ADMINISTRATIVE REPORT
Date: March 18, 2003
Author/Local: Mario Lee/871-6034
RTS No. 03295
CC File No. 2633
Council: March 25, 2003
TO: |
Vancouver City Council |
FROM: |
Director of Social Planning |
SUBJECT: |
Gaming News Update |
INFORMATION
This report is submitted for information.
CITY MANAGER'S COMMENTS
The City Manager puts this report forward to provide Council with an update on gaming issues because some casinos are poised to close or move outside the City of Vancouver. Given the current revenue generated for the City by the casino operations, their departure from the City will leave us with financial challenges. The City Manager also notes that the Province may reconsider the issue of slot machines at race tracks, which could impact the current operations of the Hastings Racecourse. Existing Council policy does not allow slot machines in the City of Vancouver.
The City Manager submits this report for Council's INFORMATION.
COUNCIL POLICY
Over the years, Council has enacted a number of policies related to gaming, and has responded to initiatives from the provincial Government on a number of occasions. Following are some of the relevant policies and responses:
· On January 27, 1987, Council asked the Attorney General to begin a review of the regulations governing the operation of casinos as soon as possible, and that the
City, and other concerned groups and individuals, be given the opportunity to express in detail their concerns and suggestions for improvements. Council also expressed its concern that revisions to casino gambling regulations adhere to basic principles, including that the maximum financial benefits accrue directly to the social service agencies sponsoring the events; and that appropriate, strict controls be in place to discourage or prevent possible negative social consequences, such as compulsive gambling or criminal activity.
· On July 26, 1994, Council requested that the Provincial Government ensure that there will be municipal participation in the evaluation of community impacts for any expansion to gaming activity, including video lottery terminals, gaming on First Nations lands and major casinos. Council further requested that gaming legislation or regulations include municipal endorsement of specific gaming locations prior to approval, and that approval of any new gaming activity be conditional on a portion of the revenue being available to local government for mitigation measures.
· On October 7, 1997, Council adopted amendments to the Zoning and Development By-law to permit a limited number of charity-operated casinos in certain areas of the city and to prohibit casinos with slot machines. The amendment prohibiting casinos with slot machines was challenged by the B.C. Lottery Corporation and the City successfully defended the By-law in the B.C. Supreme Court and Court of Appeal.
UBCM POLICY
· On September 23, 1994, the UBCM unanimously endorsed the resolutions submitted by the City of Vancouver:
"Be it resolved that the UBCM request the Provincial Government to ensure that there will be municipal participation in the evaluation of community impacts of any expansion to gaming activity, and that gaming legislation or regulations require municipal endorsement of specific gaming locations prior to approval."
· On June 17, 1999, UBCM signed a Memorandum of Agreement with the Province, whereby the Province fully affirms the municipal powers related to casino location, relocations and scope and type of gaming in gaming facilities within municipal boundaries.
PURPOSE AND SUMMARY
This report provides information to Council on some important recent developments in the casino industry, particularly in regards to regional relocations of casinos, including the recently announced relocation of the Great Canadian Casino in Richmond. These relocations, in which the ability to have slots plays an important role, may have significant impacts for the City of Vancouver.
This report also informs Council about a letter received from Hastings Entertainment Inc., the operators of Hastings Racecourse, in which the City is being asked to approve the addition of slot machines at Hastings Racecourse.
BACKGROUND AND DISCUSSION
Casino Issues - Recent Developments
On February 18, 2003, the Planning Committee of Richmond's City Council gave first reading to a Bylaw authorizing the rezoning of portions of land on River Road and Bridgeport Road to allow for the relocation of Great Canadian Casino from its existing location at Number 3 Road. This new development will be a comprehensive development that will consist of a full-fledged casino, including slots, a 200 suite Hotel, food services, a 650-seat dinner theatre, a conference area, a fitness centre, and a marina (already existing). The site will also accommodate Great Canadian Casino's Head Office.
This expansion is possible due to a negotiated settlement between Great Canadian Casino and the Provincial Government. In the Fall of 2002, Great Canadian Casino sued the Province and the BCLC for having been excluded from the Provincial announcement early in 2002 that authorized only four casinos to expand and/or relocate. As part of the settlement, Great Canadian Casino has agreed to close down one of their two casinos in Vancouver, most likely the one located in the Renaissance Hotel. The Lottery Corporation has informed us that the closure of one of the Great Canadian casinos won't be implemented until the Richmond casino is ready for operation, probably sometime in 2004.
Two other Vancouver-based casinos are considering relocating to other municipalities. The Royal Diamond Casino located at the Plaza of Nations (presently closed due to a labour relations dispute) and the Grand Casino, located at the Quality Inn on Fraser and S.E. Marine Drive, were authorized by the provincial government to relocate and bring in slot machines to their operations. There are other municipalities in the region, such as Surrey and Langley, that have already indicated a willingness to consider the hosting of a casino with slots in their jurisdiction. We understand that there are other municipalities that may have been approached as potential casino hosts as well.
Considering the Lottery Corporation's commitment to meet provincial budget targets by increasing gaming revenues for the next two years, and also considering the casino operators' authorization to bring in slot machines and relocate, it is quite likely that the move for the Royal Diamond and Grand casinos will be implemented by 2004.
The Lottery Corporation has also indicated to staff that as their regional plan for casinos is implemented, they may also consider the closure of another casino in Vancouver.
There are ten casinos in the Greater Vancouver area, five are in the City of Vancouver:
1. Grand Casino - Vancouver - no slots (approved for slots by the Province)
2. Great Canadian Casino Holiday Inn - Vancouver - no slots
3. Great Canadian Casino Renaissance - Vancouver - no slots
4. Mandarin Centre - Vancouver - no slots
5. Royal Diamond Casino - Vancouver - no slots (approved for slots by the Province)
6. Gateway Casino - Burnaby - with slots
7. Great Canadian Casino - Richmond - no slots (approved for slots by the Province and Municipality)
8. Great Canadian Casino - Coquitlam - with slots
9. Royal Towers Casino - New Westminster - with slots
10. Royal City Star - New Westminster - with slots
The following map illustrates the location of the ten casinos in the Greater Vancouver area:
In summary, it quite possible that within a year, three and potentially four, of the five Vancouver-based casinos will no longer be in operation in the City of Vancouver. Also, all of the casinos outside Vancouver will have slot machines.
Existing Council policy is to oppose the introduction of slot machines in the City of Vancouver. Over the years, there have been many municipalities in British Columbia, regardless of whether they have casinos or not, that have opposed the introduction of slot machines, but the City of Vancouver is the only municipality hosting casinos that opposes slot machines.
Hastings Racecourse
On March 10, 2003, Mr. Phil Heard, the President & CEO of Hastings Entertainment wrote a letter to the City (Attached as Appendix A), asking Council to approve the addition of slot machines at Hastings Racecourse. The letter argues that the addition of slot machines would be of tremendous benefit, as it would allow for the enhancement of purse money, the potential creation of another 450 jobs, above and beyond the existing 800 jobs, and would help ensure the future financial viability of horse racing in Vancouver.
The addition of slot machines to horse-racing tracks is a common development throughout Canada. Ontario's horse-race tracks have slot machines distributed among 15 facilities. The Province of Alberta has introduced slot machines at horse-race tracks in Edmonton, Calgary and Lethbridge. The introduction of slot machines in both Ontario and Alberta has been utilized as a strategy to enhance and revitalize a horse racing industry that has been in decline.
Current provincial policy does not allow for slot machines to be located at horse-race tracks. Initial contacts with the BC Lottery Corporation indicate that the provincial government may be willing to explore such an option. As the owner of the lands and facilities at Hastings Park, the City is very much interested in the future viability of the race track. At present, monies collected from the race track operators help to support the restoration of Hastings Park. If slots are allowed at horse-racing tracks, and Vancouver continues to oppose slots, it is possible that the race track operators may wish to relocate to a municipality willing to accept slot machines.
Financial Implications to the City
This report identifies three areas of financial implications for the City. First, the relocation and closure of Vancouver-based casinos will diminish the amount of revenue collected from casino operations. Provincial regulations provide that 10% of casino revenue goes directly to the municipality in which the casino(s) is located (16.7% in the case of destination casinos). During the last year, Vancouver received $3.7 million from casinos located in thecity. In the year prior to that, the City received $3.6 million. If three or four casinos close down or move from Vancouver, we can anticipate a loss of about $3 million.
Second, the financial viability of the Hastings race track is in question. The City currently receives approximately $750,000 annually from the track and could loose that revenue if the track moves to another municipality or ceases operations.
Third, based on the experience from other jurisdictions where slots are allowed, if the City was to permit slot machines at a gaming facility, the potential for augmented revenue is significant. The City of Burnaby for example, collects $6.3 million a year from one casino with slots.
CONCLUSION
This report presents an update on gaming issues in the City of Vancouver. Three or four of the Vancouver-based casinos are planning on either moving out of the City or closing operations, in part due to the City's ban on slot machines. This will affect the City's share of casino revenue. At the same time as this is unfolding, the operator of the Hastings Racecourse has requested Council to approve the installation of slot machines at the race track.
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