Gateway ditching new $75M casino, will expand Western Fair site
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Gateway Casinos and Entertainment Ltd. is pulling the plug on its planned $75-million casino on Wonderland Road, and will instead make a multimillion-dollar investment at Western Fair to expand its current operations, sources close to the fair say.
The gambling industry is still reeling from the COVID pandemic that either closed gambling sites across Canada or greatly reduced crowds during the last two years, forcing Gateway to rethink its London gaming strategy.
“They are staying at Western Fair, and will make a significant investment to expand,” a source said.
Gateway said in December 2018 it planned to build a new casino on Wonderland Road South after failing to secure a better deal on its lease at Western Fair District. Six months later, the company announced its plan to build the Starlight Casino at 3334 and 3354 Wonderland Rd. north of Wharncliffe Road in south London. Construction crews began clearing the site and demolishing existing buildings in January 2020 before COVID hit a few months later, stopping all work on the $75-million project.
It was an ambitious plan for a 10,000-square-metre casino featuring 900 slot machines and 40 gaming tables that was expected to employ about 1,000 workers and generate $4.5 million for the city in gaming revenue alone.
Prior to the decision to build a casino, Gateway was in talks for more than a year with city hall and Western Fair about reducing its lease or buying land at Western Fair District to expand its existing casino.
The head of an association that represents the Canadian gaming industry says the COVID-19 pandemic is forcing casino companies to review their operations and growth plans.
“Every casino operator I know has been evaluating their business plan because of COVID and their financial position. It’s a proper business decision as they go forward,” said Paul Burns, chief executive of the Canadian Gaming Association.
“They look at where the business was and the closures and public health restrictions. It had a serious impact.”
Rob Mitchell, spokesperson for Gateway Casino and Entertainment Ltd., would not comment on the company’s plans for the Wonderland Road casino, only saying in an email, “Our current focus at all our sites is on customer engagement and recovering lost business resulting from the COVID pandemic.”
Deputy mayor Josh Morgan, who sits on the Western Fair board, declined comment, as did other board members contacted by The Free Press.
Reg Ash, chief executive of Western Fair, also declined comment.
A report published in May from the Responsible Gambling Council said many gamblers took to online gaming in the pandemic and online gaming has expanded in Ontario during the last two years.
“It continues to be slow. Some players have returned and casual players have not. Casino operators are all re-evaluating their capital plans. We have not seen building coming back,” Burns said.
The Ontario Lottery and Gaming Corp. (OLG) said Tuesday it is not aware of Gateway’s plans for its London site.
“We work closely with all our gaming service providers and the host gaming communities across Ontario. However, it would be inappropriate to comment on speculation of any kind,” spokesperson Tony Bitonti said.
The OLG receives revenue from gambling operations in Ontario and divides the money between operators, municipalities and the province.
Gateway leased the Wonderland Road casino site from London businessperson Walt Spivak, who said Tuesday he has not been told the casino will not be built.
“They have not made an announcement to me,” Spivak said.
Mayor Ed Holder also said he has not been told what Gateway’s plans are but he spoke to Gateway early in the pandemic about the challenges facing the industry.
“They had a thriving business and then, overnight, zero income,” he said.
