I disagree with you, but even following your logic shows that a casinos effects (good AND bad) would be overwhelmingly regional, not 'local.' Keeping Mr.Pickering, it wouldn't matter at all whether he bankrupted himself in downtown Toronto or Casino Rama. The effects are regional and occur regardless of where a casino is located.
You're picking an irrelevant 'community' though. The relevant community here isn't downtown Toronto, it's the Province which will internalize most of the costs and benefits.
What if the MTCC's IMMEDIATE area supported a Casino (mostly hotels and tourist traps, not impossible to imagine they would)? Would that make the proposal good? No, obviously not since they wouldn't be internalizing all of the casino's costs.
The relevant 'community' is the one which internalizes most of the costs, which in this case is the Province and not the local ward.
You make good points, but you assume the province wouldn't be any more likely to download costs to the City of Toronto if the casino was located here. If the province treated Toronto like they treat every other municipality in the GTA, the TTC would get provincial funding, we'd have an equivalent number of hospital beds per capita as the rest of Ontario, etc.
I believe that if the casino is located elsewhere the Province is much more likely to internalise costs, even if these involve handouts to Toronto. By building the casino right downtown, I fear (with a long history of examples to cite) that the province would not take full responsibility for most negative impacts. 'You let this happen', they'll say, 'you wanted the profit too', they'll argue, and we'll end up with a very small share of the benefits and a large share of the costs after it's all said and done.
Toronto already offers disproportionate amounts of aid to those who end up in poverty as a result of drug-addiction, alcohol addiction (while the province profits), and gambling addiction (while the province profits). If the province hasn't stepped up yet, I don't see them being of much help once we shoulder a greater share of gambling in the region within our borders.
If the province is going to force the casino onto downtown residents, I demand they come up with a plan which guarantees we won't have to deal with the costs without reaping the benefits. That's the bottom-line. I actually do trust them to protect the rest of Ontario.