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Ontario's government is game to the idea of a Toronto casino Add to ...

The Ontario government is receptive to the idea of a casino in Toronto because it would help the province raise a new source of revenue, suggests Finance Minister Dwight Duncan.

At his request, the province’s lottery corporation launched a strategic review of its operations a year ago. The government wants to earn a higher dividend from its lottery corporation, which contributed $1.9-billion to the province’s coffers in fiscal 2011.

“We have to maximize profits, and we haven’t necessarily been doing that,” Mr. Duncan told reporters on Monday. “Obviously, we wouldn’t move on something like that without the city itself wanting it.”

As first reported by The Globe and Mail, the Ontario Lottery and Gaming Corp. is pushing for a casino in downtown Toronto. Councillor Doug Ford, Toronto Mayor Rob Ford’s brother and closest adviser, said the administration would support a casino as long as the public is behind it. Most major metropolitan regions in Canada have gambling venues.

Mr. Duncan said he looks forward to receiving the review of OLG’s gambling and lottery operations. The current strategy is outdated, he said, because it was devised in the 1990s, before U.S. border states got into the casino business and when the Canadian dollar was trading well below the U.S. dollar, making Ontario a magnet for American tourists.

Today, however, the border communities of Windsor and Niagara Falls can no longer count on a steady flow of Americans flocking to their casinos. They are facing new competition from casinos that have opened in recent years in Michigan and New York State, which lure Canadian visitors with $50 gift vouchers, free drinks and smoking on the premises.

“Growth in those organizations was predicated on access to the U.S. markets and a Canadian dollar at 60 cents,” Mr. Duncan said. “We don’t have that any more. That world has changed.”

The challenge, Mr. Duncan said, is ensuring that the government protects the province’s border casinos while maximizing the profit potential of the lottery corporation.

Mayors of border communities have expressed concerns that a casino in Toronto would squeeze revenues in their gambling operations. But Mr. Duncan credited the new board of OLG, led by chairman Paul Godfrey, for coming up with a strategy that is no longer based on the 1990s. He also said he cannot imagine that the board would make a recommendation that would undermine the agency’s revenues and profitability.

“Those facilities in Niagara Falls and Windsor are still very important,” said Mr. Duncan, whose own riding is in Windsor.

According to sources, there have been discussions within government about how a casino in Toronto would help the province slay its deficit, which is projected to hit $16-billion this year.

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