Closing casino costly
If the Liberal government decides to close Casino Niagara, it will likely cost them tens of millions of dollars.
Canadian Niagara Hotels, which owns the building Ontario Lottery and Gaming Corp. leases for the original Niagara Falls casino, said Thursday the 15-year lease extension signed in 2010 has no early-exit clause.
That means if Liberal Premier Dalton Mcguinty decides to shutter Casino Niagara, which opened in 1996, the government will still have to pay out the full cost of the lease, which expires in 2025.
Casino Niagara could be on the chopping block if the Liberals accept a recommendation from the Drummond Report, a 700-page document released Wednesday on ways to reduce the province’s $16 billion deficit.
Among his 362 recommendations, Don Drummond, chairman of the Commission of the Reform of Ontario’s Public Services, said one of the two casinos in Niagara Falls should be closed.
Asked for a reaction, OLG spokesman Tony Bitonti said the agency would wait to comment until the government decides how to act on the report.
“Drummond is advice to the government only. They set gaming policy in Ontario so it’s advice to them and they can pick and choose what they wish,” he said.
The lease with Canadian Niagara Hotels was renewed in January 2010, two months before it was set to expire.
It was a 15- year extension, and CNH president Dino Dicienzo Jr. said there’s no option for the contract to be broken.
“It’s a full 15 years the government has committed to,” he said. “It’s a long- term commitment, which is what they wanted to do.”
Neither Dicienzo, Bitonti or Greg Medulun, the director of communications for the two Niagara Falls casinos, would comment on how much the OLG pays the hotel company each year.
However, with no exit clause, breaking the lease early would mean the OLG would have to pay out the remaining 13 years.
“We don’t release the details of the lease agreements because of commercial sensitivities,” said Bitonti. “We deal with several private operators and each of them have different types of agreements so we keep everything private.”
Dicienzo said he believes the long-term lease deal shows the government sees a need for Casino Niagara.
“Their commitment to Casino Niagara has been unwavering. What we envisioned was rebranding it now that the longterm commitment is there,” he said. “Similar to Vegas, where you have the Bellagio and the Palms, use it to create different markets and perhaps attract a younger demographic.
“Gamers in Ontario are continually getting older, so they need to make sure they’re appealing to the younger demographic as well,” he said.
Businesses around t he Clifton Hill area are intently watching the Casino Niagara issue, said Clifton Hill Business Improvement Area president Harry Oakes.
“It would be a major, significant concern for the business area,” he said. “The economic position is better with the casino there. There are a lot of jobs at stake.”
Oakes said he’s taking the recommendation seriously.
“When you put this report together with the discussions about opening a casino in Toronto, obviously this is an issue that could happen,” he said.
One possible solution to declining gaming revenues could be having two separate management teams running each of the two Falls casinos.
“Let them compete and grow the market,” he said. “It needs to be a competitive environment to thrive. If you had guys at Casino Niagara and said, ‘ Your bonus is based only on Casino Niagara’ and separate guys at Fallsview, you’d see some results.”
Conservative finance critic Peter Shurman, a Thornhill MPP, took it a step further, calling on the Ontario government to look into privatizing the casino gaming industry.
“Maybe it’s time to get the private sector involved,” he said. “You could probably have 10 casinos and they would probably all make a profit. You’re talking about the best of both worlds.”
He called the Drummond Report “a wake-up call.”
“I think this is the opportunity to review what’s going on with the OLG and gaming operation in general,” he said.