America First in Canadian Fallsview Casino and Casino Niagara Bid

Under, Ontario Lottery and Gaming Corporation’s new plans, Fallsview Casino and Casino Niagara’s leases are up for grabs. Both casinos will be bundled together for a 20-year lease deal. Originally five companies expressed their interest in taking over the lease. Out of the five bidding companies, only two were Canadian. These two companies, are the Great Canadian Gaming Corp and Gateway Casinos and Entertainment Ltd.  Heading up the American charge is Hard Rock Café International Inc., Caesars Entertainment Corp. and Mohegan Sun Inc. However, despite strong bids it was reported by Globe and Mail that only the US companies remain in the running. Meaning that for at least the next 20 years Fallsview Casino and Casino Niagara will be under US management.

What does this mean for the city of Niagara?

Currently, both casinos are owned by the government of Ontario. Through the government, they are both run by the Ontario Lottery and Gaming Corporation. This means that the government have a say in the day to day running of the casino. It also means that they are responsible for the future planning and costs associated. In the past, this has been a very profitable relationship. Not only for the government, but also for the city.

Since December 1996, the OLG netted revenue of $124.7 million for the city of Niagara. Revenues which of course were raised from payments. These payments are made to “thank” the city of Niagara for being the host city. Currently, payments to the city from the OLG are made quarterly. In June 2018, the city of Niagara received $7,393,429 in hosting payments. In addition to these payments, the casinos are also the largest employer in the city. This provides further revenue to the city. Although, no new lease-holder deal is finalised it is likely that the ‘host’ payments will continue.

However, just as the two casinos bring money, they also cost money. This is because as government operations, the government is liable for costs. As you can imagine, the running and upkeep of a casino is not cheap. This means dipping into tax payer money. Speaking about this in an interview OLG President Stephen Rigby said the lease sale ““Will make future capital costs of developing, expanding, improving and maintaining the Niagara casinos the responsibility of a service provider — so public money is no longer used to cover these costs.”

What does the future hold for Fallsview Casino and Casino Niagara?

Despite, being the prize at the end of a bidding war the future of both casinos is assured. One thing that is for sure is that they will no longer be Canadian run. That privilege will now pass to one of the three remaining US bidders. According to sources the OLG will base their final decision on the bidders’ experience in gaming development. Of which, all of the three remaining contenders have plenty. Especially, when it comes to online gaming operations. Online gaming in Canada is a strong and fast growing industry. Figures on Canadian casino review website Casinos.co suggest that over 70% of Canadians have gambled online in the last year. It is highly likely that all three companies will be looking to negotiate on online gaming.

Another area of the casinos, all bidders will be looking to expand and build upon is loyalty schemes. Something, which Hard Rock and Caesars Entertainment Corp can easily incorporate into their existing schemes. This has raised some concerns with the OLG, who fear that both casinos will lose their high-rollers to Las Vegas. Something, which would have a seriously negative effect on Fallsview Casino and Casino Niagara.

Unfortunately, as no deal has been reached there is no concrete plan for either casino. Nobody, besides the OLG knows for sure what terms and conditions will be attached. For Fallsview Casino, and Casino Niagara any future without Canadian ownership will be bittersweet.