Agenda Index City of Vancouver


Date: March 9, 1998

Author/Local: M. Lee/6034

CC File No. 2633-1


Vancouver City Council


Director of Community Service, Social Planning in consultation with the Director, Community Planning and Director of Legal Services


Information on Rhodes’ Report on Gambling Policy


The Director of Community Services, Social Planning presents this report for Information.


The City Manager presents this report for Information.


·On November 1, 1994, Council passed a resolution opposing gaming expansion including the introduction of 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 March 25, 1997, Council reiterated its demand to the Provincial Government for a comprehensive Gaming Act before expanded gaming activity goes forward. Council further advised 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.

·In addition, between January 27, 1987, and April 22, 1997, Council passed several additional related resolutions expressing concern that maximum financial benefits accrue directly to the social service agencies sponsoring casino events; that controls be in place to discourage or prevent possible negative social consequences, such as compulsive gambling or criminal activity; that revenues be made available to mitigate community impacts; that there be by-law amendments to prohibit electronic gaming devices; and that Council object to the Provincial Government’s approval of an increase in the betting limits and expansion of gaming hours.

·On October 11, 1997, Council made amendments to the Zoning & Development By-law and approved new policies and regulations to deal with casino use in the City of Vancouver.


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."


The purpose of this report is to inform Council of proposed changes to the charitable gaming model in British Columbia arising from the Frank Rhodes’ Report on Gaming Policy, and how these changes could affect City regulations and charities in the City of Vancouver and other potential implications.


On March 2, 1998, Minister Michael Farnworth released a report prepared by Frank Rhodes in the aftermath of the Court decision handed down on January 14, 1998 by Mr. Justice Owen-Flood of the British Columbia Supreme Court. The Court decision held that the method implemented by the provincial government for the collection and distribution of charitable gaming money was invalid.

Council’s Request

At the Council meeting of March 3, 1998, Council requested a report back from staff to provide information on:

A.The implications of the two recommended models identified in Frank Rhodes’ report; and

B.Where electronic bingo cards are currently being used and whether the use of these cards complies with the City’s Zoning and Development By-law.


Summary of the Rhodes’ Report

On January 19, 1998, Frank Rhodes was commissioned by Minister Dan Miller, the Minister Responsible for Gaming at the time with instructions to:

·implement measures to ensure a continuation of charitable gaming,

·initiate a review process that will lead to the establishment of an interim gaming regime,

·identification of longer term objectives.

Rhodes’ review did not question one of the main stated policy objectives of the Provincial government, namely, the utilization of gaming for the enhancement of provincial revenues. The review dealt mostly with the mechanisms for collection and distribution of gaming money.

Consultation was undertaken with gaming operators and charities. Municipal issues were not reviewed, nor were municipalities consulted. The report recognizes however, that municipal issues will have to be addressed in implementation of selected policy options.

The Rhodes Report identifies six potential models for the collection and distribution of charitable gaming proceeds, and recommends that government implement one of two models. The summary of the two recommended models (options 4 and 5) included in the Rhodes Report is appended to this report (APPENDIX A).

If either of the two recommended models is implemented, it will provide for a guaranteed income of $125 million to the charities for the fiscal year 1998/99 (charities received $112 million in 1996). Either of these models will also provide $174 million of revenue for government (government received $14 million in 1996).

Both of the two recommended models separate the conduct and management of gaming into two different streams:

Option 4 proposes the separation of Casino Gaming and Bingo Gaming. Casino Table Games, Slot Machines, electronic and linked Bingo are to be conducted and managed by Government under Section 207 (1)(a) of the Criminal Code. Paper Bingo and Ticket Raffles are to be conducted and managed by Charity Licensees under Section 207 (1)(b) of the Criminal Code.

Option 5 contemplates the consolidation of most of the gaming activity under the conduction and management of Government, with the exemption of Independent Bingo Sites (a facility in which bingo is conducted on a part-time basis).

A. Implications arising from Rhodes’ Report

1. Gaming regulations in the Province as currently understood

Historically, most forms of gambling have been illegal in Canada, but a series of reforms to the Canadian Criminal Code in 1969 has allowed for expanded public gaming activities to take place, under section 207(1)(a) and 207(1)(b) of the Criminal Code.

In 1970, an Order In Council was passed in British Columbia, to permit the province to conduct public gaming and a Licensing Branch was created in the Ministry of the Attorney General. Charity casinos and bingos were then allowed to legally operate.

There are 17 charitable casinos presently in operation, 5 of them are located in the city of Vancouver. Vancouver is also home to 3 Bingo Halls (41 province-wide), including the only Bingo Hall that operates electronic bingo (Starship Bingo). These facilities operate under a partnership between government (regulator), charity organizations (holders of the licenses) and management companies. The Starship Bingo operation is self-managed by a group of 62 Vancouver-based charities.

A revenue-sharing formula that used to offer a percentage of gaming proceeds to government, management companies and the non-profit charitable organizations has been replaced by a new approach, whereby the charities revenues from casinos and bingos are pooled into a trust account and charities are guarantee a set amount (presently at $118 million but proposed by Rhodes to increase to $125 million). The legality of the earlier formula, particularly the aspect of government collecting a portion of the revenue has been declared invalid by the ruling of Justice Owen-Flood this last January 14, which precipitated the Rhodes review.

In the confusion generated by the Court ruling, charities are still owed monies that were incorrectly collected by the provincial government ($24.5 million as of January 21, 1998) during 1997 and 1998. The provincial government is also facing another Court challenge related to the 10% collected from casinos and the 2% collected from bingos ever since the revenue splits were introduced in 1987.

2. Impacts to charities and social services grants

Even though the "Community Chest" model is one of the six outlined models in the report, it does not fall within the report's recommendations, therefore, staff has not fully analysed the merits of this approach. Contrary to the "Community Chest" model which provides for total government control of funds and which provides grants to the charities, the "trust" model proposed in the report, pools casino and bingo revenues in a trust which can be accessed by individual charities via the B.C. Gaming Commission.

Charities have indicated concerns as the government plays a bigger role in the conduction and management of gaming activities. Some of the charities stated concerns are:

·Government priorities may change over time, thereby changing the distribution of funds and threatening the financial stability of organizations that get left out.

·Government control of all charitable gaming dollars may be subject to political interference in the distribution of grants.

·Revenue going to charities may be reduced over time. Unless the charity rights are entrenched in legislation there is no guarantee that revenues will remain constant.

·Government control of charity gaming may increase bureaucracy and administration costs, and therefore reduce charity revenue.

·Public support for gaming may diminish or even disappear, as the original intent of the gaming system was to support charities.

Some of these fears and concerns may not be resolved until such a time when there is a Gaming Act that entrenches the rights of charities in the Legislation.

If revenue to charities is jeopardized over the long-term, the services that many of these organizations provide may be underfunded, which in turn may put extra pressure on City resources.

3. Zoning and Development By-law and other applicable by-laws

Currently under the City's Zoning and Development By-law, gaming is regulated as a casino use. Two classes of casinos are defined: Class 1-Casinos - charity casinos without player-operated VLTs and slot machines are permitted in several zones; Class 2-Casinos - non-charity casinos with or without slot machines are prohibited anywhere in the City. At the present time, the provincial government relies on private operators and charitable organizations to carry out most gaming activities.

Both of the options recommended in the Rhodes Report change the existing relationship between the provincial government and the casino operators. A fundamental change in both of the options is to move a substantial portion of gaming activities which are currently managed and conducted by charities under s. 207(l)(b) of the Criminal Code to have them conducted and managed by the government under s. 207(l) (a) of the Code. This could have fundamental ramifications on the City's power to regulate what could become essentially a provincial crown operation. However, the Rhodes Report offers options that make it difficult to determine whether the conduct and management of the gaming activities will be by a Crown agency or not.

Option 4 provides for the conduct and management of casino table games, slot machines, electronic and linked bingo by the provincial government. The conduct and management of paper bingo and ticket raffles would be by charity licensees. A change under Option #5 is that bingo in "registered halls" would be conducted and managed by the government; further, electronic gaming could be available in these bingo halls. This could substantially expand the possibility for electronic gaming beyond the existing permitted Casino Class-1 in the City's Zoning and Development By-law. Changes to the definition of casinos in the Zoning and Development By-law and broadening of the prohibition to exclude electronic gaming in association with any use anywhere in the city will be required.

4. Provincial consultation with Municipalities

The Press Release that was issued by Michael Farnworth, the Minister responsible for Gaming, at the time of the release of the Rhodes’ Report, indicated that municipalities will be consulted. At the time when this report was circulated, staff was unaware of any specific initiatives to that regard. This is a serious concern in light of the recommendation given by Frank Rhodes that government should implement one of the suggested models by March 31, 1998.

City Staff is coordinating efforts with colleagues from the UBCM to respond to any initiative in this regard.

5. Interim and long term considerations

Even though the Rhodes Report deals mostly with immediate issues, it does contain a number of longer term recommendations. The most significant one relates to the fact that this Province still needs a Gaming Act which could provide for a firm foundation for effective public gaming policy. Rhodes rejects, however, the possibility of Legislation being brought forward for this calendar year, but rather recommends that a Gaming Act be introduced to the Legislature sometime in 1999.

B. Electronic Bingo Cards

Some Bingo halls are testing the use of an electronic bingo handset, which allows a player to be mobile without having to sit on the same spot to play bingo. This handset unit allows a player to play multiple cards and each time that a number is entered, it automatically covers all cards. The handset notifies the player when it wins.

This machine can be played in coordination with the going game and as stand-alone. As a stand-alone it has properties that could be viewed as a VLT. The Lottery Corporation has notified us that for the time being they are not testing this machines as stand-alone (personal play). Staff will further investigate this item. For more details on this machine, please see APPENDIX B.


Staff will continue to monitor the situation and will work together with the charities and other municipalities in anticipation of possible impacts arising from the implementation of a new model for charitable gaming.

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