Canada: What Will The Rules Be For Establishing A Toronto Casino?

The Ontario Lottery and Gaming Corporation (OLG), the provincial government agency mandated under provincial law to conduct and manage casinos, recently delivered a report to Dwight Duncan, the provincial Minister of Finance, proposing the establishment of a casino in the Greater Toronto Area (the GTA). The Ontario government has stated that it has directed OLG to implement this proposal. However, under the current governing statute and related regulations, OLG does not have the statutory authority to approve the establishment of any additional casinos in Ontario. The Ontario government will presumably shortly propose new regulations to provide this authority. This bulletin sets out the requirements that are currently in place for establishing a casino in a municipality in Ontario and describes the requirements that previously applied as these requirements may inform the process for establishing a casino in the GTA in the future.

Under the Criminal Code, provincial governments are the only entities that are allowed to conduct and manage casino gaming premises. The Ontario government has established OLG pursuant to the Ontario Lottery and Gaming Corporation Act, 1999 (the Act)as the provincial entity that is empowered to conduct and manage gaming premises in Ontario in accordance with the Act and the Gaming Control Act, 1992.

The Act provides that OLG shall not authorize the establishment of gaming premises until OLG takes certain prescribed steps and unless OLG requires the prescribed conditions to be met in respect of the proposed gaming premises. Regulation 347/00 under the Act (the Regulation) currently contains the prescribed requirements that are in force with respect to the establishment of casinos. The Regulation states that OLG may only authorize the establishment of a casino in an "eligible municipality", subject to the conditions and restrictions set out in the Regulation, and that OLG shall not authorize the establishment of a casino in any other municipality. However, any "eligibility" designations that applied to municipalities under the Regulation expired on March 31, 2003 and OLG is not authorized to make any further eligibility designations after that date. Accordingly, under the Act and the current Regulation, OLG does not have the authority to authorize the establishment of a new casino in the GTA or elsewhere in Ontario. Thus, the Regulation would need to be amended or a new regulation would need to be promulgated by the Lieutenant Governor in Council (the provincial cabinet) in order for a new casino to be established in the GTA. In June 2011, the Ministry of Finance solicited comments regarding possible amendments to revoke and replace the Regulation; however, nothing further appears to have arisen from that process.

The Regulation contains a number of requirements that applied with respect to previously designated "eligible municipalities". Under the Regulation, the council of any municipality that was designated by OLG as "eligible" and which desired that their municipality host a casino had to submit a referendum question to its electorate regarding the establishment of a casino before any further steps could be taken. If the referendum was in favour of establishing a casino, the establishment of a casino would then have to be approved by the municipal council through a notice to OLG stating its desire to establish same. The municipal council would also have to agree to a revenue sharing plan with OLG and to initiate any necessary rezoning of the proposed site for the casino. Finally, OLG would have to deem the municipality to be "suitable" for a casino, approve the proposed site, and make its reasons available to the public. The requirements set out in the Regulation are discussed in more detail below.

Designation as an "Eligible Municipality"

In order to be eligible to be considered for the establishment of a casino, OLG first had to designate a municipality to be an "eligible municipality" for the purposes of the Regulation. As noted above, the Regulation prohibits OLG from making any such designations after March 31, 2003, which, given the provisions in the Act and the Regulation, effectively prohibits the consideration of any further municipalities for the establishment of casinos until the Regulation is amended or a new regulation is promulgated.

Municipal Referendum

If a municipality was designated as an "eligible municipality" by OLG, and the municipal council desired that its municipality host a casino, the council would have to submit an authorized referendum question to electors during the next election, in accordance with the requirements of the Municipal Elections Act 1996, such as the one reproduced below:

Where the Municipal Elections Act, 1996 required that notice be given to the Minister of Municipal Affairs and Housing, notice also had to be given to the Chair of the Management Board of Cabinet. If a majority of electors cast their ballot in favour of the proposal, the municipal council then had 60 days to notify OLG that it wished to establish a casino.

Revenue Sharing Plan

Once OLG received notice from a municipal council that it wished to establish a casino, it could propose a revenue sharing plan to the council. This revenue sharing plan had to be accepted by the council before OLG would authorize the establishment of a casino.

Suitability of the Municipality

Regardless of the outcome of the referendum, OLG could not authorize the establishment of a casino in a municipality if, in the opinion of OLG, the municipality was not a suitable location for a casino. In making this determination, OLG was to consider, among other factors that it deemed relevant: (i) the cost of establishing the proposed casino and (ii) the viability of the proposed casino. Before making a decision regarding suitability, OLG was also required to solicit and consider the opinion of the Chair of the Management Board of Cabinet.

Approval of the Site

OLG also had to approve the site where the casino was to be located. The Regulation does not provide specific criteria as to how this determination was to be made, except to provide that OLG would not approve a proposed site unless, within 60 days after the referendum approving the casino, the municipal council agreed that it would initiate any necessary re-zoning of the site.

Reasons Had to be Made Available to the Public

The Regulation provides that if OLG authorized the establishment of a casino in accordance with the above, OLG had to make its reasons available to the public upon request in a summary format.


In light of OLG's recent proposal to the Minister of Finance regarding the establishment of a casino in the GTA, it will be interesting to see if any new or amended regulation contains requirements similar to those which applied in 2003 providing for a municipal referendum and a number of municipal council approvals, or whether the requirements for a referendum and municipal council approvals are eliminated or substantially modified. It is worth noting that OLG's recent proposal called for some form of municipal approval in the process, but did not specify the precise nature of that approval or approvals or the form they should take.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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