The Ontario Lottery and Gaming Corporation (OLG) revealed that Niagara’s casino, resort and entertainment venue is to be run by a US gambling operator over the next two decades.
As revealed by the OLG, the so-called “Niagara Gaming Bundle” which comprises of the Casino Niagara, Niagara Falls Entertainment Centre and the Fallsview Casino Resort is to be run by Mohegan Gaming & Entertainment (MGE). The latter has been chosen to operate on the “bundle” among strong competition for the right to run the facilities. The US company is set to take over the venues in the summer of 2019 for the next 21 years.
— Canadian Gaming Association (@CanadianGaming) September 10, 2018
The President and Chief Executive Officer of OLG, Stephen Rigby, explained that choosing MGE to run the Niagara Gaming Bundle was the latest step of the Corporation towards land-based gaming modernization to provide local customers with a greater variety of entertainment options.
On the other hand, MGE shared that the acquisition of the venues is expected to create new jobs and boost the local economy. The employees who are currently working at the Niagara Falls casino and resort will keep their jobs for the time being, because they cannot be fired for at least 12 months under the terms of the acquisition contract. OLG explained that employees who are union members would be transferred to the service provider under the terms and conditions of their existing collective agreement.
Aggressive Bidding Process Preceding the Lease Contract
Back in 2017, the OLG revealed its intentions to boost government revenues generated by the province’s casinos. Then, in April 2017, it revealed its decision to sell the lease contracts for Fallsview Casino Resort and Casino Niagara.
Mohegan Gaming & Entertainment has been one of the three US gambling operators left to compete for the acquisition of the Niagara Falls casinos after the Canadian rivals left the bidding war for the venues when the stakes became too high for them. According to reports, the other two US who have remained in the competition for the Niagara Gaming Bundle’s acquisition were Caesars Entertainment Corp. and the Hard Rock Cafe International Inc.
A number of Canadian bidders have emerged as well, with the two of the largest gambling operators – Gateway Casinos and Entertainment and the Great Canadian Gaming – also being part of the bidding process. However, the US operators have reportedly been making quite aggressive acquisition offers for the Niagara Falls properties making the latter’s price rise significantly, which was the main reason why Canadian bidders decided to back off.
Mohegan Gaming & Entertainment (MGE) is the new operator. Current employees will be protected for 12 months? https://t.co/ZMltP2hql9
— Jim Fannon ?? (@jimfannon) September 10, 2018
Warnings have emerged over the bidding process that the acquisition of Niagara Falls casino from US casino chains could end up with a decline in Canadian properties’ revenues. The Ontario Lottery and Gaming Corporation, however, has shared that lease contracts for the venues could bring the province an additional tax revenue of at least CA$2 billion annually.