After the announcement that casino gaming would be coming to Nova Scotia, the government appointed a Casino Project Committee to (1) draft a request for proposals (RFP) for bidders and (2) select and recommend a proponent to the government for the license to operate the two casinos. The RFP was designed in a record time of four weeks. Its most important aspects and requirements were as follows:
The two casinos would be publicly owned and operated.
A gaming commission would be established to regulate and monitor gaming.
A gaming corporation would be established to operate and manage the two casinos. The day-to-day operations of both casinos would be conducted by a private company on behalf of the gaming corporation; this agent would be determined through the bidding process.
The tax on gaming revenue (win tax) was set at 20 percent; in addition, 70% of the net income of the Halifax casino would go to public coffers; the remaining 30 percent would go to the private company. The Sydney casino would be a charitable casino operation, and the casino operator would receive a management fee plus a negotiated percentage of the net income.
Two interim casinos would have to be in operation within sixty days of acceptance of a proposal.
At the time of the announcement of the short list, the names of the six initial bidders were officially disclosed. They were ITT Sheraton Canada, Casinos Austria, Harrah’s, Aztar, Grand Casinos, and Crystal Casinos. With the exception of Harrah’s, all casino companies had entered into partnerships with local interests in order to enhance their chances. The first three bidders made the short list, and ITT Sheraton Canada eventually got the nod. Since the proposals of other bidders were not made public, one can only speculate about the reasons why it was ITT Sheraton Canada. Most likely, ITT’s guarantee of a payment of C$100 million for the first four years, which ended on 31 July 1999, may have tilted the balance in its favor. These payments ensured that total provincial revenue from gaming would not be less than C$25 million in each of the first four years. In return, ITT received the license to be the sole casino operator in Nova Scotia for twenty years, after which time the casino assets along with the customer database would become property of the province for a symbolic amount of one dollar.
In order to enhance its chances to become the operator of the two casinos, ITT Sheraton Canada had formed a partnership with a Halifax-based company, Purdy’s Wharf Development Ltd., on a 90 percent to 10 percent basis. This partnership would operate the casinos under the name Sheraton Casinos Nova Scotia (SCNS). SCNS became part of Park Place Entertainment Inc. (PPE) in 1999 when PPE acquired the gaming assets of Starwood Enterprises, which, in turn, had acquired ITT in 1997; subsequently, SCNS changed its name to Casino Nova Scotia.