Ernst & Young, the consultants hired by the city to parse the potential economic benefits of a Toronto casino, came back with some impressive (on the face of it) numbers this week. The report says a mega-casino complex would be a boon. But it depends on the way you read the dollar signs. The bottom line is that we'd be suckers to go with this bum deal.
THE BIG NUMBERS
3.8 million square feet
Size a casino resort would have to be to ensure a reasonable return on investment, according to the Ontario Lottery and Gaming Corporation (OLG).
Land area a casino complex that size would require.
Estimated proceeds from the sale of city-owned land to the developer of a casino complex.
City's estimated share in property taxes.
Amount by which a casino would reduce gaming revenue at Woodbine Racetrack.
Number of people employed at Woodbine. (That's 5.5 per cent of all jobs in Rexdale, an area that's seen a 26 per cent increase in unemployment since 2000.)
Less than 1.2%
Proportion of the gambling revenue pie Toronto would receive from a casino complex - far less than the 8 to 51 per cent cut casinos pay to host municipalities in the U.S.
What Toronto received in hosting fees from Woodbine, out of the racetrack's 2011 revenues of $588.4 million.
What Toronto could receive in hosting fees (less than 1 per cent of the city's total budget), based on the rosiest OLG forecast of $1.4 billion revenue from a casino resort.
People in the GTA who have a severe gambling problem, according to Toronto Public Health.
People in the GTA considered at risk of developing a severe gambling problem.
READING BETWEEN THE LINES
Possible locations mentioned in Ernst & Young's report Metro Toronto Convention Centre (MTCC) site, Exhibition Place, the port lands.
Problems with the port lands and the Ex The CNE, Royal Winter Fair and Molson Indy need to be accommodated at the Ex, where a separate plan for a hotel is reportedly in the works. Meanwhile, the port lands are a flood plain. Also, some city-owned land there is already subject to long-term leases.
The report argues Putting a casino complex on the MTCC site and building a bigger convention centre would make Toronto more attractive to convention business. Why not move the MTCC to the CNE grounds, where there's more than enough exhibition space in the Direct Energy Centre - more than a million square feet, to be exact?
Wishful thinking Ernst & Young estimates that Asian high rollers would arrive in droves, spending anywhere from $250 to $400 million. That's one huge assumption, since the two largest casinos on the planet are already in China.
Wild card OLG is revising the formula it uses to determine what cut of the gaming pie host municipalities should get. It'll be based on revenue from slots, on a sliding scale, as well as the number of customers.
What the Ernst & Young report says about that "The new formula does not proportionately compensate municipalities for hosting larger [venues] and/or higher-performing gaming revenues."
New wrinkle OLG wants to set up a temporary casino at Exhibition Place while a new one is being built in Toronto.
Given short shrift The cannibalizing effect, which the E&Y report estimates would be in the tens of millions, of a downtown casino on area businesses.