ONTARIO CASINO CORPORATION ACT, 1993 / LOI DE 1993 SUR LA SOCIÉTÉ DES CASINOS DE L'ONTARIO
CONTENTS
Tuesday 31 August 1993
Ontario Casino Corporation Act, 1993, Bill 8
Stewart Eadie
Jill Brown
Sammy's Cellar
Sam Birnbaum, owner
Empire Developments
Alicia Natividad, legal counsel
Diamond Gaming Services Ltd
Jack Edmondson, president
Matt Sagle, vice-president
STANDING COMMITTEE ON FINANCE AND ECONOMIC AFFAIRS
*Chair / Président: Johnson, Paul R. (Prince Edward-Lennox-South Hastings/
Prince Edward-Lennox-Hastings-Sud ND)
Vice-Chair / Vice-Président: Wiseman, Jim (Durham West/-Ouest ND)
Caplan, Elinor (Oriole L)
Carr, Gary (Oakville South/-Sud PC)
Cousens, W. Donald (Markham PC)
Jamison, Norm (Norfolk ND)
*Kwinter, Monte (Wilson Heights L)
*Lessard, Wayne (Windsor-Walkerville ND)
Mathyssen, Irene (Middlesex ND)
North, Peter (Elgin ND)
*Phillips, Gerry (Scarborough-Agincourt L)
*Sutherland, Kimble (Oxford ND)
*In attendance / présents
Substitutions present / Membres remplaçants présents:
Dadamo, George (Windsor-Sandwich ND) for Mr Jamison
Duignan, Noel (Halton North/-Nord ND) for Mrs Mathyssen
Harrington, Margaret H. (Niagara Falls ND) for Mr Wiseman
Marland, Margaret (Mississauga South/-Sud PC) for Mr Carr
McClelland, Carman (Brampton North/-Nord L) for Mrs Caplan
Sterling, Norman W. (Carleton PC) for Mr Cousens
Also taking part / Autres participants et participantes:
Ministry of Consumer and Commercial Relations:
Duignan, Noel, parliamentary assistant to the minister
Mundy, Jim, project team officer, casino project
Clerk / Greffière: Grannum, Tonia
Staff / Personnel: Luski, Lorraine, research officer, Legislative Research Service
The committee met at 1409 in the Delta Hotel, Ottawa.
ONTARIO CASINO CORPORATION ACT, 1993 / LOI DE 1993 SUR LA SOCIÉTÉ DES CASINOS DE L'ONTARIO
Consideration of Bill 8, An Act to provide for the control of casinos through the establishment of the Ontario Casino Corporation and to provide for certain other matters related to casinos / Loi prévoyant la réglementation des casinos par la création de la Société des casinos de l'Ontario et traitant de certaines autres questions relatives aux casinos.
The Chair (Mr Paul Johnson): Order. The standing committee on finance and economic affairs will come to order. This is our first day in Ottawa. We're dealing, of course, with Bill 8, An Act to provide for the control of casinos through the establishment of the Ontario Casino Corporation and to provide for certain other matters related to casinos.
STEWART EADIE
The Chair: I would like to welcome Mr Stewart Eadie to the committee. Sir, you have 30 minutes to make your presentation. You might like to save some time for questions from the committee members. When you're comfortable, you may proceed.
Mr Stewart Eadie: My name is Stewart Eadie. I'm assistant vice-president and branch manager for Montreal Trust, located on the Sparks Street Mall. I also serve as a director on the Sparks Street Mall management board. As important as anything else, I'm a concerned private citizen. I welcome and thank you for the opportunity to say a few words to you today.
Naturally, I have many friends and clients who work in downtown Ottawa, who run restaurants, who run retail stores, many of whom happen to be independent and don't have the backing of some of the large chains. I am very much in favour of an upscale and classy casino located on the Sparks Street Mall which, as many of you no doubt are aware, is one of the most famous tourist streets in Ottawa but has suffered for a number of years with a decline. As a unique outdoor mall, the city spent some $6 million in 1988 to restore the street to its previous status. Unfortunately, we have never been successful in doing anything to invite people back to the street.
Our independent merchants are faced with the problem of having to operate their stores up until about 5 o'clock with heavy traffic, but after 5 o'clock in the evening and on Sundays, with very light traffic. I think it a travesty that anybody should have to operate a business in those conditions in one of the largest tourist areas in the country when we can't attract people there in the evening. I feel that a casino would go a long way towards attracting the kinds of traffic that we need in order to rejuvenate the mall and to complete that phase of its life.
Sparks Street suffers from some unique problems, being an outdoor mall, as you can imagine. While very pleasant in the summer months, I can assure you that in January and February the wind howls down and it can be quite a desolate place. We have to be able to attract people there in order for these businesses to survive. This is particularly true in light of some of the recent announcements by the federal government that we will be laying off government employees here in Ottawa, which makes it all the more important that we proceed to become reliant on the tourist business as much as we've become reliant on the government business in the past.
As far as the specific location is concerned, if we don't make a move within the city of Ottawa soon, we risk losing out to possible similar ventures that could occur in west Quebec. I feel that it's important that the province recognize Ottawa and give it the opportunity to move on a casino prior to anything of that nature happening in western Quebec.
In terms of what some of the benefits could be, you're going to hear from a lot of speakers who no doubt have more technical knowledge than I do and will be able to quote you percentages of tourism, employment and what the actual benefits to the downtown core economy would be. But I've got to believe that the construction and the attraction of businesses that will come as a result are going to be very beneficial for the rejuvenation project.
I understand and am led to believe, not just from talking to people who are pro-casino but from people in general, that tourism is down in Ottawa. I could envision busloads of people coming to Ottawa to participate in the casino.
In closing, I think you're going to hear a lot of information about an outstanding proposal, and I would urge us to move quickly to ensure that we can get our casino in Sparks Street. That's all I have to say today, Mr Chairman.
The Chair: We have about seven minutes per caucus. We're going to start with Mr Kwinter.
Mr Monte Kwinter (Wilson Heights): Mr Eadie, I was interested in your opening statement. Could you tell me your definition of an upscale, classy casino?
Mr Eadie: Well, perhaps I'll start by telling you what I don't think it should be. Obviously, we want to ensure that we have adequate security. We want to ensure that we have a well-managed casino. I don't believe we want to have people just wandering in who perhaps would be participating in something they could not afford to participate in, and that's why I would advocate the idea, for example, of there being a membership fee or something along those lines to discourage that.
I'm well aware that many people gamble already through Sport Select or lottery tickets or horse racing. We're talking about something, as I see it, that would be a more first-class type of scenario: well managed, clear of any prostitution or anything along those lines on Sparks Street.
Mr Kwinter: We had some discussion about this yesterday in Sault Ste Marie. Your vision would be more of the London type of casino, where it's on a membership basis or you get invited by members and it's not open to the general public per se.
Mr Eadie: Correct.
Mr Kwinter: Does that have support in Ottawa?
Mr Eadie: I believe it does, and I believe that if the membership fee is set properly, we could encourage people who are coming, let's say, to stay in Ottawa for a week or 10 days, that they could still afford to have that kind of membership fee and still enjoy themselves in good style.
Mr Carman McClelland (Brampton North): We just came in from another hotel and had lunch there and wandered up through the Sparks Street Mall and were really struck by the fact that last night it was essentially vacant. As you well point out, there's virtually nobody, other than a few caretaking staff out having a coffee or having a cigarette break.
Where would you envisage locating a casino? The other thing that struck me as I walked around through Parliament Hill and so on -- I was obviously thinking in terms of this committee and wondering, if it were to come to Ottawa, where would we put it? There's a certain -- I don't want to use a cliché -- charm or whatever as the capital. I started to reflect in my mind, would they put a casino in Washington, DC? It's the image that the city of Ottawa portrays, particularly in this downtown area adjacent to Parliament Hill.
Where would you see it as being most beneficial? It seems to me that if you want some spinoff effect for the benefit of the Sparks Street merchants, they'd have to be in relatively close proximity. Do you see that as being in conflict with or offsetting some of the natural attraction of the waterfront and the draw of Parliament Hill? Do you see that somehow being in potential conflict?
Mr Eadie: I don't.
Mr McClelland: If you could help me with where you see the location.
Mr Eadie: I think, as a resident of Ottawa, charm is one of the great things that we have going for us. I'm not convinced that it's definitely enough to support or sustain a business in Sparks Street or in the downtown core. In terms of image, I'm not sure that the comparison to Washington, DC, is necessarily a good comparison.
Mr McClelland: Nor do I. I'm just saying it conjured up in my mind a vision: Where would it fit? How would it fit in and be in sync with what we already have?
Mr Eadie: Certainly I see it as being downtown and I would very much support it being located right on Sparks Street, where we have some great facilities that would be available for that now. I think it would be quite acceptable for an individual to spend a number of days downtown enjoying some of our nice hotels and restaurants, enjoying the charms of Parliament Hill and the various museums and art galleries, and to then go and spend a few dollars in an upscale type of casino located on Sparks Street would very much be in line with our goal of attracting people to the Sparks Street Mall, particularly in the evenings.
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Mr McClelland: And the size of that vision, what you envisage: How large would that operation --
Mr Eadie: My understanding, if we're referring to the specific building on Sparks Street that you will hear advocated today, is that that would allow square footage of about a quarter of the size of the one in Windsor; we are more comfortable with that rather than going to the larger type of facility.
Mr McClelland: So in the order of 20,000 square feet or less.
Mr Gerry Phillips (Scarborough-Agincourt): What struck me in the hearings is that this is sort of like the 1990s gold rush. I think everybody in North America has their eyes wide open and that there's money to be made there. Everywhere we go, people want to be part of the gold rush. The concern some have is that it gets kind of overbuilt, overdeveloped, in that we have a series of expectations raised and find that they are either unsustainable or will require an awful lot of ongoing support.
I don't expect you to be an expert on this, but I think you understand leasing and what not and you must be viewing this. Have you or your group any concerns about the potential implications five years from now if indeed, as we heard yesterday, they build a large one in Detroit? I think virtually every community in North America is looking at it now. Have you any concerns about betting your future on something that has that risk?
Mr Eadie: I think we're all aware that there is only so much in terms of an entertainment dollar to go around and that this type of project is obviously going to compete with other forms of entertainment. Supply and demand, yes: There would be some concerns that if we put a casino in absolutely every municipality in Ontario then we're going to take away from the uniqueness of having that, but I also don't think one particular location would be adequate within the province.
I think a well-managed business, in the entertainment business as well as in any other business, is certainly going to be able to compete and hold its own. If it doesn't, well, then clearly there would be a problem with the business, and that's no different from any other entertainment businesses that are in existence at this point. It's got to be what the supply and demand will contain, as far as that goes. That's one reason we're suggesting that it's not appropriate to put in a huge facility.
As a final point to that, I see this as something that complements what we are trying to do on Sparks Street, downtown Ottawa, within eastern Ontario. Rather than it being the be-all and end-all and something we would totally pin our hopes on, it is merely something to complement what we're attempting to do as we try to rejuvenate this great street.
Mrs Margaret Marland (Mississauga South): Mr Eadie, I missed what your own background is; I'm trying to understand from what perspective you're coming. Are you a property owner in Sparks Street Mall or are you a retailer or a business person?
Mr Eadie: I work for a financial institution located in Sparks Street Mall.
Mrs Marland: Which one?
Mr Eadie: Montreal Trust. I sit on the board of directors of the mall and I'm also an interested private citizen.
Mrs Marland: I see. Are you representing the Sparks Street Mall tenants' association or business people's association?
Mr Eadie: That is correct, and also my own personal ideas.
Mrs Marland: What is it called? What is the name of your organization?
Mr Eadie: The Sparks Street Mall management board. You'll be hearing from our executive director tomorrow, I believe.
Mrs Marland: Have they done some kind of study into whether 20,000 square feet would work, would be a viable size for a casino? I'm just picturing it, and I think the smallest supermarket chain stores now are 40,000 square feet. I'm just wondering where you get 20,000 square feet as a viable size.
Mr Eadie: I would ask to defer that question to our executive director when he is on. We have not, to my knowledge, commissioned any full studies but rather have relied on some of the experts within the industry to assist us in that. We certainly believe we can support it on that basis.
Mrs Marland: Do you know which experts in the industry you're talking about?
Mr Eadie: I cannot quote that offhand, no.
Mrs Marland: I'm not familiar with a casino industry that exists in Ontario today. I'm just wondering where they would have gotten that information.
Mr Eadie: I would ask that this technical question be asked of our technical person, if you like.
Mrs Marland: Okay. You're a resident of Ottawa?
Mr Eadie: Correct.
Mrs Marland: We hear that there are adverse social impacts in some locations in North America where casinos exist. I don't know whether you're a family person or not -- that doesn't matter -- but as a resident of Ottawa, how do you feel about that possibility? How do you feel about the additional costs if you're a property owner in terms of policing and other costs that will fall on the municipality, perhaps, as a result of operating a casino?
Mr Eadie: In terms of the family aspect, I think that's why we are advocating a casino that is somewhat on the upscale and smaller size than some of the other ones that exist in North America. The regulation by the government and the professional management of such a casino could, for example, include running its own security and, if necessary, security on the street to ensure that we're not using this to tap into the city's policing resources, and this would be one of the responsibilities of the management company.
Mrs Marland: So you're visualizing a private security force?
Mr Eadie: Under the auspices of the management of the casino, yes.
Mrs Marland: I don't think private security forces have the power to enforce; if it was a criminal activity under the Criminal Code, I'm not sure they would have that power. In any case, if it's going to be a membership club format that you're talking about, and knowing of course that the Bob Rae socialist government that's proposing this bill --
Mr Noel Duignan (Halton North): Hey, that's the first time you've used it.
Mrs Marland: No, it's the second time, actually; I've used a lot of restraint.
The consideration is that a major portion of the income is obviously to go into the general revenue fund of the government. What do you see the spinoffs being? Will your other tenants in the mall stay open so they benefit from the traffic? Is that what you're saying?
Mr Eadie: That's what I would envisage.
Mrs Marland: So it would be late-hour operation in conjunction with the casino's operation?
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Mr Eadie: That is correct. As it stands right now, a downtown, open-air pedestrian mall such as what Sparks Street is cannot easily compete with the larger suburban shopping centres that are open till 10 o'clock in the evening. We've got to find a way to retain the 100,000-odd people who are employed in the area. We've got to find a number of different ways to make them want to stay downtown so that our downtown can prosper. I believe a downtown that is just a shell does not add to the charm of any city. I've seen rejuvenation projects in a number of downtown cities that I've lived in, including North Bay and Sudbury, and I know how difficult it is to keep people downtown.
The Chair: You have about a minute left. Did you want to ask a question?
Mr Norman W. Sterling (Carleton): Maybe I should ask one question. It's a bit dangerous to come to a provincial government and say, "We want a casino," because I think that not only this government but hopefully a different government the next time around is going to look back at these hearings and say, "Ottawa asked us for this," and when the costs associated with running a casino -- the police costs, the other kinds of structural costs -- come in, I think it may be legitimate for that government to say: "You asked for it. You'd better pay for it." What are your views in terms of taxes? Are you willing to pay higher property taxes in order to sustain the infrastructure around installing a casino down in the Sparks Street Mall?
Mr Eadie: I think so, if we say that based on increased business in the area there is obviously a clear offset to that. But I'm not sure where we would draw the line if we say that this is going to increase taxes. I mean, does that say we should not have a hockey team in town because we've got to have more police? Obviously, when we make any decision in society, whether we're going to put in a hockey team or a casino, there are going to be some costs to that, but I'm also sure we wouldn't be having this meeting today if we felt there were not adequate offsets to that both to local businesses and also to the government in terms of its increased revenues.
The Chair: Mr Lessard, all of your colleagues would like to ask questions, so you've got about seven minutes. I'll start with you.
Mr Wayne Lessard (Windsor-Walkerville): I'll be as brief as possible. Thanks for your presentation, Mr Eadie. I haven't been to the Sparks Street Mall in many years, but I'll make sure I take a tour down there while I'm in Ottawa. I'm from Windsor myself, and I was kind of intrigued by your vision that what you're thinking of is an upscale type of facility, because that's kind of how we got on to this in the Windsor area. It was going to be a smaller, upscale, Monte Carlo type of casino attached to a sporting facility, but once we got on the road, it just didn't seem as though that was the appropriate way to go, and that's how we've ended up with a standalone facility of 75,000 square feet that's going to be located on 13 acres of property downtown. That's a fair-sized facility.
I'm wondering where on Sparks Street there might be a few acres where a facility could be erected, because the Coopers and Lybrand study -- and I understand what your vision is -- is suggesting that a facility of 60,000 square feet could be supported in the Ottawa market area. That's fairly close in size to the Windsor facility.
One of the things we found when we got into this was that it wouldn't do us much good in Windsor if we had a facility that people, when they came to visit the city, weren't able to get into because it was too small. That was a fear we had and I would think that would be something you would be interested in addressing as well.
I don't know if you have any comments on any of those remarks. I didn't really have a question other than where it might be.
Mr Eadie: I would say, and I certainly hope you will take this in the right intent, that what you're doing in downtown Windsor is certainly admirable and suitable for downtown Windsor. I think that Ottawa, which has historically been a more natural tourist destination area anyhow, does not need to use the casino as a main pull to attract people into Ottawa, but rather it complements what the many other attractions are. With the one that is envisioned for Windsor, I could see people from the large populated areas around going specifically into Windsor to enjoy that form of entertainment when they may not have gone there before on as regular a basis.
Mr George Dadamo (Windsor-Sandwich): I come from Windsor too; the interim casino will be in the area that I represent. I believe you need to have an entire city warmly embrace the idea of casino gaming. We were in the Sault yesterday, and its approval rating, if we can use that terminology, is around 80%. In Windsor it's pretty close to that as well, if not a bit higher. I'm just wondering what kind of support you think you have or know you have from the city of Ottawa.
Mr Eadie: I cannot say in any certainty that we would have 80%, and I have no access to any formal polling that has been done in that regard. I have, however, conducted my own informal poll by asking people what they think and whether their thoughts are in line with mine, and I would say that 7 out of 10 clients and 7 out of 10 people I know on a social basis, and perhaps a bit higher than that amount on the mall, would certainly be in favour of this type of casino.
Mr Dadamo: If I can make the analogy between Windsor and Ottawa for a minute, permit me. Do you have any indication how many empty stores there are in the downtown?
Mr Eadie: What is vacant in downtown Windsor I don't know, but my perception is that it would be very high.
Mr Dadamo: In downtown Windsor, there are about 160 presently. I'm just trying to solicit from you the approximate number if you know. If the DBA sits and you're discussing how the situation is downtown, how best to attract people in, whether it be a new venture or whatever, you must talk about what's empty and what's not.
Mr Eadie: I do not know the specific vacancy rates in downtown Ottawa at this point, but I would suggest they are not as high as Windsor.
Mr Dadamo: We know that casinos are not the answer to everything and that they will bring along with them some problematic areas. Do you discuss other ideas on how to bring people to Sparks Street?
Mr Eadie: Certainly, and we've executed a number of those ideas over the course of the last couple of years. We find, and I think you will hear more of this, that we're not in a position to take out a large newspaper ad on a periodic basis like a Bayshore Shopping Centre might be able to do and say, "Come on down to the fashion centre today." We've found ourselves having to become more event-driven, where we would put on specific events over a three- or four-day period in the hope of attracting the people from the suburbs back to Sparks Street, where many of them probably enjoyed their childhood when Sparks Street was converted over to a pedestrian mall. I won't name them specifically, but I can tell you of at least half a dozen high-profile events that we have been involved in in the mall during the course of this last summer alone that have attracted significant numbers.
Mr Dadamo: May I have just one other brief question?
The Chair: Mr Dadamo, our time has expired. Mr Eadie, I want to thank you.
Ms Margaret H. Harrington (Niagara Falls): On a point of order -- actually, a point of clarification that I think is important for all of us including the presenter, that is, with regard to the membership issue. I have had this presented to me in Niagara Falls as well, about whether there can be a casino club with membership. I would like to ask our staff people to clarify for us whether that is legally possible.
The Chair: We'll get that information and share it with the committee members. Mr Eadie, I want to thank you for presenting before the committee today.
Mr Eadie: Mr Chairman, committee members, thank you.
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JILL BROWN
The Chair: Our next presenter this afternoon is Councillor Jill Brown, representing the city of Ottawa -- well, maybe not representing the city of Ottawa, but certainly a representative of the city of Ottawa. You have 30 minutes within which to make your presentation, and you may like to save some time for questions from the committee members. Whenever you're comfortable, please proceed.
Ms Jill Brown: Thank you very much. I certainly do not represent the city of Ottawa, as the city of Ottawa passed a motion in favour of casinos and I was one of three councillors who opposed it.
I've been a councillor with the city of Ottawa for the last 21 months, and for the previous 23 years prior to that I've been in private industry. I own four golf stores, one in Ottawa and three in Montreal.
I oppose casinos in Ontario generally, but Ottawa specifically, and for two main reasons: (1) crime and (2) addiction. Where there are casinos, there is organized crime; as we all know, it's the best way for organized crime to launder its money. If you're going to have a casino, you're going to have addiction. One person is one person too many to be addicted to anything.
My opponents are in favour of this for three main reasons. First of all, it's going to increase employment, so they say, it's going to be an asset to tourism, so they say, and it's going to revitalize Sparks Street, so they say. Well, I'd like to address those three statements.
First of all, to increase employment: I don't know if any of you have heard of John Turmel, who had a gambling casino in Ottawa which has since closed down. Mr Turmel's establishment was three times the size of what the proposed Sparks Street is, and he employed 100 people. Mr Dale of the Sparks Street Mall Authority has said that this would employ 450 people. I don't understand how a place that is smaller than Turmel's would employ more people, three and a half times more people.
You're saying it's going to be an asset to tourism. Well, I'm sorry, but tourism, in my mind, in Ottawa is a mother and a father and two children; that's the average. They come here to see the Parliament Buildings, they come here to see the Byward Market, they come here to see our Gatineau and all the areas and everything that is Ottawa, not a gambling casino. I'd like to see a mother and father get a babysitter in at night and go down and gamble; that's not my idea of tourism.
Revitalizing Sparks Street: Yes, if you're going to put a casino in, put it in Sparks Street, but it's not very far from the Byward Market where we have prostitution and drugs. If you've been aware of anything on Ottawa city council in the past 21 months, it's the problems we have in the Byward Market with respect to prostitution. As a matter of fact, come to council tomorrow and you'll hear us debating another problem on prostitution in the market. That's not very far from Sparks Street, so I'm sure the prostitutes aren't going to have that far to walk to get to a casino.
Socially, it's going to have a negative impact on low- to middle-income people, people least able to afford another addiction. It's going to reduce their disposable income, which in turn will lead to more economic hardship. I'm going to keep saying this, but 10% of all gamblers are addicts. Why are we opening up a casino when we know there will be an addiction?
It also creates jobs in a very unsavoury climate.
You say you're coming to the public for their input. Well, Mr Laughren in April 1992 made a statement, and his statement was, "Government will establish casinos by working with interested communities and consulting with charitable and other organizations." "Will establish casinos": That is not consulting the public to see if they want casinos.
The people we have here today and that you're going to hear from tomorrow are special-interest groups. They're not the average, ordinary person on the street.
Your government is not asking us; you're telling us. There is simply no consultation with the public. Do we know if people are happy with casinos? No, we don't. This is too important an issue for politicians to make a decision on.
I was out in my ward last night and I canvassed about 50 homes. I spoke to somewhere between 10 and 15 people and I asked them the question, what do you think of a casino in Ottawa? As a whole, they said no. Not one person I have spoken to in the past year who is a resident of Ottawa wants a casino. As a matter of fact, I was doing an interview with two reporters a couple of weeks ago, and as an aside both of them said to me, "I don't agree with casinos in Ottawa."
Until recently, you couldn't buy gas in the city after 10 o'clock at night. What hours are you going to have for this casino? Are we going to close it at 1 o'clock, 3 o'clock, 5 o'clock, or are we going to leave it open 24 hours a day? Ottawa is a sports town, and I have 23 years' experience in that. Ottawa is a conservative town. It's not a big city.
Interjection.
Ms Jill Brown: I beg your pardon?
Mr Dadamo: I just said there's a lot of sport going on in Ottawa.
Ms Jill Brown: Oh, really? Do you live here?
Mr Dadamo: No, from the newspapers I read.
Ms Jill Brown: Would you take that off my time?
I spoke to the commissioner of lotteries for Ontario about nine months ago and he was telling me about the Winnipeg experience. I don't know if anybody here has spoken to anybody in Winnipeg about how they're doing but I certainly did, and I've spoken to a number of residents in Winnipeg. One of them has some experience in that area. Winnipeg was supposed to and expected to make a net of $25 million minimum. They made $12 million, which was well below what they thought they would make; that's over a year. When you look at what has to go into putting in a casino and the investment in it, you don't make any money on it. You need extra police, you need extra undercover people. You need extra social services. You need an addiction centre.
I think what the government is doing is looking at this whole thing from the wrong aspect. If any of you have ever been to Las Vegas, as you know, when you go into Las Vegas you see the billboards, you see the lights, you see the glitz, you hear the music and you see the entertainment. You hear the whole ambience that goes with gambling in Las Vegas. We are thinking of putting one little casino on one little street in Ottawa, and it's not going to have the draw that Las Vegas or Atlantic City has. It's going to be a nothing, an absolute nothing.
Then we come to crime. It has been shown that where there is legalized gambling, there is crime, directly or indirectly. If we think we're any different here from any other major centre in the States, we're wrong. It will increase prostitution and it'll be another outlet for drugs. More policing will be required, both visible and undercover, which will incur more costs for the region, with the economic benefits going back to the province.
Windsor has now, I understand, involved the FBI with Canada's undercover agents. Normally, we don't look for crime, but this time we're courting it.
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This province has had a sign up for the last two and a half years, and what does this sign say? It says, "Closed for business." We are not interested in attracting or working with any new companies, whether they are Canadian or non-Canadian. Now, all of a sudden, because of budget problems, they think they have found a way to increase revenues. Is this good for Ontario or Ottawa? No. "We'll find out," they say, but in the meantime they'll open Windsor. The police chief of Windsor is not in favour of this -- smart man. Now this government is putting up a new sign, "Open for casinos, open for crime and open for addiction." I would hope you would rethink this. Thank you.
The Chair: Thank you very much. We have a little less than seven minutes per caucus. We're going to start with Mrs Marland.
Mrs Marland: Ms Brown, I'm very interested in Mr Turmel's casino. I hadn't heard about that before. How long ago was that?
Ms Jill Brown: I didn't follow it all that closely, quite honestly. He opened it about six or nine months ago. The police closed him down about three months ago, but he was open for a couple of months.
Mrs Marland: Do you know why the police closed him down?
Ms Jill Brown: Because gambling casinos are illegal.
Mr Sterling: Aren't there two that still remain open in Ottawa?
Ms Jill Brown: You could be right.
Mr Sterling: How are the police distinguishing between what's legal and what isn't legal? That's what I find amazing in all of this, that here in Ottawa we have these pseudo-casinos or illegal casinos operating in the open.
Ms Jill Brown: Quite honestly, I didn't know. You could be right that there are two other casinos open here, but I have no knowledge of that.
Mrs Marland: We have a casino at the Canadian National Exhibition, so it's possible to get a casino licence.
Ms Jill Brown: A roving casino licence.
Mrs Marland: When you say that they're illegal, it is possible to get a licence under certain circumstances.
I'm interested, since you're a councillor on Ottawa city council, how many people sit on council, 12?
Ms Jill Brown: Sixteen, including the mayor.
Mrs Marland: Sixteen, and only three oppose this.
Ms Jill Brown: That's right.
Mrs Marland: So, Jill, why do you think the majority -- you said something about elected people. You said this shouldn't be voted on by elected people, that elected people don't represent the average, ordinary person on the street. I'm wondering who you think the rest of Ottawa city council is representing. Why are they voting in favour of it, in your opinion? You've listened to the debate, and I haven't heard what they've said.
Ms Jill Brown: There wasn't a whole lot of debate about it, as a matter of fact. I was one of maybe two or three people who spoke. I spoke against it and two spoke in favour of it. It was almost a gimme.
Mrs Marland: Is that right? There wasn't a lot of discussion?
Ms Jill Brown: No, there was not a lot of discussion. I was also on the standing committee originally. I think a lot of people see it as economic development. I say to the province, it's not economic development. Instead of spending the millions and millions of dollars that we have spent researching and sending out advisory boards on casinos, really do economic development. Go into the United States and see how they market their businesses. Bring back ideas, bring back new companies to Ontario. Make Ontario more creative. Market what we already have here. Open our borders and say, "Welcome" to new business. "We want to help you, we want to participate with you."
We have instituted the pay equity. I believe in pay equity, except we went to the top of the scale instead of going halfway up the scale and meeting in the middle. We have the labour laws --
Mrs Marland: Excuse me. Can I get back to casinos? I only have a little time.
You said you sat on a standing committee. Did the city of Ottawa have a standing committee to look into whether it wanted a casino or not?
Ms Jill Brown: It wasn't even a motion on whether casinos would be accepted. They just passed a motion to say they would look at the concept of having a casino in Ottawa, but what they didn't do was go out and see what the public felt about it. There has never been an advisory board that has gone out to the public and said, "Are you interested in having casinos in Ottawa?"
Mrs Marland: So you feel that Ottawa council at the moment, although they're elected, and to be re-elected they have to represent the wishes of the people of this city -- you do not feel they have actually asked the people of this city if they want a casino? That's what you're saying?
Ms Jill Brown: That's right.
Mrs Marland: This standing committee that discussed it, that you're speaking of as being a member, it's just a regular committee of council that discusses a number of issues?
Ms Jill Brown: That's right. Community services and operations committee, CSOC.
The Chair: Mrs Marland, your time has expired.
Mrs Marland: Okay, thank you, Mr Chair.
Mr Kimble Sutherland (Oxford): Welcome to the committee, Ms Brown. I think it's important that people understand that this committee's purpose is not to be here to debate the merits of a specific proposal of a casino in Ottawa but to talk about Bill 8, which is enabling legislation, and get some feedback on the actual legislation and the merits -- or demerits, I guess some would say -- of casino gambling, so I'm glad you talked about some of the issues in general.
I guess I'd like to know from you what makes casino gambling a worse form of gaming than any of the other various forms we've got, whether that be the charitable casinos, lottery tickets, people who bet at a racetrack. It's all gambling; they're all forms of gambling. I would say that the province of Ontario has become very accepting of other forms of gaming, whether that be the lotteries, whether that be the charitable casinos. What is it that makes casino gambling seem so much more negative than other forms of gaming?
Ms Jill Brown: It's just another form of gambling. You've only got so many dollars to spend and people are going to eat into that. Rather than supporting their families, they're just going to spend more money on gambling. It's something that's not necessary.
Mr Sutherland: Mr Eadie before you was making a case, as has been made in other communities, that they believe it's an opportunity -- not the sole reason -- to either (a) increase the number of tourists or (b) increase maybe the amount the tourists are going to be spending in their community. In other words, rather than being a panacea, it's a catalyst for other types of economic-related activities in the community.
Ms Jill Brown: I think you heard my comments and my feelings on tourism. I don't believe it is going to necessarily increase tourism in this area.
What I also think you have to look at is that you already have established gambling areas, ie, racetracks, lotteries etc, and all you're going to do is take away from those. If you do take away from them, it's going to be disposable income, hopefully; I don't necessarily believe that, but the disposable income, rather than going to racetracks or lotteries or something, is just going to go over to casinos.
I have heard that the racetracks are down to 17% of the disposable income versus what they used to have, something like 80% of the gambling income.
Mr Sutherland: One more question for myself. You said casino gambling will increase addiction. Don't you think if people are compulsive gamblers, they are addicted to some other form of gambling already, so casino gambling by itself is not going to increase the amount of addiction?
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Ms Jill Brown: I spoke to a friend of mine the other night who has a propensity for addictions. She said to me she has cured herself of overeating, she has cured herself of smoking, she doesn't like horse racing, she doesn't like lotteries, but she loves blackjack. She made a statement to me the other night that if we did have a casino here, she most likely would become addicted to that. It's whatever your form of addiction is.
Mr Dadamo: For the purposes of Hansard, Ms Brown, I need to say that the police chief, in any of the meetings he's had with the three Windsor MPPs or in a public forum, has never voiced an opinion that he was against casino gaming. As far as I know, and we've been speaking with him for well over two years now, his main concern is policing, period.
Ms Harrington: Thank you for coming to our committee. From your perception, do you feel that a casino would fit into the community of Niagara Falls?
Ms Jill Brown: I quite honestly don't know Niagara Falls that well, so I would hate to make an answer on that. It's still Ontario.
Mr McClelland: Councillor Brown, you may be interested in knowing this and you may choose to comment. It was interesting that you made reference to the fact that the Treasurer announced, in a budget, "We will have casinos," and then we go through this exercise. That was news, by the way, as well for the ministry that is now charged with the responsibility of heading up the casino team. I think it's rather telling, this whole process.
Another one of the concerns that we've had, apart from the issue of whether we should have casinos or not, and it tells very much, is that the decision was made and then, after the fact, studies were commissioned. We even note that the date in the terms of reference, with respect to the studies, was presuming that the casino was going ahead and giving a whole lot of premises that may or may not be true. Indeed, many of the issues that we've been canvassing have been suppositions. We feel one of the important things to do is to test some of the concerns you have, bring them forward and have some critical analysis.
By way of example, you mention organized crime. The government's response has been that, due to regulations and the entry of large multinational corporations in the casino industry, organized crime has been removed from casinos. It's just a statement with no real basis in fact, contrary to police intelligence, contrary to data that are very, very voluminous in terms of setting out that problem and all the attendant problems. I just share that with you.
It's contrary to what the chief of police said. The chief of police from the region of Peel, where I come from, who had experience in western Canada, said very, very unequivocally, "If you're going to have casinos, you're going to bring problems," and he articulated those problems. The government, on the other hand, said, "It's okay; we've decided that we're not going to have those problems," so it therefore follows that we're not going to have them -- just total naïveté. That's one of the things we've been addressing.
I thank you for at least bringing a critical analysis to the table, saying we've got to deal with those problems.
Ms Jill Brown: I have a videotape in my office of three reporters, two in Windsor and one in Toronto, and they had data showing that there is not a casino in the States that does not have organized crime in it, again I say, because it's the best way to launder their money.
Mr Kwinter: Councillor Brown, I was really interested in your comments. I agree with much of what you have to say. You talk about economic development. Something that's sort of coming through to me in the hearings, and we've been at this now for nearly three weeks, is that rather than economic development, it seems to be economic desperation. Virtually every single group that has come forward as a proponent is coming forward not on the basic concept of casino gambling, that we should have it or we shouldn't have it; it's Windsor looking for this because there are 160 empty stores in downtown Windsor and this is going to be a salvation. Sault Ste Marie is doing the same thing.
The Sparks Street Mall is saying: "We've got all these problems. There's nobody there. If we had a casino, it would do these things." Ottawa certainly doesn't need a casino to make it a tourist attraction and get people here. Given the scale of what they are proposing, it's not going to make any difference. It would be an adjunct, without question; it would be something that those who wanted to do it would do it, but it would not change the economic face of Ottawa to any great extent.
The same thing would happen in Toronto. There's just too much going there. There's too much of a basic economic infrastructure to be impacted by a casino one way or the other.
How do you feel about that as someone who is in a city where this, particularly the one that's proposed for here, isn't going to have that kind of impact on the city?
Ms Jill Brown: Tourism is our second-largest industry in Ottawa, and a casino is not going to make it the first-largest industry. I have many ideas, too many to say here, but I think that as a retailer and as a business person, casinos are not the way to go. We should be going out and really actively soliciting economic development, and by that I mean welcoming businesses and industry into Ontario.
Go into the States. I think the States could teach us the greatest lesson on this earth. They are really aggressive business people. Instead of spending all this money on the last three weeks and the next however long, the length of time you're going to be out there, get out and really, really see what the Americans are doing with respect to economic development. We have so much to learn and we're not opening our eyes.
Afterwards I'll leave you my card. The problems with the pay equity, the employment equity and the labour laws are not helping us here, for sure not helping us. They have been so detrimental to Ontario, and the NDP government hopefully -- no, sorry. They'll never wake up because they don't understand what business is.
The Chair: Thank you, Ms Brown, for presenting before the committee this afternoon.
SAMMY'S CELLAR
The Chair: Our next presenter is Sam Birnbaum, representing Sammy's Cellar, if you would please come forward, sir, and make yourself comfortable. You have 30 minutes within which to make your presentation and field some questions from the committee members.
Mr Sam Birnbaum: I have copies here. I ran over here from work, so I'll try to catch my breath and blow off the condensation sticking to my body and face, if I may, a moment.
The Chair: Whenever you catch your breath and feel comfortable, proceed.
Mr Birnbaum: That's what I'm trying to do. First of all, I want to thank the committee for allowing me to speak before this standing committee on finance and economic affairs of the province of Ontario. I've been known to be a bit long-winded in my speeches when I go before a committee, so I kept it very short and succinct to allow more time for questions, if that's all right with you.
I've been a businessman residing in the cities of Nepean and Ottawa for some 19 years now, and during those years I've been involved with the hospitality industry, mostly in the downtown core of Ottawa. I have been the operating and general manager of a hotel and the manager and owner-operator of restaurants and bars.
During the 1970s and 1980s, we have seen the increase of restaurants and bars in Ottawa and the opening of entertainment lounges. The hours have expanded past the 9 o'clock syndrome closing hour and the rollup of sidewalks at an early hour. As a result of ethnic increases in our regional population, we see more specialized restaurants which are opening every week. Government does not control the type of restaurants nor the hours of operations.
We have seen and continue to see the shift of families from the suburbs to downtown Ottawa and thus the redevelopment of older and rundown areas of the city core. We see people desiring more in the way of evening entertainment and dining facilities, including Sunday shopping.
It is a fact: There is nothing new in gambling. It's something that has been going on for thousands of years. We've seen gambling in the form of bingos which proliferated in church basements and are widespread as a form of entertainment. Of course the players want to win, and we call this gambling. We have seen the evolution and widespread use of lotteries all over the world. Millions of dollars are gambled by people who search for the dream of winning big.
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Casinos are just another form of entertainment for many people to enjoy themselves. It is the choice of entertainment for those who may not wish to go to the racetrack. We see thousands go to Las Vegas for three-, four- and seven-day trips from this province alone. Thousands more go to Atlantic City, and it is because it's closer to home.
Cruise ships continue to be another popular form of travel, and gambling ships and destination gambling countries are popular as well. As a matter of fact, my predecessor who spoke before you went on her honeymoon on one such ship. Cruise ships, everything like that type of gambling, are a fact today. You can't change the reality of it in the 1990s. People who want to gamble will do so whether this province regulates and controls it or not. The province can only regulate the form.
It should not be the role of government to decide the rights of the people. If I want to gamble, then it should be possible for me to do so. It is the responsibility of the individual to regulate himself or herself. Government has no right to decide what I can or cannot do.
Just a note: I do gamble. I've been to Vegas many times, I've been to Atlantic City, and I can tell you I am not addicted to it. I gamble here in my own province. It is something that is my right if I wish to do so.
A casino operating in the downtown core of Ottawa and on Sparks Street has definite merit. It is an excellent location, and the downtown core will benefit from it. It is just another form of entertainment. It is not a catch-all where it will be the only way of generating tourist dollars, local dollars or whatever. But I must say that if I have to go to Las Vegas or Atlantic City, and many thousand like me, all we're doing is taking money out of the province, for flights, hotels, accommodation and everything else pertinent to that particular fact.
If properly regulated, then the bad side-effects will be minimized. Revenues generated will assist the tax base of Ottawa and the province. More important, jobs will be created.
I've heard that other betting institutions, for example racetracks and the breeding associations, are concerned about the possible side-effects and the ripple effect of the loss of gambling dollars, specifically to their own industry. I say that it is also my right as an individual to go and do what I like where I like without having to be told that I cannot because a particular group has a selfish interest, such as the racetracks and the breeding associations. I should have the right to go and do what I want with my gambling dollars, if I wish to gamble.
Another concern is the addicted gambler. I say there is a problem with gamblers now, regardless of whether it becomes a casino or any other format. They spend it any which way. If people want to gamble and they become addicted, it's no different from having liquor and being addicted to liquor, wine, beer, whatever. Addiction is a minority cause of individuals. It is certainly not something the government should dictate to the greater majority how, where and when they should do things. Why blame the institution when it is a problem of the individual?
I say that casinos should be allowed and should be given permission now, not to wait until the Windsor program is under way and wait two or three years for its adjudication.
The Chair: Thank you very much for your presentation. We have a little more than seven minutes per caucus.
Mr Lessard: Thank you for your presentation, Mr Birnbaum. You're certainly right that there are plenty of other gambling opportunities that are available out there right now, and that there is a great deal of money and people leaving the province to gamble in places like Las Vegas and Atlantic City. That's one of the attractions for us in the city of Windsor to embark on this endeavour there, because there is a large American market that we can draw from to come to Canada and to Ontario to visit us here.
You indicate that the province can only regulate the form of gambling, and that's part of the reason that we're here: we're conducting public hearings on Bill 8, which is the bill that is going to permit casinos and to regulate them. You speak of proper regulation, and that's what our interest is, to make sure they're regulated properly. I wonder if you have any suggestions for us as to what you think that might entail.
Mr Birnbaum: I've lived in Europe in the hotel industry and I've been on the Riviera. I've been in all the areas where there is gambling in many countries of the world in my 30 years of hospitality. I've been to Las Vegas more than 10 or 12 times. I've been in Atlantic City once with my wife a year and a half ago, and I can tell you that my wife was no more addicted than I am.
I think one of the concerns we have is to make sure the operators run a bona fide, tight ship; that a committee be established of non-governmental people, whether three or four people, have a gaming commission with no direct ties to the particular interests of any MP or any particular interest within the government. That to me is paramount, because you have political opportunity and that should not be the case.
I think that the individuals who form such a committee, call it a gaming commission, should be such that they have the controls therein to indicate -- and on site as well, as there are in Vegas and Atlantic City -- when there is recourse to improprieties. Absolutely. It should be the right of the commission established to investigate and to see on a periodic basis, I wouldn't say the revenues generated but certainly that should be open to some scrutiny in some form as well; that there is no impropriety by people who say there's going to be, call it illegal operators from within, call it the Mafia, if you want to call it that as an expression, or some form therein.
I think it's like calling wolf too many times. They're going to blame the bad ripple effects like Mafia or gambling operators who are from the underworld, so to speak. That's a concern that I think can be very easily minimized and I think it's blown totally out of proportion.
I've had no problem when I've had to go to Atlantic City and complain about a minor problem to have it corrected. If it's a greater area from behind in terms of the operation, then we can take the best, whether it's in the United States or Europe, absolutely. I see no problem.
Mr Lessard: One of the concerns that was raised by the chief of police had to do with age restrictions. The bill itself requires that a person be 19 before being able to gamble in a casino, but the police chief thinks that should be 21. Do you think that's something that we should do?
Mr Birnbaum: I have no problem with that. I think 21 is a fair assumption, even 22. You have to draw the line somewhere and I think 21 certainly takes it out of the realm of the older teenager syndrome and puts it under more responsible persons.
I think dress codes are important; not necessarily suits, because I can go into Vegas or Atlantic City or Europe wearing a shirt and a pair of slacks. But I think dress code, appropriate behaviour, internal controls such as intoxicated persons to be immediately removed, and certain bylaws of the particular city should be coherent with those particular problems. Wherever there is a casino, the ground rules should be the same throughout. But it's not impossible.
Mr Lessard: How about being able to have drinks at the table? Do you think that that's important?
Mr Birnbaum: I have no problem with that at all. I see that at Atlantic City, I see that in Vegas; no problem at all. I think it's naïve to believe that drinking or eating -- the trouble with eating is that your fingers get sticky with the cards, but I don't particularly see any problem in that at all.
Mr Lessard: Do you play dice games when you visit Las Vegas or Atlantic City?
Mr Birnbaum: Mostly poker. I'm a hell of a poker player.
Mr Lessard: Well, I don't think I'll engage in a poker game with you while I'm here. We've heard from people expressing to us that we really need to have dice games to be able to compete with American jurisdictions.
Mr Birnbaum: Why not? Why shouldn't we open it to the particular games? Whether you play red dog or you play other games that are inherent to the Americans, if it works, why not? It's just another style of gambling, whether it's dice or other particular games. Why not? I don't think it should be particularly just the wheel or just poker or 21 or whatever you want to play. I have no problem with any of those and I would suggest to the committee that it should look at opening and expanding what people want to play. It happens now whether we like it or not.
Mr Lessard: One of the reasons there is a problem is because it's within the federal jurisdiction under the Criminal Code that we can't have craps, so that's why I asked you.
Mr Birnbaum: Well, maybe it's time. We don't have it now, but the application should be made by the province to allow it to expand and open. That could be done concurrently at the present time, and just say in the legislation that we'll allow it as soon as the federal government relaxes its rules and allows that to happen. There's no reason why it can't be put into the legislation at this time, because if you narrow the legislation, then you have to go back and change it again.
Mr Lessard: I thank you for your suggestions.
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Mr Phillips: I appreciate your comments. I said earlier -- you probably weren't here -- that the whole casino gambling is sort of like a gold rush. It's like everybody's eyes are wide open and there just seems to be untold money to be had here.
The challenge, I think, is that I see all sorts of jurisdictions around North America opening casinos now. I think the projections from the government are that there's probably about $1 billion of Ontario residents' money that will suddenly be freed up and spent and left at the casinos. I'm not sure where the $1 billion is going to come from, whether it's locked away in a mattress right now and it'll be freed up or where that will come from.
My question is I guess along your basic philosophy, which I think is kind of laissez faire, let's just open it up. Would you visualize quite a few casinos for Ottawa? I'm just going by your comment that it shouldn't be the role of government to decide the rights of people who want to gamble; that it should be possible. In your mind, is it possible that we should be seeing several casinos, as I say, in Ottawa?
Mr Birnbaum: To your question, first of all, I think you have to have operators who have a substantial amount of money to back such an operation, not only in the betting pool but certainly in its building foundation, a long-term ability to sustain itself. It's not something that you can have a dozen people and just say, "We're going to put $1 million into it." It just won't fly.
I don't think they should proliferate to the point that you have 15 in Ottawa or the region; perhaps one or two. But certainly the way the provincial government is looking at it, that the one in Windsor is a test case and we'll see two or three years down the road, to me is a joke. I can't put it any plainer.
Mr Phillips: My point really is more, should the government dictate how many there should be in Ottawa?
Mr Birnbaum: I think for the present time it should be looked at that in particular regions of the province it be allowed to establish from within itself. If you would say two in this particular region, that's fine; three, that's fine. But perhaps the region should be the one to decide. If it's private money going into the operation of the casino, it's just like any other business. I don't see the government telling me as a businessman how I'm going to invest my particular hard-earned dollars. We can call that a casino instead of a restaurant-bar. When I had a tavern before, I didn't see the government coming in and telling me where I should put my money or not. Why should a private operator who wants to put in a casino, with very tight controls and regulations, be told no? I have no problem.
Mr Phillips: So you'd just let it --
Mr Birnbaum: I think it should be open.
Mr Phillips: To as many as --
Mr Birnbaum: I think the particular region should make the decision. I don't think the province should even enter into that. I have no particular problem with opening it up. As I stated in the basic mandate of my address, I think there's enough government intervention on four levels of government now, provincial, regional, city and the federal government, that dictates to the individual how, where and why he can almost literally go to the bathroom. I think it's time we got a little bit out of the bedrooms of the individual and allowed the individual to thrive and do what he or she wishes, basically. If casinos are something that I and maybe thousands more like me wish to partake in, that's my right. I don't go to the racetrack, but I do go to Vegas, I do go to Atlantic City and I do go to Europe.
Mr Kwinter: Mr Birnbaum, I'm really interested in your comments and I'd like to just get your observations. We're talking two different kinds of casinos. We're talking the Windsor model, 75,000 square feet, open to everybody, try to encourage as many people as possible to maximize the amount of money that everybody's going to get out of it. From what I heard from Mr Eadie in particular he's saying the Sparks Street casino is going to be a private members' club, it's going to be less than 20,000 square feet and it will benefit a relatively small area as the spinoff but it will be a facility that will be available to the people in Ottawa who want to come and participate in a casino operation, very much like what is happening in Winnipeg.
I think that any objective evaluation of Winnipeg would state that it's there, it makes money for the province, but it hasn't had a major impact on Winnipeg per se. It may have had some spinoffs in the immediate area. I don't even know whether it does or not; it's in a hotel. I have no evidence that suddenly, because that casino was there, Winnipeg has changed or it's been an economic boom other than the revenues that have been derived specifically from the casino.
Is your vision of a casino for Ottawa the same as Mr Eadie's, that it would be this relatively small, contained, as he said, his terms exactly were an "upscale, classy casino," or do you see it more in the Windsor model, 75,000 square feet and open to everybody?
Mr Birnbaum: I don't know if you've been to Fort Garry, where it is, the hotel. I've been there and it's a very, very nice operation. If the city of Ottawa and the region has given its approval and backing, endorsement, to a casino of the size of some 20,000 square feet on Sparks Street, I don't think it should be the role of this particular committee or the province to regulate the form of the building. I believe the form is the type of gambling therein, whether it's 20,000, 30,000, 50,000 or 200,000. There may be border towns that may want to open gambling to 200,000 square feet to get people on the American side. We're an hour away from the border, but I don't believe that people -- I've heard in the past and read in the paper that they're saying tourism dollars. That may be good for Windsor. It may not all be tourism dollars in Ottawa.
We've seen the likes of a John Turmel, who has been arrested for calling himself a gambler, a self-professed gambler, and he generates the money from what was thought legal. Now he's been arrested. He's been around on the scene for many, many years, for several years, and there are others still in operation. It's a borderline grey area whether it's illegal or legal. Otherwise they would all have been shut down.
I'm just saying that the rule should be very clearly that government should regulate the form: the type of dice, the type of gambling, the format behind the scenes, who the operators are, that they be checked out, that there be very tight controls in that area. But I don't believe it should be the mandate of the government to dictate whether it be proper dress in terms of a suit or a pass be required of $20, we'll say, for an annual card as a membership, whatever. I don't think that's the role of government, and it shouldn't be the role of government.
That's the problem in this province right now. We've had governments in the past and this one that believe they have the right to mandate, dictate and tell us how we should live, and as business people, we are leaving the province at an alarming rate because of this attitude.
I think it's time we opened our eyes to what the reality of the 1990s is. Gambling's been here for thousands of years on this world, this planet, and it will not change. It's time we recognize that. We have an opportunity to open gambling in a proper format, make it legal once and for all and do it right. I think this committee should do it right.
Mrs Marland: You say that if properly regulated, then the bad side-effects will be minimized. What do you consider to be the bad side-effects?
Mr Birnbaum: Well, I've heard this and I've read it in the paper. Basically I'm referring to the underworld elements, as my predecessor said, whether it be people who are intoxicated and there be tight controls, whether people come in and they gamble beyond a certain point. It's easy enough to tell, believe me. I don't know if anyone here has been to Las Vegas or Atlantic City. They know very clearly what your credit ability is. I mean, you just don't go and say with Visa, "Give me another $1,000." They know very carefully. Believe me, when I go there and I say, "Give me $1,000 of credit," they know my background from my bank whether I have $1,000 to back it up. That's my decision, though. Whatever the bad side-effects, they can be regulated. They can be controlled.
I'm not saying that every individual will be properly regulated that way with the tight controls. Certainly the individual who goes to gamble, whether to a casino, to the racetrack, to a lottery -- there are people who've gambled literally a second, third, fourth mortgage on their homes to buy 500,000 lottery tickets. We read about that a few years back in the States.
If people want to go crazy, they will go crazy. It's no different from the province emptying out institutions and allowing people who have mental handicaps and problems to walk the streets. How far does the province go to control the rights of the mass? That's the bottom line. I believe very strongly that we should allow the people to make their own decisions.
I think the committee here has heard about all the possible side-effects and I'm just indicating as such. I'm sure you've heard it all before. I won't minimize. Yes, people may be addicted, but they'll be addicted now, because you can go to a telephone and call a bookie and you can bet whatever you want, and if the man or woman doesn't have the money, they'll threaten to break your legs. Why should it be any different to presume all of a sudden that's going to stop by opening up a casino? It's really no different than today. I think the province shuts its eyes to the realities of today. We cannot regulate the individuals who want to go beyond their means, and it is the same today. It won't change anything by opening legal institutions called casinos, whether it's very ornate or very sedate.
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Mrs Marland: Can I ask you another question? You also say, "Revenues generated will assist the tax base of Ottawa and the province." How do you see the tax base of Ottawa being helped by the revenues generated?
Mr Birnbaum: It could be that a percentage of certain gambling dollars, whether pennies on the dollar, could go to the city, it could be in the way of jobs, it could be in the way of any number of venues. I'm not the expert at it, but it would seem to me that there are possibilities. If bars are allowed to operate, then certainly there are tax dollars therein that can go both to the city and the province as well. I'm sure you must have had some people investigating this. I'm sure there are ways of generating a reasonable amount of money both to the city as well as the province, certainly. And when I say reasonable, I don't know; it could be $1 million, it could be $500,000, it could be $20 million a year from all the possible casinos. I haven't got a clue.
The point is, and I advocate from the basis on which I started, that casinos are here one way or another. They are now operating. Call it racetracks, call it lotteries, call it bingos, call it illegal betting houses, call it whatever you want. They're here. All we're doing is giving it a legality, a proper image, a location for people to go and spend if they wish to. It's just another form of entertainment. Call it another lounge by a bigger name. It won't be a catch-all to provide for all the ills of the province in terms of tax dollars, it won't be a catch-all as if the city or the region of Ottawa can put all its eggs in one basket, but it is one venue I believe should be allowed to operate.
The Chair: Thank you very much, Mr Birnbaum, for presenting before the committee this afternoon.
Mr Birnbaum: Thank you very much.
EMPIRE DEVELOPMENTS
The Chair: Our next presenter is Alicia Natividad. Welcome to the committee. You have 30 minutes within which to make your presentation. The technician will turn your mike on for you there. Whenever you're comfortable, please proceed.
Ms Alicia Natividad: Thank you. My name is Alicia Natividad. I'm a lawyer with the firm of Gowling, Strathy and Henderson, and as Councillor Brown has said, I'm one of the interested parties that is appearing before you today. I represent Empire Developments, which is proposing to establish a casino at Sparks Street, and later on in the report, if the committee so allows me, I would like to correct some of the statements made by Councillor Brown with regard to the motion that was made. My comments are general, however, as it relates to the bill itself.
Mrs Marland: Excuse me, Mr Chair, just on a point of order to protect Ms Natividad: She has opened this afternoon by saying that she is a lawyer with Gowling, Strathy and Henderson and is representing Empire Developments, which is proposing to make a proposal for the Sparks Street Mall location.
Ms Natividad: Correct.
Mrs Marland: We had this arise not quite in this way in the Sault. I recognize right now that in the contract for proponents for the Windsor location, proponents are not allowed to discuss their proposals. Your proponent isn't for Windsor anyway, but I'm just wondering if you're aware of what the ministry ground rules are and whether you're comfortable in what you're going to say.
Ms Natividad: I was asked, actually, when I put in my name, whether a proposal has in fact been made. I indicated no, that no such proposal has been made. I was told that I would be permitted to speak. As I said, my comments are quite general. Actually, unfortunately my paper has been given to you. I would, if you felt otherwise, delete some portion that may lead to that. As you will note, however, the comments are quite general. They do not in any way deal with the proposal whatsoever, other than the fact if you ask me a question, I may answer it.
Mrs Marland: That's fine. I just wanted to protect you; that was all.
The Chair: We appreciate that, Mrs Marland. Mr Duignan, the parliamentary assistant, would like to just respond to your comments.
Mr Duignan: I'm going to be asking the staff here, Jim, to outline the whole question of proposals. I must point out at this point, though, that there is no proposal call for a casino here in Ottawa. There is a proposal call out and there are nine proponents in relation to the Windsor casino, and that's the only casino that's being envisioned by the provincial government at this time. There is no call for a casino in Ottawa or anywhere else and there won't be until the pilot project in Windsor has been evaluated. So it's no problem, but I'll have the staff of the team indicate the whole area around the proposal call.
Mr Jim Mundy: The only request for proposals that is out there now is for the Windsor casino. The Windsor casino complex request for proposals bars proponents from speaking to members of the government about their proposal.
Mrs Marland: Only members of the government?
Mr Mundy: Members of the government, members of the cabinet, members of the Ontario public service.
Mrs Marland: So they can talk to opposition members?
Mr Mundy: About their proposal. But as I said, there is no request for proposals for a casino in Ottawa and there are in fact groups across the province, in various municipalities, that would like to establish a casino, but the government hasn't asked for any proposals.
The Chair: Mr Kwinter, you wanted to add a comment?
Mr Kwinter: It's on the same point of order. I have absolutely no problem with you making a presentation as long as we're assured that Empire Developments is not one of the proponents making a bid on the Windsor casino.
Ms Natividad: Absolutely not.
Mr Kwinter: I have no problem at all.
Mr Duignan: I'll just very briefly outline the grounds for disqualification, but in your case it doesn't apply because your particular company has no application.
The Chair: We don't really need to go through that. The Chair would like to indicate too that before you actually started your presentation -- I'd like to think that I'm reasonably knowledgeable about what's been happening in this process and I was quite certain that you weren't in any violation, so I was more than willing to allow you to come forward and make your presentation. I'd like you to proceed at this time, if you would.
Ms Natividad: The introduction of Bill 8 into the Legislature is welcomed, and the responsible manner in which the government has solicited input from all those concerned is applauded. Bill 8 is reflective of the present reality regarding gaming and the public's acceptance of legalizing casino gaming in particular. In fact, in the February 1989 issue of Canadian Business, an article on the growth of charity casinos in British Columbia indicated that gambling vacations, mostly to casinos, ranked as the fourth most popular specialty- interest vacation in North America after golf, skiing and honeymooning.
This observation is indicative of the public's acknowledgement of gaming as a source of entertainment. For many, bingos, horse racing, charity casinos, lotteries and the like are merely part of a person's entertainment budget. If such gaming is not available in a person's locale, that person will go elsewhere to seek such entertainment, hence the trips to Las Vegas, Atlantic City, Europe and elsewhere in the world. Here in Ottawa it is rumoured that weekend trips to Atlantic City which are organized by a certain restaurant for its patrons are quite common.
Indeed, casino gaming has gained acceptance with the public, and its legalization is only a matter of time, as is evident from the other jurisdictions in Canada and in the United States that have enacted gaming legislation. Some of the reasons for such acceptance is the acknowledgement that gaming will always be with us, legal or not, and that gaming can be a source of revenue as well as a source of recreation.
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Another reason is government involvement in its regulation. The public has confidence and trust in the credibility and integrity of the regulatory process that would be imposed pursuant to the proposed legislation and the people who will enforce such process. The public is therefore comfortable that the proposed legislation will ensure that casino gaming in Ontario will be well scrutinized and the public interest protected.
We are advised that in looking at various models of casino gaming, the Ontario casino project has looked at the Atlantic City and Las Vegas models. In the Coopers and Lybrand report, which was commissioned by the Ontario casino project, it was suggested that certain market areas be targeted for a casino, of which Ottawa is one, and suggestions made as to the model and gaming size of proposed casinos.
While it is useful to look at the casino model south of the border for comparison, it is also useful to note that the demographics of Atlantic City or Las Vegas are not the same as those of Ottawa, for example. As such, the proposed gaming square footage that is suggested for the proposed casino sites may not be fitting for the locale. For example, the report suggests that the proposed casino site in Ottawa be approximately 60,000 square feet. A casino this size would be overwhelming for Ottawa, which is significantly different from that of Atlantic City or Las Vegas. Ottawa requires a smaller, more intimate type of casino that would complement its demography. Unlike Las Vegas, a casino in Ottawa will merely be an addition to the existing hospitality and tourism industry; it will not be the main economic activity which will sustain the city.
Although the economic impact of a smaller-size casino would be less in the long run, a freestanding smaller-size casino would have a lesser social or economic impact to a community. Consequently, should such a casino be discontinued, its demise would have less of an impact on a community than one that is greatly dependent on it, as in Las Vegas.
In addition, the type of casino model should also be complementary of the demography of a locale. The Atlantic City or Las Vegas model is not necessarily the only casino model that is available for comparison. For example, a Monte Carlo type of casino is another model that is more conducive for the Ottawa demography. We are, however, hopeful from statements made by the Ontario casino project that the type of casino model and size for a designated casino site would be reflective of its community.
There have been voiced various concerns regarding the negative elements that are present in Atlantic City or Las Vegas. Suffice it to say that the experiences in those places need not necessarily be the same in Ontario. The demographics in Ontario are quite different from Las Vegas or Atlantic City, and lessons can be learned from their experiences.
There have also been concerns raised about the government's involvement in the proposed casino gaming. Government participation in gaming is present in many jurisdictions around the world. It is not an unlikely occurrence and in fact shows foresight in identifying that gaming can be a source of revenue.
I would now like to just clarify a few comments made by Councillor Brown, and I would hope that they are statements of fact and they're not at all subjective.
The motion that she spoke of was heard in the city of Ottawa on June 16. Prior to the council meeting, there was an economic affairs hearings. The economic affairs committee hearing is a subcommittee of council that reflects on economic development in the city. At that time, the economic affairs committee, of which Councillor Brown is a member, recommended that Ottawa request the province that it be designated as a site for a casino, and in fact recommended and endorsed the proposed casino that my client proposed to develop in the city of Ottawa.
This matter then went before council and at that time there were actually 15 councillors who were present, and as Councillor Brown indicated, the majority, 12 councillors, voted in favour of it; 3 did not. The councillors actually did speak individually as to their particular comments or observations with regard to the development, and I think it's fair to say that it was quite well debated.
The council also had appended to it a report of a local task force that was created by the mayor to provide input to council as to the general feelings of the city of Ottawa. The task force did recommend that Ottawa would favour a casino and that they saw no problem whatsoever in having a legalized casino in the city of Ottawa.
In terms, as well, of the size of the Turmel "casino gaming facility," I would just like to say that my observation is that the facility would be about the size of this room.
The next correction I'd like to make is that the regional council also voted in favour of having Ottawa designated as a casino; that was done November 1989. So both the regional council and the city council of Ottawa have made motions and it has been debated and both councils were in favour of a casino in Ottawa.
Those are all my comments. I'd be pleased to answer any questions.
The Chair: Thank you very much for making a presentation. We have about six minutes per caucus and the Liberal caucus is up first.
Mr Kwinter: Ms Natividad, you've obviously been an observer of the casino issue in Ottawa and obviously you represent a client who has a vested interested in seeing this thing come about. I'm trying to get a handle, because I haven't got a clear fix as to exactly what kind of casino you think Ottawa should have and the people of Ottawa think they should have. We've heard that something in the neighbourhood of 18,000 to 20,000 square feet, which would be a quarter of the size of the Windsor casino, is the sort of thing they're looking for. If that is what you're proposing, because you're saying that you think 60,000 would totally overwhelm Ottawa, what do you see as the economic spinoff for Ottawa of the kind of facility that you're envisioning?
Ms Natividad: I think I'll have to answer on behalf of myself. As Councillor Brown indicated, our city is a conservative city. It's also the capital, and I think that, as I perceive Ottawans, they would like to see something that is reflective of the capital, and the city itself is not very large. Overall, the Ottawa-Hull area is roughly about 937,000, and I think that a 60,000 square footage would be just a little bit overwhelming for that size of city.
In view of the fact that we are the nation's capital, we would like to enhance that image, and a Monte Carlo type of casino is something that is more favoured, that it's non-intrusive, it has the image of elegance and so forth and it also is quite fitting in terms of the demography and the location of where it is proposed. It is very close to Parliament Hill and it is going to be housed in a heritage-designated building and it will be in an area where it's non-residential, it's commercial, and in terms of the economic benefit, I think it would enhance tourism in general.
What is proposed here in Ottawa is that it would work and complement the existing tourism industry, for example, the hotels. Instead of having to build extra hotels, for example, you would work with the hotel people in terms of assisting patrons and working with them in terms of arrangements of some benefit to patrons of both casinos and hotels. The same thing with the restaurants: Instead of creating restaurants, you already have existing facilities on Sparks Street and you would then utilize those existing facilities and work with that. Those are the things that are envisaged.
It will give Ottawa a flair. It is an additional attraction, something that they would have apart from the existing gaming that is available here, the sports facilities and all the other natural amenities that are available. It is another, additional entertainment. There will be spinoffs. I would think that the vacancies in the Sparks Street Mall area would be filled, depending on how the casino is presented and how it will be sustained. I suspect that there will be a greater amount of night life that may occur and different kinds of restaurants that are there may change their menus and so forth. I think it would, in general, complement the entire tourism industry.
It really is a beautiful location. When you come right down to it, it exists right in the heart of downtown Ottawa, flanked by the major hotels linking it to all the existing amenities, where the market is and so forth. I think the councillors see that it would actually revitalize and make a coherent tourism area for the city of Ottawa. The size is not large enough that it would be intrusive, and at the same time it would, as I indicated, complement and work with whatever are the existing facilities that are here.
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Mr Kwinter: Are you supporting the concept of a membership club?
Ms Natividad: I think the mention of membership came about in response to those people who were concerned that welfare recipients may be using their last dollars to gamble. I think there would be some kind of membership. It would be certainly looked at and geared towards the patrons who will be coming, and it will be part of a marketing scheme. It is not there to prevent people from coming; it is merely there to assist in the marketing of that particular kind of casino and the image that you wish to create.
Mr Kwinter: The reason I ask is that my vision of a membership club implies that you're going to have members who live in the Ottawa region, and as a result, it's not going to be an attraction for tourists because you have to be a member to enter; either that or you are a non-resident member, that you list your clubs where you belong, and "I belong to this particular casino." I just don't see how that is compatible with the tourism objective if it's to be a membership.
Ms Natividad: You could create marketing things with that. For example, you can have it so that tourists would have a certain entry level and persons with membership can have credit facilities. Those without membership will not have a certain credit facility. As I said, it's simply part of a marketing scheme as opposed to being the main criterion. I think what people are trying to say is that they would like it to be something that they would want to go to, it's a commodity to be purchased and that they perceive it as one of the additional features of a particular type of casino that is featured.
I would also like to say that before the regional council meeting, there was an unofficial poll that was taken of roughly about 120 people. The majority of those people who were polled actually favoured a casino in Ottawa of that nature that we're speaking of.
Mrs Marland: What's the current population approximately of Ottawa?
Ms Natividad: If you're talking of the Ottawa-Carleton region, it's roughly about 637,000, but usually the Ottawa-Carleton and the Outaouais area is thought of as being together. It's roughly about 900,000-some-odd; it's under a million.
Mrs Marland: So taking the lower figure, 120 people isn't much of a poll, is it?
Ms Natividad: No, that's what I indicated, a small sampling. But surprisingly, when the concept of the casino came up and there was media attention, I actually got calls in my office from people I don't even know who were quite pleased with it and said that it would certainly add something to the tourism industry and people were quite enthusiastic. So I suppose it's a question of who you poll, isn't it? Those who are in favour of it will say, "Yes I am," and those who are not will say they're not.
Mrs Marland: I'm just interested that regional council would have paid any attention to a poll of 120 people out of 637,000.
Ms Natividad: No, I don't think that was mentioned to them.
Mrs Marland: Oh, you just mentioned that it was before --
Ms Natividad: Yes. That's right.
Mrs Marland: You corrected Ms Brown, Councillor Brown, so I want to be clear about what you said. I will get it in Hansard, but it takes a couple of weeks. Was it the economic affairs committee?
Ms Natividad: Yes, it was the economic affairs committee.
Mrs Marland: A motion was passed by that committee recommending Empire Developments?
Ms Natividad: Correct.
Mrs Marland: Could you tell me who Empire Developments are, please?
Ms Natividad: Yes, it's actually a numbered Ontario company. Its sole officer and director is a man by the name of Luciano Minicucci.
Mrs Marland: Mr Minicucci is a resident of Ontario?
Ms Natividad: No, he's a resident of Quebec -- Montreal -- but the company's resident in Ontario.
Mrs Marland: But he's a resident of Quebec and this is an Ontario numbered company?
Ms Natividad: Correct.
Mrs Marland: Does he operate casinos in Quebec?
Ms Natividad: No, he doesn't. This is his first experience in it. No, he doesn't.
Mrs Marland: So he doesn't have any experience in it right now?
Ms Natividad: No.
Mrs Marland: He hasn't done a casino before?
Ms Natividad: No.
Mrs Marland: And he's the sole owner of this company?
Ms Natividad: Correct.
Mrs Marland: Did the economic affairs committee entertain other proposals?
Ms Natividad: No, no other proposals were made by anyone else.
Mrs Marland: So were you surprised that a committee of the Ottawa council would endorse a single proposal for a casino in Ottawa without hearing any other proponents for a casino?
Ms Natividad: No, we were very pleased.
Mrs Marland: You would be very pleased because you're representing them. But speaking from my experience as a city councillor for 12 years, I'm just floored that any municipality would say, "Yes, we'll endorse Empire Developments," without hearing from anybody else.
Ms Natividad: I think the mayor endorses us as well. We were the only proponents and I think the councillors saw the viability of our project and were quite assured and confident in our ability to do what we indicated we would.
Mrs Marland: It's very interesting. If the Ontario government were to heed the recommendations of the Coopers and Lybrand report, which is indeed to have an Ottawa location, does your client now have his foot in the door for that proposal because this motion's been passed? Was the motion of the economic affairs committee ultimately passed by the full city council?
Ms Natividad: Yes, that is correct, on June 16.
Mrs Marland: What did that motion say?
Ms Natividad: That the city of Ottawa approach the province to have Ottawa designated as a site for a casino and that the city of Ottawa support and endorse the development of a casino by Empire Developments and Carnival Cruise Lines Inc at 125 Sparks Street.
Mrs Marland: What's the second part of that? Empire Developments and what?
Ms Natividad: Carnival Cruise Lines Inc.
Mrs Marland: And who are they?
Ms Natividad: Carnival Cruise Lines run cruises. They have ships with casinos and they have vacation resort places in Nassau in the Bahamas, for example.
Mrs Marland: So they're Americans.
Ms Natividad: That's correct.
Mrs Marland: This is wonderful. It's interesting. So the door is closed now for any other operator of a casino in Ottawa, according to the Ottawa council.
Ms Natividad: Well, we have their support and their endorsement.
Mrs Marland: That's very interesting. Has this all been in the Ottawa media?
Ms Natividad: Yes, it has.
The Chair: Thank you, Mrs Marland.
Mrs Marland: I was just getting started.
Mr Lessard: Maybe there will be some time left when I'm finished so Mrs Marland can pursue this line of questioning, because it is interesting. I was going to ask about other proposals as well. We've gone through this exercise in Windsor for the past couple of years, and the results in the Coopers and Lybrand study suggest that a facility of at least 60,000 square feet could be supported in this market area. One of the fears that we had in Windsor was, what if we built a facility that was too small and thousands of people ended up coming to the city but were disappointed because they couldn't get in and there was nothing else for them to do? They'd never come back again. I just wanted to caution you and your client with respect to that possibility in this proposal.
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I understand that you are a lawyer and you have an interest in your own client's proposal, but I'm interested in your comments with respect to Bill 8. I would assume that you're familiar with that legislation?
Ms Natividad: Yes, I am. Yes, I have read the legislation.
Mr Lessard: In your comments you refer to the public confidence and trust in the credibility and the integrity of the regulatory process, and something that we're very interested in is the public's comfort in the regulations and making sure that they do feel as though it's properly regulated and controlled; and that's part of the reason for this committee. So I'm interested in knowing whether you have any suggestions with respect to Bill 8 itself.
Ms Natividad: No. The act itself actually is quite brief and quite succinct. I have nothing else to recommend.
I just wanted to say that I think that the public do feel very comfortable if there is the regulatory process that is being imposed. As I've indicated in my submission, I think that casino gaming will be well looked after and the public protected.
Mr Lessard: I wondered what basis you used to be able to make that statement, that people really do feel comfortable with what's proposed, because I find that most of the submissions that we're receiving are from people who really want to talk about a specific facility or gambling in general. They don't really talk specifically about the regulations because they're not really that familiar with what's in them.
Ms Natividad: I think I was really speaking of the trust and the confidence of the public in terms of regulating. There have been a lot of negative comments made about casino gaming in general. As you know, people like to highlight those things, and I make the comment really in the context that I think people, in general, feel comfortable if government is involved because they feel that those negative elements may not be present or would be removed if there is that presence.
Mr Lessard: All right. Thank you.
The Chair: Thank you very much, Ms Natividad, for presenting before the committee this afternoon.
Ms Natividad: Thank you.
Mrs Marland: That's all the time?
The Chair: We have about a minute left, Mrs Marland, and I figured if we were to get into more questioning you would hardly have enough to ask a question, to be quite honest.
Mrs Marland: That's too bad.
DIAMOND GAMING SERVICES LTD
The Chair: Our next presenter is Jack Edmondson, president of Diamond Gaming Services Ltd.
Mr Jack Edmondson: My partner, Matt Sagle, is going to speak instead of myself.
The Chair: Okay. If you would please make yourself comfortable and identify yourself for the committee members and Hansard, you have 30 minutes within which to make your presentation and field some questions from the committee members. Whenever you're comfortable, please proceed.
Mr Matt Sagle: Thank you very much. My name is Matt Sagle. I'm a vice-president of an Ontario company named Diamond Gaming Services Ltd. We are a company registered to provide gaming services to charities that put on charity casinos in the province under the Gaming Services Act. I've never made one of these presentations before; I hope you'll bear with me. We've given some information in this presentation with respect to the individuals involved in the company. You can see there are three of us and we're all present this afternoon, but I don't intend to spend much time on it; you can look at that after perhaps.
It's our view that at the present time, Ontario is proceeding with an experiment in Windsor that's very expensive in terms of time and money, without any serious concrete plan to follow should it be successful or any reasonable alternative to put into place should it not be successful. We think that in two or three years from now when this experiment is completed, there's going to be a lot of pressure, given the time and money already invested in that project, to carry on in that same course that's now being considered. This is especially true if there's no alternative. No one's going to want to start in two years to try something else and wait another two or three years while that's tested.
I also think that what may seem feasible today may not be feasible in two or three years, as has been pointed out by members of the committee already, that there seems to be almost a gold rush mentality where casinos are concerned. It appears that within the next two or three years you're going to find American casinos serving the Detroit market. Already there are casinos around the Sault, in Michigan, and I expect that's going to become even a bigger involvement. Closer to home, you may have heard of the Akwesasne Indian reserve, which is just opposite Cornwall, where there's constant pressure to have a casino there. Just across the river in Quebec, casinos are already operating. Two months ago, there were busloads of people coming to Ottawa to gamble in casinos that exist here now. Today, if you look in the paper, you'll see ads for people to go to Montreal to play in their casinos. Of course, the casino in question is the one that's already been mentioned, and that was Casino Turmel.
As I understand it, in the last two years in the United States there has been an increase from 2 to 10 states that allow legalized gambling, and everything you read seems to indicate that trend is going to continue. Every region, every big city, wants its own casino.
The third thing I want to mention is that in Ontario we already have a gaming industry. Under the Gaming Services Act of Ontario, you have right now perhaps as many as 50 registered gaming service suppliers, perhaps as many as 4,000 casino personnel licensed to operate charity casinos of a maximum of 30 tables. This industry was created by the province very recently. They've taken a great deal of money from these people, who've had to make substantial investments besides the fees involved, yet the mood of that industry now is that they're sitting in limbo trying to compete with unregistered, unregulated and unrestricted casinos which operate not just in Ottawa but in other cities as well, and trying to decide what move the government's going to make next: Is it going to support this industry it's created or is it going to abandon it? There are a number of people, as I've already indicated, licensed and trained to work in this industry and again everybody's waiting to see just what's going to happen.
What we're suggesting here is that there should be an alternative plan, that it doesn't make sense to go ahead with just the one casino in Windsor, just that one idea, and see what happens. What's going to happen if the indication is that that's not a suitable situation for other cities in Ontario? Will we start over again? What I'm suggesting to the province is that it cast its eyes to the west, not to the south so much. Forget the big megaprojects and the huge casinos of Atlantic City and Las Vegas, but look to Alberta and look to British Columbia, Saskatchewan. Manitoba is a slightly different case with the one large casino there, but the Alberta model is the one that -- I don't know if anybody here has looked at that or examined those kinds of casino operations, but generally they're smaller. Their table limit is 24 tables, and probably requires not more than 5,000 square feet. There are numerous ones; they're all over. They're basically small businesses, people like ourselves who are gaming service suppliers working hand in hand with charities to operate them. The province doesn't own them, the province doesn't operate them, and if they don't work, the province doesn't have to pay for their failure.
What we're suggesting here is that there can be simultaneous testing. Already you have the framework within the Gaming Services Act. You already have the gaming suppliers and the personnel set up. All you really have to do is take legislation similar to that in Alberta or one of these other provinces I mentioned and amend it if it's thought necessary; perhaps, for example, to include the government in the revenue-sharing, and that direct benefit I think would pay for the scheme. You're going to have to have these expenses anyway: Already you have the Gaming Services Act as a mandate, and it's going to have to regulate and supervise casinos.
We're just talking about casinos no bigger but with slightly different games and limits. The city of Edmonton, for example, has five or six of those casinos. The city of Ottawa could probably do four or five as well. Twenty-four tables, you can imagine, is not a very large casino, although, I'll tell you, it's about the size of Casino Turmel, which, as you've heard, hired approximately 100 people.
The advantages we see to this proposal are that, first of all, there are no additional public funds required. The job that has to be done with respect to the charity casinos just carries on. There's no risk to the taxpayers in the event that somebody wants them to cough up extra money for the purpose of subsidizing a large casino or to protect an investment already made by a province or a municipality.
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There will be jobs created immediately. Right now, this is pretty much a part-time industry. You may or may not know that we're allowed to operate for three days at a time in different locations each month, so mostly it's part-time work, but these jobs would immediately become full-time, and that would have obvious benefits to many communities as well as Ottawa. These casinos would be run by small business people, Canadian citizens, rather than by large American multinational corporations.
As I indicated already, the legislative framework is already in place under the Gaming Services Act. The simultaneous testing of this kind of model would allow the government, when the time comes, to actually have an alternative. I stress again that if there's no alternative, there are people who are not going to be happy to sit back and start it over two years from now. At the least, you'll get a lot of information about various areas of the province and whether casinos would work in those places. You would have people working in the industry gaining experience, so that even if you go ahead with the large projects you will have trained personnel ready to work in them.
You would also rescue the present charity casino system, which forces charities to compete with these unlicensed and unregulated casinos that have also sprung up, as I say, not only in Ottawa but also in Toronto and I would guess almost every mid-sized city in the province. With respect to this last point, I note that right now there are three unlicensed casinos in Ottawa. There were four a month ago and, as I understand, there may be as many as six by next month.
The province has specifically indicated that this is not its problem, and it's left it in the lap of local authorities to deal with. The police here and other authorities do not have the resources to do the kind of investigative work necessary to try and determine if each one of these casinos fits within the fairly vague and complicated provisions of the Criminal Code. The investigation which you may be familiar with lasted some 18 months. They can't do that with each one. They can close down and open up in another location next week under a different name.
Licensed charities cannot compete with these casinos, given the betting limits, the hours of operation and the impermanent locations that are forced upon them by the terms of their licence. What I say to you is that if you let the registered gaming suppliers and the charities operate competitively with these places, they'll become redundant. People will play in casinos that are regulated and licensed and have those kinds of limits before they will go to those places.
It is our belief that the future of gambling, casino gambling in particular, in Ontario ought to follow the Alberta style: There ought to be smaller casinos, more of them, and let independent business people run them.
Part of the problem is that there are not going to be new Las Vegases or Atlantic Citys. These megaprojects are a thing of the past, really. There are going to be so many casinos in so many places through the States and through Canada -- Indian reserves all want part of this action as well, as does every province and a growing number of states -- that people are not going to have to travel very far to get to a casino, in another five or six years. What are you going to do with 60,000-foot casinos when no one's coming, when they can go to the casino an hour's drive away?
In our respectful view, those who support bringing large American gambling interests in to run Canadian megaproject type of casinos are misreading the future of gambling, if not the past, and they ignore the concerns of the Canadian taxpayer where such projects are concerned. They always turn out to be more expensive than they're planned -- they always do -- and a lot of the time they require public funds to bail them out later on.
In our view, those in Ottawa who dream of rejuvenating our own local economy by creating a Caesars Palace on Sparks Street have stars in their eyes; in this case, perhaps stars and stripes. If these people could get behind this kind of proposal and the small businessmen and women in the community, rather than courting large American gambling interests, they would see immediate financial benefits.
We don't believe that any decision you make with respect to how casino operations carry on here is going to make a big difference to the economy of Ottawa. There are some jobs and maybe some tourists will come here and be glad to play, but they're not going to flock here, and it's not constantly, I believe, going to make that big a difference.
What we urge the province to do is look to the future of casinos as reflected in the western Canadian experience rather than in the American past. Keep them small, keep them community-based. They should be able to survive in the community without a lot of tourists, and if they can't, then they shouldn't be in the business, and that's how it'll turn out.
However, it's not necessary that we all have the same vision of what casino gambling is going to be like in the future. What we're suggesting is that both methods can be tested at the same time. The Windsor project obviously is going to proceed and we're going to see what happens. You've already got the Gaming Services Act set up. That can be used as the framework to do the other test at the same time.
In three years, you'll have your answer, you'll have choices, and the way you're going now, we suspect you won't have a choice in three years. You'll have spent your time and money chasing that one model, and where will you go if it's not successful?
The second part of this presentation I'm not going to go into verbally. Basically, it's a more detailed response to Bill 8 and to the proposed Ontario Casino Corp. Mr Edmondson of Diamond has gone through it and has made some recommendations which we think will be helpful. Obviously, that's going to happen. It's going to be needed to run the Windsor experiment, and no matter what choice you make in the future, it'll still be helpful.
I know most of what you've heard here today and likely will hear tomorrow is more based on, what are you going to do here in Ottawa? But if you spend some time going through that, I think you'll find it very interesting. We'll be glad to have anyone contact us who has questions or suggestions about it. If you've any questions now, of course, we're both present to hear them.
The Chair: Thank you for your presentation. We have about six minutes per caucus. We'll start with the Conservatives.
Mr Sterling: Thank you very much, Mr Sagle, for coming here. I did read the other parts of your brief, and you no doubt have a fair bit of knowledge, along with your partners, of these various models that are available. I was out in Alberta about a year and a half ago and talked with one of the people who is responsible for administering some of the charitable gaming houses or casinos in Alberta, and he was telling me how successful they have been for the charities out in that area and how trouble-free they have been as well. He mentioned that in setting them up they had seconded, I guess from Manitoba, the same retired RCMP officer to help them set up their regulatory framework so that they wouldn't run into problems in that province.
I think your suggestion, if we are going to go in terms of doing casinos, is a very valid one, and I think it's one that probably makes a lot more sense than the idea of having a number of would-be casino owners who don't have a great deal of experience set up across the province in various areas and I think lead to a lot of disastrous financial situations as well as dashing a lot of false hopes.
In terms of the training in Alberta, the trained dealers etc, do you know how they control them?
Mr Sagle: How they're regulated by the province? I have a copy of the terms and conditions for the casinos there, but I don't think it tells me exactly how they were trained. Jack, do you know anything about that?
The Chair: If you want to make a statement, you're going to have to come up to the microphone; otherwise we won't record it. If you'd please come forward and just identify yourself, make your statement and it'll be in Hansard.
Mr Edmondson: My name is Jack Edmondson; I'm Matt's partner. I'm not sure, but I believe Alberta Bingo Supplies, which is one of the main operators there, does the bulk of the training of the staff for personnel and dealers. I'm not sure of what the licensing requirements are in terms of gaming assistants, as they're known under the Ontario legislation.
Mr Sterling: I visited one of the casinos. In fact, I was at the West Edmonton Mall and was quite surprised that there was a casino there; I didn't realize they had it, and walked into it. Then I was surprised to learn, as I met this individual through a social contact at a later time -- I thought it was a regular casino, yet it was in fact being run by them for charities, and fairly well controlled as I saw it.
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Mr Edmondson: Yes, Bill McColl did a pretty good job, the fellow that you're referring to, I think, from the RCMP?
Mr Sterling: Yes.
Mr Edmondson: Yes, I've talked to Bill. He's done a good job there.
Mr Sterling: I think it's an interesting perspective. Quite frankly, I'm glad to get some facts here rather than sort of the emotional appeal of the whole debate. Thank you very much.
The Chair: Mrs Marland, we have about a minute and a half.
Mrs Marland: I would like to congratulate the Diamond Gaming Services. This is a very comprehensive presentation which obviously Mr Sagle just skimmed through very superficially because of the time limitation. I'm going to enjoy reading this.
I think you said there were four illegal casinos going on in Ottawa today?
Mr Sagle: I know you've toured the Sparks Street. If any of you are interested in touring the casinos, we can arrange that as well. There's three of them at the present time.
Mr Phillips: Are they legal?
Mr Sagle: Let me say this: They're unlicensed and unregulated, but they have not been determined to be illegal. They've not been charged. Gambling is not illegal, as you know; only certain kinds of gambling and only under certain conditions. These have not been determined to be illegal. It can't be confused --
Interjection.
Mrs Marland: No, I haven't finished.
The Chair: Okay, you've got a little bit of time, but just --
Mrs Marland: Well, those are really rather astounding statements. I guess I don't know very much about casinos. It's interesting to me that you have a city council in Ottawa which, bang, they hear one proposal and they endorse it. At the same score, there must be some of those councillors -- do the city of Ottawa councillors sit on the regional council?
Mr Sagle: Some of them do, I believe, yes.
Mrs Marland: That's what I thought. So they are in turn responsible for policing, as regional councillors. You have a regional police force, don't you?
Mr Sagle: Yes. There's been a lot of publicity about these other casinos. It's not hidden and it's not been a surprise. One casino was recently closed; it'd been open for 18 months. It'd been advertised in the local paper and been on the newscasts. It's not been anything hidden or underworld, if that's what you're thinking.
Mrs Marland: Has anybody taken responsibility for anything in Ottawa when it pertains to casino operations?
Mr Sagle: I would say no. I mean, obviously there have been charges laid in one situation, but there's no guarantee that person will be convicted. In fact, there's some serious doubt as to whether these casinos are illegal. The laws with respect to casinos and gambling are fairly complicated, they're fairly old and they're hard to interpret. There's a reasonable chance that these are not illegal casinos.
There's probably not a gaming service supplier in the province who doesn't look to these places and ask himself, given the way our hands are tied and the way we have to operate in competition, "Why don't you go to the other side?" Everyone is asking themselves: "Well, if they're okay, why aren't we doing that? Why are we paying $4,000 and playing under restrictive rules?" Everybody's wondering.
Mrs Marland: So we have Bill 8, which is proposing to do something unique in Ontario, which is to open casinos in specific locations that benefit primarily the general revenue fund of this provincial government.
Mr Sagle: Yes, and not charities, of course.
Mrs Marland: And not charities.
The Chair: Thank you very much. Ms Harrington.
Ms Harrington: I'd like to first thank you very much for this brief. It certainly does contain information, and that's what we're after.
First, can you tell me how many casinos are in Alberta?
Mr Sagle: I can't. I've seen the list and there are numerous.
Ms Harrington: Are you talking 20 or --
Mr Sagle: I would say at least that. There are five in Edmonton, and I think they're spread out throughout the province. I know they have some that come and go, like the Calgary Stampede casino, which is just there, I guess, for the few weeks of the event, but I believe in other smaller locations as well throughout the province.
Ms Harrington: I see. Well, we do have the one at the CNE, which is a seasonal one as well.
Mr Sagle: Yes, it's a special case, true. We have one here at the Ex as well.
Ms Harrington: I was interested in your talking about it being community-based and helping charity. Obviously, what we were talking about in the previous few weeks was something more than that or different from that, where you certainly would have a saturation point where you couldn't put them in every community or it just wouldn't work. Also, of course, it wouldn't benefit tourism at all if it is community-based.
Mr Sagle: You know, I hear that business about tourism and I'm not convinced that gambling is a big tourist attraction. People don't go to Las Vegas just to gamble. If all there was was gambling in Las Vegas, you wouldn't have near the number of people from here who go there. They'd go to Atlantic City, into the United States. There are places and reserves right now within a few hours of here where you can gamble. It's not the gambling. It may be part of it, but that's a big entertainment city. There are all kinds of things to do there. It's an event just being in that place.
With the number of casinos, even if there are five or six of them in this province the size of the ones you're talking about, along with the unlicensed type of casinos and the reserve casinos which are also going to have to be dealt with in the next couple of years, I expect, I think there are just going to be enough of them that I don't think anybody's going to say, "Let's go to Ottawa because we can gamble there." You know, if they like to come to Ottawa and they come because of the city or for other reasons, that's fine, and maybe some of them will gamble when they're here, but I don't see it being a big gambling destination. We're not going to go to Toronto from Ottawa to gamble. If you have one in the Sault or Sudbury, those people aren't going to -- I mean, I just don't see it being a big tourist attraction any more. I think there will be too many of them.
Ms Harrington: I think what you're telling us is that we have to go carefully and slowly and know exactly what we're doing and why we're doing it --
Mr Sagle: I guess so, but I think you need alternatives.
Ms Harrington: -- and make sure that the outcome is what we want, which is, I believe, tourism and economic development and not too many, a saturation.
Mr Sagle: If that's what you're looking for, I guess I would say that. I don't know if that's the opinion of everybody as to why you're going the way you're going, but certainly in the eyes of the communities you're speaking to, if somebody says they've got gold in their eyes, that they see it all as big bucks, a lot of money coming in, then it's going to be hard to fight that.
Secondly, going slow is okay, but in more than one direction perhaps. You're taking that one course, but what happens if that course leads you to a decision that that's not the way to go? Where is your alternative?
Ms Harrington: Yesterday we spoke, actually in closed session, with some of our experts who have done studies for us, and I want to ask if our casino project team has spoken with Diamond Gaming Services.
Mr Sagle: They wouldn't even know about us, quite likely. We do deal with the government agencies concerned with charities and are working with them closely, but we haven't spoken with anybody along this line, no.
Ms Harrington: At that point, I think I'd like to refer your brief very specifically to our project team to look into.
Mr Sagle: I appreciate that. Thank you.
Mrs Marland: Well said, Margaret. It's a good resource.
The Chair: Mr Duignan, you want to make a comment to clarify something, I understand.
Mr Duignan: Actually, I wanted to ask a question but I didn't get an opportunity to do that. However, I did want to make a comment in relation to the casino in Windsor. The Coopers and Lybrand report took into account the possibility of a casino opening in the Detroit area. They identify that that potential catchment market area could stand casinos in the range of about 250,000 square feet. So our casino in Windsor would be around the 75,000-square foot mark, and in fact they have taken that into account and the projections are based on that fact.
Mr Sagle: That's good. I hope it works for Windsor.
Mr Duignan: Well, we feel it will.
I was interested in your statement on credit and why, again, you would not allow any credit in the casinos.
Mr Sagle: I'll tell you, I think that a lot of people are concerned about gambling in general and that there are people who have difficulty with it. I think it's just an answer to that problem. I think people who have that problem are more likely the ones who are going to need credit. I was brought up saying if you can afford to buy it, you can buy it, but if you don't have the money, you don't. Credit has a way of getting away from a lot of people, and I think people who are generally concerned about gambling may be somewhat assuaged by that kind of situation, where they know that if they have some money, they can lose it, but they're not going to lose everything.
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Mr Duignan: The credit in the casino in Windsor is a pre-arranged credit and there are stringent credit checks, more stringent in fact than going to get a loan at the bank. If you simply don't have the money, you don't get it.
Mr Sagle: Maybe they are, and I wish you good luck if they are. My experience in casinos in the United States, for example, is that I can go down and I can have credit at Caesars Palace, or have had credit at Caesars Palace, and two years later I still have it. There are no more checks, no more questions: I've got it. I'm not saying it has to be that way; it's a suggestion. If other people feel differently, it's not the be-all and end-all of my discussion, but I tend to think that if people are worried, not necessarily about people who are addicted but people who will just overspend and use their family money on gambling, it's a way of protecting them a little bit. Maybe you don't have to protect them or maybe you feel you don't have to, but it's just an idea.
Mr McClelland: Sir, it's been said before: Well done. Thank you for the format. It's very useful and it's much appreciated.
It's interesting, sir, your representing the industry that you do and your association with it. Last week in Toronto, we had some of your competitors, in that particular market in any event, who indicated that in their estimation there are some 5,000 people -- you indicated 4,000 -- employed. Be that as it may, it's a goodly number of people. They indicated as well that there had been no consultation, notwithstanding the fact -- you mention that nobody had spoken to you -- that they had actually come forward and said: "We would like to talk to you about it. We'd like to make our concerns known and have an opportunity to share with you some ideas and hopefully some suggestions." That opportunity was not afforded them. I appreciate Mrs Harrington making specific reference to that and moving it on. I want to say this just by way of comment, and you may or may not want to comment. My colleague has a pretty good question.
There are a couple of things I've heard today. I suspect my friend the parliamentary assistant, who is a good man, an honourable man -- I think things are going to come back to haunt him. I think the pressures will be considerable. Coopers and Lybrand indicated last week that timing is of the essence. I suspect the projects will be accelerated and that we will find ourselves in a situation where we're trying to juggle a whole lot of chips in the air, if you will, at the same time, and some of them may not fall where we want them. My friend will indicate, "Well, that's the government policy of the day." It is today, but we'll wait and see what tomorrow or the day after holds.
Similarly, regarding credit more strict than the bank, I'll wait and see on that one. I'm sure there's no intent -- as I said, my friend is an honourable man and I count him among my friends, but I think we're being naïve. I think there are going to be tremendous pressures. I appreciate the alternative plan, as you put it, that you've set forward, and I thank you for that.
Mr Sagle: I tend to think their intent is good and I'm sure they'll do the best they can. It's a difficult area to really control.
Mr McClelland: I suspect, just for the record, that some time around the eve of an election, we may hear an announcement of projects in a few select communities.
Mr Kwinter: If I could just put it on the public record, I neither wrote this report nor read the report before it was presented, but much of what you've said, I have said over the last two weeks.
One of the things that I'm really interested in, given your knowledge of the industry, and it's a question I posed to one of the officials yesterday: The model that is being set up in Windsor is that the government will own it, it will enter into a management contract with the operators, and the government will then take 20% of the win. It would seem to me that for anybody to get involved in that kind of operation, whether you're Caesars Palace or anyone else, you would want to get some sort of guarantee from the government that you're going to get a fair return on your investment at minimum, plus some ability to share in the upside: the better the casino does, the more profit you make. The question I asked of the official is: "You'll also have to give them a guarantee on the downside. What happens if they lose money? Are you going to make some arrangement?" The response was, "How could they possibly lose money?" Could you comment on that? Because you allude to the fact that it is possible to lose money in a casino.
Mr Sagle: It's gambling, and you can always lose. These kinds of casinos will always bring money in. I think that they will always bring money in, and it depends -- I suggest to you it's something perhaps like the SkyDome in Toronto. It brings in lots and lots of money, but it costs even more.
Mr Kwinter: That's why I said. I used that exact example in Windsor.
Mr Sagle: A small casino with a low overhead has less risk, but as I understand it -- and I don't know the details of the finances of the Windsor operation, but it's huge. If it doesn't work, there is a downside. In Las Vegas right now there are casinos in receivership. You can buy a casino in Las Vegas, the gambling capital of the world. There are casinos for sale, casinos in receivership, and that's not particularly unusual there as the economy goes up and down and gambling interests go up and down. Those people are trying to get into other areas. I don't know who's made all the applications in Windsor. My guess is almost all of them are American and almost all are American gambling interests from Las Vegas and Atlantic City, and they see that the future of gambling is spreading and they're going to be stuck with those places when people are not going to be going to them as much. So casinos can lose money. Casinos can go bankrupt, and have. So you still have to be careful.
The Chair: Thank you, Mr Sagle, for presenting before the committee this afternoon.
Mrs Marland: Have they used all their time?
The Chair: Yes, they have.
At this point in time, I regret to inform the committee that our next presenter is not available.
Mrs Marland: Oh, so did you want to hear from me more?
The Chair: No, Mrs Marland, not necessarily. Therefore, we will be adjourned until 9:30 am tomorrow.
The committee adjourned at 1637.