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Casino would cure city’s fiscal ills, report says

The president of the CNE board says the site is too small for the fair and a casino.

J.P. MOCZULSKI/The Globe and Mail

If Toronto welcomes a new destination casino, the municipal government could win a jackpot big enough to fix its money woes for good, the city's top bureaucrat says.

City manager Joe Pennachetti's office released a highly anticipated report Monday that estimated the municipality could reap as much as $195-million per year – on top of a one-time sale or lease of city-owned land – from an integrated resort casino near the waterfront.

Toronto would get the biggest gambling bang for its buck at Exhibition Place, the report suggests.

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"If the hosting fees and the property tax revenues are anywhere near the potential [identified in the report] … the fiscal benefits to the city would be significant enough to virtually solve our operating fiscal sustainability budget," Mr. Pennachetti told reporters.

The report also zeroed in on the problems a casino could cause.

A technical analysis from the medical officer of health concluded a new casino would increase problem gambling no matter where it is located in the Greater Toronto Area, but the fallout would be more pronounced for the facility's neighbours.

"I can think of a hundred ways to make the city money. But I choose to do those ones that are fair and actually benefit the city," said Councillor Gord Perks, a casino opponent. "They [casinos] make about a third of their money off people who are addicts."

The city manager is asking for permission to conduct public consultations on a casino over the next couple of months.

Council would not be asked to vote on a casino or a site until February or March of next year at the earliest.

In the meantime, councillors will be digging into the report's estimates to decide whether a new Toronto casino is a good bet or a bad one.

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$195-million

The top-end estimate for hosting fees ($168-million) and extra property-tax revenues ($27-million) if Toronto welcomed an integrated resort and gambling palace near the waterfront.

Hosting fees, which are essentially the city's cut of gaming revenue, are sure to be the subject of intense negotiations with the Ontario Lottery and Gaming Corp. The report suggests three formulas for determining Toronto's take, which would net anywhere from $18-million to $168-million. The lowest figure actually reflects a modest increase from OLG's current revenue-sharing model. (Casino Windsor gets approximately $3-million a year, for example.) Mr. Pennachetti believes Toronto has the leverage to score a special deal, but Councillor Adam Vaughan called the hosting fee estimates wildly unrealistic.

"It's not even in the same ballpark," he said.

What would $195-million buy Toronto? The figure is almost as large as the transportation department's operating budget or about 70 per cent of the parks, forestry and recreation budget.

$250-million

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The estimated amount the city could reap from selling or leasing Exhibition Place for a casino.

The 192-acre site is one of three downtown or waterfront locations mentioned most frequently. The others are the Port Lands and the Metro Toronto Convention Centre, whose owners, Oxford Properties Group, have unveiled preliminary plans for a $3-billion to $4-billion casino-anchored redevelopment.

The MTCC's Front Street site is privately owned. The city owns most of the Port Lands, but the report pegs the land's worth at $35-million to $110-million, less than the Exhibition Place estimate of $125-million to $250-million.

In speaking to the gaming industry, Ernst and Young found little appetite for a casino in the Port Lands because of "the cost of remediation, flood protection costs, infrastructure needs and distance from other attractions in the City."

0.2 per cent

The percentage of the population currently afflicted with gambling problems. A technical analysis from the city's medical officer of health concludes the prevalence of gambling addiction would increase no matter where a new casino is located in the Greater Toronto Area. However, people living near the new complex would likely suffer most, the MOH says.

If Toronto rejects a casino, the province could put one in Mississauga, Markham or Richmond Hill. If that happens, the reports warns that Toronto could suffer the negative consequences of a casino without cashing in or controlling the development. "The City must weigh the importance of being in a position to manage the various impacts noted in this report."

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About the Author
Health reporter

Kelly Grant is a health reporter with The Globe and Mail. More

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