The government-run agency has put out a request for information from companies to build a 5,000-seat "privately funded multipurpose entertainment centre" that is larger than either Casino Windsor or Casino Rama near Orillia.
OLG currently operates two casinos in Niagara Falls with a maximum capacity of 1,500 seats, compared with 5,000 seats at the two other casinos.
In a news release, OLG says non-gaming facilities such as the entertainment venue being considered for Niagara Falls are becoming core amenities for gamblers.
It says such a centre in Niagara Falls could help increase business for OLG, help create jobs and economic development and increase tourism.
OLG is asking companies to identify and recommend possible locations, as well as what factors the agency should consider with respect to a location such as being connected to a casino and parking.