Pt. Edward’s slot revenue jumps 50 percent since Hiawatha’s closure
Sarnia’s loss has been Point Edward’s gain.
It’s been a year since the Ontario Lottery and Gaming Commission closed down the slots at Hiawatha Horse Park, throwing over 100 people out of work and leaving the city without a very lucrative money maker – municipalities which host slot facilities get five percent of the revenue.
At the time, Sarnia Mayor Mike Bradley said the OLG was closing Hiawatha – which had higher revenue figures than the Point Edward Casino – to drive gamblers to the casino making it more attractive to potential buyers.
Recently released figures show the closure of Hiawatha has had a significant impact on Point Edward’s revenue.
Jim Burns, the village’s CAO, says in the 2012-2013 fiscal year, Point Edward received $2,316,876 in revenue sharing payments. That compares with $1,579,336 the previous year. “Our revenue went up to 50 percent; part of that was coming without the closure of Hiawatha,” says Burns noting revenue was climbing before the horse park slots closed. However he believes much of it came from former Hiawatha customers.
Bradley says while the 50 percent increase seems high, “the OLG thought they would pick up 100 percent” of those customers.
Bradley speculates some people simply quit going because they were upset with the way the closure was handled; others may have gone to Dresden Raceway where the atmosphere was similar to Hiawathas. “I do know there are a lot of people who lost employment who couldn’t afford to game anymore…take 100 plus jobs out of the community’s economy that makes a difference, too.”
But Tony Bitonti, the OLG’s senior manager of media relations, says the closure did exactly what the OLG wanted.
“Most of the influx is going to Point Edward and that was what we believed was to going happen,” says Bitonti. “The competition (between Sarnia and Point Edward) had an impact…that was one of the reasons for that modernization in these areas; there was an over-saturation of the gaming product.
“It was a difficult decision, in the end it was the proper business decision.”
While the OLG says it was the right business decision, Sarnia is now beginning to see the impact of it. The payment for the final quarter of the 2012-2013 fiscal year was the last payment the city will get. Bradley says over the years the city has received $26 million, putting much of it into parks and recreation and the fire department’s equipment.
The city now has to find ways to pay for those things without the slots revenue.
In Point Edward, the municipality is taking a lesson from Sarnia’s loss. Burns says much of the money the municipality is receiving is going into infrastructure to allow for development in the future.
“We have an agreement with OLG now that talks about revenue sharing…as long as there is a casino in Point Edward that agreement is in place; if it closes down completely that’s another problem. We’re very cognisant that could possibly happen,” says Burns. “The level of awareness of the dependence of that revenue stream is very high. Council is aware what would happen if it vanishes…We’d have a very difficult time making ends meet.”
– Heather Wright