Fallsview Casino and Casino Niagara Lease Up for Grabs!
Written by Geraldine
Published / 10 Aug 2018
After years of being under the management of the Ontario government, Fallsview Casino and Casino Niagara are up for grabs. The OLG (Ontario Lottery and Gaming Corporation), which has been taking care of the casinos thus far, announced its more elaborate plans this summer. However, it first stated its plans to re-structure its casino holdings back in 2016. It will be doing this by awarding the lease of both casino to privately owned companies, as opposed to its own government-operated company.
The new tenants will be taking over both casinos approximately by June 2019, when the current contract in place expires.
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While there were initially five companies that made a bid for the casinos, only three now remain. And the two that pulled out were the only Canadian entities in the running. These Canadian companies, the Great Canadian Gaming Corporation and Gateway Casinos & Entertainment Ltd., had to drop out of the bidding war. This is because the price of the casinos went up, and they could no longer feasibly meet the price.
The three companies that remain are all American: the Hard Rock Cafe` International Inc., Caesars Entertainment Corp., and Mohegan Sun Inc. All three companies have a great deal of experience when it comes to running casinos. Caesars Entertainment already operates Casino Windsor in Ontario, so it seems like a good candidate in that respect.
Both land casinos have been tied together in a 20 year lease deal. This means that whoever wins the bidding war will be the new management for the upcoming 20 years for both casinos. This amazing two-in-one deal comes with an equally amazing price-tag, no doubt in that.
However, it's a slight shame that two big CA casinos will no longer be under Canadian control given that the only Canadian companies have been eliminated from the ‘competition'.
OLG and the City of Niagara
Both casinos are situated in the City of Niagara Falls. Together, they employ the greatest amount of people in the city plus they bring in a much needed source of revenue. Part of the current deal with the OLG is that the city receives a monetary gift as ‘thanks' for being the host city.
Since December 1996, the OLG has acquired well over C$124.17 million in revenue from the two casinos. While this might sound attractive, it's also had to maintain the upkeep of the casinos – which comes from tax-payer money. It's also had to donate the ‘thanks' to Niagara. In 2017, this gift amounted to C$26.2 million.
The new contract with whoever wins the bidding war will also have to uphold this in a way. The company would have to pay a yearly tax to the City of Niagara, in exchange for receiving the casino revenue and being the sole entity in control of the Canadian casinos.
There are some current fears about what the new ownership will bring with it. Some have worried that it might be a threat to the 1,400 jobs established right now at the two casinos. The OLG has also expressed its worry that the new plans proposed by the three companies might lead some of the casinos' highrollers to head off to Las Vegas.
At this early stage, there's no real way of knowing of who will get the two prestigious casinos. We'll keep you updated on that one.
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