Agenda Index City of Vancouver

ADMINISTRATIVE REPORT

TO:

Vancouver City Council

FROM:

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

SUBJECT:

UBCM Position Paper on Gaming Act

 

RECOMMENDATION

CITY MANAGER'S COMMENT

COUNCIL POLICY

· 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.

UBCM POLICY

On September 23, 1994, the UBCM unanimously endorsed the resolutions submitted by the City of Vancouver:

PURPOSE

The purpose of this report is to seek Council's endorsement of the submission, including its recommendations, being put forward by the Union of British Columbia Municipalities (UBCM), relating to the new Provincial gaming legislation.

BACKGROUND AND DISCUSSION

The Minister responsible for gaming, the Honourable Mike Farnworth, appointed Mr. Frank Rhodes on April, 1998 to initiate a process of consultation leading up to the development of a White Paper and Draft Legislation on a new Gaming Act for British Columbia.

The UBCM is taking part in the consultation process, and is submitting recommendations on seven different items (see APPENDIX A).

City staff has been working with UBCM staff and have provided input to the draft recommendations that are attached to this report. The recommendations, as they stand, are consistent with City policy, and furthermore, are fundamental to reaffirm the role of municipalities in relationship to gaming issues at the local level.

The recommendations deal with a variety of policy areas that Vancouver City Council has consistently expressed concern about. Most of the recommendations are self-explanatory, but there are a few that have additional comments:

1. A CONSULTATION MODEL THAT INCLUDES CONSULTATION WITH THE UNION OF B.C. MUNICIPALITIES

Aside from endorsing on-going consultation with the UBCM, the City of Vancouver has demonstrated that consultation with the community at-large could utilize different available mechanisms. A good example is the 1994 Casino Gaming Review, where the City of Vancouver distributed a Discussion Paper, encouraged letter submissions, held a series of community meetings and conducted public polling. That process was very successful and helped City Council in their policy decisions.

2. THE ABILITY OF LOCAL GOVERNMENTS TO DETERMINE THE EXTENT AND TYPE OF GAMING IN THEIR COMMUNITIES

This is a crucial policy issue that the City of Vancouver has been concerned with for a number of years. Vancouver was the first Municipality in British Columbia that defined casino use in its Zoning and Development By-law.

Vancouver City Council believes that all B.C. communities have the right to determine whether
any or expanded gaming should occur in their communities.

3. ALLOCATION OF GAMING REVENUES: LOCAL GOVERNMENT COSTS

The UBCM recommendation clearly identifies not only the need for revenue being available to local governments for mitigating measures, but also identifies the disparity that is part of the present model of expansion, whereby funds are made available to municipalities hosting new facilities, but no compensation is being offered to municipalities with existing facilities.

4. A FORMULA TO DETERMINE THE ANNUAL ALLOCATION OF REVENUE TO A CHARITABLE TRUST FUND

5. ALLOCATION OF GAMING REVENUE: CHARITIES

Vancouver-based charities have become dependant on gaming revenues. Many of the social agencies that deliver programs in Vancouver receive both gaming revenue and City of Vancouver grants. The permanency of gaming revenues together with a fair and open process for distribution of revenues are stated goals of the City of Vancouver.

6. ALLOCATION OF GAMING REVENUE: ROBLEM GAMBLING

The City of Vancouver has consistently called for the implementation of a comprehensive Problem Gambling Program. This is particularly crucial in light of the more addictive forms of gambling that have been introduced in the last period, namely slot machines and other forms of electronic gambling such as Club Keno in liquor-licensed establishments.

7. ECONOMIC AND SOCIAL IMPACT STUDIES

As the gambling industry expands and becomes more entrenched in communities, this type of analysis is essential. Again, during the 1994 Casino Review in Vancouver, City staff were able to fully study all the potential economic and social impacts arising from the proposed casino development in the City's waterfront. The review was an important component that enabled City Council to take the policy decisions that they took.

CONCLUSION

As stated in the UBCM submission, once the White Paper and the draft Gaming Act are released by the Provincial Government, Council will have another opportunity to further express concerns and opinions. Staff recommend endorsement, at this time, of the UBCM submission on a Gaming Act.

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DRAFT

UBCM SUBMISSION ON A GAMING ACT

1. INTRODUCTION

The Union of BC Municipalities (UBCM) is an association that has been representing the interests of local government for nearly 100 years. Today its membership includes all 180 local governments in the province. Although membership is voluntary, every municipality and regional district is a member. UBCM is directed by an Executive with local elected officials representative of all regions of the province. The Executive meets regularly and one of its key roles is to convey the policy positions of local governments to both the Federal and Provincial Governments.

This past year, local governments in B.C. achieved a milestone - local governments have now been recognized as an independent, responsible and accountable order of government with the enactment of Bill 31. This accomplishment has not been attained anywhere else in Canada. This marks the culmination of a decade long campaign for a new local government constitution. Incremental steps have been taken along the way through the Protocol on Sharing Environmental Responsibilities, (with Ministry of Environment, Lands and Parks), the Memorandum of Understanding on local government involvement in treaty negotiations, several legislative changes that required consultation with UBCM and finally, the Protocol of Recognition that was signed with the Provincial Government in 1996.

2. BACKGROUND TO UBCM SUBMISSION

The decision by the Provincial Government to issue Request for Proposals for expanded gaming, cemented the importance of local government in gaming matters. The RFP explicitly recognized the UBCM position that local government approval was a requirement and that surrounding local governments must be consulted. This decision, coupled with various other provincial gaming announcements, resulted in the establishment of a Gaming Committee of the UBCM Executive. The Committee composed of Councillor Lynne Kennedy, Chair, Vancouver; Mayor Corinne Lonsdale, Squamish; Councillor Patricia Wallace, Kamloops; and Councillor Judy Higginbotham, Surrey was charged with the following responsibilities:

· policy implementation - to implement the 1996 UBCM policy paper recommendations (including a gaming act) and 1997 resolutions.

· monitor and share information - monitor government activities and court actions and share information on gaming related matters with members.

· policy development - to develop new policies as required to be recommended to Executive and/or Convention.

· represent UBCM - to represent Executive in consultations with the government.

In April 1998, the Provincial Minister responsible for gaming announced his government's decision to create a gaming act for B.C., starting the establishment of a Gaming Project Working Group chaired by Mr. Frank Rhodes. The primary objective of the Working Group is to prepare a white paper and draft gaming act for the Minister's consideration. A key stakeholder in this process, the UBCM has prepared this submission paper as an explanation and summary of the principal recommendations endorsed by its membership.

3. UBCM KEY PRINCIPLES FORM THE BASIS FOR RECOMMENDATIONS

In reviewing previously endorsed UBCM gaming policy papers and resolutions, several principles emerged that form the basis of local governments' position on gaming. The six principles listed below for the basis of the nine recommendations that we have proposed in our submission.

The guiding principles for the Gaming Act that reflect UBCM members views are

· that local government:

· the Provincial Government:

While these six principles focus on key local government issues, there are also a number of additional issues identified in Section 5 that should be considered and discussed in the preparation of a gaming act. UBCM considers each of these issues as important and worthy of inclusion in the Act.

4. UBCM RECOMMENDATIONS FOR THE GAMING ACT

UBCM has, since 1994, called for a comprehensive Gaming Act that would guide and coordinate the actions of every gaming agency and its activities in the province. Members have requested that the Act be developed under the auspices of a full public review process.

There is currently no defined or secure role for UBCM in developing or considering changes to gaming policy that affect local government nor is there a role for individual local governments in determining gaming related land use, the level of gaming in their communities or sharing gaming revenues.

The UBCM membership had consistently supported the need for a comprehensive gaming act that would maintain integrity and fairness and provide a measure of stability to communities, the industry and charities. Local government authority over land use for gaming activity and development should be protected and the ability of communities to determine the appropriate level and type of gaming for their communities.

Recommendation # 1

A CONSULTATION MODEL THAT INCLUDES CONSULTATION WITH THE UNION OF B.C. MUNICIPALITIES

UBCM recommends a public consultation process relating to gaming issues in British Columbia. This process should include consultation with the UBCM.

Working relationships and an effective consultation process between provincial and local government can lead to valuable resolutions. Structured consultative models that involve the UBCM and several Ministries have proven to be successful in developing sound policy solutions. Due to the highly sensitive issues around gaming, the need for such a consultative model is essential. The most effective models are based on negotiated protocol agreements, memorandum of understandings and active working committees. The consultative model between the Ministry of Environment, Lands and Parks, Ministry of Municipal Affairs and the UBCM dealing with the Sharing of Environmental Responsibilities is an example of a protocol that has been relatively successful.

As the order of government closest to their constituents, local governments are the first to hear from their constituents if they have a concern. Local residents have grown accustomed to the many opportunities available to them at the local level to express themselves the public hearing processes, referenda, etc. Increasingly, citizens are seeking opportunities to influence the decisions that may affect their immediate neighbourhood. This has been the case for many communities with respect to gaming policy. A number of community groups and organizations are seeking an opportunity to provide input as gaming policy unfolds.

The gambling industry has evolved in the past 10 years to more than a two billion dollar industry. There have been significant changes to the B.C. gaming model in the past year and virtually no input from the public. The consultation process has never allowed the widespread public, easy access to the policy makers to present their views.

A number of mechanisms for meaningful consultation are available and should be considered such as a 1-800 phone line, Internet website, focus groups and polling with results made available to the public.

Recommendation #2

THE ABILITY OF LOCAL GOVERNMENTS TO DETERMINE THE EXTENT AND TYPE OF GAMING IN THEIR COMMUNITIES

UBCM recommends that the right of local governments to determine the extent and type of gaming in their communities to recognized in the Gaming Act.

The issue of community values has become an integral part of municipal governments. It is this issue that is central to local governments' insistence that there be a mechanism for communities to accept or reject new gaming facilities, the extension of existing facilities, and to generally determine the appropriate extent and type of gaming activity in their communities.

There is historical precedent for local government involvement in these types of gaming policy decisions. The consultation policy initiated in 1987, by the B.C. Gaming Commission, granted municipalities the ability to oppose or support additional gaming venues and to determine the most appropriate location. In 1998, the Lotteries Advisory Committee increased local government participation in their proposal call for Destination Casinos and Bingos. Local governments were able to support or oppose projects and were included in the evaluation proposals of their community.

As part of local government's involvement in gaming matters, municipal powers relating to land use and development must be recognized and preserved. B.C. Courts have consistently upheld these powers, and the provincial government has traditionally acknowledged local government authority over land use decisions relating to gaming locations.

Recommendation #3

ALLOCATION OF GAMING REVENUES: LOCAL GOVERNMENT COSTS

UBCM recommends that any local government hosting gaming facilities be allocated a share of gaming revenue to mitigate increased costs for gaming.

The Province recently acknowledged local governments need for a share of gaming revenue to offset additional costs to mitigate the costs associated with increasing gaming activity. The Lotteries Advisory Committee's Request for Proposal for Destination and Charitable Gaming Facilities, July 31, 1997, stated that the "Host Local Government" would receive the equivalent of 1/6 of net gaming income from the gaming facility (approximately 9 - 10% of the total win). The gaming revenue was intended to assist in an infrastructure development or for other purposes, such as policing that would generally benefit or mitigate the negative effects on the community. This is a reasonable approach for communities with destination bingo and casino facilities. There are however, communities with charity bingo and casinos and other forms of gaming that incur additional costs to municipalities not entitled to share of revenue. This disparity should be corrected.

The negative social impacts of gambling have been acknowledged by the government and the gaming industry. The issue of illegal gaming has been identified in gaming policy reviews dating back to 1987 in the B.C. Gaming Commission's Report on the Status of Gaming in British Columbia, January 1998. Illegal gaming activity impacts government gaming revenue and brings with it associated serious criminal activity. The Government announced in 1994 that additional police officers and financial resources would be forthcoming to address the problem of the estimated 10,000 illegal VLT's in British Columbia.

In addition to the potential for increased policing, other costs to local government could include: expanded by-law enforcement due to increased need for traffic management and parking requirements, infrastructure and servicing to new facilities, and ongoing maintenance.

Recommendation #4

A FORMULA TO DETERMINE THE ANNUAL ALLOCATION OF REVENUE TO A CHARITABLE TRUST FUND

UBCM recommends that there be a provision in the Gaming Act for a formula to determine the annual allocation of revenue to the charitable trust fund. The formula must reflect the increase in government gaming revenue in the annual allocation to the charitable trust fund.

The distribution formula from the charitable trust fund that was established by a Lottery Act Regulation in the Fall of 1997, was subsequently struck down by the Courts. In June 1998, when charitable casino gaming was eliminated, one source of funding for charities was no longer available. The impact of this significant change to charitable gaming revenue and the impact on their ability to deliver programs must be monitored and assessed.

The Province has since stated it would guarantee charitable organizations at a minimum the amount of gaming revenue they earned in the previous year in a newly-established trust fund. Government has consistently stated its intent to ensure a stable funding base for charitable organizations. Given the historical record of charitable revenue development through gaming, it is important then that a formula be developed that will provide a stable and adequate level of funding in the charitable trust fund. The formula should be tied to government gaming revenue increases.

Recommendation #5

ALLOCATION OF GAMING REVENUE: CHARITIES

UBCM recommends that there be a provision in the Gaming Act for a fair and open process for allocating gaming revenues to charities.

The B.C. Gaming Commission policy governing gaming licensing of eligible charitable and religious organizations has been in place since 1987. The charitable gaming model has provided a stable funding base for thousands of British Columbia charitable and religious organizations. Government has stated that the existing eligibility criteria will remain and the application process for funds will remain the same. There must however, be a fair and open process for allocating gaming revenues.

UBCM is concerned that unless there is a fair process for allocating revenue to charities that a pressing need for funding will bring charities to local governments in search of funding for their programs.

Recommendation #6

ALLOCATION OF GAMING REVENUE: PROBLEM GAMBLING

UBCM recommends that a portion of gaming revenue be allocated for problem gambling education, prevention and treatment, and the provisions for increasing the fund base for these problem gambling programs as government gaming revenues increase.

Gambling is an increasingly popular form of entertainment and the vast majority who take part does so responsibly. Among the segment of the population with the problem gaming behaviour, there are however a range of mild to severe problems with serious consequences to families, friends and the community. There has been intense public debate and growing concern over the need for education, prevention and treatment strategies for this serious problem as the Provincial Government moves to expand gaming activities in B.C.

British Columbia, the last Province to implement problem gambling programs announced in March 1997 a commitment to $2 million for funding problem gambling programs. No time frame was announced. Although some aspects of the program have commenced, there is no assurance that the magnitude of the program announced will be implemented. It is therefore essential that the gaming act include a formula that ensures a funding base for problem gambling programs. The formula should be based on a minimum per capita basis and government gaming revenues. This will allow public education and prevention strategies. There should be a provision for increasing the funding base if gaming is to continue to expand and as government gaming revenues escalate.

Recommendation #7

ECONOMIC AND SOCIAL IMPACT STUDIES

UBCM recommends that there be regular and ongoing assessment of the economic and social impacts of existing gaming activities.

An examination of the economic and social impacts of gaming activity is important for several reasons. The economic impacts are both direct and indirect. An economic impact assessment can provide useful information to the business community and government to determine what the impacts might be. The assessment of social impacts of existing and planned gaming expansion is critical to planning and developing programs for mitigating the negative impacts on gaming activity.

Policy considerations that determine forms of gaming, the number of venues in an area and their proximity to other entertainment venues should be devised with consideration to their potential impact on other businesses. There is a concern among other entertainment businesses that customers will spend large sums of cash in betting and have little disposable income remaining for movies, restaurants, bars and pubs, sporting events and arts and culture. There are also concerns in both the bingo and horse racing industry that casino gaming will negatively impact their revenues.

The Gaming Act should include a requirement for an assessment of the economic and social impacts of existing gaming on a regular basis. There should also be a requirement for a similar evaluation before any planned changes to gaming policy are implemented.

5. ADDITIONAL ISSUES FOR INCLUSION IN THE ACT

Although UBCM has made specific recommendations regarding local government's role in gaming policy, the following issues have also been identified as important issues that should also be included in the proposed comprehensive gaming act. While there is some overlap, our objective is to ensure all of these issues are included in the White Paper for discussion.

a. Agency Roles and Responsibilities

b. Separation of Powers

c. Regulation and Enforcement

d. Accountability

e. Types of Gaming

f. Gaming Expansion Consultation Processes

g. Social Issues

h. Gaming Revenue Distribution

6. CONCLUSION

UBCM appreciates the opportunity to present their recommendations on behalf of the local governments of British Columbia for the first stage of the consultation process for a comprehensive gaming act. As a provincial organization which represents every local government in the Province, we believe the six key principles that form the basis for the seven recommendations are a fair representation of our membership and their position on gaming policy. We strongly urge their inclusion in the proposed act.

UBCM believes the proposed gaming act should be comprehensive. The additional issues included in this paper are very important to local governments and we are optimistic that most of these issues will be acknowledged in the White Paper and draft gaming act. We urge the Gaming Policy Working Group to examine carefully the additional issues we have presented and ensure they are covered in the next stage of consultation for public discussion.

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