LATE DISTRIBUTION
FOR COUNCIL OCTOBER 22, 1996
A14
ADMINISTRATIVE REPORT
Date: October 16, 1996
Dept. File No.
TO: Vancouver City Council
FROM: City Manager, in consultation with Social Planning, Permits &
Licenses, Law and Police
SUBJECT: CLUB KENO in Liquor Licensed Premises
RECOMMENDATION
A. THAT the Director of Legal Services bring forward an amendment
to the business license by-law to prohibit the operation of
electronic gaming devices, including CLUB KENO, as defined in
the previous amendment dealing with Video Lottery Terminals in
liquor licensed establishments.
B. THAT Council express concern to the Province over the lack of
consultation on the announced gaming expansion related to the
introduction of CLUB KENO lottery game
C. THAT Council authorize a delegation of the Mayor and Council
to meet with the Minister responsible for Gaming to
communicate the foregoing position as soon as possible.
CITY MANAGER'S COMMENT
The City Manager RECOMMENDS approval of A, B and C and notes that
if Recommendation A is adopted by Council, a by-law will be
presented for enactment later today.
COUNCIL POLICY
- 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 November 1st, 1994, Council passed a resolution opposing gaming
expansion including the introduction of Video Lottery Terminals
(VLT's) in charity casinos and licensed drinking establishments,
the expansion of electronic bingo, and an increase in the number of
charity casinos in the City of Vancouver or in adjacent areas where
the City could be impacted, and furthermore, that the City of
Vancouver considers gaming expansion a matter for determination by
the people of British Columbia through appropriate broad and local
involvement in a meaningful consultation program.
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;
And be it further resolved that the UBCM request the Provincial
Government ensure through policy that any new gaming activity,
including First Nations, be conditional on a portion of the revenue
being available to local government for mitigating measures, and
that any proposals for new gaming activity specifically address the
potential effects on charity gaming."
On September 19, 1996, the UBCM endorsed the following recommendation,
submitted by the UBCM Executive:
"That the BC Lottery Corporation be advised that, in keeping with
previous UBCM resolutions, firstly, the expansion into Club Keno
gaming should have included municipal participation in the
evaluation of the community impacts; and, secondly, that the
Corporation should now take action to comply with the resolutions
by establishing a process where, on request, local government can
require the endorsation of specific locations; and if not endorsed,
the expanded gaming at inappropriate sites meet local conditions."
PURPOSE
The purpose of this report is to provide Council with information
regarding introduction of the CLUB KENO game into establishments with
liquor licenses. The report analyses this particular gaming expansion
in the context of the existing gaming policy in British Columbia, and
provides a short profile of gaming expansion in the rest of Canada.
BACKGROUND AND DISCUSSION
British Columbia has had a Keno type of lottery since 1988. The initial
version was played once a week. In 1991, the Lottery Corporation
introduced BC KENO, which was played once a day. From a field of 56
numbers, 8 numbers were drawn; a player could choose a maximum of 6
numbers from the same field of 56. The more numbers that a player
matched with the drawn numbers, the bigger the prize.
Then, in November 1995, the British Columbia Lottery Corporation
introduced another revision of this game. The new version, called CLUB
KENO, has a few significant differences from the previous versions. The
field of numbers has been expanded to 80 numbers with a draw of 20, and
a player may choose up to 10 numbers out of the field. The frequency of
the draw is every five minutes and numbers drawn are flashed on a highly
visible display screen. A player could potentially bet up to a maximum
amount of $100.00 per play every five minutes.
On September 17, 1996, the Attorney General of B.C. announced that the
Provincial Government, through the B.C. Lottery Corporation, will
introduce the game CLUB KENO to liquor licensed establishments.
Staff have contacted representatives from the Lottery Corporation and
were given the following information:
The CLUB KENO game, presently available at any of the 2,250 outlets
where lotteries are sold will be introduced to some liquor licensed
facilities throughout the Province. The Lottery Corporation's intent is
to install up to a maximum of 800 new machines (500 as minimum). It
would take about six months to install all the machines. Revenue
projections indicate that the Lottery Corporation may get an additional
$30 million from this expansion.
The Lottery Corporation's intentions are to introduce machines only into
facilities where they already have "break-open accounts" (pulltabs).
There are 1,137 facilities with this type of account in the Province of
British Columbia and 67 of those accounts are located in the City of
Vancouver.
In order to analyze any potential impacts on the City of Vancouver,
staff need to know the actual or potential location of the new gaming
machines. Staff requested such information verbally on September 26,
1996, and in writing on September 30, 1996. Upon receiving a negative
response, a request for access to records utilizing the Freedom of
Information and Protection of Privacy legislation was filed on October
2, 1996. It is staff's hope that such information will become available
prior to the Province going ahead with its plan.
Problem Gambling & Other Social Implications
CLUB KENO is already available at corner stores where lotteries are sold
and staff have not been aware of any complaints or significant problems.
The introduction of this game into licensed facilities, however, creates
a completely different environment for players.
Staff are concerned about the potential problems arising from mixing the
consumption of alcohol and gambling. The literature and common sense
indicates that is a dangerous combination, particularly for problem
gamblers. The fact that CLUB KENO could be played at five minute
intervals may not be an issue elsewhere, but people will spend more time
in bars or pubs than they do in corner stores and the potential for
immediate feedback and group interaction when playing the game is a
factor to consider.
Staff are further concerned about the availability of this game in areas
already stricken by poverty and high degrees of alcohol consumption.
There is a direct relationship between the augmentation of gaming
availability and the problems associated with it (i.e.; problem
gambling, increased crime opportunities). Stress associated with
gambling problems may be linked to domestic disputes, spousal assaults
and other criminal activities. Studies confirm that gaming expansion
has direct repercussions on policing demands.
The Province has recently expanded gaming opportunities in other areas,
namely casino gaming (more games, increased betting limits and more
tables) and it has plans to expand Bingo operations, but what is clearly
missing from the announced changes is the issue of a comprehensive
program to assist problem gamblers. When the Provincial Government
announced its Gaming Policy Review in October 1994, it made a commitment
to implement such a program:
"The Provincial Government will provide assistance to problem
gamblers, and institute prevention measures. Planning will begin
in the near future. An advisory council, public education, a
toll-free hotline, counsellor training and treatment will be
included in the prevention and assistance measures."
Report of the Gaming Policy Review, Ministry of
Government Services (p. 22)
No such program exists today.
Staff is further concerned about government reliance on gaming revenue
(and a diminished ability to regulate the industry) and the possibility
that this particular expansion (CLUB KENO) may progress to further
expansions into VLT's.
Collaborative Approach
Historically, staff have been able to maintain a very good working
relationship with the Provincial Government bureaucracy on issues
dealing with gaming, particularly in relationship to charitable gaming.
We have in Vancouver, for example, an approval process for charitable
casinos that is smooth and efficient.
When the Provincial Government was conducting its gaming policy review
in 1994, it incorporated the August 1994 City of Vancouver Casino Review
into its policy development.
It is of concern then, that one provincial agency, the B.C. Lottery
Corporation, has been reluctant to provide information needed by staff
to assess any potential impact arising from the introduction of CLUB
KENO games into liquor licensed establishments, and that there is no
avenue for City input to the decisions being made. It is important to
remember that during the 1994 casino review, a similar situation arose
when the Lottery Corporation wouldn't release a prevalence study on
problem gambling.
BC Gaming Policy
In the 1994 gaming policy review, the Province did announce its
intention to bring lottery gaming - in the form of Video Lottery
Terminals - to bars, pubs and other adult-only establishments, but that
policy was later rejected in May 24, 1995 when the B.C. Government
Services Minister Ujjal Dosanjh announced that video lottery terminals
would not be introduced anywhere in B.C. The Provincial Government's
intentions to develop gaming in a moderate fashion were further
reiterated again in June 28, 1995 when instructions were given to the
Gaming Commission to ensure that its decisions and policies reflected
this moderate approach.
It is surprising now that the Province is again considering expanding
gaming activities to liquor licensed establishments.
One of the reasons why it is so easy for the province to change policy
directions is the fact that no Gaming Act is in place. The need to
draft legislation on this important industry was recognized in the 1994
Provincial Review, the Lord and Streifel gaming review in 1992 and in
the 1987 provincial gaming review. To date, however, no such Act
exists.
One of the direct repercussions arising from the lack of provincial
legislation is the inability of the Police to effectively deal with
illegal video gambling machines and other forms of illegal gambling.
Gaming in British Columbia is presently governed by provisions in the
Criminal Code of Canada, the Lottery Corporation Act and by the Horse
Racing Act. Other policies and regulations have an effect on gaming and
how it operates, but do not directly control it.
One such indirect restriction on gaming is found in the Policy Manual
from the Liquor Control and Licensing Branch of the Province of British
Columbia. It states:
"A licensee or his employee shall not authorize or permit gambling
in the licensed establishment... Licensees permitting pay-offs
from electronic games or permitting other forms of gambling will be
jeopardizing their liquor licensing privileges."
Policy A840, Policy Manual, Liquor Control & Licensing Branch
This restriction arises from Section 38 of the Liquor Control and
Licensing Act which outlines prohibitions against gambling. (The actual
title of this Section is Prohibition against gambling).
The same Act however, allows for an exemption when gambling is done
under the authority of Section 207 of the Criminal Code of Canada (which
allows a province or its agent to operate lotteries). In other words,
the Lottery Corporation has the legal ability to circumvent the intent
of the Liquor Control and Licensing Act and carry out business in
licensed establishments, provided that it is authorized by order of the
General Manager of the Liquor Control and Licensing Branch.
As of September 19, 1996, the General Manager has circulated a policy
directive (No: 96-02) allowing the B.C. Lottery Corporation to sell
"Keno" games in Class "A", "C", "D", "F" and "I" liquor licensed
establishments.
It is important to remind Council that the Casino Review Task Force, in
a memorandum dealing with issues related to VLT's, presented to Council
on October 31, 1994, indicated that it is difficult for a local
government to regulate provincially authorized activities.
Gaming Expansion In Other Jurisdictions
Over the last few years, gambling activities have been expanding
throughout Canada, generating hundreds of millions of dollars in revenue
to the different provincial governments as well as creating many social
problems. Government revenues range from $1.5 billion in Ontario to
approximately $270 million in British Columbia. According to The
Canadian Press, utilizing Statistics Canada data, Canadians are
supporting this industry by spending $166 per capita every year (1995
figures). The highest spenders are Albertans at $214 lost on lotteries,
video lottery terminals and casinos. The lowest average spent was in
the Yukon and Northwest Territories at $49. They arrived at these
figures by measuring the total amount gambled, minus the prize payouts,
divided by total population.
Governments are becoming more and more dependant on gambling revenue.
All four Atlantic Provinces depended on gambling for more than four per
cent of their total 1994 revenue. Nova Scotia, at 5.6 per cent, was the
most dependent. By far the biggest money generator is the video lottery
terminal. There are nearly 60,000 video lottery terminals now in use in
every province and territory except British Columbia.
There are consequences however. Problem gambling has grown, and demand
for services (where those services are available) has increased. In the
Province of Alberta, for instance, the 1-800 Gambling Help Line saw an
increase in telephone calls from 1,251 for 10 months in 1994/95, to
2,713 for the 1995/96 year. Annual total admissions of clients (to
counselling programs) also increased, from 1,323 in 1994/95, to 2,316 in
1995/96. The Alberta Alcohol and Drug Abuse Commission is spending over
$1 million a year to provide services to problem gamblers. The Province
of Ontario, which is in the process of expanding VLT's into racetracks
and charitable gaming halls (bars and restaurants may follow), has
pledged two per cent of the proceeds for research and treatment.
Other provinces also provide help for problem gamblers. In Manitoba for
example, the Addictions Foundation of Manitoba provide support to both
residential and non-residential programs. In New Brunswick, programs
for problem gamblers are administered by Addiction Services units of
regional Hospital Corporations. B.C. has no government-supported
programs for problem gamblers.
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It is important to note, however, that the effectiveness of treatment
programs for problem gamblers remains unclear. Most treatment programs
are relatively new and for the most part are modelled on alcohol and
drug programs. Further research is needed in this area.
Municipal governments in other provinces are also requesting more
participation in dealing with gaming expansion, particularly in relation
to video lottery terminals, and the repercussions they are having in
their communities. At the annual convention of the Alberta Urban
Municipalities Association, on September 20, 1996, a resolution was
passed to ask the province to share half of its annual $450-million
profit (from VLT's) with them. One of the concerns raised by some of
the delegates was the issue of too much money being taken out of their
communities.
In 1994, Vancouver City Council indicated concerns in relationship to
the introduction of VLT's and enacted a by-law to curtail their
introduction in the City of Vancouver.
CONCLUSION
Council's consistent position has been that any further gaming expansion
in the City of Vancouver should incorporate consultation with the local
government. Through consultation it may be possible to further assess
and understand social and safety repercussions as well as the necessary
mitigation measures.
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