Casino and gaming can be very big business. Whether you are playing online roulette through your Lucky Nugget app or heading down to the local casino to take on the blackjack dealer, there are many who enjoy the thrill and excitement that this brings. With that in mind, it was inevitable that when the Ontario Lottery and Gaming Corp (OLG) decided to hand over operations to four casinos for the next 22 years, there would be significant interest.
After several elimination rounds, there are now three companies left with a chance of landing what would be an extremely lucrative deal. The three companies that are hopeful of concluding a deal are; Malaysia’s Genting Group, Caesars Entertainment and Toronto’s very own Brookfield Asset Management.
How will this impact the Toronto gaming market?
The company that does manage to strike a deal would gain exclusive rights to Toronto’s Woodbine Racetrack, Ajax Downs and the Great Blue Heron casino. Furthermore, it’s expected to include ownership to Great Canadian Gaming, a company associated with OLG whilst also offers the potential of opening a brand new casino in the Toronto area, if a suitable community is located.
Figures for the deal are astronomical, as you would expect. The winning company can expect to earn a minimum of $57m annually from the 22-year deal. On top of that, you can expect to receive as much as 70% of the gambling revenue. In Toronto, that gambling revenue is reported to have hit $1bn throughout 2016! That demonstrates the huge Toronto gaming market and shows that there is a big area to work with, hence the desire for many companies to get involved.
Future developments offer promise for players
As briefly touched on, the proposal for the winning company offers the prospect of a new casino in Toronto, which should appeal to players. Of course, nothing has yet been confirmed, but a new casino would bring additional economical benefits to the region as well as giving players another venue to fulfil their gaming needs.
Another part of the deal focuses specifically on Woodbine Racetrack, which could see some major redevelopments. Anything decided would require approval from the council, but plans include replacing the current slots parlor with a full casino.
Given the prime location of this venue, close to Toronto Pearson International Airport, it’s hoped it would be the ideal place to attract more players who visit the city. A spokesman for Woodbine said; “The OLG’s modernization plan is the catalyst for Woodbine Entertainment to unlock the value of the Woodbine lands to sustain horse racing on our 680-acre site and bring real economic development to Rexdale.”
If the plans come off, the addition of table games and thousands of slots would combine to increase the revenue whilst also offering players a great combination of games at a fantastic facility.
OLG continue to increase revenues
This prospective deal is the latest in attempts by OLG to increase it’s revenues and profitability over recent years. Almost half of their casinos have been sold off to private operators as they seek to modernise the operations. That included the $46.9m sale of Slots at Kawartha Downs and Casino Thousand Islands.
OLG is of extreme importance to the Ontario government given how it can impact the economy, with profits at over $2.3bn at the end of the 2015/16 fiscal year. Long-term, the plans are clear too, with OLG planning to generate a further $900m a year from their outsourcing process by 2021.
Ultimately, it’s a positive time for Toronto gaming, no matter who lands the lucrative contract. With revenues increasing and a lot of positive ideas for the future it appears everyone concerned can be pleased with how things look right now.