Torstar to launch online casino to help fund its journalism

Torstar Corp., owner of the Toronto Star, the Hamilton Spectator and other papers, announced on Monday it plans to launch an online casino betting brand in Ontario this year.

"We are excited at the prospect of participating in a regulated online Ontario gaming market with a made-in-Ontario product," said Corey Goodman, Torstar's chief corporate development officer, in a news release.

After decades of being controlled by a trust owned by the families who founded the Toronto Star in 1892, Torstar was recently bought by an investment company called Nordstar, which promised to maintain the company's focus on producing "world-class journalism befitting the Star's storied history."

The Toronto Star has, since its founding, espoused the so-called Atkinson principles, which are named after one of the founding families and broadly focus on advancing progressive causes such as worker protections, civil liberties, and other social justice issues.

Torstar's new owners say they are branching into online gambling to help pay for those continuing efforts.

"Doing this as part of Torstar will help support the growth and expansion of quality community-based journalism," co-owner Paul Rivett said. 

Plans contingent on expansion of online gambling market

The company cited government data showing Ontarians spend about $500 million a year on online gambling, with the vast majority going to grey market websites domiciled outside Canada, where there is less legal and regulatory scrutiny, and the revenue does little to stimulate the Ontario economy.

Under current rules, only the Ontario government itself is licensed to conduct online gambling, but the province's last budget opened the door to expanding the market to other companies some time this year.

Torstar says its plans are contingent on those government plans moving ahead.

Rivett said it's to everyone's benefit for an Ontario-based company like Torstar to become a player in the province's industry.

"We want to ensure the new marketplace is well represented with a Canadian, Ontario-based gaming brand so that more of our players' entertainment dollars stay in our province," he said.

Company diversifying revenue models

A gaming industry consultant hired by Torstar to advise the company said it's not clear yet how much revenue the new business will generate since the government review process is not complete.

"We don't know how big the market is going to be in Ontario yet, because it will depend on the consultation process within government, which is about to happen in the next couple of months," Jim Warren said in an interview with the Canadian Press.

"What we do know is that Torstar is looking at diversifying the revenue model of how we fund and pay for reporters, columnists, and editorial staff."

The move is also just the latest by Torstar to diversify its business beyond newspapers and into other digital realms.

In November, the company launched a parcel delivery service, and then in January partnered with retailer Golf Town to purchase the SCOREGolf brand.

Concern about media independence

The move is not without its critics. Tom Muench, a city councillor in Richmond Hill, Ont., just north of Toronto, said newspapers are critical to the functioning of a healthy democracy, so it gives him pause that such a prominent newspaper chain may be financially beholden to an outside business to keep its doors open.

"I think it's fair to say that if a casino was to pop up in communities say six months ago, many local Torstar-owned papers would write a concerned local story," he told CBC News in an email.

He also wonders how those same newspapers would report on it, if any other sort of business were to open an online gambling operation on the side.

"If the federal government propped up the media with government tax dollars and now with casinos, how do we assure a strong independent news and media industry?"