Ontario's Non-Gaming Question: Are First Nations Losing a Revenue Slice?
The OFNLP formula promises First Nations a share of gross revenue, but newer operator deals raise the question of whether non-gaming dollars still count.
Ontario's revenue-sharing arrangement with First Nations is one of the most consequential in Canadian gaming, channeling well over a hundred million dollars a year to communities across the province. But a technical shift in how the province's newer casino operator agreements treat non-gaming revenue has surfaced a question that could matter a great deal over time: when a casino earns money from hotels, restaurants, and entertainment rather than slot machines and tables, does that money still flow into the First Nations share?
The mechanism at the center of this is the Ontario First Nations Limited Partnership, or OFNLP. Under its long-standing agreement, the partnership receives an amount equal to 1.7 percent of Ontario Lottery and Gaming Corporation gross revenue, distributed among roughly 130 First Nations in the province. In a recent fiscal year, communities hosting gaming facilities alone received on the order of $140 million, part of a total distribution that OLG has projected around $170 million. Our overview of how the OFNLP model works walks through the formula and its history.
Where the non-gaming issue arises
The complication comes from how Ontario has restructured its casino industry. Over the past decade the province moved from operating gaming sites directly to a model in which private operators run bundles of casinos under long-term agreements. Those agreements determine how revenue is defined and split, and reporting on the newer deals suggests that non-gaming revenue, the receipts from hotels, dining, and entertainment, is now largely retained by the private operators rather than routed through the OLG revenue base that feeds the 1.7 percent calculation.
If that reading is correct, the effect is subtle but compounding. The OFNLP formula was written when non-gaming was a smaller slice of a casino's business. As operators invest in hotels, concert venues, and restaurants to diversify away from pure gambling, the non-gaming share of total site revenue grows. Should those dollars sit outside the shared base, First Nations would receive their 1.7 percent of a pool that represents a shrinking portion of what casinos actually earn.
The percentage has not changed. What may be changing is the definition of the revenue it applies to, and definitions are where the real money moves.
Why diversification makes this urgent
Across North America, tribal and First Nations operators have been deliberately reducing their dependence on slot and table revenue by building out hospitality and entertainment amenities. That strategy is sound business: non-gaming attractions draw visitors, lengthen stays, and buffer against downturns in pure gambling. But it also means the non-gaming category is precisely where future growth is expected to concentrate. A revenue-sharing formula that captures gaming but not the fastest-growing non-gaming segment could see its real value stagnate even as the casinos themselves prosper.
This is not a uniquely Ontario problem, but Ontario's scale makes it a bellwether. The province hosts one of the largest concentrations of casino activity in Canada, and the OFNLP is a model that other jurisdictions study when designing their own frameworks. How Ontario resolves the treatment of non-gaming revenue will inform revenue-sharing debates well beyond its borders. Our comparison of Canadian revenue frameworks shows how differently the provinces approach the same underlying question.
What resolution could look like
There are a few plausible paths. The cleanest would be to update the OFNLP agreement so that the shared base explicitly includes a defined portion of non-gaming revenue, keeping the formula aligned with how casinos now make money. A second option is to renegotiate the percentage upward to compensate for a narrower base, though that trades transparency for a blunter fix. A third, and least satisfactory from a First Nations perspective, is for the status quo to persist, with the shared pool gradually diverging from total casino performance.
Context matters here too. Ontario's revenue-sharing arrangement grew out of years of advocacy and negotiation, and it remains among the more generous province-wide models in Canada precisely because it is tied to a broad definition of gross revenue rather than to the fortunes of any single site. Preserving that breadth as the business changes is what is really at stake. A formula anchored to gaming alone would slowly untether First Nations from the parts of the industry now attracting the most investment, even as the communities' need for stable, predictable funding remains constant.
What makes this worth watching is that it is a definitional dispute, not a headline confrontation, and definitional disputes tend to be settled quietly and to last for decades. The communities that depend on OFNLP distributions to fund governance and services have a direct interest in ensuring the formula tracks the industry as it actually evolves. For a sector increasingly built on hotels and entertainment as much as on the gaming floor, whether non-gaming revenue counts is not a footnote. It is the question. Readers can explore the broader landscape of operators in the casino directory.