Backgrounder: Expanded Gaming at Woodbine Racetrack – City Conditions

April 12, 2018

Council Decision

 

On July 7, 2015, City Council passed a conditional resolution supporting expanded gaming at Woodbine Racetrack subject to, among other things, Ontario Lottery and Gaming Corporation’s (OLG) service provider (Ontario Gaming GTA Limited Partnership or OGGLP) meeting 21 conditions (EX7.4). The conditions include 12 planning conditions, and nine social (or non-planning) conditions focused on community benefits (economic development, local employment, access to community space and Responsible Gambling matters).

Council’s conditional approval set the stage for the development of an integrated entertainment complex including gaming and non-gaming development at the Woodbine site in the northwest part of the city.

Council conditions for expanded gaming

The conditions for expanded gaming can be found on the City’s website, as part of the July 2015 Council decision: http://bit.ly/2nM9znZ  The City’s 21 conditions include requirements such as the need to:

  • Expand gaming in the context of an integrated entertainment complex;
  • Develop in a manner that supports the international calibre racetrack;
  • Follow the City’s planning process;
  • Create opportunities for local employment;
  • Develop an international marketing plan;
  • Create opportunities for local and diverse businesses;
  • Agree to commitments related to labour peace;
  • Agree to commitments related to the provision of community access to space;
  • Maintain all existing and planned responsible gaming measures;
  • Identify community benefits to mitigate potential risks, including regular reporting and referral to social services; and,
  • Enter into an agreement with the City and create tables such as a Responsible Gaming Oversight Committee and an Employment and Labour Market Working Group.

The selected service provider (Ontario Gaming GTA LP or OGGLP) is responsible for identifying how it intends to meet the City’s conditions while staff’s role is to assess and recommend to Council whether each condition has been satisfied. Council also agreed to explore the possibility of designating revenues from expanded gaming for community benefits, and supported certain employment related requirements tied to the expansion of gaming.

Staff report to Executive Committee meeting of April 17

The City Manager’s report “Expanded Gaming at Woodbine Racetrack – City Conditions”, which is on the agenda of the April 17, 2018 meeting of Executive Committee https://bit.ly/2JRTurd, provides an assessment of how the Ontario Lottery Corporation’s (OLG) service provider OGGLP has met or has contractually committed to meeting Council’s nine social conditions. The report also identifies the terms and conditions of a Community Benefits Agreement (CBA), which will mitigate the potential risks of expanded gaming at Woodbine.

In the report, City staff are of the opinion that the nine social conditions have been satisfied and are recommending approval of expanded gaming at Woodbine Racetrack subject to the signing of a CBA. The CBA includes specific requirements and targets that secure local employment, economic development, access to community space, and Responsible Gambling benefits from OGGLP for the local community, equity-seeking groups and Toronto residents. It sets the stage for a more than 20-year relationship between the City and OGGLP with transparent reporting and accountability to stakeholders and the broader community.

City staff also are of the opinion in the report that the 12 planning conditions have been met (as included in the final report EY29.2 “555 Rexdale Boulevard – Zoning Bylaw Amendment and Draft Plan of Subdivision Applications, which was adopted unanimously by Etobicoke York Community Council on April 4, 2018: https://bit.ly/2JDlTBl

Staff recommendations

The April staff report to Executive Committee contains eight recommendations:

  1. Subject to the execution of a Community Benefits Agreement, Council determine that the 21 conditions for expanded gaming set by Council have been met, thereby fulfilling the conditions required for Council’s support of expanded gaming at Woodbine Racetrack.
  2. Council authorize the City Manager to enter into a Community Benefits Agreement (CBA) with OGGLP.
  3. Once the CBA has been executed, Council forward the Council decision on the April 17 report (EX33.2) and the decision on Planning item EY29.2, together with its decision on the July 2015 item EX7.4, to the Province of Ontario and the OLG confirming support for expanded gaming at Woodbine Racetrack.
  4. Council direct the City Manager and Chief Financial Officer to report back to Council on the costs required to implement the CBA, the incremental operating costs to City Programs and Agencies to support expanded gaming and proposals on utilizing any unallocated incremental revenues from expanded gaming.
  5. Council request that the Toronto Police Services Board provide estimates for incremental policing costs that may be required due to expanded gaming at Woodbine Racetrack.
  6. Council request OLG to incorporate an assessment of OGGLP’s past progress towards implementing the CBA as a criterion when making future decisions to renew or extend the OGGLP contract.
  7. Council request the Province to amend the Ontario Lottery and Gaming Corporation Act to provide a clear requirement for municipal approval prior to any decision to substantially expand or renew gaming sites and related contracts in the municipality; and continue to enhance and invest in the Responsible Gambling framework and approaches.
  8. Council request that Woodbine Entertainment Group work with the City and local residents on Community Benefit Agreements as part of future development of lands at 555 Rexdale Blvd. outside of the proposed Gaming District.

City’s share of gaming revenues

Currently gaming at Woodbine Racetrack provides the City with about $16 million per year in revenues through the 2013 City of Toronto-Ontario Lottery and Gaming Corporation Municipal Contribution Agreement (MCA). Funds received from the MCA are part of the City’s general revenues and are not allocated as a direct funding source to any particular City services.

Actual hosting fees to the City from 2018 to 2022 will depend on the timing of the introduction of the additional slots and live tables to coincide with development plans of where the expanded gaming area will be located. The April staff report identifies that OLG estimates each year from 2018 to 2021, prior to full build out, the City would receive an additional $2 million to $5 million in hosting funds. In 2022, this would rise to $10 million to $15 million in hosting funds once expanded gaming is fully phased in and the facility is fully built. This would bring the total annual amount to $26 million to $31 million. OLG financial estimates are in line with hosting fee revenues previously estimated by City staff.

Property taxes and other City revenues

Property taxes will be payable to the City depending on the assessed property value of the development. Based on City staff estimated economic impact and construction costs of the proposed development, staff estimate incremental annual municipal property taxes of approximately $15 million upon completion of Phase 1 (anticipated in 2022) and another $9 million upon completion of Phase 2 (post 2022), for a total of $24 million a year once full build out is achieved. These are very preliminary gross tax revenues from the proposed development. Development charges and other planning and building fees will also apply.

Development Impacts

The Planning report EY29.2, which was adopted by Etobicoke York Community Council on April 4, 2018, provides a conceptual design and plan for the expansion of gaming at Woodbine Racetrack and seeks Council approval for the zoning bylaw amendment and draft plan of subdivision applications. The costs to develop the facility and the necessary City infrastructure improvements to support the facility will be fully borne by the owner.

Incremental costs to the City resulting from expanded gaming

City staff are currently working to determine any incremental financial implications resulting from expanded gaming at Woodbine Racetrack. However, given that the gaming facility is to be developed over the next few years, financial impacts of expanded gaming cannot be fully quantified at this time.

Implementation of a Community Benefits Agreement

Subject to Council approval, implementation of the proposed CBA between the City and OGGLP is expected to begin upon its executive in Q2 2018. Implementation of the CBA may require additional City resources to support implementing the CBA terms and the proposed accountability framework over the life of the City’s 20+ year agreement with the OGGLP. Staff will report, as part of the 2019 budget process, whether additional resources are required to support this work.

Use of incremental gaming revenues

In 2015, Council requested that the City Manager report back on options to leverage additional revenues from expanded gaming at Woodbine Racetrack to support Neighbourhood Improvement Areas and other lower income communities for capital or operating projects aimed at improving the quality of life for local community members. Currently actual incremental gaming revenues are unknown and revenue projections depend on timelines for construction, operations and the phased introduction of expanded gaming. In addition, the actual impact of expanded gaming on the local community and potential policy and program implications will not be known until the facility is operational.

It is anticipated that additional gaming revenues will help offset the implementation of the CBA and the City’s incremental operating costs associated with expanded gaming. Staff recommend that once Phase 1 of the proposed development is completed (anticipated in 2022) and the total incremental revenues are confirmed, staff will report back with proposals on utilizing any unallocated incremental revenues from expanded gaming after accounting for the costs.

OLG’s Modernization Plan

The Ontario Lottery and Gaming Corporation (OLG), a Provincial Crown Corporation reporting to the Minister of Finance, is responsible for the Province’s lotteries, casinos and slot facilities.

In July 2010, the Government of Ontario directed the OLG to modernize charitable and commercial gaming in Ontario, including a comprehensive review of land-based gaming facilities.

As part of modernization, the OLG launched a procurement process in 2013 to find a single private sector operator for the GTA Gaming Bundle, which includes Woodbine Racetrack.

On August 8, 2017, the Ontario Lottery and Gaming Corporation (OLG) announced Ontario Gaming GTA LP (a partnership of Great Canadian Gaming Corporation and Brookfield Business Partners LP) as the service provider for expanded gaming operations at Woodbine Racetrack. See: http://bit.ly/2yKrof8

The gaming facility at Woodbine Racetrack, has approximately 3,000 electronic games, but no live-dealer tables. More information on the existing facility and its contribution to Toronto can be found here: http://bit.ly/2oZphwW

To expand gaming at Woodbine Racetrack, the Province of Ontario, through Ontario Regulation 81/12, requires a resolution of support from City Council.

Media contacts:

Wynna Brown, Strategic Communications, 416 392-8937, Wynna.Brown@toronto.ca

Deborah Blackstone, Strategic Communications, 416 392-7377, Deborah.Blackstone@toronto.ca