The special funding deal Ontario's lottery corporation has promised Toronto if councillors approve a downtown casino has sparked anger among mayors of border cities and the nation's capital.

The mayors of Ottawa, Niagara Falls and Windsor are all calling on the Ontario Lottery and Gaming Corp. to offer their cities the same deal as Toronto.

Windsor has a legal agreement with the OLG to bolster its case. As the province's first home to a casino, it has a "favoured nations clause" in its agreement with the OLG, stipulating that Windsor is to receive the same sweetened terms as any other region.

Story continues below advertisement

"We will enforce that agreement," Windsor Mayor Eddie Francis told The Globe and Mail on Friday. "This is one issue that Windsor is not going to stay quiet about."

The clause acknowledges the fact that Windsor was the first city in Ontario to open its doors to a casino back in 1995, a move that Mr. Francis said helped pave the way for the OLG's expansion to other markets by making gambling more socially acceptable.

Ottawa Mayor Jim Watson sent a letter to OLG chairman Paul Godfrey on Friday, threatening to withdraw his support for a new casino if his city does not get the same revenue-sharing deal as Toronto.

"I am not pleased with this at all," Mr. Watson, a former Liberal cabinet minister, told The Globe. "I think we are one province and every municipality and every region should be treated equally."

Mr. Watson is threatening to bring a motion to Ottawa councillors, recommending that they rescind their support for a new casino in their city if the OLG continues to "discriminate" against all other municipalities.

His letter was prompted by a Globe report revealing that the OLG was planning to cut Toronto a deal that would send more than double the share of gambling revenue its way in return for playing host to a new casino.

Toronto would receive $50-million to $100-million in hosting fees. OLG plans to use a standard formula, based on a percentage of revenues, in every other municipality. If that formula were applied to Toronto, it would receive about $20-million in fees, according to estimates by one industry player.

Story continues below advertisement

Niagara Falls Mayor Jim Diodati told The Globe earlier this week that he does not think any region should get "preferential treatment."

Despite the uproar, Premier Kathleen Wynne appeared to stand behind the formula the OLG is using to calculate Toronto's fees, one that is based on the size of the capital investment to build a casino and the economic benefits to the city.

"The hosting fee for Toronto would reflect the size and scale that global gaming companies have confirmed is possible in the city," she said in a statement.

OLG officials declined to comment on Friday.

Mr. Francis said that until now, he had supported the OLG's plans to expand its operations in Ontario, including opening five new casinos. But he said he now feels that OLG officials are turning their backs on his city as they try to win over the support of Toronto councillors for a casino.

Mr. Godfrey has made no secret of the fact that he favours opening a casino in Toronto, a city he says is large enough to house something "iconic."

Story continues below advertisement

A casino executive said the hosting fee for Toronto is designed to improve the OLG's chances of getting the green light from city councillors for the casino.