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:

Gaming Policy Agreement

 

INFORMATION

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.

· On March 9, 1999, Council responded to the Provincial White Paper on Gaming, reiterating its stand on the preservation of municipal powers on issues surrounding gambling expansion.

PURPOSE AND SUMMARY

The purpose of this report is to inform Council about the Memorandum of Agreement on Gaming Policy between the Union of British Columbia Municipalities (UBCM) and the Provincial Government, signed on June 17th, 1999. This report briefly analyses the implications to the City of Vancouver arising from this agreement.

BACKGROUND AND DISCUSSION

On February 2, 1999, the Provincial Government released the "Report on Gaming Legislation and Regulation in British Columbia", containing the White Paper on Gaming and a proposed "Gaming Control Act".

The Provincial report provided background on the legal framework for gaming, government policy on gaming, social and enforcement issues, as well as draft legislation. The proposed legislation would have had a very significant impact on municipalities, such as eliminating the City's ability to control the expansion and relocation of Vancouver's five existing casinos and allowing for the addition of slot machines.

On March 9, 1999, Council responded to the provincial government. The City's response to the Minister in charge of gaming had six components:

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

The UBCM responded on April 15, 1999. The UBCM response raised similar issues and concerns to those raised by the City of Vancouver.

Memorandum of Agreement on Gaming Policy

On June 17th, 1999, upon having reviewed the more than 150 submissions commenting on the White Paper on Gaming, the provincial government agreed to sign a Memorandum of Agreement between the Province and UBCM (Appendix A).

Memorandums of Agreement were also signed with the B.C. Association for Charitable Gaming (BCACG) and the Charitable Bingo Association Committee of the Bingo Council of B.C. (Appendix B).

The Memorandum of Agreement on Gaming Policy between the Province and UBCM, lays out a series of principles that will govern the relationship between the Province and UBCM with respect to gaming issues, until gaming legislation is introduced. Some of the highlights are:

· The Province affirms the jurisdiction of local governments, specifically with respect to their land-use and by-law making powers.

· The Province affirms the ability of local governments to make decisions as to whether new facilities or re-located facilities will be permitted within their boundaries.

· The Province affirms the ability of local governments to direct and define the extent, scope and type of casino and bingo gaming permitted within their boundaries, including the acceptance or rejection of slot machines.

· The Province will share gaming revenue with local governments as set out in the White Paper. In Vancouver, this means 10% of the net income from local casinos.

· The Province will consult in a meaningful way with local government regarding the form and content of gaming legislation before it is introduced into the Legislature.

· The UBCM intends to actively work with the Province in the development of comprehensive gaming legislation.

This Agreement clearly satisfies many of the concerns expressed by Vancouver City Council in its response to the provincial White Paper on Gaming. Traditional municipal powers over land use and by-law making have been supported.

Charities

The provincial government signed another Memorandum of Agreement on Gaming Policy with two charity organizations, namely, the B.C. Association for Charitable Gaming and the Charitable Bingo Association Committee of the Bingo Council of B.C.

Some of the highlights of the agreement with charities are:

· The Province affirms the role of licensed charities as the sole beneficiaries of bingo gaming, including both paper and electronic bingo;
· The Province will pursue changes to the gaming provisions of the federal Criminal Code to facilitate bingo charities having exclusive domain over all bingo activities;
· The province reaffirm its commitment to the existing charity guarantee of a minimum of $125 million annually;
· The Province affirms that the "public foundation" licencing model recommended in the White Paper will not be pursued.

This agreement satisfies most of the charities' concerns with the changes proposed in the White Paper on Gaming. One of the outstanding concerns from some of the bingo halls relates to their ability to sustain their customer base considering that casinos with slot machines attract many of the same customers. At present there are two casinos with slots, one in Burnaby, one in New Westminster and a third one (river boat) to be open in New Westminster in September, 1999.

Existing Vancouver casinos

The announced agreement has satisfied most of the City's demands. Casino operators, however, are not satisfied. Casino operators have wanted an even playing field for all casino operations, independent of their location. Many casino operators feel that this announcement leaves the five Vancouver based casinos in a position of disadvantage. Casinos in other jurisdictions such as Burnaby and New Westminster enjoy a full complement of casino games, including slot machines, while Vancouver based casinos don't have slot machines.

It is possible that some of the Vancouver casinos may seek relocation in municipalities that will accept slot machines. From the perspective of casino operators, however, this doesn't deal with the fact that a good portion of the Lower Mainland casino customers reside in the City of Vancouver, and that market considerations may not permit for all of them to relocate to other municipalities. Many of the casino operators have also incurred in significant capital investments in their facilities, even though they have known Council's policies regarding expansion, all along.

Staff anticipate requests from existing Vancouver-based casinos to relocate within the City of Vancouver.

The five existing casinos in Vancouver employ about 1,000 employees with an annual payroll of around $25 Million. It is not known how many of those employees reside in the city of Vancouver, and whether any reduction in employment in Vancouver will be absorbed by job enhancements in casinos elsewhere in the region.

Revenue Sharing

With respect to the share of gaming revenue, the White Paper on Gaming (page 223) indicates that the 10% of the net earnings from the casino operations within the City's jurisdiction, will be paid on an automatic and ongoing basis, effective April 1, 1999. Payments should be made quarterly, in arrears, and a fiscal year-end reconciliation should be provided to each local government. The share of the revenue will be paid to the benefit of the host local community and under the Memorandum of Agreement between the Province and the UBCM, without requiring the adoption of a Council resolution.

We are not certain yet about the exact amount of the City's share of gaming revenue. During the 1998/99 fiscal year, the City's share would have amounted to approximately $5 Million dollars. However, casino revenue from Vancouver's casinos is going down as customers go to casinos with slot machines in adjacent municipalities. It is anticipated that the Province will officially inform the City on the exact amount to be distributed in the near future.

CONCLUSION

As a result of City Council's persistent assertion of its right to control gaming in Vancouver -a position that was then taken by UBCM - the provincial government has finally recognized the historical municipal powers to regulate gaming facilities within their boundaries. Staff will continue to work with UBCM, charity organizations and industry representatives in order to assess any future developments.

- - - - -

This document dated for reference the 17th day of June 1999.

Memorandum of Agreement
On Gaming Policy

Between:

The Union of BC Municipalities (UBCM)

-and-

The Government of British Columbia (the Province)

The Province and UBCM have agreed to govern their relationship with respect to gaming issues according to the following principles:

The Province:

· affirms the jurisdiction of local governments, specifically with respect to their land-use and by-law making powers;
· affirms the ability of local governments to make decisions as to whether new facilities or re-located facilities will be permitted within their boundaries;
· affirms local government's ability to direct and define the extent, scope and type of casino and bingo gaming within their boundaries. It also affirms the ability of local government to decide whether slot machines or other similar devices could be placed within their boundaries;
· will provide an independent and transparent selection process for new and re-located gaming facilities;
· will share gaming revenue with local governments as set out in the White Paper;
· will share gaming revenue with local governments that host gaming facilities, regardless of their stated opposition to gaming, and without the adoption of a Council/Board resolution;
· will consult in a meaningful way with local government in the development of gaming policy changes that may affect local governments;
· will consult in a meaningful way with local governments regarding the form and content of gaming legislation before it is introduced into the Legislature;
· will ensure that charities are guaranteed an ongoing source of revenue from gaming and that eligibility rules for this funding will be maintained;
· will ensure there is a legislative mechanism for consultation / mediation with adjacent communities; and
· reaffirms its commitment that video lottery terminals will not be permitted in British Columbia.

The UBCM intends to:

· actively and cooperatively work with the Province in the development of comprehensive gaming legislation.

The Province and UBCM intend to:

· bring resolution to existing and future disputes through negotiations, where possible, and in a manner consistent with the principles of this Agreement.

These principles will govern the parties' actions with respect to gaming henceforth, and until legislation consistent with these principles is passed in the Legislature.

___________________ _____________________________
John Ranta Honourable Jenny Kwan
President of UBCM Minister of Municipal Affairs
This document dated for reference the 17th day of June 1999.

Memorandum of Agreement
On Gaming Policy

Between:

The B.C. Association for Charitable Gaming (BCACG)

The Charitable Bingo Association Committee of the Bingo Council of B.C.
(Signed on June 18th, 1999)

-and-

The Government of British Columbia (the Province)

The Province and the BCACG (and the Charitable Bingo Association Committee) have agreed to govern their relationship with respect to gaming issues according to the following principles:

The Province:

· affirms the role of licenced charities as the sole beneficiaries of bingo gaming, including both paper and electronic bingo;
· affirms that charities have exclusive domain over all bingo activities, subject to licencing by the Gaming Commission, and subject to the provisions of the federal Criminal Code;
· will pursue changes to the gaming provisions of the federal Criminal Code to provide greater legal certainty for the continuing key role of licenced charities in charitable gaming;
· will pursue changes to the gaming provisions of the federal Criminal Code to permit the broad use of technology in bingo by licenced charities, so that licenced charities can have exclusive domain over all bingo activities;
· reaffirms its commitment to the existing charitable guarantee of a minimum $125 million annually, indexed annually at the rate of Vancouver CPI, with a formula that ensures charity entitlement to an amount, after accounting for retained bingo revenues, equal to 1/3 of ongoing government net community casino gaming revenue;
· affirms that the existing bingo facility-level guarantee will remain in effect for an interim period to be determined by the Gaming Commission in meaningful consultation with licenced bingo charities;
· affirms that the British Columbia Gaming Commission is the sole licencing authority for charitable gaming;
· affirms that the "public foundation" licencing model recommended in the White Paper will not be pursued;
· will consult in a meaningful way with charities in the development of gaming policy changes that may affect charities;
· will consult in a meaningful way with charities regarding the form and content of gaming legislation before it is introduced into the Legislature; and
· reaffirms its commitment that video lottery terminals will not be permitted in British Columbia.

The BCACG (and the Charitable Bingo Association Committee) intends to:

· actively and cooperatively work with the Province, in the development of comprehensive gaming legislation.
· Actively and cooperatively work with the Province in the support of negotiations with the federal government to achieve changes to the gaming provisions of the federal Criminal Code as contemplated in bullets three and four on the previous page.

The Province and BCACG (and the Charitable Bingo Association Committee) intend to:

· bring resolution to existing and future disputes through negotiations, where possible, and in a manner consistent with the principles of this Agreement.

These principles will govern the parties' actions with respect to gaming henceforth, and until legislation consistent with these principles is passed in the Legislature.

___________________ _____________________________
Robert MacInnes Mike Farnworth
President of BCACG Minister of Employment and Investment
Frank Garnish
Chair, Charitable Bingo Association Committee
Bingo Council of B.C.

* * * * *

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