Caesars to face competition from major North American players as OLG prepares to announce new operator for Windsor casino
The Ontario Lottery and Gaming Corporation (OLG), the provincial agency that owns Caesars Windsor, could announce a new operator for the property by fall. For the first time since the property opened 30 years ago, the license to operate the slot machines and blackjack tables at the Ontario casino is up for grabs.
As per The Globe and Mail, the OLG is in the final stage of reviewing offers for who will run the casino, set to take over the operations in 2025. According to unnamed sources cited by the publication, Caesars Windsor, which is currently being run by Caesars Entertainment, is facing competition from Bally’s, and Indigenous-owned Mohegan Gaming and Entertainment, which operates two casinos in Niagara Falls, Ontario.
In April 2023, the OLG put Caesars’ contract out to tender. The move marked the final stage in a shift in the way the province licenses casinos, a policy change that has been playing out for more than a decade. Caesars Windsor is the last contract to be redone.
The OLG’s aim with the new licenses is to increase the province’s take while encouraging operators to invest in facilities. Previously, the agency and casino companies used to split up gambling revenues. Now, operators are required to guarantee a predetermined annual payment to the OLG. The companies get to keep 70 percent of revenues above this amount.
A controversial transition
Earlier in 2022, the provincial auditor-general published a report that criticized the OLG for allowing three casino operators to redo their 20-year contracts after pandemic restrictions were lifted, and reduce their guaranteed payments.
The auditor-general also held the OLG responsible for handing out licenses without balancing guaranteed payments against the operators’ commitment to invest in their casinos. Provincial accountants zeroed in on the OLG’s decision to award the two Niagara Falls casinos to Mohegan in 2018, despite Caesars pledging $140 million more than Mohegan to spruce up the properties in its unsuccessful bid.
In response to the auditor general’s review, the OLG pledged to hold operators to their payment guarantees and put an increased emphasis on investment in casinos when renewing licenses.
Last October, the OLG finished its initial review of bids for the Windsor casino and started negotiations with potential operators. The process is meant to be confidential: Caesars and the companies vying to replace it are not supposed to know who else is competing for the license.
Strong backing for Caesars to continue operating Windsor Casino
The Globe and Mail report cited Dave Cassidy, President of Unifor Local 444, who said: “Caesars should be the favored candidate, based on the job they’ve done running the casino and providing quality jobs.”
He also said Windsor Mayor Drew Dilkens also supports Caesars’ bid to remain the operator. “Windsor needs an international casino operator who can do what is needed to win customers and stop them from playing across the river in Detroit,” Cassidy added.
The Unifor leader further estimated that it would cost a rival operator at least CAD 80 million ($59.3 million) to rebrand the property if Caesars loses the license, while noting that Caesars has consistently invested in the business to build its client base.
Gordon Orr, Chief Executive Officer at Tourism Windsor Essex Pelee Island, said: “It’s critically important that whoever OLG chooses to run the casino has an established brand, with the gambling expertise and the loyalty programs that keep patrons coming back.”
“The casino was the tide that lifted all boats. For the tourism sector, Caesars put us on the path to prosperity. In the hospitality industry, the casino offers destination jobs,” Orr added. In 2022, the Windsor region welcomed 4.4 million visitors, who injected $ 669 million into the local economy.
