Office of the Mayor Bureau du maire September 24, 2012

Dear Council colleague, I am writing to you today to outline a proposed two-stage process to address the issue of a possible new Ottawa gaming facility. As you know, Ottawa has been identified by the Ontario Lottery and Gaming Commission (OLG) as a possible host city as it looks to modernize gaming in the province. There has been much interest in this issue, and I believe we need to set a way forward that is clear, fair and transparent. This process begins with City Council signalling its support, in principle, of a possible new Ottawa gaming facility. This decision would not commit the City to a gaming facility, or a specific site location, but it allows the OLG to issue a Request for Proposals (RFP) to accept bids from proponents. In my view, every Ottawa dollar that is spent at the Gatineau casino is a dollar lost for Ottawa taxpayers. An Ottawa gaming facility would allow us to repatriate the money currently going into Quebec roads, schools and hospitals. If a new gaming facility were to open in Ottawa, I am proposing that any new revenue generated for the City be split equally between infrastructure renewal and economic development initiatives that create jobs in Ottawa. In a time of infrastructure challenges and federal job cuts in Ottawa, we need to thoughtfully consider this opportunity. At the same time, we need to fully understand the economic benefits and potential public health impacts of a gaming facility. We must also allow residents to provide their feedback through public delegations at committee. When a final decision is made, we will ensure that we have all the necessary information in front of us. I believe this is a fair proposal and I hope you will consider it.

Proposed Process To proceed with this issue, I am proposing a clear two-stage process. The first stage would begin on October 2, 2012 at the next FEDCO meeting.

At this time we would consider the staff report, to be released on September 25, which includes a direction to staff to look at the economic benefits of a gaming facility. Further, we would plan to consult with Ottawa Public Health about the public health impacts of a new gaming facility, and mitigation measures for populations at-risk of problem gambling. This information would be available to us to be considered at the same time as a final OLG proposal. The October 2 FEDCO meeting will be held in the evening to make it easier for residents who work in the day to comment on the staff report. If approved by City Council on October 10, 2012, I would write a letter to the OLG to signal that the City would be supportive of a gaming facility in principle. This would not commit the City to a gaming facility, or even a site location, but it allows the OLG to issue a Request for Proposals (RFP) to accept bids from proponents. The second stage would occur in 2013. It would involve the OLG coming back to the City after the RFP process with a prospective proponent and location. At this time, we would receive a second set of public delegations so that residents can speak to the specific proposal and location. We would also receive the staff report requested earlier on the economic impacts of a gaming facility, and also have an opportunity to review comments from staff at Ottawa Public Health. Note that while this is a process driven by the OLG, Ottawa City Council holds the final approval on rezoning for a new gaming facility.

Location It is important to note that currently there are no sites proposed or shortlisted by the OLG. The OLG modernization process is about involving the private sector and becoming more customer-focused. A broad and competitive bidding process is likely to lead to a higher level of innovation and competition between proponents. It is in this spirit that I think we should proceed. While some, myself included, have expressed early personal opinions about possible locations for a new or expanded gaming facility, we should not pre-judge or rule out any locations or areas until we receive a final proposal from the OLG. I will be encouraging Council to allow the OLG to work with proponents who have the expertise and market depth to identify options for Ottawa that are most likely to lead to long-term success. We should see what the best proposal is and make an informed decision when the time comes.

It is also important to note that the National Capital Region zone at least one other municipality other than the City of Ottawa (Clarence-Rockland), which may also signal its interest to the OLG.

Rideau Carleton Raceway I would also like to recognize the long-standing, positive relationship we have had with the Rideau Carleton Raceway (RCR). We all recognize the importance of the Raceway to the local economy. Further, I understand the provincial challenges facing the RCR as the OLG reviews the horse-racing industry as a whole. I will be calling on City Council to encourage the OLG to run a fair, competitive process that provides all proponents, including the RCR, an opportunity to compete on a level playing field. Further, I will be proposing that Council ask the OLG to consider providing an opportunity for the RCR to be pre-qualified to take part in the final bidding process, given their strong record of success in the Ottawa region.

Current gaming in the Ottawa region Gaming is not new to the City and its residents, and Ottawa's experience with gaming has been positive. The City has had a long-standing and successful relationship with the RCR, with the slots welcoming 2 million visitors per year. Since 2000, the slots at RCR have generated over $45 million in general revenue for the City. In 2011 alone, the Slots at Racetrack program contributed $4.4 million in revenue to the City of Ottawa. Another gaming option is about 6 km from the Ottawa downtown core - the Gatineau casino. It is one of the regions most popular tourist attractions with slots, table games, an impressive five-star hotel, restaurants and live entertainment. Industry experts suggest that a majority of the Gatineau casinos revenues comes from Ottawa residents revenues that the City of Ottawa and the Province of Ontario do not benefit from. These economic benefits, driven by Ottawa residents, instead accrue to the Province of Quebec. They use this money to invest in roads, hospitals and schools while the City of Ottawa wrestles with tough decisions about infrastructure renewal and feels the effects of federal job cuts. Ottawa residents enjoy easy access to these two facilities, but also have smaller-scale gaming options right in their neighbourhoods. This includes charity and church bingo fundraisers, as well as lottery tickets sold in most convenience stores.

Given these existing gaming options, a new Ottawa gaming facility would not be a big change from what our residents are used to. However, the difference would be that the City of Ottawa would receive new revenues that would be earmarked for investments in infrastructure renewal and economic development initiatives that create jobs in Ottawa. In March 2011, Councils solid vote (20-3) in favour of adding gaming tables at the RCR underscored Councils desire to provide residents with a broader range of quality gaming services. The decision was made with the goal of generating more revenue for the City of Ottawa that is currently crossing the river to Quebec. I recognize that the idea of expanding gaming in the City of Ottawa may not meet with unanimity. However, given the City of Ottawas positive experience with gaming, and given the numerous options already in the region, I believe residents would support a modest expansion of gaming in Ottawa. I also believe that, at the end of the day, individual residents are best able to decide whether or not they want to use a gaming facility in our community it really comes down to an issue of personal choice. Further, my consultations with Council indicate that the vast majority of members of Council do not favour holding a divisive referendum on the issue of gaming. Instead, we should let the best proposal come forward based on industry expert opinion, make a decision, and then let residents vote with their feet. I believe this is a fair proposal that allows us to move forward on this issue in a responsible way, with two separate opportunities for public consultation. This is a decision that should be made with an open mind, but with all of the facts in front of us. I hope you will join me in exploring this exciting opportunity.

Jim Watson Mayor City of Ottawa