A thoroughbred gallops around a dirt track just after 8 a.m. in a bucolic stretch of northwest Toronto, the sound of the horse's heavy panting blocking out the roar of cars in the distance as Highway 427 fills with traffic from far-flung suburbs.

While the horses aren't going anywhere, officials at Woodbine Racetrack dream of persuading some of those drivers to slow down over the next three decades, enjoy a race and maybe buy a home in the green meadows around their grassy oval. Jim Lawson, Woodbine's chief executive, says the 684 acres around the track could be Toronto's next up-and-coming area, a "city within a city" with public squares, jobs and homes in the last big tract of undeveloped land in Canada's largest city.

The plan to replace Woodbine's untouched knolls with a new neighbourhood hinges on a separate project to develop a full-fledged casino at the site. A key development in the future of Toronto's gambling fell into place on Aug. 8 when the Ontario Lottery and Gaming Corp. awarded Great Canadian Gaming Corp. and Brookfield Business Partners LP a lucrative contract to operate casinos in the Greater Toronto Area for the next 22 years. While many of the finer parts of the business deal are unsettled, Great Canadian has made no secret that it wants to expand the existing slots at Woodbine into a casino, while Brookfield is looking beyond the gaming floor to a possible entertainment complex. Woodbine isn't directly involved in the casino deal, but it owns all the land. With billions of dollars at stake, all three companies are betting they can all work together to build big.

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Woodbine is hoping to break ground on its project by next fall and is pushing ahead to secure permits. Earlier this week, Woodbine and the winning bidders met with senior Toronto city officials in the first step in a process that will take months as zoning and planning approvals are sought and public consultations are carried out. The issue is not expected to come before city council again until the new year, but when it does, another debate over the contentious subject of expanding gambling within city limits is likely.

In conference calls over the past two weeks, executives from Great Canadian and Brookfield heaped praise on Woodbine's development plans. Mr. Lawson says he has strong hopes that Woodbine and the new gambling operators will work together. "The fact that they're Canadian is a big plus for us. This is in Brookfield's backyard, they care about Canada, they care about Toronto, this is their home market. Companies of that size are always looking for things of a scale that can move the needle for them and it's exciting for us to partner with them," he said.

A municipal notice at the Woodbine Racetrack. Mark Blinch/Globe and Mail

Woodbine's focus will remain on horse racing even as it eyes becoming a master planner, Mr. Lawson said. The track hopes to use the proceeds from development to keep horses racing at the site for decades to come. Horse racing's importance in Canada has waned considerably over the past century. While the Melbourne Cup is considered a national holiday in both Australia and New Zealand, Woodbine's marquee race, the Queen's Plate, goes largely unnoticed in Toronto.

Nestled between three highways and Rexdale Boulevard, Woodbine's nearly 700 acres are often compared to the size of Toronto's downtown: The site is larger than the area between Spadina Avenue to Church Street, and from Queen Street to the lake. The track lies in the shadow of Toronto Pearson International Airport; with acres of low-lying industrial buildings and wide roads, it's a gritty space where airport employees with high-visibility vests are a constant presence. The nearby industrial grind is punctuated by the roar of passenger jets taking off. Due to restrictions from low overhead flight paths, housing will be limited to small areas at the corners of Woodbine's site.

The two business partners, who have committed to gambling at Woodbine for the next two decades, see the GTA as an underserved gambling market that would deliver strong return on investment. This will let Great Canadian collect a management fee, adding to the returns it would get as an equity holder. While the company declined an interview, CEO Rod Baker said on a conference call with analysts earlier in August that the bundle's upfront acquisition costs would be $94.6-million, with an anticipated additional $50-million in working capital. Building costs are not included in the company's acquisition-cost estimates because the facilities are leased, Mr. Baker said.

"The vast majority of the capital that the partnership is going to contribute is going to be involved in the development, redevelopment, expansion of the properties," Mr. Baker said. The partners expect to spend $1-billion over time and anticipate bringing in "a significant third-party component" that could see total spending eventually reach many billions of dollars.

In the conference call, Mr. Baker called Woodbine's location "excellent" and said the track's redevelopment plans are "amazing."

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Jockeys work out their horses at Toronto’s Woodbine horse track in Toronto. Mark Blinch/Globe and Mail

Expanding Woodbine and the vacant expanse that surrounds it into some sort of mega-entertainment complex – with or without a full-blown casino – has been a developer's dream for decades. In 2007, the city signed a deal to bring in a $1-billion project led by the Cordish Companies, a Baltimore, Md.-based developer of malls and entertainment complexes across the United States.

The plan was predicated on not actually expanding the gambling options beyond the existing slot machines and horse races, as then-mayor David Miller and city council at the time simply wouldn't stand for that. Instead, Cordish proposed turning the area around it into an adult playground of restaurants, stores and a concert venue, with big-box stores and 2,500 residential units.

The vision fell victim to the global financial crisis, and squabbling between Cordish and Woodbine. The resulting delays saw prospective commercial tenants lose interest and the project collapsed in 2013, as time-sensitive (and at the time, novel) pledges of $120-million in property-tax breaks expired.

By that time, under the turbulent term of then-mayor Rob Ford, the city had become embroiled in another debate over casino expansion, with the possibility of a megacasino floated for Exhibition Place or the Port Lands. Council once again voted no, and supported an amendment moved by left-leaning downtown councillor Mike Layton opposing any expanded gambling at Woodbine, too.

But in 2015, with support from new Mayor John Tory, council reversed itself, voting 25-19 to give its conditional approval to a dramatic increase in gambling at Woodbine – with thousands more slot machines and new live tables for poker, roulette and blackjack – provided the casino and its backers lived up to 21 conditions. While Mr. Tory touted the jobs to be created in an economically desolate part of the city, it was a divisive debate, with a handful of the mayor's key allies – deputy mayor Denzil Minnan-Wong among them – voting no.

People bathe a horse at Woodbine Racetrack. Mark Blinch/Globe and Mail

City bureaucrats will now have to evaluate whether the casino developers are meeting council's requirements, and city council will get a chance to vote on the matter again. Among the demands, which were to be included in OLG's procurement process, are calls for the promised non-casino development to proceed "concurrently" with the expansion of gaming, that the casino prioritizes local hiring and opportunities for other local businesses, that it okays existing labour agreements and addresses the "negative impacts of problem gambling" with social and health services and other "community benefits."

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Among those expected to re-litigate the matter is Mr. Layton, who fought vigorously against the notion of a downtown casino in 2013. He argues that there is a risk that the casino will get built while the other benefits fall by the wayside. And even with the proposed development bundled with the plan, he argues, gambling sucks more money out of a community than it ever puts in, and leaves the city on the hook for extra costs.

"When you look at who shoulders the burden of social services, of shelters when people go broke and lose their house – we do," Mr. Layton said. "And it's expensive. And those are the hidden costs that aren't calculated in."

One potential point of contention: In its 2015 resolutions on the expanded gambling plans, council banned the use of its main property tax-break program for "any proposed integrated entertainment facility connected to a casino." But in Woodbine's submissions to the city's planning department in May, it argues it is entitled to the same property tax breaks extended to the 2007 Cordish plans for the site, which were deemed "transformative" for their size, effect on the economy and the jobs they pledged to create.

Mr. Layton said he believed any developments related to the casino site should pay their full taxes: "So we're going to now bankroll a casino? … It is distressing to learn that we may funding a casino to move into a community."

This empty parking lot is a site where the new casino may be built at the Woodbine Racetrack. Mark Blinch/Globe and Mail

Officials at Woodbine have indicated that they may seek tax increment financing, a type of subsidy from the city to help them develop the site.

In addition to the jobs and investment the plans promise to create, the city stands to benefit under the profit-sharing deal it has with the province. According to city staff, under a "best-case scenario," Toronto could see up to $14-million more in revenue a year, bringing the total "hosting fee" it is entitled to collect from the casino to $29.5-million. That's just a little more than the equivalent of a 1-per-cent residential property tax hike.

Championing Woodbine's cause at city hall is Etobicoke Councillor and deputy mayor Vincent Crisanti, who says the plans, after decades of dreams, are finally are coming to fruition for a part of the city that the current development boom has left behind.

"This is as real as real can get," Mr. Crisanti said. "What's important to remember is that [the expanded casino] is what truly triggers the interest in developing the rest of the master plan for Woodbine, which is a very ambitious plan."

The OLG is expected to turn over gambling at Woodbine to its new operators early next year. Great Canadian will have a 49-per-cent interest in the partnership, as will Brookfield Business Partners, an acquisition- and management-focused wing of Toronto-based Brookfield Asset Management Inc. Private equity management firm Clairvest Group Inc. will hold a 2-per-cent stake. Neither Clairvest nor Brookfield Business Partners executives were available for interviews. But the latter has made clear that the GTA gambling agreement aligns nicely with its investment strategy, which aims for 15-per-cent to 20-per-cent returns.