Two of Canada’s biggest casino operators conceded defeat to U.S. gambling companies in the Niagara Falls casino bidding wars, according to a Globe and Mail report.
Canadian casino operators Gateway Casinos & Entertainment Ltd. and Great Canadian Gaming Corp. folded their respective bids for the Ontario Lottery and Gaming Corp. (OLG)-owned Casino Niagara and Fallsview Casino Resort after the prices of the two Niagara properties became too steep.
With the Canadian operators out of the picture, the remaining bidders for the two properties were Caesars Entertainment Corp., Hard Rock Cafe International Inc. and Mohegan Sun Inc.
Sources involved in the bids claimed that two of the U.S. casino operators made aggressive offers, resulting in an increase of the properties’ values. What made the Niagara Falls casinos attractive to American casino operators was the fact that they could link it to their global client loyalty program.
Casino operators like Hard Rock and Caesars offer programs aimed at increasing gambling traffic at all their properties. The news sources, who requested anonymity due to the confidentiality of the sale process, expressed fear that the Ontario casinos may lose their high rollers to Las Vegas because of such programs.
OLG spokesman Rui Brum declined to comment on the issues as the procurement process is ongoing, but maintained that OLG abided by the public procurement rules to ensure the integrity of the whole bidding process.
Last year, OLG announced that it would be auctioning 20-year leases of the Niagara casinos as part of an initiative to modernize facilities and increase government revenues from all of the province’s casinos.
No one really knows the terms and conditions that OLG set except that winning bidders may partake a percentage of the revenue generated from gambling. Revenues from casino hotels and restaurants will go straight to the operators, according to the report.
OLG expected Ontario’s annual revenue to grow as soon as the new casino operator took over the two facilities.