New company to take over Kawartha Downs, build new casino
The company chosen to take over the gambling at Kawartha Downs is willing to spend nearly $50 million to renovating and developing a casino in the Peterborough area, but it’s too early for that company to say where the facility will go.
In the Ontario Lottery and Gaming Corporation’s plan to hand over the operation of gaming sites to private companies, Ontario Gaming East LP is the first to be announced as a successful bidder. The company is signing off on a deal to operate gambling sites in the Peterborough area, as well as in the Kingston and Belleville areas.
The largest shareholder in that partnership is the British Columbia-based Great Canadian Gaming Corporation, which already operates a number of gambling facilities in Western and Eastern Canada.
The deal cost Ontario Gaming East LP about $50 million — $37.4 million for the purchase price and $13 million to cover working capital.
Chuck Keeling, vice president of stakeholder relations and responsible gaming for Great Canadian Gaming, says the deal will become official and the operation of gambling at Kawartha Downs will change hands in early 2016.
The company is aiming to have a new, or expanded facility ready to open by the fall of 2017.
The City of Peterborough and the Township of Cavan Monaghan have each expressed interest in hosting a casino. Host municipalities receive a portion of gambling revenue, which has provided the Township with nearly $50 million in non-tax gaming revenue since the slots opened at the racetrack.
In an effort to streamline the process for the incoming casino operator, previous Peterborough city councillors pre-selected three potential areas for a new gambling facility, including in the east end on vacant land at the city’s edge and near The Parkway and Highway 115 connection in the city’s south end.
Kawartha Slots has been very good to Cavan Monaghan Township - to the tune of $47.5 million
Cavan Monaghan Township council has previously suggested the facility at Kawartha Downs should stay where it is and could be expanded to include table games and more slot machines.
“We are honoured and thrilled to have been chosen,” Mr. Keeling says of the OLG’s decision to enter into a partnership. “In terms of greater details about the future…those are conversations and discussions we will have at the municipal level and with the OLG.”
Currently, there are 454 slot machines at Kawartha Downs. Under the OLG’s guidelines, about 150 more could be added at that facility or in a newly-built casino. The OLG will also permit up to 180 table positions in a Peterborough-area casino, which works out to about 30 live table games.
Mr. Keeling says Great Canadian Gaming has experience operating small-scale and large-scale casinos including the River Rock Casino Resort in Richmond, British Columbia, which boasts a 1,000-seat theatre, a hotel and restaurants.
Mr. Keeling says the facility is much larger than what the company is planning for the Peterborough area, although complimentary features for a new casino aren’t off the table.
“Anything that drives traffic is good for our business,” he says.
The transition agreement Ontario Gaming East LP will sign with the OLG lays out customary closing conditions that will need to be satisfied in order for the 20-year operating deal go ahead.
This includes a requirement for the service provider to retain employees for a period of no less than 12 months in their current position and geographic location and to provide eligible employees with benefits and a registered pension plan.