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 onlineOntariogaming market with a made-in-Ontarioproduct," saidCorey Goodman, Torstar'schief corporate development officer, in a newsrelease.

After decades of being controlled by a trust owned by the families who founded the Toronto Starin 1892,Torstar was recently bought by an investment company called Nordstar, whichpromised to maintain the company's focus on producing "world-class journalism befitting theStar'sstoried 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 focuson 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 ofonline gambling market

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

Under current rules, only the Ontariogovernment itself is licensed to conductonline gambling, butthe province's last budget opened the door to expanding the market to other companiessome time this year.

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

Rivett said it's to everyone's benefitfor 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 aboutmedia 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 tothe 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 sixmonths ago, many local Torstar-owned paperswould 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?"