A U.S.-based gaming operator will be running Niagara’s casino, resort and entertainment centre for the next two decades, the Ontario Lottery and Gaming Corporation announced Monday.
The OLG said Mohegan Gaming & Entertainment, also known as MGE, was chosen “following a competitive procurement process” to run what is called the “Niagara Gaming Bundle” — Casino Niagara, Fallsview Casino Resort and the Niagara Falls Entertainment Centre, a 5,000-seat venue now under construction.
“By leveraging the success of the Niagara casinos and integrating with the wide mix of entertainment and tourist offerings in the area, MGE will help ensure the long-term competitiveness of the Niagara gaming market — particularly in relation to markets across the border,” said OLG President Stephen Rigby, in a written statement.
MGE has said the centre will bring in new jobs and boost the local economy.
“As the operators of one of the most successful arenas in the U.S. over the last 15 years, we are eager to put our experience to work and establish Niagara Falls Entertainment Centre as one of Canada’s top-ranked venues,” said Anthony Casdia, a senior vice-president at MGE, referring to the Mohegan Sun casino and entertainment complex in Connecticut.
Staff currently employed at the Niagara casino and resort cannot be let go for at least 12 months, and OLG said “unionized employees will transfer to the service provider under the terms and conditions of their current collective agreement.”
MLG, based in Connecticut, will take the reins next summer, in the 21-year agreement.
In July, the Niagara Falls Review reported that three bidders were seeking the casino contract, after the two Canadian firms dropped out.
MPP Percy Hatfield, the NDP’s critic for the OLG, called the deal is a costly one for the province.
“It’s not about who won the bid,” said Hatfield (Windsor-Tecumseh), “but about the fact the government privatized gaming operations at all, costing the province billions of dollars in revenue.”
OLG spokesperson Tony Bitonti would not provide any specifics on the value of the deal, saying they are “commercially confidential at this time.”
However, he said “service providers are taking on the day-to-day operations of gaming sites and investing in communities across the province, while OLG continues to focus on its conduct and manage role in the gaming market.”
The service providers such as Mohegan, he added, “are expected to invest billions of dollars in capital development — creating thousands of well-paying jobs in the gaming industry and thousands of additional jobs through broader economic development.”
Agreements with service providers set out that gaming revenues from casinos “will flow to OLG, less the winnings paid out to players.”
The amount of the revenue is guaranteed up to an undisclosed threshold amount “guaranteed by the service provider,” he also said.
“The service provider’s compensation for providing the services is made up of two components: (1) a fixed fee; and (2) a variable fee that is 70 per cent of the revenues above the guaranteed threshold amount.”
In 2017, revenues to the province from OLG totalled $2.3 billion.
Bitonti said the OLG expects to boost revenues to the province by up to $900 million annually by 2021-2022 as it modernizes the system.