Ontario will officially take applications from operators to open new Niagara casinos as the provincial government aims to make Niagara Falls the “Vegas of the North.”
On Thursday, an Ontario government press release announced an agreement between Ontario Lottery and Gaming Corporation (OLG) and Mohegan subsidiary MGE Niagara Entertainment Inc. that will allow additional casino operators to enter the gaming market in the Niagara Region.
Mohegan will continue to operate the two existing Niagara casinos, Fallsview Casino Resort and Casino Niagara, under a long-term revenue-share agreement with OLG. However, it has agreed to give up its brick-and-mortar gaming exclusivity rights in Niagara, Ont. to facilitate other operators entering the market through new Niagara casinos and resorts.
The crown corporation will open a procurement process later this year to identify potential new gaming operators.
“Niagara has long been one of Ontario’s premier tourism destinations, and we’re working to unlock its full potential and attract more visitors and investment for decades to come,” said Ontario Attorney General Doug Downey, who is now also serving as Interim Minister of Tourism, Culture, and Gaming after Stan Cho’s resignation last month.
OLG President and CEO Duncan Hannay said that the change will help the province and the lottery corporation “realize the full potential of Niagara’s casino business and the economic benefits that flow from it.”
Mohegan will remain as Fallsview, Casino Niagara operator
The government confirmed that Mohegan will continue to operate Fallsview Casino Resort and Casino Niagara. The company also offers the licensed PlayFallsview iGaming platform in Ontario’s crowded online gambling market.
In an earnings call on Thursday, Connecticut-based Mohegan said it agreed to “suspend and potentially terminate” its Niagara casinos exclusivity in exchange for undisclosed financial considerations.
Chief Operating Officer Joe Hasson told analysts on Aug. 13 that Mohegan believes that the move will ultimately prove to be “a win-win” as the Destination Niagara initiative seeks to increase tourism to the city, and therefore revenues and wider economic benefits.
“The interests of Mohegan in the Niagara market as well as the government of Ontario are aligned in the sense that both parties want more development, more tourism, and ultimately better drivers of guests and visitation into the Niagara area, particularly on the Canadian side of the border,” he added. “… We’ve given our OK in exchange for financial consideration to allow that market exploration.”
Mohegan earns a service provider fee as the operator of the two existing Niagara casinos. Executives said the agreement offers them “some protection” regarding that fee and their revenues in the region.
“We feel as if we’ve got the right cushions and the right buffers in place,” added Hasson. “Should competition change the fundamental landscape of Niagara, ultimately, we’ll reinvest in our businesses there as well. We view the deal that we’ve struck as immediately accretive to our businesses there, but nominal in value today. That’s what makes us very comfortable with it.”
Chief Financial Officer Ari Glazer added that Mohegan believes this will prove to be “a win-win for everybody involved.”
“We’ve gotten to a commercial arrangement whereby, in our view, we’re better off in just about every scenario as a result of changes in the structure of our concession agreement there,” Glazer added. “So whether or not competition ultimately comes in the form of new gaming supply to Niagara, we’d feel confident that we’re in a better position than where we sit today.”
Ontario wants big Vegas brands for Niagara Falls casinos
The Ontario government and the City of Niagara Falls have been assessing ways to upgrade the Canada-U.S. border city, which sees millions of visitors every year, and have been in talks with Mohegan since 2024.
In December of last year, Ford said at a press conference that Mohegan needed to decide whether it wanted to be involved in the plan.
“You’re either on board or you’re out,” the Premier said of Mohegan. “We have to build Niagara, we have to invite other casinos in, and they’d better come to the table … We’re moving with you or without you. I’d prefer to move with you, but if you don’t move, we’re going. Simple as that. We want more casinos, large casinos, to come here.”
He urged “all the big casinos in Las Vegas” to submit proposals for Niagara casinos, resorts, and hotels with attractions. “That’s what we’re looking for.”
Ontario wants to double Niagara Falls visitors
The bid to attract more Niagara casinos is part of a wider multi-billion-dollar Destination Niagara strategy that also includes various other upgrades and plans, such as:
- A new theme park
- Opening Niagara’s first five-star hotel
- Improving road, rail, and air transportation through measures such as upgrading Niagara District Airport
Ford’s government wants to double the number of annual visitors to Niagara Falls from the current 13 million to 25 million, and to double the region’s tourism impact by generating an additional $3bn in annual GDP.
Mohegan reports decline in Niagara casinos revenue
The government and Mohegan announcements came on the same day that Mohegan reported a decline in Niagara casinos revenue.
Net revenue for the Niagara casinos fell 11% year over year for the quarter ended June 30, to US$66.8m. Adjusted EBITDA dropped 57% to US$2.2m and the segment made a US$984,000 net loss after reaping a US$1.3m net profit in the same quarter last year.
Glazer put the declines down to lower gaming revenue resulting from an adverse swing in table hold.
In contrast, gross gaming revenue on the PlayFallsview platform in Ontario grew 9.7% year over year, and Ontario monthly active users soared 48%.
During the quarter, Mohegan opened the 16,000-square-foot Fallsview Privé slots, table games, and hospitality venue at the Fallsview casino, designed to deliver a luxury gaming experience exclusively for VIP guests. Glazer said on the call that the early results showed that it had a positive impact on overall gaming volumes.
