Ontario's new gaming tax rate of 9.75 per cent bet heavily on Niagara's draw

29 October 2026

The province's plans are built on a history of weak controls, opaque contracts and downplayed public health impacts

Ontario's aggressive gambling expansion in Niagara, which includes plans for over $3 billion in new investments, repeats the mistakes of past casino overhauls that left holes in anti-money-laundering controls, warned of inadequate profits, and relied on vague contracts.

The province announced the development in 2026, pitching it as a way to draw new investors to Niagara's gaming scene and unlock new investment. The plan focuses on new infrastructure and ditches a revenue-sharing model in favour of a new 9.75 percent gaming tax.

Billed as a way to supercharge the region’s gaming industry and attract big spenders down from the U.S., the plan isn't Ontario’s only foray into expanding brick-and-mortar gambling in Niagara.

Ontario's Auditor General has long flagged weaknesses in the province's casino governance - a pattern with a proven history in gambling inquiry.

Meanwhile, Ontario was forced to defend a 2017 deal with Great Canadian Gaming Corp. even as the private operator faced an investigation in British Columbia over suspected money laundering - a documented risk factor that would haunt Ontario’s plan.

The Auditor General concluded in 2022 that 639 slot machines had paid out less than the 85 percent guaranteed, with 83 paying out less than 80 percent. Test purchases by mystery shoppers at two casinos saw them secure large cash payouts with no record of winnings.

The province has also faced concerns about gaps in corporate structure and financial transparency:

Fallsview Casino saw a similar deal. It locked in more than $200 million in subsidies for the operator to build the resort and "thousands of jobs" - a later unfulfilled promise.

In 2018, documents showed Gateway had been guaranteed up to $24 million to cover losses when it bought casinos in Northern Ontario.

David Miller, a longtime critic for the NDP in Ontario, said the plan was a goldmine for the gaming companies and a raw deal for the cities and towns the government promised a fair allocation.

More on this is available via 500-casino.org and Canadian players.

Given forced to spend a large part of their resources policing far more residents than one might expect, saw Woodbine as a $30 million windfall and hundreds of jobs - a figure some say didn't factor in problem gambling costs, which could incur soft costs in increased policing and public health resources.

Those risks and costs can grow when players and investors accumulate debts. When Ontario Lottery and Gaming Corp. was taken in its first phase of privatization, it promised to extract billions from its players and franchisees. Years later, its auditor found that plan overpromised and underdelivered.

"Ambitious" described what best case analysis showed should be expected. The province didn't do enough upfront work to establish the basis of a multi-billion dollar plan, the auditor ruled.

The oddity of Ontario promising to cede economic control of a big entertainment draw alongside guarantees for consistent pay-outs reflects why the US has long preferred Native American booking casinos to operator-owned. If OLG's expansion exceeds projections, there's a hole between gambling operators and the province. If it trails predictions, the company will be underperforming but receive the same deal.

The Auditor General found OLG hadn't done enough to be "tough on problem gambling". OLG also paid less attention to whether there were problem gamblers or not.

OLG licensed operators reported frequent visitors from 27,000 machines, pledged 85 percent payouts to customers and fell short under 85 percent, including 83 machines paying out under 80 percent.

Money laundering laws also came to the fore in 2017, when Ontario continued an operating relationship with a company investigated in British Columbia after a cash check of up to $10,000 at two casinos with no ability to check gaming history. Great Canadian Gaming was under investigation in B.C. for a cash scandal.

When Toronto staff projected that Woodbine's expansion would generate about $30 million per year in municipal revenue and hundreds of jobs for local residents, some city residents worried about what had been excluded, like policing and problem gambler costs.

In 2018, Gateway acquired several Northern Ontario casinos, with OLG agreeing to cover up to $24 million a year in losses under certain conditions, including misrepresentation risk and OLG's failure to live up to its commitments.