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A croupier places gaming chips on a card table at Aspers Casino at Westfield Stratford City Mall in London, U.K. on Wednesday, Jan. 11, 2012.

Mayors of Ontario border communities are assailing a proposal by the province's lottery corporation to build a casino in Toronto, saying it would squeeze revenues in their gambling operations at a time when they are already struggling.

Windsor and Niagara Falls are highly dependent on visitors from Toronto to their casinos. But the mayors say they risk losing much of that business if Canada's most populous city builds its own casino.

"Only OLG would come up with a business plan that would cannibalize their existing business," Windsor Mayor Eddie Francis said in an interview on Friday, the day after The Globe and Mail reported that Ontario Lottery and Gaming Corp. plans to recommend that a casino be built in downtown Toronto.

Casinos are major tourist attractions and employers in Windsor and Niagara Falls. But the casinos are confronting a number of challenges, brought on by the high Canadian dollar and more stringent border rules that make it much less attractive for Americans to play blackjack and the slots in this country.

As well, the communities are facing new competition from casinos that have opened in recent years in U.S. border cities, including Detroit and Buffalo, which lure Canadian visitors with $50 travel vouchers, free drinks and smoking on the premises.

Instead of flocking to Windsor and Niagara Falls, many Americans are now gambling at home. Niagara Falls Mayor Jim Diodati said there's no question a casino in Toronto would have a negative impact on Casino Niagara and Fallsview Casino.

"The joke around here is the only thing left are the locusts," he said in an interview on Friday. "We're being asked to compete with our hands behind our back."

The Toronto casino idea is part of a strategic review OLG is conducting of its casino and lottery businesses, in a bid to find new revenue sources. The stark reality is that its casinos are no longer where the people are, according to sources familiar with the review.

Over the past five years, OLG's gambling revenues have steadily declined. In the first quarter ended June 30, 2011, they were $297.4-million, down from $404-million in the same period in 2006. The number of patrons also fell, to a daily average of 42,104 from 53,953 over the same period.

Toronto is one of the few large municipalities in Canada that does not have a casino. Yet there is huge demand, the sources said. They point to the people who routinely board tour buses at the corner of Gerrard and Broadview bound for other cities to gamble, and who line up three deep to play the slot machines on Friday evenings at Woodbine racetrack in Toronto.

It would be up to the province to decide if Toronto gets a casino. The McGuinty government placed a moratorium on building new casinos in 2005.

"Unless a decision is made by the government to remove the moratorium, there will be no new casinos," a spokesperson in the Finance Minister's office said Friday. She reiterated that the government does not plan on making a decision about Toronto until it receives OLG's strategic review, expected in March.

But sources close to the government said Premier Dalton McGuinty is interested in looking at a casino in Toronto to help the province raise new revenues and erase its deficit. OLG contributed $1.9-billion to the province's coffers in fiscal 2011.

"The fact that [the story]is out there tells me there are some people who are supportive of it," one of the sources said.

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. Councillor Giorgio Mammoliti, who talked up the idea of a casino at Ontario Place during his aborted mayoral run in 2010, predicts a casino could bring in roughly $500-million to city coffers alone and urged the province to open the new revenue stream as soon as possible.

"We should have hit the jackpot a long time ago," he said.

With a report from Patrick White

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