CHICAGO -- As Chicago prepares to own its own casino, Mayor Rahm Emanuel won't find many examples of government-run gambling halls to study in this country.
But there's plenty to see in Canada, and it's not all covered in gold.
In Ontario, the nation's largest province, publicly owned casinos have pumped billions of dollars into government coffers over the years. But increased competition and a poor economy have left the four biggest casinos with flat or falling revenue and operating losses in recent years that total tens of millions of dollars.
The Windsor casino employed 5,000 people at its peak after opening in 1995, but good times have turned hard in the last decade. The payroll of the city's second-largest employer is down by about half, and its fate has become a political issue.
"They don't want to advertise it, but there's no doubt in my mind that they're subsidizing the casino right now," said Rick Laporte, president of the Canadian Auto Workers local, which represents many casino employees as well as workers at the Chrysler plant that is Windsor's top employer. "The government is not going to let that fail."
On Friday, Ontario gambling officials announced the province received $2 billion in the last year from the various forms of government-sponsored gambling, including the lottery, slot machines at racetracks and the four Las Vegas-style casinos in Windsor, in Niagara Falls and outside Toronto. Much of the big-casino revenue -- $217 million in the 2009 fiscal year -- comes from the 20 percent share the government gets off the gambling halls' take before expenses.
But the officials have not yet released the latest breakdown of how the big casinos fared overall. In fiscal 2009, the casinos had operating losses of $70 million, up from nearly $56 million in losses the year before. That trend continued into this year, according to a spokesman with the Ontario Lottery and Gaming Corp., the government agency that oversees gambling.
Still, "it's a net benefit to the province," spokesman Don Pister said.
Other than the tribal casinos, the gambling industry north of the border is owned and operated by Canada's provincial governments. Officials in those governments have scrambled in recent years to protect their investments and revenue streams. The gambling agency's most recent annual report stressed the importance of cost-cutting to "counter the increasing threat to revenue and profit expectations."
Much of the decline at the big casinos over the last decade has been blamed on a bad economy and U.S. casinos popping up across the border in Michigan and New York. Competition with U.S. casinos has only increased since restrictions on Americans crossing the border were tightened in 2009.
The competition Ontario's casinos face echoes some of what has been planned in Illinois' gambling expansion bill, which was passed last month but has been held up while an ambivalent Gov. Pat Quinn considers whether to sign it. While Chicago would get its own casino, the bill also floods the region with more gambling competition, creating two more suburban casinos and allowing slot machines at the area's horse-racing tracks.
In Ontario, the increased competition has meant higher expenses at the casinos trying to keep up.
In 2004, the government added a second, bigger casino in Niagara Falls. In 2008, the province finished a nearly half-billion-dollar overhaul of the Windsor casino to shore up its appeal to U.S. gamblers who began staying on their side of the river when three casinos were developed in Detroit.
"People go to the closest and the cleanest, and everything else is on the margins," said Jacob Miklojcik, a Michigan-based consultant who has advised his state's gambling industry on developing casinos to compete with Windsor.
In the hunt for more gambling revenue, the Ontario government is making plans to expand into the murky field of online gambling next year. The casino workers union is also lobbying the government to expand sports betting at the casino to spur revenue, Laporte said.
The message for Chicago may be that in a faltering gambling market, with mushrooming competition and a shaky economy, governments can find themselves scrambling to maintain the same levels of gambling revenue.
"It's a pie, and you're not going to grow the pie that much," Miklojcik said.
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