Employees at Caesars Windsor and land-based casinos across Ontario, who have suffered greatly due to layoffs during the ongoing pandemic, are about to face yet another ominous challenge as the Ontario government is poised open up the e-gaming sector.
While online gambling has existed under Ontario Lottery and Gaming (OLG) in recent years and expanded during the ongoing COVID-19 pandemic, the provincial government starting April 4 will open up the industry to the private sector.
Dozens of global companies that offer online sports betting, slots games, bingo or poker offerings will be able to obtain an e-gaming license from the newly created iGaming Ontario (iGO), and for the first time open up legally for business.
A private consultant’s report by HLT Advisory Inc. commissioned by Great Canadian Gaming — a Toronto-based company with the largest share of Ontario’s casino market — has estimated land-based casinos will see job losses that equate to 2,588 full-time equivalents (FTEs) over the next five years.
Locally, about 100 of the 500 gaming-related jobs at Caesars Windsor will eventually be lost, the report said.
Municipalities are also projected to lose out due to the introduction of e-gaming in Ontario. The city of Windsor currently receives about $10.5 million annually as the host city for Caesars Windsor based on revenues. Once e-gaming rolls into full force that number is projected to drop by roughly $1.6 million annually or $8.1 million over the next five years, according to HLT.
Other impacts include a large decrease in new casino infrastructure investment or facility upgrades, reduced level of customer service and greater chance of casinos becoming insolvent, the report said.
The government is making the move to get a slice of the billions of gambling dollars that Canadians spend online in the “grey market,” where accounts are set up in the U.S. or overseas to place sports wagers, play poker or any number of games on sites such as Draft Kings, Betway or Jackpot City.
By opening up the industry within Ontario, the government intends to charge a 20 per cent “tax” on all revenue from each online gaming business.
“Today, most internet gaming by Ontarians takes place on websites not conducted and managed by the province,” said Martha Otton, iGO’s executive director. “Our new internet gaming market will give consumers enhanced entertainment choice, support the growth of a new, legal market and generate revenue that can help fund programs and services that benefit all of us.”
But critics have already blasted the plan, fearing a wide open e-gaming sector will undercut land-based casinos across the province and potentially eliminate thousands of jobs as customers instead choose newly legal online gaming options and play from home.
The national office for Unifor — the union which represents over 10,000 workers in Ontario’s casino industry, including at Caesars Windsor — has already been active trying to alter the government’s current blueprint for e-gaming in Ontario.
Chris MacDonald, assistant to Unifor’s national president Jerry Dias and responsible for the union’s gaming file, said lobbying efforts have gone straight to Premier Doug Ford’s office regarding looming job loss concerns.
“The whole reason gaming was approved in Ontario was to generate jobs,” he said. “Now it seems it will have nothing to do with jobs. People will stay home and not go to the casino.
“Casino workers are already going through a lot of trauma (due to pandemic shutdowns). A lot of people are getting used to not going to the casino. Now you are providing further incentive for people to stop going to the bricks and mortar.”
Unifor has called for meetings with the premier to alter the government’s current e-gaming plans, MacDonald said. The biggest issue is how online gaming companies will only be obligated to hand over 20 per cent of revenues, while land-based casinos, such as Caesars Windsor, currently hand over more than 50 per cent of revenues to the government.
“A lot of operators are in agreement and want this put on pause,” he said. “They just want a level paying field.”
Another concern is how land-based casinos can currently regulate or cut off a gambler due to intoxication or other reasons. That ability gets lost for someone sitting at home fully inebriated, “picks up their phone, loses the mortgage money and has no memory of it in the morning,” Macdonald said.
“We had a meeting on Friday with (government officials) on this and expressed our concerns on these tax rates and other issues,” he said. “We want to meet with the premier’s office. Hopefully, they will be open to creating a level playing field for existing (casinos). Otherwise, you are looking at 25 per cent of gaming-related jobs being gone — and that’s a significant number.”
But Paul Burns, CEO of the Canadian Gaming Association, which represents casino operators and other related companies across the country, countered it’s far from clear exactly what impact legalizing internet gaming in Ontario will have on casino jobs or revenues.
“A lot of data is being put out there on the cannibalization of the industry,” Burns said. “It’s based on certain segments of the market. But other markets (elsewhere) have what we do not. There is at least $1 billion a year (in online gaming) leaving the country and half of that is in Ontario.
“There is debate on this from all sides. The experience in many other markets has been positive for the sector. Casino operators not having access to this market has been harmful, as well. You want to respond to the needs of your customer whether they come to the casino or use their device from home.”
For sports betting, it’s very important for a casino such as Caesars Windsor because for the first time in Ontario they will be allowed to gain new customers online and generate revenue instead of that money strictly going to overseas companies, he said.
“Caesars is a powerful brand,” Burns said. “Now they can say, ‘if you are going to gamble online, why not gamble with us’ and attach it to their rewards program. That might actually drive more people back to the property. You are extending the brand of Caesars beyond its four walls.”
In terms of potential job losses, while some in casinos may indeed be lost, new ones will become available with new internet gaming companies setting up in Ontario or through current casinos creating new online-related positions.
“You have The Score, PokerStars and Fan Duel already setting up here,” he said. “There will be $100,000 (software) development jobs being created, plus marketing, media and a whole range of spinoff jobs.”
The introduction of e-gaming in Ontario is being viewed as positive by those in charge at Caesars Windsor.
“iGaming is an evolving channel and as part of the worldwide Caesars brand,” said Susanne Tomkins, the casino’s communications manager. “Gaming will be another option for our Caesars Rewards guests to experience the brand between their physical visits to our property.
“We are looking forward to the introduction of iGaming in Ontario. Stay tuned as we will be announcing exciting details in the upcoming weeks.”
But Tomkins said she “would not speculate at this point” on potential impacts to staffing or revenue at the local casino.
Meanwhile, OLG, which to date has been entitled to all revenues as the only source for legal online gaming in the province, will for the first time find itself competing with dozens of other online gaming companies.
“OLG is the only online provider with deep roots in the communities we have a presence in throughout Ontario,” said Tony Bitonti, OLG’s director of corporate affairs. “We know the regional/Canadian market better than any global competitor.”
Global online gaming companies that extend into Ontario will only be “contributing a portion of their revenue to the provincial coffers,” while “100 per cent of OLG proceeds are reinvested into provincial priorities that improve the quality of life for all Ontarians,” Bitonti said.
“Since 1975, OLG has provided approximately $55 billion to the people and province of Ontario,” Bitonti said. “When you play any OLG lottery, casino or sports game, you play for Ontario.”
Finally, there are questions on what the new array of legalized online gaming options in Ontario will mean for gamblers themselves, especially those with addiction issues.
The COVID-19 pandemic has already “increased problem gambling and gaming significantly,” said Diana Gabriele, a counsellor at the local Centre for Problem Gambling and Digital Dependancy at Hotel-Dieu Grace Healthcare.
“Some have had their employment affected and think they will do this to supplement their income, they’re bored at home or do this because of limited recreational or social opportunities,” she said. “Some look at it as a way to relax or stress management because places like their gym have been closed.”
She wasn’t sure what impact the province’s new legalized e-gaming world will have, noting “there are no limits in place now” for anyone gambling online as they “already have access to the entire world.”
Gabriele expressed hope any online gaming companies that set up in Ontario will be under tight government regulations so each has safeguards that include betting limits, or time limits to help avoid increased problem gambling.
“These gaming sites are not there to give money away, they are there to make money,” she said. “The house always wins. I would suggest if people are doing this because they are bored to find other activities (online) they can do besides risking their income or mental health through an online gaming site.”
The Centre for Problem Gambling and Digital Dependancy at HDGH is available to any individual or family member in crisis due to problem gambling and can be reached at 519-254-2112.
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