Special Report: Casino

Casino Crisis is a Provincial Problem

It is grossly insulting to the people of Hamilton to suggest that the City should have to finance its share of what is essentially a provincial responsibility.

By Sam Merulla
Published February 05, 2013

The Province of Ontario does not have a mandate to amend the Ontario Lottery and Gaming Corporation (OLG) business plan. The Ontario Liberal Party did not seek a mandate in the previous Provincial Election, and both the NDP and Conservatives favour a referendum in our minority government.

Frankly, prior to an underhanded amendment this past summer, it was a legislated requirement to have a binding referendum prior to any city pursuing a casino, as we conducted in 1997 which showed a clear majority and mandate against a casino in Hamilton.

This too was not an election issue, and the Province - and by extension the OLG - does not have a mandate to amend the legislation. Also, not one member of Hamilton City Council ran on obtaining a mandate to pursue a casino.

Frankly, my mandate is to get back to basics by focusing on infrastructure, manufacturing jobs, poverty reduction and mitigating waste.

OLG Targeting Vulnerable Communities

OLG's business plan at the conception of casinos in Ontario was based on targeting American tourists, based on the fact that states bordering Ontario did not offer casino gambling and. The OLG was focused on capitalizing on this fact through tourism and a weak Canadian dollar, which acted as a catalyst to this successful endeavour.

After American border cities were introduced to casinos, the OLG has seen a significant decrease in profits and a need to create a new business plan. Their new business plan of focusing on "where the people are" is an attack on cities such as Hamilton.

Unlike cities such as Ottawa and Toronto, Hamilton will never be a tourist mecca to the extent of those cities. Furthermore, all of our studies have clearly indicated that the vast majority of our tourism is based on family visits to our great city.

Therefore, OLG's attempt of targeting Ontarians, Hamiltonians, and particularly Hamiltonians in low social economic neighbourhoods, is predatory in nature, which is not to dissimilar to a "crack dealer"!

Hence, I proudly stand by my opposition to this pathetic process.

Provincial Revenue Problem

The official position of Council has been in place since April 2012 protecting, the status quo and the horserace industry. The problem is the $4.5 million in revenue we receive is part of the City's operating budget. The purpose of the pro casino argument is to maintain the revenue, thereby not impacting the general levy.

It is grossly insulting to the people of Hamilton to suggest that the City should have to finance its share of what is essentially a provincial responsibility in the face of the $120 million annual deficit - or $600 per household.

We need to upload the download, not amplify the regressive nature of this taxation crisis.

The casino deal sees the Province getting 50 percent of the gross revenue and the private operator receiving the rest, with a very small percentage actually going to the City of Hamilton. It is the epitome of privatizing the profits and socializing the costs.

Motion Supports Flamborough Site

The motion I have tabled since the summer of 2012, and which I will be lifting on the 6th of February, clearly supports the status quo protecting the Flamborough site and the horse race industry.

It demands a referendum in the event that the OLG and province choose not to support this endeavour.

Let's not confuse the issues. The problem was created by the Province and OLG and the solution must come from them, not the City of Hamilton taxpayer.

Sam Merulla is the City Councillor for Ward 4 in Hamilton.

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By Conrad66 (registered) | Posted February 05, 2013 at 13:10:40

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By Bill Kelly Revealed (anonymous) | Posted February 06, 2013 at 10:03:12 in reply to Comment 85868

Now we finally know who Bill Kelly's online persona is!

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By AnjoMan (registered) | Posted February 05, 2013 at 16:02:54 in reply to Comment 85868

This article isn't opposing an entertainment complex. It is opposing a casino.

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By professorzed (registered) | Posted February 05, 2013 at 13:39:36 in reply to Comment 85868

It's quite possible that PJ Mercanti was lying, isn't it?

After all, he did make that announcement at a private invite only meeting where livestreaming would not be permitted, the public wasn't allowed, and only those who showed Government identification would be permitted.

This was in response to a protest at City Hall, where over five hundred people showed up to oppose the downtown Casino by holding up 'No' signs. While the people with 'No' signs were outside, he had people with 'Yes' signs sneak in and fill the Galleys to make it appear like a balanced argument. He was also handing out 'Yes' signs, telling some people that this was to support the racetrack in Flamborough, which the Casino would close down.

In the Spectator, he was being quoted as saying about his opponents

“Who are these people? What is their background? What have they done?” he said. “They get almost all the same weight as the people who really count. It shocks me.”

So who are the people that 'really count'?

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By Conrad66 (registered) | Posted February 05, 2013 at 13:47:41 in reply to Comment 85874

Those peoples are Hard Rock LIUNA whatch it on Cable 14 the Bill Kelly show

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By Conrad66 (registered) | Posted February 05, 2013 at 13:43:31 in reply to Comment 85874

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By Le Chiffre (anonymous) | Posted February 05, 2013 at 13:23:46

If I understand this issue correctly, Hamilton council's vote is for a casino or against a casino. If council doesn't want casino downtown, change zoning to reflect that stand. You don't need a referendum, just political will.

Moreover:

"Referendums were an extension for large populations of the practice of direct democracy in the Swiss canton meeting or the New England town meeting of voters, where legislation is still passed, and taxes are levied, directly by the voters. This type of referendum is direct democracy in the sense that the voters are actually passing legislation if they approve the proposition presented to them.

"The other meaning of the word, and the one now meant in Canada, is the reference of a question to a popular vote, which is not binding on the government or legislature that referred it. A government or legislature may ignore the result and they have often done so. Thus the non-binding referendum is merely a kind of expensive public opinion poll.

http://www.revparl.ca/21/3/21n3_98e_Rowat.pdf

Kicking the question to 2014 is a sound enough plan, and the OLG shouldn't complain, since the Slots at racetracks agreements have now expired and SARP municipalities that haven't been renewed have no guarantee of any run-off revenues. This gives the Council a good chance to prime voters for the 2014 municipal election by selling on the merits of a tax increase (offsetting the loss of $4.5 million annually) in the run-up to the referendum vote.

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By Sigma Cub (anonymous) | Posted February 05, 2013 at 15:51:49 in reply to Comment 85870

The Slots-at_racetracks host communities continue to get their money until fiscal year 2014-2015.

"In the Ontario budget, the government announced that the Slots-At-Racetracks program would end in 2013-14."

http://www.modernolg.ca/restructuring-the-slots-at-racetracks-program/

Council should be able to pass the buck until we re-elect the requisite 80%+ incumbents.

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By Conrad66 (registered) | Posted February 05, 2013 at 13:32:46 in reply to Comment 85870

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By AnjoMan (registered) | Posted February 05, 2013 at 16:07:15 in reply to Comment 85872

Good! Lets pay the taxes. The casino option requires $90 million to be lost by casino-goers in order for the city to get it's $4.5 million. Raised taxes is a major win over a casino.

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By Citizen Cane (anonymous) | Posted February 05, 2013 at 13:29:25

PJ also said they'd "partnered" with Mission services to help with any troubles associated with problem gambling... Mission services said "Who?"

They said the average salary of a casino attendee is over "$90,000" where on earth did they get this stat?

They said the jobs would be living wage, but a quick look for available positions on OLG's website shows $11.50 - $15 an hour are pretty much the norm.

With OLG not controlling any part of the development outside the casino you can expect many no benefit, part time work, all with horrible split shifts.

Casino expects to take over $200,000,000 before it pays out it's percentages to the city... about 3% and I think I heard another 25% was going to the hard rock group.

That's $200,000,000 leaving the city for Ottawa and Florida.

I honestly think it'd be better spent here.

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By Conrad66 (registered) | Posted February 05, 2013 at 13:37:06 in reply to Comment 85871

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By Dane (registered) | Posted February 05, 2013 at 13:50:07

Sam,

I and am sure many others appreciate your position. What my concern is that any action taken by yourself or other lower city councillors will be in vast contrast to your upper city peers. There seems to be a very stark line drawn, dividing this city.

My question to you is amongst the other councillors has there been a dialogue that seeks to address this situation?

Why has there been a hesitation amongst many councillors to take a vocal part in the ongoing debate?

Will you ask Mr Mercanti to apologize for demeaning and diminishing the efforts of individuals who are active in civic matters, create community initiatives and invest their time and money in the downtown? Or at least make it clear that council doesn't share the view that some voices are more valuable than others.

I have to say while I have not always aligned my views with every position you have taken in the past, I encourage you to show leadership that is clear lacking at the chair position. The City is clearly missing an overall vision and as a result will continuously suffer from these types of unimaginative and nepotistic economic proposals

Dane Pedersen

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By HamiltonBoy (registered) | Posted February 05, 2013 at 13:55:36

Point of Clarification:

The asinine comment about "the people who count" was made by Papa Peter Mercanti and not son P.J. It's complicated when people name their kids after themselves :) Either way, I don't trust either of them...

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By Rimshot (anonymous) | Posted February 05, 2013 at 13:55:36

If the OLG wants to be "where the people are," it should look to Wards 7 and 11, which have the merits of double-digit growth and auspiciously lucky-sounding names.

The lower city has been bleeding residents for generations, albeit not in the way that the OLG would propose to do.

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By Brb (anonymous) | Posted February 05, 2013 at 15:08:51

Won't have to raise any taxes. Will get money from Flamboro slots as always. Only horsemen got screwed with arbitrary (no inkling in pre election platform)SARS cancellation. Communities and track owners looked after. Don't let anybody coerce you with that argument.

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By Rimshot (anonymous) | Posted February 05, 2013 at 15:17:50 in reply to Comment 85886

Truth! No funding is at risk, either way. It's only found money at the end of the day.

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By mrjanitor (registered) | Posted February 05, 2013 at 15:24:05

Sam, I think it's ultimately unfair but the reality is that Council will have the sole power to decide a Casino location.

I'm agreeing that a referendum would be both fair and ideal, just not likely to actually occur. I think you could achieve far more for this city Sam by accepting the role council has been forced into and using your incredible energy to lobby your peers to make a smart decision.

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By Alas (anonymous) | Posted February 05, 2013 at 15:56:27

If only Flamborough had a Liberal cabinet minister!

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By realfreeenterpriser (registered) | Posted February 05, 2013 at 16:08:10

One thing I've learned over the years: if the Mercanti's and/or the Mancinelli's are involved, it won't help anyone but themselvesand their insiders. The more they tout the benefits/jobs/wages/spinoffs the more suspicious I become. Pyjama Mercanti and Joe Mancinelli are in business to make money not jobs but to hear them talk you'd think they were a benevolent association. Sadly, they know that there's lots of Councillors who'll buy their snake oil talk of Hamilton becoming Vegas North instead of concentrating on the only two things that will restore Hamilton; vision and prudent management.

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By caring is sharing (anonymous) | Posted February 06, 2013 at 10:13:28 in reply to Comment 85894

If they cared about jobs and wages, they'd give all of their employees a raise right now cause, hey why not!

Oh I know why not - cause this is all just a story being told so that they can rake in the dough.

And the city and media lap it up like obedient pets

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By QuidPro (anonymous) | Posted February 05, 2013 at 16:34:53

Super news, Samwise! Now Council can get back to updating prehistoric zoning, abolishing its Kafkaesque licensing bureaucracy, giving teeth to its posturing on architectural heritage and implementing a decades-old pedestrians first urban development strategy!

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By mrjanitor (registered) | Posted February 05, 2013 at 16:39:07

Actually for Hamilton to get $5 million close to $200 million will be wasted in a casino.

We have reliable information that we can expect 10% more in hosting fees so $5,000,000 for Hamilton is a perfectly defendable figure.

1) We get 5.25% on the first $65,000,000 of slots.

.0525 x 65,000,000 = $3,412,500 for Hamilton

2) Subtract that $3.4 million from the $5 million and we find that we need another $1.5 million to arrive at $5 million in hosting fees

5,000,000 - 3,412,500 = $1,587,500 needed to reach $5,000,000

3) We get 3% on the next $135 million from slots. So how to get $1.5 million from the lower payment tier?

Unknown Gross Slots Revenue x .03 = 1,587,500

Unknown = 1,587,500/.03

Unknown = 52,916,667

4) Therefore Hamilton needs another $52,916,667 at 3% hosting fee payment

5) $65,000,000 + $52,916,667 = $117,916,667

Hamilton needs $117,916,667 to be spent in slots to get $5,000,000 back

This does NOT include the money lost at gaming tables, of which Hamilton gets nothing. If $80 million is estimated to be lost at table games than we are pretty close to having $200 million sucked out of our economy to get $5 million back. EVERY YEAR.

And Bratina justifies the relocation by throwing around a ONE TIME figure of the $200 million in construction costs. The man does not understand basic math.

Comment edited by mrjanitor on 2013-02-05 16:41:19

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By Noted (anonymous) | Posted February 05, 2013 at 16:58:26 in reply to Comment 85896

OLG Slots at Flamboro Downs

Fiscal Year / Slots Revenue

2008-09: $128.9 million } http://goo.gl/OjOMW
2009-10: $121.0 million } http://goo.gl/CNXyv
2010-11: $120.8 million } http://goo.gl/UUBZ1
2011-12: $121.6 million } http://goo.gl/y9b4Z

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By mrjanitor (registered) | Posted February 05, 2013 at 17:11:26 in reply to Comment 85899

It's important to remember that the hosting fee formula has been changed. It used to be based on the number of machines. A new casino will have the sliding payment scale on the total slots net.

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By Rimshot (anonymous) | Posted February 05, 2013 at 17:17:28 in reply to Comment 85900

Of course. And an extra 400 machines. It's a shell game.

The only safe bet is axing all gaming. If the province wants our money it should do it the old-fashioned way: By inventing euphemisms for new taxes.

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By Felix (registered) | Posted February 05, 2013 at 16:42:43 in reply to Comment 85896

Not no mention that the math will be the same regardless of whatever ward the slots end up in. The old math is history. The house wins, not the host.

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By One or two casinos? (anonymous) | Posted February 05, 2013 at 16:49:31

Let's remember that Toronto and Rob Ford's desired 'casino' is in play too. OLG needs new "players" to replace those citizens who get "tapped out": people who have become broke. Rob Ford's election over-spending and illegal spending are being examined by an audit panel. Remember that over-spending in a campaign has potentially--and rightly--harsh penalties, whether they get applied or not is another matter that will need Kathleen Wynne's gov't to re-examine Ont. Munic. Conflict Act and Elections Act. THEREFORE Ford in Toronto is weaker than his council is--and maybe no casino/gambling den in Toronto. So, if no 'Casino' to Toronto, bigger pressure in Hamilton.

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By Conrad664 (registered) | Posted February 11, 2013 at 12:02:39

I thought OLG was canceling the slots at Flamborough and stop funding for the racetrack

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By Usual suspect/Dissident (anonymous) | Posted February 13, 2013 at 23:03:30

So much for this article!
Can't wait to hear the Councillors blame the Province when we end up with a downtown entertainment facility.
So much for standing Proud in support of your previous decision. Thanks for leaving the door open wide enough for us to get hosed. Thanks for leaving out the refferendum issue should it fail in Flamborough.
I think your supporters deserve an explanation for this shift... And the fact that you believe there will be at least 1 bid for Flamborough means very little without rationale.
God bless you Sam while some are shaking their heads and figuring this is a masterful strategic move others of us see it for what it is.
When you can't beat em...
Oh wait how about
Good cops vs Bad cops?
Please prove us wrong!

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