Ontario opens Niagara casino investment process with three-operator cap

Ontario's provincial government and the Ontario Lottery and Gaming Corporation (OLG) have launched a Call for Investment aimed at establishing a competitive land-based gaming market in the Niagara Region. The first phase is open to a maximum of three new operators, and responses to phase one of the procurement are due by 3 December.

Under the new framework, a casino operator entering the market must commit at least CA$1.5 billion, and a CA$100 million entrance fee applies to every newcomer. That fee is meant to offset provincial revenue losses tied to changes in MGE Niagara Entertainment's exclusivity rights under the Niagara Gaming Bundle. Niagara gaming operators will also face a gaming tax rate of 9.75 per cent, alongside a new gaming framework for the province.

No more than three new operators will be admitted at the outset. After a fixed term of 10 years, the market could grow further, depending on indicators of market maturity such as tourism figures and how well operators perform. In the first phase, established gaming operators are invited to register interest, and those shortlisted move on to a competitive stage where they present detailed proposals for new integrated casino developments.

The Call for Investment sits within the Destination Niagara Strategy, which the province says aims to double tourism to over 25 million visitors a year, add CA$3 billion yearly to Ontario's GDP and produce roughly 46,500 permanent jobs. According to the province, the call will draw more than CA$3 billion of direct gaming investment into the Niagara Region and support the creation of over 10,000 construction jobs.

Earlier this year, OLG and its Niagara-area service provider, MGE, reached an agreement to suspend MGE's current exclusivity rights to Niagara land-based gaming and allow additional casino operators to enter the market. Since 1996, OLG has provided more than CA$256 million to the City of Niagara Falls for hosting Fallsview Casino Resort and Casino Niagara.

Zee Hamid, Minister of Tourism, Culture and Gaming, said Niagara has considerable potential for growth and that the strategy is intended to attract investment, create jobs and strengthen the region's tourism economy. Duncan Hannay, president and CEO of OLG, said the corporation is working with partners and the Ontario government to strengthen Niagara's position as a tourist destination, citing new investment in hotels, entertainment venues and dining alongside the existing Fallsview and Casino Niagara properties.