Niagara Falls mayor warns proposed Toronto mega-casino could lead to market cannibalization

Last week, a CAD$1 billion "Las Vegas-style" mega-casino in Toronto was announced. While the property promises to be Canada’s largest destination resort and was touted as bringing a "world-class experience" to Ontario, not everyone sees it as in the best interest of the region. Niagara Falls Mayor Jim Diodati has now expressed concerns that the introduction of the casino could lead to cannibalization for the province's existing venues, having a negative effect on the two casinos in Niagara Falls.

According to the Ontario Lottery and Gaming Corporation, Toronto’s new casino would be the largest one in the province, and it is on schedule to launch in the summer of 2023. It will be operated by Great Canadian Entertainment, and it will be branded Great Canadian Casino Resort Toronto. The facility will also feature a hotel, entertainment center, and parkade, promising an all-inclusive experience.

Mayor Diodati spoke on its possible effect on the local land-based gaming industry. He said the province should not "cut the gaming pie" into smaller portions and instead grow it, reports Toronto Star, calling for the introduction of a new model.

Great Canadian Casino Resort Toronto rendering.

The current system calls for Ontario to own the casinos, while third-party operators are in charge of the properties. Diodati said that through this model, the outsider firms will not invest major money to upgrade someone else’s casinos. He gave Las Vegas as an example, where operators own the property, and it is in their interest to make enhancements to them by reinvesting and rebuilding. 

The mayor said that the key is to use gaming to leverage tourism, leading to investment and economic development. "That's why gaming was originally created in Niagara Falls. If you go back to the original (Ontario Lottery and Gaming) mandate, it was to utilize gaming to drive tourism, investment, economic development, and employment," the mayor commented.

The mayor also noted that a very small portion of gamblers at the two casinos in the city is from the U.S. This could be attributed to the fact that New York’s properties allow smoking and offer free drinks, Diodati suggested, noting it is important to focus more on the international market.

He said about 50% of tourism revenues in Niagara Falls come from Americans, but those numbers are significantly lower at the two casinos, which are in the heart of the tourism district. Instead of further allowing the cannibalization of the market, which he believes must grow, the mayor is calling for a focus on the U.S. and international markets and letting Niagara Falls play to its strengths. 

Niagara Falls Mayor Jim Diodati

It should be mentioned that Niagara Falls’ two gaming properties, Niagara Fallsview Casino Resort and Casino Niagara, have recently launched in-person sports betting, which could be the right step in expanding the customer base. Niagara Fallsview Casino Resort debuted it on November 16, 2022, and incorporated 21 kiosks. Meanwhile, Niagara Casino introduced it on November 23, 2022, with fewer machines on its floor.

Niagara Casinos president Richard Taylor said more than CAD$32 million has been invested in the two facilities since Mohegan Gaming & Entertainment took over operations in 2019, including upgrades to both properties to ensure they’re “prepared to meet anticipated new customers and visitors attracted by the OLG Stage at Fallsview Casino.”

"We will continue to contribute to the long-term competitiveness of the Niagara market and believe the future is bright for Niagara Casinos as we announce new big-name entertainment each and every week and look forward to the opening of a new Sportsbook in late 2023," he added.