Welcome to fabulous Waterloo, Ontario?


What having a casino in Waterloo Region could look like

H.G. Watson

When you drive into Windsor, Ont., the first thing you see across the long flat plains of south western Ontario is the skyline of Detroit, rising up impressively in the distance. You’d be forgiven for missing the two tallest skyscrapers that dot the sky on the Canadian side of the border – Caesars Casino. Closer to the downtown, however, the twin white hotel towers loom over the core. In contrast to the greys and browns of Windsor’s downtown, Caesars gleams white. The blue windows mimic the Detroit River it sits beside, offering no glimpse inside.

The inside of Caesars couldn’t be any further from it’s calming exterior. It takes a moment for your eyes to adjust to the dark, cavern like rooms that hold hundred upon hundreds of slot machines. They whir and sparkle, some screaming slogans from popular films and TV shows. A group of elderly women sit in front of a bank of machines modeled after Star Trek – Captain Kirk appears briefly on screen and informs them they get to play the mini-game, “the Trouble with Tribbles”.

The machines surround banks of blackjack tables. The crowd gambling here is younger, sporting the baseball hats and t-shirts of their favourite American college teams. The distinctive twang of the Michigan accent – “hackey” rather than “hockey” – is unmistakable. Upstairs, poker players sit shoulder to shoulder, 20 to a table, carefully watching each other for signs of a good or bad hand.

This, for better or worse, is what a casino is like in Ontario. A place much like Caesars may soon be calling a new municipality its home. Toronto, Hamilton and various other municipalities have all been identified as potential casino sites.

On March 25 the city councils of both Kitchener and Waterloo voted to have public consultations about whether to have a casino in the region. It’s a debate we share with many other municipalities and like any game involving a casino, the stakes are high.

“We would not have been able to do most of the projects that we’ve done without casino dollars”

Casinos weren’t even up for discussion just 30 years ago. The Canadian Criminal Code made gambling illegal, which meant people had to jet off to Las Vegas or Cuba to get their fix. But slowly certain forms of gambling were legalized. Lotteries, bingo halls and eventually casinos began to open across Canada.

In 1998, Caesars Windsor — then called Casino Windsor — opened its doors. At the time, it was leapfrogging off the success of temporary casinos just down the street. It had a lush gala opening and people lined up to get in. A year later, OLG Casino Branford opened.

Brantford Mayor Chris Friel — himself once a proponent against casinos — is enthused with the benefits having a casino in town have brought his small community. “We would not have been able to do most of the projects that we’ve done without casino dollars,” he said. Friel credits money generated by the casino for much of the downtown revitalization that has occurred in Brantford. As well, funds used from the sale of the building the casino is currently in were used to help bring Brantford its Wilfrid Laurier University satellite campus.

Brantford has received anywhere from $3.5 to $3.8 million over the last few years from casino dollars. It’s a drop in the bucket compared to the overall money that OLG brings in every year. Last year overall revenues for OLG were about $6.7 billion, almost half of which came from resort casinos and OLG slots. Money not slated for municipalities goes towards paying resort operators and into government of Ontario programs, including the Trillium fund that provides money for non-profits and other organizations.

OLG is now pursing an aggressive “modernization strategy” as they call it, in response to the changing taste of gamblers. Online gambling options have become attractive for many players and their key customers are aging. The corporation has also noted a drop off in foreign spending since the opening of American casinos close to the Canadian border. Part of their strategy going forward is the expansion of privately owned casinos — opening the door for companies like Wynn Resorts, Sands Corp., MGM and Rockhammer to come court municipalities for their property and dollars.

Casinos are a machine for making money – and they are very good at what they do. Even in Ontario, which lacks the glitz of Las Vegas, there is clearly money to be made. Each casino also brings along a whole host of jobs with it. Friel noted that 905 people in his community are employed because of OLG Casino Brantford. “They’re good jobs,” he said. “They have benefits, they pay well – even the number of long full time to part time is as good as any industry that functions within the community as a whole.”

It’s easy to see why casinos are attractive for some municipalities. It’s a combination of jobs and revenue that’s attractive, especially given losses to blue-collar jobs in other municipalities. But many argue that the impact of casinos may be more mixed than it first appears to be.

“The funnel from the tunnel”

Tunnel BBQ — so named for its proximity to the tunnel between Windsor and Detroit — has sat in the shadow of the casino since it arrived in 1998. Thom Racovitis, the owner of Tunnel BBQ, remembers well the first days of Caesars. “’The funnel from the tunnel’” they called it,” he recalled. “90 per cent of the business was cross the border. They [Americans] had no casinos so the flood of business was astronomical. Traffic was non-stop”

But today, a sunny Friday in March, there’s no evidence of the same flood. A trickle may more accurately describe the amount of cars crossing the border. If you were to look south into Detroit, you would see three new additions to the skyline; MGM Grand Detroit, Motor City Casino and the Greektown Casino. Those competitors, in addition to the tightening of border security after 9/11, have led to a decreased demand from the Americans who went to Caesar’s Windsor in its early days. The casino has certainly felt the loss – it recently laid off 38 unionized employees.

The economic benefits of casinos are debatable. Atif Kubursi, an economist based at McMaster University, is one of those who might debate it. He argued that you have to look at casinos in the abstract while appearing on “In the Neighbourhood,” a radio program on CFMU 93.3 in Hamilton. “What else could have this money been spent on?” he asked host Matt Jelly. Kubursi also pointed out that because OLG wants to open more casinos in Ontario, it becomes less likely you’ll attract out of town customers when every neighbourhood has one.

Local businesses like restaurants and food suppliers worry that when a casino comes to town, it represents a threat to their livelihood. OLG reported that they purchased over $50 million in products locally to support their casinos in their last fiscal year. When Caesars Windsor opened, Racovitis had to be proactive to make sure that the casino sourced local food. “It was a totally unknown commodity coming into our community,” he said. “[We worried a] big American company would come in and outsource all their purchases and products and not purchase locally, so we petitioned the government quite emphatically.” He and a group of local suppliers were successful at getting the casino to purchase locally initially. “[I encourage people to] really get together and be very assertive about being treated fairly.”

The potential financial gain also has to be weighed against the social costs of bringing a casino into a city. A majority of Canadian and American research indicates that proximity is the biggest factor in encouraging problem gambling – gambling without the ability to stop. Problem gamblers face bankruptcies and mental health issues. Las Vegas, for example, has the highest per capita suicide rate of anywhere in the United States.

Critics of the problem gambling argument point out that only about one per cent of the population of Ontario are at risk of becoming problem gamblers. But Kevin Harrigan, head of the Gambling Research Lab at the University of Waterloo points out that this number can actually be misleading. “It’s true of the general population [that the percentage is low] but of the people that are gambling a good percentage are problem gamblers,” he said, referring to the people on the gaming floor at any given time. “Somewhere around 20 per cent that are problem gamblers,” he added. Casinos also make over 30 per cent of their revenue from problem gamblers. It’s a troubling statistic because it means that a large chunk of money is coming from a few people who have a really bad problem.

Friel dismissed much of the economic and social criticisms against casinos. “We’re on the ground. If we saw a massive increase in suicides we would know it and we would measure it. If there was a massive increase in bankruptcies we would know it; in crime we would know it. [But] all of these things are in fact the rolling average.”

“…and never open to public scrutiny.”

When so much money is at stake, the lines between right and wrong can sometimes become blurred. In Hamilton, where debate over a downtown casino raged for the latter half of last year, this became apparent when city councillor Sam Merulla publicly released an e-mail from Mayor Bob Bratina asking Merulla to retract disparaging comments about the possibility of a downtown casino. The letter appeared to have been directly copied from one sent directly to Bratina from PJ Mercanti, the president of Carmens group, one of the groups interested in operating a casino in Hamilton.

“Hamilton does not have a registered lobbyist policy,” said Matthew Green. He, along with Dan Jelly, are part of a coalition opposed to a downtown Hamilton casino. “Anybody, be it MGM, Caesars, Wynn…can be meeting with staff and politicians that are never recorded, never documented and never open to public scrutiny.”

Their anti-downtown casino campaign also strengthened calls in Hamilton for a mandatory lobbyist registry, like those already in place in Toronto and Ottawa. Neither Waterloo or Kitchener has a lobbyist registry. “We’ve never felt that it was required here in this community,” said Kitchener Mayor Carl Zehr. Zehr has been very open about the fact that he has previously met with casino operators and landowners, though he would only consider the casino question if someone brought it to city council (as it was on March 25). According to Zehr, the City of Kitchener works hard to ensure transparency even without a mechanism like a lobbyist registry (Waterloo Mayor Brenda Halloran could not be reached for comment regarding lobbying in the City of Waterloo).

Zehr did not anticipate that the City of Kitchener would put in place any sort of lobbying rules regarding the consultation period as they have for the LRT process, in which councillors are banned from speaking with any of the companies bidding on the project. “I don’t think it’s required. [It] doesn’t have the same significance.”

But as both municipalities open public consultations, it’s not unreasonable to believe that more and more interested operators will step forward. Mark Bingeman, the president of Bingemans Entertainment Complex, has openly stated to CBC Kitchener-Waterloo his desire to operate a casino. Bingeman was also a listed delegate at the March 25 council meeting where Kitchener City Council decided to go forward with public consultations.

“We’ve already defied that and are rebuilding the city the way we want it rebuilt.”

Hamilton shares much in common with the Kitchener-Waterloo area. Once an industrial centre, the downtown core suffered as manufacturing and heavy industry left. Yet in the last few years, the city has seen a revitalization thanks in part to a rising creative class and more educational facilities moving downtown. It’s part of the reason downtown residents mobilized quickly to push back against a proposed downtown casino.

Green and Jelly first met at a Hamilton subcommittee meeting on the casino issue. Initially interested simply in getting information, they swayed to the con side and started organizing a campaign against the downtown casino. “Because we started using web and social media the campaign just got bigger and bigger,” said Jelly. The two spearheaded the campaign, culminating in a huge gathering during one of the council meetings. “We had horse racing people show up,” said Jelly (“with horses,” Green chimed in) in support of keeping the OLG slots and racetrack in Flamborough instead of moving it downtown. Hamilton has since pushed back their final decision on a casino until 2014.

Shawn Micallef, one of the founders of Spacing Magazine, a magazine dedicated to exploring urban issues, believes that casinos are simply “crappy urban citizens.” The writer and editor, who’s own father was a blackjack dealer at Caesars Windsor for seven years, thinks that there are more creative solutions to bring jobs and money into the downtown. “There are a lot more innovative ways to create jobs and create exciting urban landscapes and create that excitement then casinos,” said Micallef. “It’s a like a kneejerk solution for people who have no other ideas.” He added that while a casino will always simply be a casino, other businesses offer the potential for evolution in dynamic ways.

This reflects the experience Green and Jelly had in Hamilton, a city that they believe is already evolving. “These were people from the outside coming in to tell us what we should want,” said Jelly. “But we’ve already defied that and are rebuilding the city the way we want it rebuilt.”

Another day…

While online consultation happens regarding the casino in Waterloo, the City of Kitchener will host a public forum April 23. If after these consultations the city councils vote no, the issue may simply fade away. But should they vote yes to simply being open to having hosting a casino in the region, K-W may find itself grappling with the kind of issues that have been faced by cities like Windsor and Brantford for some time.

Back in Windsor, we step out of the casino and walk back into the now blinding light, past a line of bored cabbies reading and smoking. Cars speed down Riverside Drive and people walk their dogs and bike in the park adjacent to Caesars.

Just another normal day in the shadow of the casino.