Gifting Casinos

So the City, or at least city council, wants two casinos. We need one down the south end of Bank St. and we also need one in Kanata, apparently. (In fact, with Casino Lac Leamy it would mean the region has three casinos.)

Of course, council doesn’t really want two casinos. They’ve only suggested two because Senators owner Eugene Melnyk threatened to sue them. Council doesn’t really care about how many casinos they have; they only care about avoiding a tough decision.

Council had made a decision. They had decided that Rideau Carleton Raceway would be the home of the new casino. Riceau Carleton already has slot machines, have invested lots of money in being a multi-faceted gambling complex and needs the income stream to prop up the actual raceway (which in turn, we are told, props up 1000 to 1500 jobs in the region).

In case you’re wondering, no one has ever explained why the Raceway couldn’t just keep their slots without going Full Casino.

It should be clarified that the Raceway was chosen to be the location of the casino, but that the casino wasn’t given to the people (living in Toronto) who run the Raceway. Theoretically, there could be a more competitive bid by another prospective ownership group who could be awarded the casino – they would just have no choice on location.

Enter Eugene Melnyk, the former saviour of Ottawa hockey (well, aside from Jeff Hunt). Mr. Melnyk wants a casino out in the wilds of Kanata. He has a lot of room near The Palladium The Corel Centre Scotiabank Place Canadian Tire Centre. Busy during the hockey season, Canadian Tire Centre and its expansive parking lot lie fallow for much of the year. Incorporating a casino into Canadian Tire Centre’s footprint would make greater use of its large parking lot and make the entire complex more lively more regularly. It would also help prop up our fledgling Senators. Though they have some success on a sheet of ice, the balance sheet is far uglier.

Both venues offer some compelling and some less-than-compelling reasons to be the choice for the new casino (it is, it seems, a forgone conclusion that we will get a casino… that’s one decision they were willing to make). It would be perfectly reasonable for the city to think both locations would be worthwhile, and so it would make sense to ask to have two sites.

In fact, it makes so much sense that the City has already made such a request, and they’ve already been turned down by the Ontario Lottery and Gaming Corporation. The OLG has determined (wisely, I would offer*) that Ottawa doesn’t really need two large gambling developments right now. There’s no indication that the OLG will change its mind, and the Premier has stated that she will support the decision off the OLG.

So the question will be back to council. But whatever council does, there is one thing they must not do. They must not treat the casino as giant corporate welfare program. Sadly, the two leading contenders for the new casino want it for that very reason.

Rideau Carleton Raceway was allowed to install slots under the guidance of the OLG. The Raceway needed the slots to bring in a bit more money as the horse industry went through a bit of a low period. The Raceway claims they still need that income to keep them solvent. Consequently, a casino anywhere else (which would mean the removal of their slot machines) would cause the death of the raceway, leading to financial ruin for people in those 1500 jobs the raceway funds.

Mr. Melnyk needs a steadier income for his property in Kanata. The Senators are losing money (as is Mr. Melnyk) and without this additional income stream there is no way to know what will become of the Senators.

There is no ongoing discussion about which location is better, which location will better serve gamblers, which location will have fewer negative effects on surrounding communities, or which location is better for Ottawa, as a whole. The question council is considering is merely, which favoured business do we favour more, the raceway or the NHL hockey team.

If a raceway cannot turn a profit on its own, the city should not be gifting them a casino. If 1500 people are reliant on the raceway and the casino, the city can find other ways to help them. For instance, they could build a casino in the most economically-advantageous area, leading to a greater increase in prosperity, as well as more money in the city’s coffers, thus allowing the city to directly help more people who are in financial need.

If an NHL team will go bankrupt or relocate without the benefit of a gambling  concern, then the team should be allowed to go bankrupt or relocate (or have the NHL step in to help its own). Despite what fanboys will tell you, in North America, a professional sports franchise is not an economic boon to its host city. Sports teams tend to extract great rents from cities. They get sweetheart deals on stadiums, infrastructure and taxation. The economic activity they foster would just as soon be spent on some other activity (go RedBlacks!). Should the Senators fall, fans won’t simply take the thousands of dollars they may have spent on a hockey team and stuff the loonies in their mattress. The money will be spent elsewhere. Other jobs will be created, and other wealth will be produce.

It is ridiculous that we would think that either a raceway or an NHL team would be worthy beneficiary of the rents from institutionalized gambling. In an ideal world, we would accept bids from all-comers, without restrictions. We would choose the optimum bid and location, and go from there.

In an almost-ideal world, we would give this potential windfall to a worthy organization. We would give the casino to the Ottawa Hospital, or to the school board, or Shepherds of Good Hope, or the Red Cross. Even OC Transpo would be a better choice.

But here we are. Our representatives are deciding on which private corporation, run by wealthy non-residents, should get this windfall. Except our representatives are doing no such thing. For if there’s one thing worse than bowing to one rent-seeking, carpet-bagging bourgeoisie, it’s bowing to two.

*This is operating under the assumption that we need a quasi-governmental organization making such decisions, which is far from clear.

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