A proposal for a Toronto casino is going to public consultation, but critics say residents are being fed false numbers that misrepresent how much the city would benefit from a gambling complex.
As expected, Rob Ford's executive committee voted Monday to get public feedback on a report from city manager Joe Pennachetti's office on the pros and cons of bringing a casino to the city.
"It's important for us to get the information that we have out, to consult with our communities, and let the people understand what's really happening," said Councillor David Shiner, a member of the executive. "We want to get their input, the time is now to get that."
Consultations could start as early as next month, and finish by February. Council is expected to make a final vote on a new casino in March at the latest.
But there is little agreement on the findings of the report the consultations will be based on, which was compiled by city staff working with consultant firm Ernst & Young.
The report estimates that in addition to an injection of thousands of new jobs, increased property tax proceeds, and profits from land sales, the city could expect to receive an annual hosting fee from the Ontario Lottery and Gaming Corporation of up to $168 million.
While many councillors say the report is short on vital details, the $168-million figure in particular has been criticized by opponents of the casino as being wildly inflated.
"We have guesses, on top of estimates, on top of flights of fancy. None of the numbers in this report are real," said Councillor Adam Vaughan, a vocal opponent of the casino proposal.
Windsor receives a hosting fee of only $3 million for its casino. Under a new province-wide formula that OLG plans to implement in 2013, a gaming complex the size of the one being pondered in Toronto would merit an $18-million hosting fee.
The public won't know the real hosting fee amount for a Toronto casino until after the consultations are over. The hosting fee would have to be negotiated between the city and OLG, and Penachetti confirmed Monday that those negotiations won't be completed until the council vote in March.
Speaking to reporters after the meeting, Pennachetti said that he will now begin a "significant and serious discussion" with OLG about the hosting fee, but that the best he can do before consultations start is "a more refined range" than the current $18-168 million gap between the lowest and highest projections.
Penachetti admits the $168 million figure is optimistic, but he believes it's also realistic given the amount of revenue a Toronto casino could pump into the OLG.
"We knew it was high. It's a number that [OLG has] never seen before," Pennachetti said. "Does that mean that we're going to drop significantly from that number? I'm not going to say that."
Speaking at Monday's meeting, OLG president Rod Phillips didn't shoot down the proposed fee, but wouldn't commit to it either, describing it as "the starting point of negotiations."
The $168-million number is based on Ernst & Young's assertion that an "integrated entertainment complex" in Toronto would generate gambling revenues of $1.4 billion a year, roughly equivalent to the industry's entire current province-wide output. The report argues that the city and province should split the government share of the revenue 50/50.
But Vaughan warns that that the $1.4 billion projection is much too high, and that OLG will never agree to a 50/50 split. The best deal any other municipality in the province gets from OLG is five per cent of government gaming revenues.
"If the revenue isn't there, the hosting fee isn't there. If the hosting fee split isn't what they say it is, this city gets next to nothing while we blow apart huge swaths of the downtown core," said Vaughan.
The Ernst & Young report examined the impact a standalone casino or an integrated entertainment complex that included a gaming facility would have on Toronto's economy. The consultants looked at three downtown locations - Exhibition Place, the Port Lands, and the Metro Toronto Convention Centre - and one outside the city core, at Woodbine Racetrack.
The most lucrative scenario would be an integrated complex at Exhibition Place, the report found, because the city-owned land at the site could fetch up to $250 million if sold or leased to a casino developer.
Last week, Caesar's Entertainment Corp. unveiled plans for a casino complex at the current site of the Metro Toronto Convention Centre. Oxford Properties group released designs for a gaming facility at the same site last month.