Special Report: Casino

Downtown Casino Still Not a Bet Worth Taking

Despite yesterday's vote, we may well end up having to watch Council panic in 2014 and chase its losses, with another municipal election coming and enormous pressure to make a fear-based decision.

By Ryan McGreal
Published February 15, 2013

After a marathon debating session yesterday, Councillors voted unanimously on a compromise motion that establishes Flamborough as the only location for a new casino in Hamilton - but that Council will consider other locations if there are no acceptable bids for Flamborough.

The motion was led by Councillor Sam Merulla, whose opposition to a downtown casino has been early, strong and consistent. Merulla, along with Councillors Judi Partridge, Jason Farr, Brian McHattie, Rob Pasuta and Bernie Morelli, have all staked out clear positions and defended them resolutely.

McHattie went so far as to argue that Council should consider not keeping a casino at all, but no one else wanted to have that conversation since the City currently depends on $4.5 million a year in revenue sharing from the slots at Flamboro Downs.

On the other hand, no member of council was willing to stake a formal position in favour of a downtown casino. The closest was Councillor Terry Whitehead, whose commentary unquestionably favoured a downtown casino but who nevertheless insisted that he had not made up his mind.

Mayor Bratina has also sounded at times like he supported a downtown location, but overall he said little over the course of the months-long discussion and exerted almost no influence on how Council's position unfolded.

The rest of Council has remained on the fence, and that is ultimately the position that carried yesterday's vote. While Merulla manged to get his vote in favour of a Flamborough-only casino location, it was only by agreeing to an escape clause big enough to race a stable of horses through.

Ontario Lottery and Gaming Corp (OLG) has an opportunity to define the request for proposals such that no Flamborough bid can meet its requirements. That means there's still plenty of opportunity for Council to bolt from the course they set yesterday.

Unfortunately, this means we may well end up having to watch Council panic in 2014 and chase its losses, with another municipal election coming and enormous pressure to make a decision based on fear of losing the slot revenue.

Many Moving Parts

Years ago, I had a friend who played for the Hamilton Tiger-Cats. He told me the players used to joke that CFL stood for "Can't F---ing Lose", because with three downs it is much harder for the winning team to run out the clock.

As a result, dramatic shifts in fortune can transform a game at any time, right down to the last play. It makes for exciting football.

Over the past several years I have often mused that Hamilton politics is no different. Big issues remain in play until the bitter end, and even seemingly guaranteed outcomes can shift suddenly as the various players jockey relentlessly for advantage. (Perhaps ironically, this was most evident in the Great Stadium Debate, where the dramatic reversals came on an almost daily basis.)

In the casino issue, there are still far too many moving parts to be able to predict an eventual outcome.

Have no doubt that intense back-channel lobbying is going on right now by a variety of parties with competing interests. In the machinations to come, Council would do well to remember that it has leverage as well as exposure.

Polarizing Debate

It scarcely needs to be pointed out that the downtown casino debate has been extremely polarizing. People I respect and admire have taken positions on both sides of the issue, and the discussions have been extremely heated.

In too many instances it has gotten ugly, with individuals on both sides leveling nasty personal attacks against each other instead of sticking to the issues.

That's deeply unfortunate, because eventually this debate will be over one way or the other, but we will all still have to live in the same city and find ways to work together.

Evidence-Based Decision

I stayed quiet about the casino issue for a long time because I was struggling to make up my mind about it.

On a few occasions, local news media have contacted me about making statements on the issue or participating in panel discussions. I declined every offer: I did not consider myself informed enough to speak on the matter, and in any case I wasn't sure what I had to say.

I did eventually form a conclusion after studying the evidence carefully. The social harm argument carried significant weight with me, but what really decided me was the economic argument, which of course includes the social costs.

When you net it all out, a downtown casino in a city that is not already a major tourist destination is mathematically guaranteed to take more money out of the local economy than it puts into it.

It's easy to point to this or that city as an example of any outcome you like, but an evidence-based approach must consider the whole set of examples to discover a median or modal case that represents the most likely outcome for Hamilton. Otherwise you're just cherry-picking.

Again, the full weight of evidence indicates that a downtown casino will do some good and some harm, but that when you net it out, the overall harm will be greater. In light of this, my thinking has solidified over the past couple of months.

When I first heard about the proposal of a downtown casino, my initial reaction was, "Hey, why not?" As Bill Maher argues, governments should not be in the business of legislating taste ('I think casinos are yucky so they should be illegal') and I think people should have the freedom to seek their entertainment however they want.

However, because the casino strategy is coming from OLG, and because the model is to locate casinos close to local populations to offset shrinking revenues in tourism gambling, and because the Ontario government has given itself a monopoly on issuing casino licences, this becomes an issue of public policy.

A Bet Not Worth Taking

I don't begrudge anyone for forming a different conclusion than I have - or to remain neutral, as a lot of people have done - and there have been a lot of spurious arguments on both sides.

It's entirely possible that my conclusion is wrong, and that a casino in downtown Hamilton would be a positive addition. My best guess at this point is that at least directly, it would have a modest negative impact - i.e. neither as good as its proponents claim nor as bad as its opponents warn.

However, social/economic change is rarely linear, and big transformations can happen on the margins.

The equation for private investment in downtown Hamilton seems to have shifted just enough over the past several years that a number of impressive developments are now going ahead. The marginal cost of a new downtown casino only has to nudge the equation very slightly in the other direction to forestall that progress.

In other words, we're looking at a very small maximum upside balanced against a very large maximum downside. That's rarely a bet worth taking.

Ryan McGreal, the editor of Raise the Hammer, lives in Hamilton with his family and works as a programmer, writer and consultant. Ryan volunteers with Hamilton Light Rail, a citizen group dedicated to bringing light rail transit to Hamilton. Ryan wrote a city affairs column in Hamilton Magazine, and several of his articles have been published in the Hamilton Spectator. His articles have also been published in The Walrus, HuffPost and Behind the Numbers. He maintains a personal website, has been known to share passing thoughts on Twitter and Facebook, and posts the occasional cat photo on Instagram.


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By J (registered) | Posted February 15, 2013 at 13:44:12

"a downtown casino in a city that is not already a major tourist destination is mathematically guaranteed to take more money out of the local economy than it puts into it."

I've heard this argument before and am not sure it's 'evidence-based' at all. The issue is whether the dollars leaving are already leaving - if so then there's no issue. If gamblers would be spending their money otherwise on vacations to Cuba then more of the money will be staying in the city. If they are spending it at Toronto Maple Leafs games then more is staying in the city. If they're spending it at Montana's before a film at the Cineplex, then I have no idea but assume it's pretty neutral. If they're spending it at Lo Presti's before a show at the Casbah then more money is leaving the city. But I've yet to see any evidence on this.

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By Robert D (anonymous) | Posted February 15, 2013 at 14:17:32 in reply to Comment 86363

When the city itself is only pocketing 5% of what is lost at the casino, I personally think it's disingenouus to say you're "not sure" dollars are leaving the city. At 5% retention I think it's fairly safe to say money IS leaving the city, the only issue is, how much.

If the city was getting closer to 20%, then I might agree with you and say "it's not clear".

Don't forget that problem gamblers, who make up a significant portion of gambling revenue, don't just spend their "entertainment" income on a casino instead of going elsewhere. They spend their emergency cash, retirement money, healthcare money, food money, mortgage their house, etc.

Arguably that's getting more money into the economy, but it's not something I would ever advocate because it's likely to turn them to social assistance in the long run (and cost us money again).

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By Borrelli (registered) | Posted February 15, 2013 at 13:57:16

This CBC Hamilton article addresses varying opinions on the economic effects of casinos on established urban areas (at a very high level). I would suggest investigating the work referred to in the article.

In short, a McMaster economist believes:

it could have a negative impact on the larger Hamilton economy. [Prof. Holmes] said that many people who visit casinos are from a lower income bracket, and they wind up spending their disposable income there instead of at local businesses.

While a researcher hired by the gaming industry says:

There really isn’t a cannibalism effect on local businesses...

For me, it just comes down to credibility. One voice is a professional paid by the industry to pump the benefits of casinos, the other is a local academic with no direct interest in the project.

Comment edited by Borrelli on 2013-02-15 13:57:53

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By Conrad664 (registered) | Posted February 15, 2013 at 14:14:43

Thats why there is 200,000,000 a year being spent by Hamiltoiains a year out in Niagara and Brantford ,why could we not keep it in Hamilton becose we don`t have what the Mercanties whant to build

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By Conrad664 (registered) | Posted February 15, 2013 at 15:12:55

Will never happend they make too much money

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By jason (registered) | Posted February 15, 2013 at 20:20:09

honestly, I'll flip if another election is hijacked by a dumb issue like this. When do we actually get around to city-building and moving Hamilton into the 21st Century.

For example:


Which city looks like it belongs in the 21st Century, and which one is lovin the 50's? http://www.raisethehammer.org/article/16...

I elect politicians to lead us into a prosperous future, not bicker over non-essentials like stadiums and casinos.

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By LOL all over again (anonymous) | Posted February 18, 2013 at 09:20:45 in reply to Comment 86382

How fitting that you reference not only an article that you wrote but also a fired city planner who has a history of butting heads with council and developers and businesses.

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By z jones (registered) | Posted February 18, 2013 at 09:40:06 in reply to Comment 86432

A planner who buts heads with council and developers? You've convinced me to watch him.

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By DowntownInHamilton (registered) | Posted February 15, 2013 at 21:12:48 in reply to Comment 86382

Comments with a score below -5 are hidden by default.

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By jason (registered) | Posted February 16, 2013 at 10:21:21 in reply to Comment 86385

'complain'? Wanting my city to invest in things that will actually move us into a competitive 21st century is now considered complaining??

Let's use two of my favourite cities as an example: Portland and Vancouver.

Vancouver has a pro football team and a downtown casino and is constantly ranked one of the top cities in the world to live in. http://www.houstontomorrow.org/images/up...

Portland has no pro football team and no casino and is constantly ranked as a top livable city with a booming downtown core and urban/inner city neighbourhoods. http://tucsonvelo.com/wp-content/uploads...

Why? Because both have focused intently on the things that matter in developing a successful urban economy. We always spend crazy amounts of energy on the things that don't matter, while allowing the status quo of unsafe streets, 'retail' districts that are completely hostile to retail and a dangerous lower city for children to be raised in to continue.

Let's get our city working right, and then worry about extras.
Like the expert pointed out in the video I posted above from Vancouver - 'we design our streets and neighbourhoods to be safe for kids....if they're safe for kids, they're safe for everyone else'. Here we design our urban neighbourhoods for trucks and speeding cars. And the difference in quality of life and of the local/urban economy shows it.

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By Woody10 (registered) | Posted February 21, 2013 at 10:55:38 in reply to Comment 86398

Sooooo, what are you saying?? Vancouver with it's pro football and casino is higher on the list than Portland without the two. Ok, build the casino and lets move on. Shouldn't bend over again for the minority like we did with the stadium. 100,000 people in Hamilton hold casino cards which means they are leaving our city for casino's elsewhere. Not to mention they are spending in those towns as well (dining, shows, etc.). When are we going to enter the real world?

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By z jones (registered) | Posted February 16, 2013 at 08:05:50 in reply to Comment 86385

Since when do you have to run for mayor to have a say in how you are governed?

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By Who are you again? (anonymous) | Posted February 16, 2013 at 11:43:55 in reply to Comment 86391

Comments with a score below -5 are hidden by default.

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By Kevin (registered) | Posted February 15, 2013 at 22:37:01 in reply to Comment 86385

Look who's talking. At least, Jason has the balls to put his name on everything, Pee Nut.

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By DowntownInHamilton (registered) | Posted February 16, 2013 at 19:38:05 in reply to Comment 86389

I would gladly use my first name in all my posts, but sadly it's already been taken. Oh well...

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By me, me and me! (anonymous) | Posted February 16, 2013 at 12:12:43

OK you kids stop calling each other names.
What really concerns me is the miss information our councilors are sending to us. Councilor Farr and his puppet patrol (you know those James North types) need to come clean with all the "hear say" stats they've created...shame on this councilor and his puppets!

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By RenaissanceWatcher (registered) | Posted February 16, 2013 at 13:14:38

An article titled "Health groups pushed against casino in core" by Molly Hayes is posted on thespec.com today: http://www.thespec.com/news/local/articl...

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By Mal (anonymous) | Posted February 19, 2013 at 10:29:22 in reply to Comment 86405

...and now that one of Hamilton's MPPs is Minister of Community and Social Services, there should be some high-profile opportunties to lend an influential voice to the debate.

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By Conrad664 (registered) | Posted February 19, 2013 at 10:55:13

Hey Pro-Casino goers .... you whant a Casino down-town GO VOTE next elections

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By RenaissanceWatcher (registered) | Posted February 20, 2013 at 08:16:22

"90,000 Hamiltonians are carded gamblers" by Andrew Dreschel on thespec.com today: http://www.thespec.com/opinion/columns/a...

It looks as though the OLG (Ontario Liberal Government) and the OLG (Ontario Lottery and Gaming) will not rest until every Hamiltonian is a carded gambler.

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By RenaissanceWatcher (registered) | Posted February 21, 2013 at 08:23:13

"Chamber of Commerce survey says 67% of respondents oppose standalone downtown casino" by Kayleigh Rogers and Samantha Craggs on CBC Hamilton: http://www.cbc.ca/hamilton/news/story/20...

"Chamber businesses split over casino location" by Matthew Van Dongen on thespec.com: http://www.thespec.com/news/business/loc...

It is interesting to see that 50% of the Chamber members who responded to the survey support a casino the existing Flamborough location and 46% support a downtown casino so long as it is packaged with a hotel and entertainment complex.

What would the results have been had the Chamber members been asked a question along the following lines:

"Do you support a standalone casino at the existing Flamborough site and a new downtown hotel and entertainment complex without a casino?"

This question presents a very real option given the potential obstacles to building a hotel at Flamboro Downs and the promise made by Carmen's to build a downtown hotel with restaurant and entertainment components contingent within three to five years of winning the Hamilton Convention Centre management contract.

Comment edited by RenaissanceWatcher on 2013-02-21 08:43:21

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By Sky (anonymous) | Posted February 24, 2013 at 13:59:45

Hi Renaissance,

As a member of the FCC and friends of the HCC ~ to answer your question ~ Yes, I believe the majority would support a "standalone casino" in Flamborough and a new hotel, restaurant etc in the core.

I personally would like to see the Casino stay in Flamborough~yet~ if it is not approved then I will support a downtown location with stipulations on monitoring the addicted Gamblers.

Where there is a will to compromise, there is a way to make things work!

Have an awesome day everyone.

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By Noted (anonymous) | Posted February 25, 2013 at 09:42:35


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By Noted (anonymous) | Posted February 25, 2013 at 12:46:29


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By Noted (anonymous) | Posted February 25, 2013 at 12:50:47

"Ontario is taking steps to privatize the operation of its lucrative lottery business in hopes that the move, which would be a first among Canadian provinces, will rake in even more revenue to support public finances.

The first step of the bidding process is already under way, with plans to award a contract by the end of 2013. According to sources close to the process, one of the parties interested in bidding for the 10-year contract is Camelot Group PLC, which operates Britain’s national lottery and was bought by the giant Ontario Teachers’ Pension Plan about three years ago."


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