Sudbury

Northern Ontario casinos hoping to re-open, but could face tough times after pandemic

The gambling business in northeastern Ontario could be facing some lean years because of COVID-19. This comes as two multi-million-dollar casinos are being planned for the region.

Addiction researchers wonder about impact of pandemic on problem gamblers and online gaming

Some experts predict casinos could be one of the last Ontario businesses to re-open and will likely face tough financial times after that. (CBC)

While other industries are getting back to business in the midst of the pandemic, northern Ontario casinos remain unusually quiet.

Gateway Casinos has also halted construction of its new multi-million-dollar facility in North Bay, which was expected to open this year.

The company declined an interview, but says it is focused on getting its existing casinos back open, including those in Sudbury and Sault Ste. Marie.

"Nobody put into their business plan 'I'm going to be closed for 12 weeks' or could be more," says Paul Burns, president of the Canadian Gaming Association.

"I think everybody's ensuring right now that they can get their employees back to work and get their doors open."

The union for workers at Gateway Casinos in Sudbury says they have yet to be involved in re-opening plans, because it is too early on in the process. (Erik White/CBC )

Burns says casinos and bingo halls are busy working on site-specific re-opening plans, which will likely mean smaller crowds and smaller profits, at least in the early going. 

"It's better than being closed," he says.

Richard Paquin, the Unifor representative for the 70 unionized workers at Gateway's casino in Sudbury, says they have yet to see any plans.

"We haven't spoken to anybody about that because it's too early in the process," he says.

Southern Ontario-based gaming industry consultant Stuart Walker says it could be a long time before the casino lights go back on.

"I would expect casinos are probably going to be in the last bucket," says the president of Gaming Advisory Services.

Walker says physical distancing in a "high touch" business like gambling will likely mean the end of casino buffet restaurants, fewer slot machines plugged in and fewer players sitting around card tables. 

"Is that viable? I guess time will tell," he says.

Walker predicts that even once the doors are open, the public may be wary to return to casinos, especially seniors who are their main customers.

He advises gambling companies to start talking to customers now through loyalty programs and filling them in on what casinos could look like after the pandemic.

Gateway Casinos has halted construction on a new casino in North Bay, which was expected to open this year. (Gateway Casinos)

"I would expect business is not going to crop right back up in the beginning," says Walker.

"It's about preserving cash as best they can and find ways to take care of their bank account."

In recent years, casino companies inked multi-million dollar deals to take over regional bundles from the provincial government.

Stock market documents show that Gateway Casinos paid $79 million for the northern Ontario bundle, including existing casinos in Sudbury, Sault Ste. Marie and Thunder Bay and the rights to the North Bay and Kenora markets.

Those documents also show that Gateway has to make fixed regular payments to Ontario Lottery and Gaming, as well as giving the government agency a cut of its revenues.

Walker says this might be a time for casino companies to go back to the province to see if there's any options in those contracts to give them some financial relief given COVID-19.  

"I may want to go back to the OLG or the government and say 'Hey, when we signed this deal, this is how things were at that point in time. Things have changed,'" he says.

This financial uncertainty comes as Gateway is finishing its North Bay casino, but also as it is trying to build a new landmark casino in Sudbury.

That project is currently stalled along with the rest of the controversial Kingsway Entertainment District, which is tied up in provincial planning appeals and court challenges.

"I still think all those plans are part of the mix," says Burns.  

"It may take a little longer."

Gateway Casinos says it remains committed to its plans to build a new casino in Sudbury's controversial Kingsway Entertain District, which is currently tied up in planning appeals and court challenges. (Erik White/CBC )

One big question about the gambling business is how many of the customers have moved to online games during the social isolation of COVID-19.

University of Calgary psychologist David Hodgins is researching the impact the pandemic is having on problem gamblers.

He says some will see it as a chance to kick the habit.

"That's facilitated by the fact that it's not easily available, but complicated by the fact that some of the drivers of problem gambling like anxiety and stress and financial problems, are all drivers toward continuing the problem," says Hodgins.

Ontario Lottery and Gaming says it has seen an increase in people registering for its web-based services in the past few months, most of them to play lotteries like Lotto 6/49 and Lotto Max.

ABOUT THE AUTHOR

Erik White

journalist

Erik White is a CBC journalist based in Sudbury. He covers a wide range of stories about northern Ontario. Connect with him on Twitter @erikjwhite. Send story ideas to erik.white@cbc.ca

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