Township Receives Third Quarter OLG Payment – How Many More to Come?

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Ontario Lottery and Gaming Corporation (OLG) issued a third-quarter (October to December, 2017) non-tax gaming revenue payment of $725,280 to the Township of Cavan Monaghan for hosting Shorelines Slots at Kawartha Downs last month. Since November 1999, Cavan Monaghan has received more than $57.7 million in non-tax gaming revenue.

The current contract with OLG for the Kawartha Downs facility expires at the end of March, so there are two more quarterly contractual payments remaining.  The township will continue to receive gaming revenues after the contract expires until the casino relocates to its new location on Crawford Drive which is currently under construction.  There has been no official notice of the date when OLG plans to cease its gaming operations at Kawartha Downs but it is expected to occur this fall.

Payments received for the interim period will likely follow the terms of the 2012 agreement where hosting municipalities receive 5.25% of the first $65 million of net slot revenue, with a declining scale applied to revenues above that threshold.  These payments are made under an equitable formula in the Municipality Contribution Agreement that ensures consistent treatment of host municipalities across Ontario. In the township 2018 budget, Director of Finance/Treasurer Kimberley Pope has only included gaming revenue for the final payment of the contract, which is for the first quarter of 2018 in her revenue projections.  Additional gaming revenue will be directed to the township’s Asset Replacement reserves for future capital expenditures.

Municipalities are not the only recipients of gaming revenue: OLG provides the Ontario government with its largest source of non-tax revenue, generating approximately $2 billion annually.   KG

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