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ADMINISTRATIVE REPORT SUBJECT: Expanded Gaming Activity
A.THAT Council, recommend to UBCM that it seek a meeting of the Joint Council established for provincial-municipal liaison to discuss gaming policy, prior to Council considering participation on a Committee to advise the Lottery Advisory Committee on procedures for municipal involvement in gaming.
B.THAT Council, reiterate its demand to the Provincial Government for a comprehensive Gaming Act before expanded gaming activity goes forward.
C.THAT Council, in collaboration with UBCM, request a meeting with the Minister of Municipal Affairs, Mike Farnworth, and the Minister of Employment and Investment, Dan Miller, to request the Government provide the opportunity for input from municipalities and the public, prior to setting gaming policy that impacts all British Columbians.
D.THAT Council advise the Minister of Municipal Affairs and the Minister of Employment and Investment, that Vancouver opposes the addition of slot machines as an expanded gaming option.
The City Manager RECOMMENDS approval of A, B, C, and D. The proposed expansion of gaming activities will have significant impact on local governments. It is important for the senior level of government to openly consult on the development of policy and procedures so that municipalities, the public, and gaming advocates are clear on the impacts of expansion.
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, andother 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 November 1, 1994, Council passed a resolution opposing gaming expansion including the introduction of Video Lottery Terminals (VLTs) 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 consider gaming expansion a matter of determination by the people of British Columbia through appropriate broad and local involvement in a meaningful consultation program.
On October 22, 1996, Council passed a resolution:
THAT the Director of Legal Services bring forward an amendment to the business license bylaw 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; and Council reiterated its concern over the lack of consultation on gaming expansion; and as Council authorized, a delegation of the Mayor and Council met with the Minister responsible for Gaming to communicate Council’s position.
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 anyproposals 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 endorsement of specific locations; and if not endorsed, the expanded gaming at inappropriate sites meet local conditions."
On March 13, 1997, the Provincial Government released to the community a new report titled "Gaming Review-Expansion Options and Implications" which outlines alternatives for gaming expansion within British Columbia. On the same day, through a Press Release,
the Provincial Government announced gaming expansion opportunities that include:
-the enhancement of charitable casinos by introducing higher betting limits, slot machines, and new games.
-the introduction of new "destination" style casinos
-the introduction of electronic Bingo in charity halls
-the creation of a gaming addiction program
-the establishment of a new Lotteries Advisory Committee to implement the Government’s new policy
In acknowledgment of local community impact the Provincial Government has introduced the following criteria which must be met before charitable and destination casinos can be approved by the Lottery Advisory Committee.
-They must have demonstrable local government support. Local governments will design their own appropriate approval mechanism.
-Adjacent communities will have input into the decisions-making process and will have the opportunity to demonstrate whether the presence of a new casino or bingo hall will have demonstrable impact upon them.
-Destination casinos, before being approved, will need a viable business plan. This plan must take into account infrastructure needs (i.e., water, sewer, extra policing, parking.)
The changes in policy are significant. It is clear that significant expansion of existing charity casinos is envisaged, and that significant gaming expansion will be encouraged. However, the policy has only been presented in press releases. There is no policy document that makesit clear how the new rules will operate, or what the general statements described above will mean in terms of process, resolution of disagreements, or appeals. There is no legislation or set of regulations that will provide certainty in the process for municipalities, the public or gaming advocates.
It is also clear that the Lottery Advisory Committee intends to see these changes take place rapidly - the introduction of slot machines will begin immediately, and the request for proposals for casinos will be issued within ninety days. It appears that the Government has delegated significant authority to the appointed Lottery Advisory Committee to implement these changes.
City Council and other municipalities, UBCM, and the public have not been offered an opportunity to comment on the new policies. There is an obvious potential for conflict between municipalities, between municipalities and native bands, and between municipalities and gaming advocates, including charities. The appointed Lottery Advisory Committee is not an appropriate venue for Council or the UBCM to provide input on municipal requirements, since it appears to be implementing a predetermined policy direction.
UBCM and the Province have established a protocol involving a Joint Council for discussion of issues. It would be appropriate for UBCM to request a meeting of the Joint Council for discussion of the obvious difficulties that the current proposals raise. Further, it would be appropriate for both Council and the UBCM to raise their concerns to the responsible Ministers. Staff recommend that council pursue both avenues.
The purpose of this report is to provide Council with information regarding the recent announcements by the Provincial Government for the expansion of gaming within the Province of British Columbia.
On March 13, 1997 the Government released a new report on gaming in British Columbia, titled "Gaming Review - Expansion Options and Implications". The report outlined alternatives for gaming expansion without recommending specific action, however, the report was used to guide the Government in its reappraisal of gaming policies.
The main component of the report has been written by the consulting group KPMG. Their report analyses the expanded gaming opportunities in British Columbia in the context of gaming expansion in Canada.
Some of the highlights of the report are:
-Increased expansion of the industry in Canada. Annual gaming revenues went from $4.3 billion in 1992/93 to $7.1 billion in 1995/96. The government share is now over $4 billion. The biggest revenue generator are VLT’s.
-British Columbia is the province with the least amount of gaming venues - no VLT’s and no full-service casinos. British Columbians spend, on average, the smallest amount of money in gambling, $231 per capita annually versus the national average of $350 ($448.6 in Saskatchewan and $447.4 in Alberta).
-The report highlights three scenarios for gaming expansion in B.C. (a small, medium and large scale expansion). A large scale expansion could potentially bring up to $500 million in annual revenues to the government. A large scale expansion however, would require a one-time capital investment of up to $330 million.
-Depending on the size of the expansion in British Columbia, up to 6,000 additional jobs, could be created.
-If the gaming market is expanded in B.C., it could detrimentally impact existing gaming venues, particularly charitable casinos and horse racing. The impact arising from the introduction of new gaming venues could be mitigated by allowing those existing gaming operations to be part of the new gaming activities (slots for example).
-Some of the gaming dollars going out of British Columbia (Nevada and Washington State) could be recaptured through the expansion of gaming opportunities in B.C.
-As gambling opportunities are expanded the government should accept responsibilities in the provision of treatment for problem gamblers. Similarly, additional police resources (paid from increased gaming revenue) have been used elsewhere to address potential areas of concern arising from gaming expansion.
On the same day, March 13, 1997, the Provincial Government outlined some aspects of their new Gaming Policy and Processes which will expand gaming opportunities within British Columbia. The review of the new initiatives, outlined in this report is based on news releases and an interview with Peter Clark, Chair of the new Lotteries Advisory Committee. The expansion will include:
-enhancement of charitable casinos by allowing higher betting limits, new games, and the placement of slot machines (Maximum allowable will be 30 tables and 300 slot machines)
-new "destination-style" casinos will be introduced and will operate under the same guidelines as a charity casino;
-a Las Vegas style casino will not be permitted, nor will VLT’s be introduced
-slot machines will be permitted in destination and charity casinos and race tracks (if requested). VLT’s and slot machines will not be allowed in bars and pubs
-electronic bingo will be permitted in Charitable Bingo Halls
-revenue from the expanded gaming activity will be largely used to help protect health care and education
-local impacts, additional costs (police and infrastructure) will be taken into account when destination facilities are established
-the Province will fund dedicated police and prosecution resources to address illegal gaming
-a gaming addiction program will be established by the Ministry of Children and Families
-there will be a minimum gaming age of 19 in British Columbia
-a new Lotteries Advisory Committee (LAC) has been established to implement the Government’s new policy. Peter Clark will chair; other committee members include: Richard McIntosh, retiring chair of the BC Gaming Commission; Lorna Romilly, Chair of the BC Racing Commission; Guy Simonis, President of the BC Lottery Corporation; Steve Letts, Director, Gaming Audit and Investigation Office of the Ministry of Attorney General.
The Lottery Advisory Committee will coordinate applications for charitable and destination Casinos and these will only proceed when the following three criteria are met that impact local municipalities.
1.They must have demonstrable government support. Local governments will design their own appropriate approval mechanism.
Both UBCM and the City of Vancouver were advised that local government approval is required if the gaming facility is within its jurisdiction. Our understanding is that without approval from the municipality, the application will not go forward.
Local government approval will be necessary for new bingo halls or for relocation of existing facilities.
2.Adjacent communities will have input into the decision-making process and will have the opportunity to demonstrate whether the presence of a new casino or bingo hall will have a demonstrable impact upon them.
Peter Clark has said that input from surrounding, not necessarily adjacent communities will be sought and that it is unlikely if there is unanimous opposition to the proposal that it would proceed. The Lottery Advisory Commission however, will review the substance of the disagreement and then make a recommendation to the Minister. Gaming activities on First Nations land will be treated in the same way: that is, input must be sought if a proposal is adjacent to their lands and surrounding local government input must be sought if gaming is proposed on band lands. Peter Clark has invited the UBCM to advise the Lottery Advisory Commission on an appropriate mechanism to seek this input.
3.Destination casinos, before being approved will need a viable business plan. This plan must take into account infrastructure needs (i.e. water, sewer, extra policing, parking).
In order for destination casinos to be developed, local governments must be involved since infrastructure, policing and traffic management needs are under municipal jurisdiction.
It is important to note that this Policy announcement and the Gaming Review itself was done with minimal municipal involvement and no public consultation.
Policy is being determined by the Lottery Advisory Committee and will be recommended to the Minister for Cabinet Approval.
Selection Criteria and the size of casinos is established. Still to be resolved is the re-design of the existing split of proceeds for charitable casinos. The intent will be to increase the government share but protect at the same time existing charitable revenues and provide for its growth. A policy decision on the revenue split of destination casinos has not be determined.
Council and the UBCM have repeatedly communicated to the Provincial Government their desire to be consulted on any gaming expansion. Council has requested that before the Provincial Government does any expansion of gaming, that there should be a Comprehensive Gaming Policy, supported by Provincial legislation. Consultation is particularly important because of the potential impacts arising from the recently announced policy directives. For example:
-The location of additional casinos (charitable or destination) in Vancouver or in its vicinity, including First Nations land, may result in disagreements between the different interest groups with no clear mechanism to resolve disagreements or appealdecisions.
-It seems that Gaming Policy is being developed by the Lottery Advisory Committee and is being recommended to the Minister. There is no clarity on the process from a local government perspective. Open, public dialogue among the stakeholders is
not evident. There is no proposal for legislation or a comprehensive gaming policy. In order to clarify the Provincial Government position on policy, Peter Clark, Chair of the Lottery Advisory Committee, has offered to meet with Council.
-Peter Clark advises that higher limits and the placement of slot machines within casinos will be implemented immediately. The Lottery Advisory Committee will issue requests for proposals for destination casinos within 90 days.
-Current B.C. Lottery policy allows sales of lottery tickets to 16 year old individuals, while the expanded gaming sets the minimum gaming age at 19.
-Council has opposed the introduction of electronic gaming services such as VLT’s into casinos. Ill effects from slot machines are identical, with harm only a matter of degree, as VLT payouts accelerate addictive behaviour.
-There is the potential for 1,500 slot machines within the five charity casinos within Vancouver. Peter Clark advised local government that they will have no ability to stop slots from going into the facilities or into any additional casinos. It is anticipated, in order to accommodate the slot machines, that some of the existing charities will need to relocate. The Provincial Government cannot and will not force local government to change zoning regulations to facilitate relocation. However, if local government delays or frustrate the process for charities, the Provincial Government is prepared to take local government to Court.
Council’s consistent position has been that any further gaming expansion in the City of Vancouver should incorporate consultation with the local government and be done within the framework of a Comprehensive Gaming Strategy.
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