The Ontario Lottery and Gaming Corporation (OLG), the government agency mandated under provincial law to conduct and manage gaming sites, has recently issued a request for information regarding the establishment of a number of new gaming sites across Ontario, including a new casino in the Greater Toronto Area. On June 1, 2012, the rules for establishing new gaming sites in Ontario became effective as Ontario Regulation 81/12, Requirements for Establishing a Gaming Site (the New Regulation), came into force following enactment by the Lieutenant Governor in Council (the Provincial Cabinet) under the Ontario Lottery and Gaming Corporation Act, 1999 (the Act).
The process for establishing a gaming site under the New Regulation differs substantially from the process for establishing a casino under the prior regime set out in Regulation 347/00 (the Old Regulation), which was repealed on June 1, 2012 (and which was described in our March 2012 Blakes Bulletin on Gaming). Firstly, the business case for any proposed gaming site must now be approved by the Minister of Finance. In the past, OLG was only required to notify and consider the opinion of the Chair of the Management Board of Cabinet. Secondly, there is no requirement under the New Regulation to hold a public referendum in the municipality in which the gaming site is to be established. A referendum was a precondition to establishing a casino under the Old Regulation. Finally, the disclosure that OLG is required to provide the public regarding its decision is more limited under the New Regulation.
Under the Criminal Code (Canada), provincial governments are the only entities that are allowed to conduct and manage gaming sites. The Ontario government has established OLG pursuant to the Actas the provincial entity that is empowered to conduct and manage gaming sites 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 sites until OLG takes certain prescribed steps and unless OLG requires the prescribed conditions to be met in respect of the proposed gaming site, as set forth in the regulations. A "gaming site" is defined in the Act as premises or an electronic channel maintained for the purpose of playing or operating a "lottery scheme" as defined in subsection 207(4) of the Criminal Code (Canada).
Under the New Regulation, in order for OLG to establish a gaming site in a municipality in Ontario, it must first prepare a business case for the proposed gaming site that:
- sets out the cost of establishing the proposed gaming site;
- demonstrates the viability of the proposed gaming site and the adequacy of responsible gaming features for the proposed gaming site; and
- sets out or demonstrates any other matter that OLG considers appropriate.
OLG must then give a copy of the business case to the Minister of Finance for review, along with any other information that the Minister of Finance may request. OLG is required to obtain the approval of the Minister of Finance with respect to the business case. This can be differentiated from the previous process, in which OLG was only required to notify and consider the opinion of the Chair of the Management Board of Cabinet when establishing a casino. There is nothing in the New Regulation that requires public disclosure of OLG's business case for a gaming site.
The process for obtaining municipal approval under the New Regulation also differs significantly from the previous requirements, where a referendum had to be held in which a majority of voters cast their ballot in favour of establishing a casino. Under the New Regulation, the municipal council is only required to "seek public input" regarding the establishment of the proposed gaming site and give OLG a description, in writing, of the steps the municipal council took and a summary of the input it received. The municipal council must also pass a resolution supporting the establishment of the gaming site in the municipality and give a copy of that resolution to OLG. A municipal council could choose to exercise its general power under section 8(1)(b) of the Municipal Elections Act, 1996 to submit a question to its electors concerning a matter within the jurisdiction of the municipality, which would appear to include the establishment of a proposed gaming site within the municipality. However, such a referendum is not mandatory either under the Municipal Elections Act, 1996 or the New Regulation.
Once approval has been obtained from the Minister of Finance and the relevant municipal council, OLG must publish a notice in a newspaper or on OLG's website (or both), as determined by OLG, advising that the proposed gaming site is to be established and containing any information that OLG considers appropriate. Under the Old Regulation, OLG was required to make the reasons for its decision available to the public upon request.
The process for establishing gaming sites under the New Regulation is markedly streamlined when compared with the Old Regulation. Although the approval of the Minister of Finance is now required, there is no longer any requirement for a municipal referendum nor is there any requirement that OLG provide any disclosure to the public beyond the announcement that the proposed gaming site is to be established.
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