Ajax casino revenue-sharing model - raising stakes

NRU
March 21, 2018
By Maryam Mirza

Fearing a forced relocation of its casino and horse racing track, the Town of Ajax has proposed a new revenue-sharing model with nearby municipalities and Durham Region.

On March 19, Ajax council adopted a motion that recommends a new revenue split on the $8-million a year in casino revenue that currently flows to Ajax. The motion has been forwarded to regional council for debate on March 21.

Ajax mayor Steve Parish told NRU that the offer of a new revenue model is a response to media reports suggesting that the Ontario government wants to relocate the casino in his municipality to nearby Pickering.

He said rumours of the possible provincial action "came out of the blue," suggesting that moving the casino to Pickering might be motivated by economic development and job creation concerns.

"There is currently a soft facility, a casino, in Ajax," he said. "It has 800 slots and a quarter horse racing track associated with it. In Pickering there is nothing but a field."

Under his council's proposal, revenues currently received by the municipality from the Ajax Casino and Ajax Downs horse racing track would be shared with region, the City of Pickering, the Town of Whitby and the Quarter Horse racing industry.

If adopted, the proposal envisions that Ajax would retain 50 per cent of annual casino revenue, leaving 20 per cent for Durham, 15 per cent for Pickering, 10 per cent for Whitby and five per cent for the horse industry.

"That argument [of economic development and job growth] is neutral, both sites will create whatever number of jobs in the gaming and related industries," Parish said.

The mayor says he is concerned about a loss of jobs if the casino moves to Pickering, as that municipality lacks a Quarter Horse facility that already is located in Ajax. The race track generates about 1,700 jobs and $56-million in revenue a year to the region.

A significant reduction or, worst case, a complete loss in revenue from casino slots would have repercussions for the town's capital budget, but not its operating budget.

"We use all the casino money toward our capital budget. How we've used it is to build reserves to look after the assets of our town," Ajax finance director and treasurer Sheila Strain told NRU.

For example, an infrastructure project like the Audley Recreation Centre will draw $17-million from city's reserves, avoiding debt.

Over time, Strain said the town has options to ease the possible loss of casino revenue, such as stretching out infrastructure schedules to reduce costs,.

She also said the town could tap contingency reserves when there are opportunities to share the cost of capital projects with provincial and federal governments.

"Its [Ajax's financial plan] is a well laid out plan that was designed to ensure that there be a soft landing if something were to occur, like a decrease in slot revenue," she said.