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The Globe and Mail

Toronto casino vote hinges on preferential hosting fees

MGM Resorts Senior VP of public affairs Alan Feldman unveils their vision for a mixed casino and entertainment complex for the CNE grounds at a Toronto press conference on March 6, 2013.

J.P. Moczulski/The Globe and Mail

Plans for a Toronto waterfront casino are facing a fresh challenge as undecided city councillors say they cannot support a new gaming facility without the major cash injection promised by the province's lottery agency.

As councillors returned to city hall Monday from a week's break, some continued to argue for a preferred status for Toronto, while those on the No side suggested their battle has been won now that the Premier has signalled she does not support a sweetheart deal for a Toronto casino. Other councillors, who could be considered swing voters, said they cannot support a new casino complex unless it brings a minimum of $100-million to city coffers each year – a number that appears unachievable if the province uses the same formula for hosting fees it is offering other communities.

Premier Kathleen Wynne is adamant that she will not approve special terms for a Toronto casino, a pledge that runs counter to statements by the Ontario Lottery and Gaming Corp., which has told Toronto it will collect hosting fees of between $50-million to $100-million if it says Yes to a mega-casino complex. To rake in that kind of cash, the province would have to give the city fees for hosting a casino that are more than double those offered to other municipalities, based on estimates of $1.4-billion in annual revenue from a downtown complex. Under the formula offered other cities, Toronto would collect about $20-million for a casino with revenue at that level.

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"Obviously, the dollar figure has to make sense," said Councillor Ana Bailao, who is undecided but leaning to the No side. "It would have to be a big chunk of money – even more than $100-million," she said, adding that could come from a combination of sources including hosting fees and leases.

Councillor Josh Colle said he, too, would need to see a fee in the $100-million-a-year range before he could support such a project. "Knowing what a casino in Toronto could make, I think that's very reasonable," he said.

Mr. Colle called the opportunity to build a Toronto casino "massive" and said the city should receive a better deal than other municipalities because of the scope of the project.

"People can hate Toronto more or less for someone saying that, but we've been told all along that this is a different opportunity and a unique one, especially by those pushing for it to be downtown," he said. "You can't at one point say, 'Toronto is special and different and unique,' and the next moment say, 'Actually, it's not.' "

Councillor Michael Thompson, chair of the economic development committee, has long said $100-million is a minimum for winning his support.

Mr. Thompson said he has had a number of meetings about a casino operation and has been told – based on costs such as transit and infrastructure – Toronto should not accept anything less than $100-million.

OLG executives were not available to comment Monday, but a spokesman said the agency has not changed its hosting fee commitment to Toronto.

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Councillor Doug Ford, an advocate for casinos at Woodbine Racetrack in North Etobicoke and on the waterfront, said a No vote would represent "the biggest business mistake this council could make."

A vote against a downtown development will result in a new facility being built in Vaughan or Markham, he predicted – locations that would threaten the continued existence of the casino at Woodbine.

Given Toronto's size and its infrastructure needs, it only makes sense that it should get the biggest share of gaming revenue, he said.

"We are the largest city in Canada, we should get the largest share," said Mr. Ford, Mayor Rob Ford's brother.

But with the province signalling there will be no special deals for Toronto, one of the most vocal critics of a downtown casino is predicting the fight for council approval is lost, even before the release of the city manager's report. The report, which has been delayed, is expected to give details on casino fees.

"If they can't put a $100-million hosting fee on the table, they are dead in the water," Councillor Adam Vaughan said.

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