Agenda Index City of Vancouver

POLICY REPORT
DEVELOPMENT AND BUILDING

TO:

Vancouver City Council

FROM:

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

SUBJECT:

City of Vancouver Response to the Provincial Report on Gaming Legislation and Regulation in British Columbia

 

RECOMMENDATIONS

GENERAL MANAGER'S COMMENTS

COUNCIL POLICY

· 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 November 1st, 1994, Council passed a resolution opposing gaming expansion including the introduction of video lottery terminals (VLTs) and, that the City of Vancouver considered 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.

· 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.

PURPOSE AND SUMMARY

This report provides Council and the public with a summary of the response from the City of Vancouver to the proposed new Provincial gaming legislation and its implications for the City of Vancouver as outlined in the attached document (Appendix A) "City of Vancouver Response to the Provincial Report on Gaming Legislation and Regulation in British Columbia". The report also provides a brief chronology of events since the Provincial "Report on Gaming Legislation and Regulation in British Columbia" was released on February 2, 1999.

BACKGROUND AND DISCUSSION

The City of Vancouver has a long-standing policy against further expansion of gambling in the city due to concerns about social and neighbourhood impacts. Of particular concern was the introduction of slot machines into gaming facilities in the city. This led, in 1997, to the adoption of amendments to the City's Zoning and Development By-law that created two classes of casinos (with and without slot machines). Only casinos without slot machines were permitted in the city.

On February 2, 1999, the Provincial Government released the "Report on Gaming Legislation and Regulation in British Columbia". Part 1 contains the white paper on gaming; Part 2 contains the proposed "Gaming Control Act". The government expects comments back from municipalities by March 15, 1999.

The Provincial report is a lengthy document which provides background on the legal framework for gaming, government policy on gaming, social and enforcement issues, as well as draft legislation. The proposed legislation will have a very significant impact, eliminating the City's ability to control the expansion and relocation of Vancouver's five existing casinos, including the addition of slot machines.

On February 16, 1999, staff presented to Council a discussion paper "Key Implications of the Province's White Paper on Gaming - Discussion Paper from the City of Vancouver", briefly summarizing the key land use, social, economic and policing implications of the white paper and draft legislation.

The City's discussion paper was made available to the public, and a two-page summary was translated into Chinese and Punjabi languages to enhance the accessibility of the information to citizens. Council also instructed staff to organize a consultation process to allow citizens an opportunity for input in advance of Council's response to the Province.

Two public meetings were organized. The first meeting was held on March 3 at the Hastings Community Centre and a second meeting was held on March 4 at the Dunbar Community Centre. The meetings were advertised in the main printed media as well as in several community newspapers. More than 200 people attended these meetings, 33 speakers presented their views to Council and significant coverage was offered by both the printed and electronic media. Many citizens also submitted letters and briefs expressing their views and outlining their concerns An analysis of the public response is part of the attached response document.

The City's response to the Minister in charge of Gaming has six components:

· Municipal Jurisdiction
· Social Implications
· Economic Implications
· Implications to Charities
· Policing Implications
· Public Meetings and Public Comments

All of these components are analysed in the attached response document.

Gambling expansion may have implications for other areas of municipal interest, staff felt however, than given the short time allocated to prepare this response we would concentrate on the above mentioned key issues.

One policy area that is not covered by either the Provincial White Paper or the City's Response, relates to First Nations and Gaming. This sensitive and important policy area will be analysed by staff at a future occasion.

Repercussions arising from the White Paper and from the proposed gaming legislation may touch upon issues and concerns from other municipalities. It is therefore recommended that the response document from the City of Vancouver be circulated among all members of the Union of British Columbia Municipalities (UBCM).

CONCLUSION

The attached response document to the Minister in charge of Gaming, explains the City's concerns on the proposed new policies and legislation proposed by the Provincial government.

* * * * *

ag990309.htm

City of Vancouver Response to the Provincial Report on Gaming Legislation and Regulation in British Columbia

The Provincial government released the White Paper on Gaming and the proposed Gaming Control Act on February 2, 1999. These documents contain a series of recommendations that, if adopted, will form the basis for gambling policy and gaming administration in British Columbia

British Columbians have been invited to respond to, and provide feedback on the White Paper on Gaming before March 15, 1999. Vancouver City Council asked for a one-month extension, but no response from the Province was received prior to March 8, 1999.

This document is the official response from the City of Vancouver.

There are many issues and implications associated with gambling expansion, particularly as proposed in the White Paper. However, in view of the very limited time that the Province has provided for discussion, consultation and consideration, our response will only deal with six specific areas.

· Municipal Jurisdiction
· Social Implications
· Economic Implications
· Implications to Charities
· Policing Implications
· Public Meetings and Public Comments

1. Municipal Jurisdiction

The White Paper makes a distinction in relation to municipal powers between new gaming facilities and existing casinos. In relation to new gaming facilities, the White Paper recommends that they be subject to local government approval. In relation to existing casinos, the White Paper recommends that they "be authorized by provincial legislation to implement government's gaming policies".

In the draft Gaming Control Act the Minister is given the unprecedented power to over-ride historic municipal powers and jurisdiction in relation to "pre-existing community gaming facilities". The Minister may over-ride any provision in any municipal by-law merely by notifying the municipality in writing. In Vancouver, this would give the Minister the power to over-ride City Council's power to regulate the five existing casinos in Vancouver in any way, including by the Zoning and Development By-law, the Building By-law, the License, By-law, the Noise By-law, the Parking By-law, the Sign By-law, and the Street and Traffic By-law.

The proposed legislation would give the Minister the power to over-ride the City's by-law prohibiting casinos with slot machines, and it would mean that the regulations, guidelines and approval procedures that City Council adopted in 1997 to limit gaming expansion in the City, and to ensure that casino relocation does not disrupt neighbourhoods, may no longer apply.

The City's present approval process includes extensive neighbourhood notification and consultation. The City's current zoning controls limit casinos generally to the commercial areas near the downtown. With no zoning controls, the Minister could allow relocation to any area of the city without any public notification or consultation. City Council may no longer be able to control any aspect of the five existing casinos, including where they are located, how big they are, how much parking they provide, and what type of signs they have. Since the City could have no control, City staff may not have any authority to respond to complaints.

Although the White Paper makes a distinction between new gaming facilities and existing casinos, the language of the draft Gaming Control Act may make this distinction illusory. In the draft legislation, the definition of "pre-existing community gaming facilities" is much broader than existing casinos. Under this definition, the five existing casinos in Vancouver may be moved to any location in the City and may also be "expanded in size or in scope of operation".

Although the White Paper also recommends that new gaming facilities be subject to local government approval, one comment in the White Paper states that, "Over the next few years, new markets may be identified for additional gaming facilities, new proponents may wish to bring forward other proposals and existing gaming operators may wish to relocate their gaming facilities from one local government jurisdiction to another". There may be some ambiguity in the language of the draft Gaming Control Act, and it may not be entirely clear that the relocation of an existing casino from one municipality to another would be subject to the approval of the new host municipality.

The definition of "pre-existing community gaming facilities" in the draft legislation would also include Vancouver's three bingo halls, the majority of the "independent" halls where bingo is played, corner stores and gas stations where lottery tickets are sold, and pubs where Club Keno is played. Under this definition, Vancouver could have as many as 500 "pre-existing community gaming facilities"! Under the draft Gaming Control Act, each of these facilities could be moved, expanded in size and scope of operation and the Minister would have the power to over-ride any provision in any City by-law in relation to all of these facilities.

Positions:

· The City opposes the enactment of any legislation that would deprive municipalities of their historic powers to regulate gaming facilities withing their boundaries.

· The City opposes the enactment of any legislation that would give the Minister or the Provincial government the power to impose expansion of gaming facilities or gaming activities without the consent of the municipality involved.

2. Social issues

The introduction of slot machines will bring issues related to problem gambling to a new level. There are many concerns related to this form of expansion. Gambling machines, whether electronic or mechanical, are highly problematic. The gambling addiction literature clearly indicates that continuous forms of gambling, particularly slots or Video Lottery Terminals (VLT's), present a special challenge for problem gamblers for the following reasons:

· immediacy - you get the results right away
· ability to increase play - the amount wagered and the time spent playing can all increase
· perception of skill - a game of chance that creates illusion that one can beat the machine
· mesmerizing effect - ability to lose yourself in the activity
· losses seem painless - there is small-increment, but high-volume betting.

The Province of British Columbia already has a significant number of problem and pathological gamblers. The White Paper indicates that in a 1996 report to the British Columbia Lottery Corporation, it was estimated that 4% of British Columbians are problem gamblers. With 3.2 million adults in British Columbia; therefore, we have possibly 128,000 British Columbians suffering from problem gambling and probable pathological gambling.

The literature is also clear in indicating that the availability of different forms of gambling has a direct impact on addiction rates. The introduction of a more addictive form of gambling, such as slots, will only increase the levels of addiction already encountered in the province.

The social impact of gambling can be thought of as a continuum. At one end, gambling is an everyday activity that provides entertainment, recreation and socializing, and one which a majority of North Americans "take in stride". At the other end, a small but significant number of people gamble excessively and experience a variety of personal, family and financial problems as a result. Like substance abuse, problem gambling is a broad term. At its most serious, however, pathological or compulsive gambling is a public health issue.

An area of particular concern relates to gambling addiction among teenagers. At a recent meeting of the American Psychological Association it was revealed that between 5 and 8 percent of young Americans and Canadians report a serious gambling problem, a prevalence twice as high as that among adults.

There are many studies that attempt to tabulate the social cost of pathological gamblers. Figures go from as high as $45,000 down to a low of $13,600 cost to society, per year, from each pathological gambler. The City of Vancouver may have as many as 7,800 pathological gamblers (this is based on a conservative figure of 1.8 per cent of the adult population). Based on this estimate, Vancouver's costs could be as high as $348 million per year, taking into account the costs of lost productivity, absenteeism, insurance, criminal involvement, policing, prosecution, incarceration, prevention and education programs, social assistance and others. (No one has yet done this kind of research in Vancouver, so the figure may be less or more).

The $2 million recommended by the White Paper to address the issues of problem gambling is not enough to appropriately implement treatment programs and, more importantly, to develop and implement education and prevention programs, particularly among youth.

Positions:

· That a proper social impact analysis be conducted prior to gaming expansion.

· That sufficient dollars be allocated to appropriately fund problem gambling programs, and that the funding formula be tied to increases in gaming activity.

3. Economic issues

No one could deny some of the positive elements of a vibrant entertainment sector that includes gaming venues in Vancouver. The gaming industry employs hundreds of people in the City. The question is not so much its existence, but rather the degree of gaming expansion that should be allowed without proper analysis and consultation.

Last October, the Union of British Columbia Municipalities presented to the province seven recommendations dealing with gaming issues. One of the recommendations specifically requested that an economic and social impacts analysis be conducted prior to any future expansion, whether in a new or existing gaming facility. The White Paper gives no indication that there will be any economic or social impact assessment required by the proposed legislation.

During the 1994 casino review (related to the "Seaport Centre" casino proposal on Vancouver's waterfront) it was concluded that in order to determine if a casino was a real contributor to the local economy, one of the necessary conditions had to be its ability to attract new visitor dollars. If local residents are the main patrons (a likely scenario since gambling expansion is occurring everywhere), money will be diverted from other existing business, such as movies, restaurants and shops.

But regardless of where the money comes from (visitors versus locals), a fully expanded casino industry in Vancouver will bring a tremendous amount of direct revenue to the Provincial government. It is estimated that if all five Vancouver's casinos are fully expanded, they could produce more than $200 million to the Provincial government.

Position:

· That regular and ongoing assessments of economic impacts of proposed and existing gaming facilities be implemented prior to gaming expansion.

4. Implications to Charities

Many charitable organizations depend on gaming revenue. The White Paper recommends that charities be given the domain of Bingo. The bingo sector however could be negatively impacted with the expansion of other forms of gambling, particularly slot machines, and therefore diminish the ability of charitable organizations to grow and expand.

Charities are requesting the government to maintain the guarantee of revenue at the facility level for a period of up to five years.

The White Paper also indicates that charities may have to fulfill legal requirements that will exclude many organizations from qualifying to participate in bingo operations, namely, the need to live up to the charity definitions of the Federal Income Tax Act.

Position:

· That the Minister responsible for gaming, together with charity associations, address the concerns of charities related to guarantee of funding and the qualification to participate in bingo operations.

5. Policing issues

The Vancouver Police Department is on record as opposing any expansion of gambling. Studies have shown that the incidence of criminal activity increases significantly with the increase in gambling opportunities. Some compulsive gamblers may engage in such illegal activities as insurance related frauds, theft, domestic violence, break and enter, assault, and other crimes, resulting in increased demands for police resources.

If casinos in Vancouver are fully expanded as proposed in the White Paper, the Vancouver Police Department anticipates a significant increase in the demands on police resources.

The proposed legislation does not adequately deal with the cost of this increased demand on police resources, needed to control criminal activities arising in and from legal and illegal gaming venues. The $1.5 million dollars mentioned in the White Paper to deal with "illegal" gambling, falls far short of the actual costs that would be incurred in effectively dealing with the issue.

At present, the Vancouver Police Department does not have enough resources to properly police the existing legal gaming venues, where such criminal activities as cheating at play, fraud, theft, loan sharking, and money laundering are occurring. Nor are there sufficient resources in place to deal with the vast amount of illegal gaming venues in Vancouver, where such illegal gambling activities include:

· Horse racing bookmaking
· Sports bet bookmaking
· Illegal poker clubs

· Midnight casinos
· Lottery ticket reselling

Due to the continual evolution and expansion of gaming opportunities, a formula should be derived that attaches a percentage to the gross revenue earned from gaming to offset increased costs of policing.

Position:

· That sufficient funds and resources be allocated to enable appropriate policing of both legal and illegal gambling activities.

6. Public Meetings and Public Comments

Vancouver residents were given the opportunity to participate in two public meetings that City Council held in the first week of March. One meeting was held at the Hastings Community Centre on March 2, 1999, and a second meeting was held at the Dunbar Community Centre on March 4, 1999. More than 200 people participated and 33 residents spoke to Council on those occasions. Virtually all the speakers supported the stand taken by City Council in its opposition to gaming expansion in the manner and fashion proposed by the province.

Dozens of letters were also sent to Council by individual residents of Vancouver, and several briefs were also made available to Council and City staff.

Tho major themes that emerged were:

· Opposition to the City losing its regulatory controls
· Opposition to the introduction of slot machines into gaming facilities

What follows are some excerpts from both the written submissions as well as some quotes from the oral presentations at the two public meetings:

"We particularly want to emphasize the importance of ensuring that there is local support from the relevant municipalities, before any changes or additions are approved to gaming facilities within a community. This should include both new facilities and existing facilities and would include changes in venue, hours of operations, parking requirements and ensuring that casinos meet all municipal bylaws... We also recommend that local support through the appropriate municipal, regional or First Nations government should be required before new forms of gaming (e.g. slot machines) can be introduced into either new or existing casinos".

The Vancouver Board of Trade

"A public foundation acting as the entity in a bingo format would eliminate any charity that is not federally registered from receiving funds, thereby affecting 45% of charities involved in bingo today."... "The overall decrease in all bingo revenue, including all enhancements is over 11% of sales province wide. This decrease of revenue is present with only seven casinos hosting slot machines currently."

Mount Pleasant Starship Community Charitable Association (Planet Bingo)

"I disagree with the B.C. Government's basic philosophy on gambling. I personally believe that most adult Vancouver residents believe that maximizing the net revenues of the Provincial Government should not be the main criterion for deciding on gambling policy issues."

Robert M. Clark (Retired professor of economics)

"Who will pay for the increased demands on Police resources?"

"The damage created by gambling can not be measured only in terms of dollars"

"Gambling is like an evil Robin Hood. It takes from the poor to give to the rich"

Vancouver residents speaking at the March Public Meetings

CONCLUSION

The City opposes the enactment of any legislation that would deprive municipalities of their historic powers to regulate gaming facilities withing their boundaries. The City also opposes the enactment of any legislation that would give the Minister or the Provincial government the power to impose expansion of gaming facilities or gaming activities without the consent of the municipality involved.

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