THE BLOG

Why the Rideau-Carleton Raceway is the Only Logical Choice for a Casino

06/27/2013 05:43 EDT | Updated 08/27/2013 05:12 EDT

With the recent decision by Mayor Jim Watson to back Rideau Carleton Raceway (RCR) as the preferred location for a proposed casino, it seems most everyone agrees it's the only logical choice for Ottawa. Everyone except Eugene Melnyk, that is.

Following a loud and messy fight, Toronto city council recently defeated plans to build a downtown casino in that city, one further blow to the failed "modernization strategy" proposed by the Ontario Lottery and Gaming Corporation (OLG). This strategy was the brainchild of former Premier Dalton McGuinty, former Finance Minister Dwight Duncan, and recently sacked OLG Chairman Paul Godfrey, and it's no coincidence all three are out of their former positions.

While the strategy was meant to bring in an additional $1.3 billion in government revenue, enacting it would have destroyed a horse racing industry that employs 60,000 people and is collectively worth $2 billion. The math simply didn't add up. Premier Kathleen Wynne recognized this, and moved to integrate horse racing into a revised strategy. It's the right move, but is still facing opposition from within the OLG.

With his latest efforts, it seems Eugene Melnyk is attacking the new strategy from the outside as well. As one of Canada's wealthiest businessmen and someone with influential ties in the Ottawa region, Melnyk has earned his success. He rescued the Ottawa Senators and has built up Scotiabank Place as a valuable contribution to the economic and cultural fabric of Ottawa. He certainly deserves the support and appreciation of local residents for what he's done here.

But on the casino issue, it's clear he's not interested in a solution that benefits the city and the region. Melnyk is not simply opposed to a casino at the RCR, nor is he calling for an open process where different casino proposals are considered and the best one is chosen. Melnyk wants the casino, if there is a casino, to be at his place -- Scotiabank Place, the stable, successful, and profitable home of the Senators, the NHL team he owns.

Mayor Watson has said he backs a casino at RCR because it will secure the livelihood of the over a thousand people who rely on horseracing in Eastern Ontario, as well as ensure the industry continues to be an economic benefit to the city. Premier Wynne agrees that the value in maintaining horse racing is a primary consideration. With the OLG determining only one casino will be allowed in Ottawa, placing it at RCR follows the wishes of both the municipal and provincial governments, a rare feat.

If a casino is granted anywhere else in Ottawa, such as downtown or on Melnyk's property, the slots currently at RCR will be moved to the new location. With the loss of this income, the raceway will no longer be profitable and it will close, taking with it over a thousand jobs and an enormous economic investment.

Compare this with the effects that placing the casino at RCR would have on the city. Melnyk will continue to have a profitable operation at Scotiabank Place, while the raceway, its employees, and its valuable economic contribution to the region would be maintained.

That's really been the crux of this debacle from the outset. Early on, I personally criticized Mayor Watson for the process, because he was leaving it to the OLG to determine the casino location. There were no guarantees the OLG would make a decision that was in the best interest of the city; in fact, it was hard to tell who would benefit from any OLG decision.

By rigging the process, by "bundling" six gaming zones in southwestern Ontario for instance, the OLG was favouring multinational casino operators like Caesars/Rock Gaming and MGM over the existing horse racing industry. Read into the history of these American companies, and you'll start to question why we would ever want them in our local communities instead of racetracks.

The OLG, therefore, has demonstrated a lack of appreciation for the effects of its actions on the overall economy of Ontario, and is instead focused solely on its own interests. The same is true of Eugene Melnyk. While I'm certain he could run a profitable casino from the entertainment complex he owns, a Scotiabank Place casino overwhelmingly benefits the mega-millionaire alone.

The OLG promoted its strategy as bringing $1.3 billion into the Ontario Government's coffers, but what people are slowly beginning to appreciate is that it isn't about the money.

It's about the impact it will have on the horse racing industry, on communities and on people.

The OLG and Mr. Melnyk would do well to realize it too.

Slots!