It appears the city hit the jackpot with a new hosting formula that will boost revenue generated by the Thunder Bay casino by about $300,000.
Officials with Ontario’s Lottery and Gaming Corporation announced Friday a new equity formula for municipalities that host a casino. Under the new formula, municipalities will receive four per cent on table game revenue on top of the five per cent on slots.
The city annually receives about $2.3 million from the Thunder Bay casino, but under the new formula that number is expected to jump to $2.6 million.
Acting mayor Ken Boshcoff welcomed the news calling it a great idea on OLG’s part.
“I’m elated,” Boshcoff said. “It’s a welcomed compromise out of the existing formula. It establishes some measure of balance for us. It also gives us better benchmarking for total revenues and will be probably easier for us to budget.”
Boshcoff said when Thunder Bay, Point Edward, Sault Ste. Marie and Brantford negotiated deals to have casinos built in the early 2000s, they agreed to five per cent of the slot revenue.
The original agreement stated that if one city was to receive an increase then they all would.
He said when they were negotiating for that five per cent it appeared significant at the time.
He added that he felt satisfied to see the work all the municipalities have done coming to fruition.
Boshcoff also suspected the situation in Toronto played a role in development a new formula.
The Globe and Mail reported in March that Toronto would not get the standard formula for hosting fees that other municipalities receive from an OLG casino, and instead would receive $50 to $100 million -- more than double what other cities receive.
Ontario premier Kathleen Wynne quickly countered by saying the province’s largest city wouldn’t receive a special deal.
Since then the deal with Toronto proposal appears to have stalled.
OLG spokesman Tony Bitonti said the situation with Toronto had nothing to do with the new formula. Bitonti argued that OLG was working on modernizing the hosting formula, which was a requested by Wynne.
Bitonti added the whole process started back in March.
“We’ve done some revamping of the old formula, which was in place for over a decade,” he said in a phone interview from Toronto.
“The premier wanted us to take a fresh look at the formula to really make sure that it was fair and equitable across the province. Some of the communities that weren’t sharing in the revenue sharing portion of the funding formula were Windsor and Niagara Falls. They were being paid on a fixed fee formula. We made a few adjustments and now have included table games.”
The new formula will apply to hosting fees retroactive to April 1, 2013.
