Industry Reports

Caesars Windsor Closure May Cut Down Annual Payments to the City

As the labour strike at Caesars Windsor enters its seventh week, the casino closure seems to be harming the local economy in more than one way. Along with the drop in tourist numbers already felt by some businesses, the strike may cut down the annual payments to the city, which are calculated every year in a formula based on the revenues of the casino.

Caesars Windsor, which is one of the four casino resorts owned by the Ontario Lottery and Gaming Corporation (OLG) in the province, has been closed for more than 45 days. After rejecting a tentative agreement for their new collective contracts with the employer, workers walked off their jobs on May 6. The casino, operated by Caesars Entertainment, closed doors and ceased all operations in its hotel and concert arena. All room reservations booked until the end of May were cancelled and all Colosseum shows and concerts were postponed.

As the largest casino resort in the area, Caesars Windsor attracts thousands of tourists, according to representatives of the local tourism industry. It creates jobs, boosts the business, and provides various opportunities for growth and development. More importantly, the casino makes generous contributions to the municipality each year as part of the revenue sharing agreement with the city and the OLG. In fact, the payments made to the city come from the government-owned agency. At the end of March, Windsor received a little over $10 million as an annual payment for hosting Caesars Windsor.

All hosting communities in the Province of Ontario receive their cheques from the OLG at the end of the fiscal year, which ends March 31. The contributions to Windsor coffers increase with each year – last year, the municipality was paid just under $10 million for hosting the casino during 2016/2017, while the payment for 2015/2016 was approximately $7 million. This year, the $10 million contribution was a welcome addition to the city budget and back in March, city chief administrative officer Onorio Colucci said that the annual OLG cheque is an “important component” of the city budget.

City Services May Not Be Affected

The lost revenues as a result of the ongoing strike and closure of Caesars Windsor may not have a significant impact on the city budget, city treasurer Joe Mancina told reporters today. According to him, the $10.3 million payment in 2018 is only 1.2 percent of Windsor’s overall budget and that every year, the city puts aside around $1.5 million as a cash buffer for such “unforeseen circumstances”. There is no risk of cutting back on the planned expenses for municipal services, he adds.

According to figures revealed by Colucci two months ago, the latest OLG payment to the city adds up to approximately 2.5 percent of the overall tax levy of Windsor. Each year, he explains, around $1.8 million of the overall contribution goes to the police budget, while the rest is used for infrastructure and city operations. Since 1998, the City of Windsor has received approximately $77 million from the Ontario Lottery and Gaming Operations.

These gaming proceeds are used in various projects – health care, community and sports facilities, educational funds, and many more. Some of the projects funded by gaming revenues are the Windsor Public Library service enhancements, the Ouellette Avenue street enhancements, and the Windsor Loop bicycle trail system.