there’s a number of things we’ll be doing,” Bitonti says. It’s similar to the arrangement the agency already has at Caesars Windsor and Fallsview Casino Resort, but in those cases the government still owns the properties – for now.
Whatever the future of gaming in Ontario, Gananoque’s mayor says she doesn’t lose sleep over the “what ifs” of gambling’s future. Part of that serenity comes from avoiding committing the municipality’s take of the casino money to any of the town’s ongoing expenses.
“It’s found money for us. It could be here today and gone tomorrow,” Demchuk says. “It’s playing the lottery.”
Photo by John McGrath.
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