Downturn causes critics to question costly expansion of Windsor facility
By Lee Greenberg, The Ottawa Citizen
October 2, 2009
Ontario's four large government-owned casinos lost $94 million last year, according to newly released figures.
Finance Minister Dwight Duncan, who is responsible for the province's scandal-plagued gaming corporation, blamed the losses on an industry-wide slowdown.
"If you look at the publicly traded companies in the U.S. you'll find that casino gaming business is down around the world," he said.
Duncan said border restrictions created after the 9/11 terrorist attacks have hurt attendance at the casinos, three of which are in the border towns of Niagara Falls and Windsor. A fourth government-owned casino is located on a native reserve near Orillia.
Government figures show a steady slide in casino revenues over the past three years. The last time casino revenues were greater than expenses was fiscal 2006, according to a Duncan spokeswoman.
The losses don't take into account a 20-per-cent slice of revenues, known as a "win contribution," that casinos are forced to send to the government.
"It's a little disingenuous to talk about the bottom line when you forgot we take in the win tax over the top," said Duncan.
Even with that significant deduction, casinos were turning a profit as recently as four years ago, however.
The figures prompted questions on Thursday about the province's decision to sink hundreds of millions into a casino expansion in Windsor, where a new 5,000-seat concert facility and hotel expansion opened in 2008.
Premier Dalton McGuinty justified the government-financed project, which came as he campaigned for billions more in federal transfers, as a way to generate revenue. Despite the additions, however, the casino continues to lose money, Duncan said. "Yes they should be profitable," he added. "But the gaming business is down as I understand it across North America and indeed worldwide."
Conservative MPP Peter Shurman called the Windsor expansion a "billion-dollar boondoggle."
"Significant tax dollars -- we're talking about the better part of $1 billion and climbing -- were invested in a casino in the minister's own riding," he said, referring to Duncan.
"And the minister's justification is nothing other than to say well it creates jobs where jobs are lacking. There are jobs lacking in lots of areas of the province. That doesn't mean we should build billion-dollar boondoggles."
The McGuinty Liberal government has come under fire lately for allowing OLGC to build an $81-million power plant at the Windsor casino. The facility cost roughly double initial estimates and is now the subject of a lawsuit.
Duncan said he was "uncomfortable" about the "odd" deal, but said he couldn't speak about the issue in detail because of the pending suit.