Gambling in British Columbia: A Case Study of Seaport Centre
by
ROBERT D. BOOTH B.A., Simon Fraser UmVersity, 1993 A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS in THE FACULTY OF GRADUATE STUDIES (School of Community and Regional Plaruoing) We accept this thesis as coriforming to the required standard
THE UNIVERSITY OF BRITISH COLUMBIA April 1998 © Robert David Booth, 1998 In presenting this thesis in partial fulfilment of the requirements for an advanced degree at the University of British Columbia, I agree that the Library shall make it freely available for reference and study. I further agree that permission for extensive copying of this thesis for scholarly purposes may be granted by the head of my department or by his or her representatives. It is understood that copying or publication of this thesis for financial gain shall not be allowed without my written permission.
Department The University of British Columbia Vancouver, Canada
DE-6 (2/88) Abstract
This thesis examines gambling in British Columbia and reviews the failed Seaport
Centre casino proposal for downtown Vancouver.
The third wave of gambling sweeping across North America started when the state of Nevada re-legalized casinos in 1931, and underwent a major boom with the introduction of the first state lottery this century in New Hampshire in 1964. Since this time, virtually every state and provincial government in North America has introduced some form of legalized gambling.
This thesis examines the third wave of gambling, and the rise of the urban casino which began to emerge in the late 1980's and early 1990's. The rise of the urban casino provides policy makers significant urban planning considerations. First, a review is conducted of the literature on gambling, illustrating the new phenomenon in gambling - the urban casino. Second, an analysis and history of gambling in Canada and British
Columbia is explored. Third, a case study on the Seaport Centre casino proposal for
Vancouver's downtown waterfront is documented, illustrating the issues associated with urban casinos from a planning perspective.
The thesis documents the history of gambling in North American society. The current gambling wave sweeping the continent has been described as the third wave of gambling. Driving the most recent wave of gambling has been governments revenue imperative, promotion of gambling interest from business and certain interest groups and consumers demand for gambling games. As casinos moved to the forefront of the gambling explosion, the rise of the urban casino provided complex urban planning considerations. The case study on the Seaport Centre casino proposal for Vancouver provides a good framework for understanding the issues associated with urban casinos, many of which are local in nature. While the Seaport Centre proposal ultimately failed, the comprehensive analysis the City of Vancouver conducted serves as a useful guide for policy makers to understand the issues associated with an urban casino. iii
Table of Contents
ABSTRACT .' ii TABLE OF CONTENTS iii LIST OF TABLES vii LIST OF CHARTS viii ACKNOWLEDGMENT ix
CHAPTER 1
INTRODUCTION: THE NORTH AMERICAN GAMBLING WAVE 1
1.1. BACKGROUND 1 1.2. PURPOSE 3 1.3. PROBLEM STATEMENT AND OBJECTIVES 4 1.4. RESEARCH METHOD 6 1.5. KEY CONCEPTS 7 1.6. ORGANIZATION 7
CHAPTER 2
THE NORTH AMERICAN GAMBLING LANDSCAPE 9
2.1. INTRODUCTION 9 2.2. THE EARLY HISTORY OF GAMBLING 10 2.3. THE GAMBLING EXPLOSION 10 2.4. THE CONTEXTUAL VARIABLES AND STRUCTURAL CHARACTERISTICS OF GAMBLING 13 2.5. THE GAMBLING DEBATE 15 2.6. THE MAJOR FORMS OF GAMBLING 16 2.6.1. State Operated Lotteries, VLT's and Other Number Games 17 2.6.1.1. The Contextual Variables of Lotteries 18 2.6.2. Pari-Mutuel Wagering. ; 18 2.6.2.1. The Contextual Variables of Pari-Mutuel Wagering. 19 2.6.3. Casinos 19 2.6.3.1. The Contextual Variables of Casinos 19 2.7. THE FIRST WAVE OF GAMBLING 20 2.8. THE SECOND WAVE OF GAMBLING 21 2.9. THE THIRD WAVE OF GAMBLING 22 2.10. CASINO GROWTH AND THE RISE OF THE URBAN CASINO 25 IV
2.10.1. Casino Locations 26 2.10.2. The Urban Casino 27 2.11. CONCLUSION 29
CHAPTER 3
GAMBLING IN CANADA 31
3.1. INTRODUCTION 31 3.2. GAMBLING IN CANADA - A CHRONOLOGY. 31 3.2.1. The Early Criminal Code Years 32 3.2.2. The Miller Bill. 32 3.2.3. The Rutherford Royal Commission (1919 - 1920) 33 3.2.4. 1925 - 1950 '. 34 3.2.5. The 1954 Joint Committee 34 3.2.6. The 1969Amendment. 35 3.2.7. The 1985Amendment. 36 3.3. THE LEGALIZATION AND LEGITIMIZATION OF GAMBLING IN CANADA 37 3.4. CANADA'S GAMBLING LANDSCAPE 38 3.5. CONCLUSION 40
CHAPTER 4
GAMBLING IN BRITISH COLUMBIA 42
4.1. INTRODUCTION : 42 4.2. THE RISE OF LEGAL GAMBLING IN BRITISH COLUMBIA 43 4.2.1. The Rise of the Lottery in British Columbia 43 4.2.2. The Rise of Charity Casinos in British Columbia 44 4.2.3. The Rise of Bingo and Other Games in British Columbia: 46 4.3. BC GAMING COMMISSION - REPORT ON THE STATUS OF GAMING 46 4.3.1. Structure and Role of the Commission 47 4.3.2. Casino Gaming .
4.6.1. Lotteries and Number Games in British Columbia 52 4.6.2. Pari-Mutuel Wagering in British Columbia 54 4.6.3. Charitable Gambling in British Columbia 55 4.7. RECENT GAMBLING DEVELOPMENTS IN BRITISH COLUMBIA 57 4.7.1. British Columb ia 's New Gamb ling Policy. 58 4.7.2. Request For Proposals - Destination and Charitable Gaming Facilities 59 4.7.3. BC Governments Revenue Imperative Rolls Snake Eyes 60 4.7.4. Gaming Policy Recommendations 63 4.8. CONCLUSION 65
CHAPTER 5
A CASE STUDY OF THE SEAPORT CENTRE CASTNO PROPOSAL 67
5.1. INTRODUCTION 67 5.2. THE CONTEXT OF VANCOUVER'S PROPOSED URBAN CASINO 68 5.3. HOW SEAPORT CENTRE WAS BORN: THE VPC PROPOSAL CALL 68 5.3.1. The Casino Genie Comes out of the Bottle 69 5.4. THE PROPONENTS BEHIND SEAPORT CENTRE 71 5.4.1. Vancouver Land Corporation 72 5.4.2. Mirage Resorts Incorporated. 72 5.5. THE SEAPORT CENTRE PROPOSAL 73 5.5.1. Seaport Centre Development Program 75 5.5.2. Seaport Centre: The Economic Projections 77 5.6. SEAPORT CENTRE: THE CITY OF VANCOUVER CASINO REVIEW PROCESS 78 5.6.1. Step 1: City of Vancouver Casino Review - A Discussion Paper. 78 5.6.1.1. City Image.: 79 5.6.1.2. Business, Tourism and Cultural Industries 79 5.6.1.3. Jobs 80 5.6.1.4. Problem Gambling 80 5.6.1.5. Crime and Policing. 81 5.6.1.6. Adjacent Areas 81 5.6.1.7. Housing and Real Estate 81 5.6.1.8. Existing Gaming. 82 5.6.1.9. Municipal Government Revenues and Expenses 82 5.6.2. STEP TWO: PUBLIC CONSULTATION PROCESS 82 5.6.3. STEP THREE: PUBLIC POLLING 83 5.6.4. STEP FOUR: CITY OF VANCOUVER CASINO ECONOMIC IMPACT ANALYSIS 84 5.6.5. STEP FIVE: CASINO PUBLIC HEARING 85 VI
5.7. A SUMMARY OF THE CITY OF VANCOUVER CASINO REVIEW PROCESS 85 5.8. A DISCUSSION ON THE AFTERMATH OF SEAPORT CENTRE 86 5.9. CONCLUSION 88
CHAPTER 6
GAMBLING AND URBAN CASINOS IN BRITISH COLUMBIA: PLANNING AND POLICY IMPLICATIONS 90
6.1. MAJOR FINDINGS 90 6.1.1. The Third Wave of Gambling and the Governments Revenue Imperative 91 6.1.2. The Rise of the Urban Casino 91 6.1.3. Gambling in Canada and the Transfer of Power to the Provinces 92 6.1.4. High Stakes Gambling in British Columbia 92 6.1.5. Vancouver's Dance With the Seaport Centre Casino Proposal. 93 6.2. GAMBLING POLICY ISSUES AND PLANNING IMPLICATIONS 93 6.3. AREAS FOR FURTHER RESEARCH 95
REFERENCES 97
APPENDIX A 102 APPENDIX B 110 vii
List of Tables
Tablet: Effects of New Provincial Gambling Distribution .- 62
Table 2: Proposed Building Program of Seaport Centre 76
Table 3: Seaport Centre Casino Profile 80
Table 4: Results of the City of Vancouver Casino Poll 84 viii
List of Figures
Figure 1: Gambling Handle and Revenue in the United States - 1982 -1996 •.. 12
Figure 2: The U.S. Leisure Economy - 1996 12
Figure 3: Gross Gambling Revenue Growth in Canada - 1992/93 - 1995/96 39
Figure 4: B.C.'s Gambling Landscape - 1995/96 51
Figure 5: B.C.'s Leisure Market 52
Figure 6: BC Lottery Sales - 1975 - 1996 53
Figure 7: Breakdown of the Lottery Revenue 54
Figure 8: Charity Casino and Bingo Locations in British Columbia 56
Figure 9: Charity Gambling Handle in British Columbia 1992/93 - 1995/96 57
Figure 10: British Columbia's Regulatory Framework for Gambling 61
Figure 11: Vancouver's Central Waterfront Port Lands 70
Figure 12: Artist Rendering of Seaport Centre 74 IX
Acknowledgment
I would like to express my sincere gratitude to my thesis supervisor, Dr. Alan
Artibise, for all his help and patience during my graduate and thesis studies. I am grateful to the School of Community and Regional Planning for providing me the opportunity to challenge my mind, and for further providing me with an education that allows me to constantly explore new issues and to examine them in a critical manner. I had the great oppoitiinity to meet many new friends and colleagues during my time at U.B.C.
A special thank you to Dr. Warren Gill for all his support and encouragement over the years, and for providing me guidance during my studies, for which I am very appreciative.
I would like to dedicate this thesis to my late father who, perhaps more than anyone, taught me the importance of always educating yourself in life, and who spent endless amounts of time with me discussing the contemporary issues of the day. A special thanks to my family for their support, and to the "Kellys", who are the greatest addition to a family one could ever hope for.
Finally, and most importantly, I am forever grateful to Casey, for all her support and encouragement over the years, and to dreaming to the rest of our lives together. 1
Chapter 1 Introduction: The North American Gambling Wave
1.1 Background
One of the major public policy issues to emerge in the 1990's is the rapid and unprecedented expansion of legalized gambling throughout North America. The current
North American gambling explosion has been cited as the "third wave of gambling." The third wave formally started in 1931 when the state of Nevada re-legalized casino gambling, and which has escalated considerably with the introduction in 1964 of the first state lottery this century - the New Harnpshire Sweepstakes (Rose 1995, 16). Since the introduction of the New Harnpshire Sweepstakes, less than 35 years ago, virtually every state and provincial government in North America has introduced some form of legalized gambling.
Given the unprecedented growth in gambling, and the lack of a clear understanding of the positive and negative impacts associated with gambling, the federal government in the United States signed into law in August 1996 the National Gambling Impact Study
Commission (NGISC). The NGISC is to report back in 1999 on the economic and social impacts of gambling in the United States (Whyte 1997, 9). The NGISC comes after a decade of major gambling expansion, and follows a comprehensive review of gambling in the United States in the 1970's. In recent Canadian gambling history, however, there has been a clear lack of any major national review of gambling impacts, despite the significant growth in all major forms of gambling in Canada.
Today, for good or bad, commercial gambling has become an integral part of
North American society. To give a sense of the amount of gambling in North America, in
1996, for example, the amount of money wagered on various forms of gambling in the 2
United States was $768.3 billion and the revenue, or the amount of money consumers spent, was $62.3 billion (Christiansen 1997, 4-5). A comparison of total U.S. annual gambling expenditures to Forbes 500 sales illustrates the magnitude of gambling in U.S. society. The $62.3 billion spent on gambling would have ranked 11th in the 1996 Forbes
Sales 500, behind AT&T at $68.3 billion, and ahead of Texaco at $58.3 billion
(Christiansen 1997, 28). In Canada, the figures are equally staggering. The net revenue, or the amount Canadian consumers spent on gambling in 1995/96 was $7.1 billion, representing 3.8% of provincial government revenues (Marshall 1996, 39-40).
Governments have typically introduced legalized gambling as a source of generating revenue, commonly known as a "sin tax," and more recently, as an attempt to generate economic development, tourism and employment. In the era of anti-tax sentiments, governments have increasingly looked for ways of expanding gambling as a means of increasing their own revenues. For example, in 1985, gambling revenues contributed 1.7% to Canadian provincial government revenues and ten years later, in
1995, they have increased by almost 225%, to 3.8% of provincial government revenues.
Starting in 1988, the introduction of casino gambling moved to the forefront of the gambling discourse. In the United States, prior to the start of the casino expansion movement in 1988, Nevada and New Jersey were the only two states that had legal commercial casinos. Today, some 25 states have some form of casino gambling with several other states discussing the option of introducing casino gambling. Similar to the
United States experience, Canada also underwent an expansion of casino gambling starting in the late 1980's. In 1989, Winnipeg was the first Canadian jurisdiction to open a commercial casino, and today, less than 10 years later, every province in Canada operates some form of casino gambling.
Gambling in British Columbia, like elsewhere in North America, is big business. In
1995/96, consumers spent $633 million on gambling. Like the gambling expansion movement that swept across North America during the 1990's, the province of British 3
Columbia has experienced ongoing movements and attempts for expanded gambling in the province. The most recent significant attempt to expand gambling in British Columbia occurred in February 1994 with the announcement of the proposed Seaport Centre gambling complex. Seaport Centre was a partnership between a local development company - Vancouver Land Corporation (VLC) - and a major U.S. casino operator -
Mirage Resorts - to build a $1 billion destination resort gambling complex in downtown
Vancouver. After conducting a gambling policy review, the provincial government announced in October 1994 that major Las Vegas style casinos would not be permitted in the province. Thus, the proposed Seaport Centre casino complex was killed, but not the gambling expansion debate in the province.
1.2 Purpose
While the issues associated with gambling are complex and numerous, the purpose of this thesis in concerned with recent gambling expansion, and more particularly, the issues associated with casino gambling in an urban context. More specifically, this thesis will analyze recent efforts in British Columbia to introduce casino gambling and examine the debate and issues associated with the failed Seaport Centre casino proposal for downtown Vancouver. While casino gambling is a complex public policy issue, many of the impacts associated with casino gambling are those of a local nature. Yet, despite the significant local policy issues, there is a lack of policy analysis particularly focused on the urban issues associated with the introduction of major casino gambling. The planning review that the City of Vancouver conducted as part of the Seaport Centre review provides policy makers with a good framework and model, for reviewing, and understanding the issues and impacts associated with a major urban casino.
The purpose of this thesis is to examine recent commercial gambling movements in
North America and to track how British Columbia underwent considerable gambling
expansion pressures during the same time period. While the provincial government is 4
responsible for estabhshing the regulatory framework for gambling, the Seaport Centre experience provides an interesting analysis of how local governments can take a pro-active part and become involved in the discussion of expanded casino gambling. Analyzing the failed Seaport Centre casino proposal provides an interesting framework for how local governments can take an active roll in reviewing the issues associated with casino gambling, and influencing the larger policy agenda of gambling expansion. Following the death of Seaport Centre, however, the province now finds itself in the midst of another gambling expansion debate.
1.3 Problem Statement and Objectives
One of the working hypothesis for this thesis is what Rose has described as the
"third wave of gambling." Starting with the re-legalization of gambling in the state of
Nevada in 1931, gambling in North America has undergone an unprecedented boom in recent years. Part of the "third wave of gambling" has been the widespread emergence of casino gambling in the 1990's. A further working hypothesis for this thesis is Eadington's analysis of the emergence of urban casino gambling. Typically, major commercial casinos have been geographically removed from urban centres, as illustrated in the past by casino operations located in Nevada, Atlantic City, rnining towns, riverboats and Indian reservations (Eadington 1995, 166-178). However, increasingly in recent years there has been a movement towards locating major commercial casinos in urban areas, as was proposed with the Seaport Centre casino in downtown Vancouver.
From the planning perspective, major urban casinos have significant, and numerous, urban planning considerations. Planners, when dealing with a major urban casino proposal, are thus faced with a major policy issue and a wide range of direct planning implications. While the decision for introducing an urban casino is political in nature, meaning that elected officials are faced with the ultimate decision making authority, it is the planner that often must provide the technical research and advice as to 5
the potential positive and negative impacts of a major urban casino. Thus, a review of the
Seaport Centre casino debate provides planners with a good framework and sound methodology for understanding and analyzing the issues associated with urban casino proposals.
More specifically, the thesis research objectives are as follows:
• To establish recent North American gambling trends and to analyze recent
developments in the casino gambling area;
• To identify recent movements towards major "urban casinos" and review the issues
associated with such estabhshments;
• To explore the history of Canadian gambling movements and identify provincial
gambling trends;
• To explore and document the recent history of gambling in British Columbia and
identify gambling trends in B.C as they relate to the larger North American trend;
• To examine the failed Seaport Centre casino proposal and explore how it fit into
the recent North American gambling trend and discuss the issues associated with a
major urban casino in downtown Vancouver;
• To discuss the City of Vancouver casino review process and illustrate to planners
how it is a good framework for analyzing and understanding the issues associated
with urban casinos.
• To discuss recent gambling expansion initiatives undertaken by the provincial
government; and
• To suggest further areas of study as British Columbia finds itself in the midst of
another gambling expansion debate. 6
1.4 Research Method
First, a literature review was conducted to assist in gaining an understanding of
gambling trends in North America within the context of Rose's "third wave of gambling."
A general overview is provided of the major forms of gambling, and the issues associated
with gambling are discussed. The trend towards casino gambling expansion is explored
and Eadington's notion of the rise of the urban casino is discussed. A review is conducted
of the major policy issues associated with gambling, with an emphasis placed on the
impacts associated with urban casinos from an urban plajniing perspective. Furthermore, a
review of North American gambling levels is presented proving the reader an
understanding as to the extent of gambling in the United States and Canada.
Second, a historical review is conducted of the legal role of gambling in Canada.
The legislative history of gambling in Canada is explored and an examination of the major
Canadian gambling events is documented. Third, a review of British Columbia's recent
gambling history is conducted illustrating how the B.C. gambling pattern fit into the larger
North American trend. The legislative and regulatory framework for gambling policy is
analyzed and a brief comparative analysis of provincial government gambling levels is set
forth to show how B.C. gambling compares to the national trend. An analysis of BC
gambling helps set the framework for better understanding how Seaport Centre arose.
Fourth, a case study of the Seaport Centre casino is conducted illustrating how the
proposal for a major urban casino in downtown Vancouver coincided with the North
American trend. An analysis of the debate, issues and impacts of the proposed Seaport
Centre helps provide a better understanding of urban casinos. Moreover, the Seaport
Centre case study is of particular use to planners, as it provides a good planning
framework for understanding the issues and impacts of a major urban casino. The
literature review, analysis of recent gambling trends in B.C. and case study of Seaport
Centre provide a thorough analysis of gambling developments and trends in North
America, and illustrate how gambling policies directly impact plajniing considerations. 7
1.5 Key Concepts and Terms
Discussions mvolving gambling are typically highly charged events. In order to more accurately understand the complex issues involved with gambling, a clear definition of the key concepts is required. According to Webster's New World Dictionary, the term gamble is defined as "1. to play games of chance for money, etc. 2. to take a risk for some advantage. Abt et. al. provides a working definition of gambling as "the stake of money or other material consideration on chance ... in the pursuit of financial gain (Abt et. al. 1985, 258). More recently the term gaming has become synonymous in general discourse with the term gambling. For the purposes of this thesis, the term gambling will be the operative phrase, unless otherwise noted. As there are numerous places where reference is made to the amount of gambling dollars expended and wagered, in an effort to be consistent and illustrate comparative gambling figures,al l dollar figures throughout the thesis will be quoted in Canadian dollars.
Within the gambling industry, there are two forms of games: games of chance and games of mixed chance and skill. Games of chance, such as lotteries, roulette, craps and
slot rriachines, are determined by statistical probabilities and involve no element of skill.
Games of mixed chance and skill, such as blackjack, baccarat, poker, bridge and backgammon involve both chance and skill in varying proportions. These above games differ from games of skill, such as checkers and chess, which are determined completely be skill and involve no element of chance. While people may gamble on a chess game, it is not considered a commercial form of gambling (Abt et. al. 1985, 258-260).
1.6 Organization
This thesis is comprised of six chapters. The first chapter introduces the subject of
gambling and sets the framework for the thesis by detailing the purpose, problem
statement and objectives, the research method and outlining the key concepts and terms. 8
The second chapter provides a literature review of gambling in North America and the issues associated with gambling are discussed. Rose's "third wave of gambling," and
Eadington's notion of "urban casinos." are presented. The literature review sets the framework for Chapters 3 and 4, which examine gambling in Canada and British
Columbia. Chapter 5, the case study on Seaport Centre, reviews the proposal for a major urban casino for downtown Vancouver and explores the urban planning considerations of such a proposal.
Chapter 6 presents the conclusion of the thesis, briefly reviews the planning and policy implications of urban casinos, and suggests future areas of study within the area of gambling. 9
Chapter 2
The North American Gaming Landscape
2.1. Introduction
North America has experienced a major expansion of gambling over the last decade as governments have searched for new ways to enhance revenues, stimulate economic development, tourism and employment. Much of the gambling expansion in
North America occurred in the late 1980's and early 1990's as the North American recession took hold. As governments searched for new ways to generate taxes through gambling they adopted new and expanded forms of games. Lotteries, once the favoured form of government gambling, was no longer the main source of government sponsored gambling. The growth of casinos, and other games such as Keno and Video Lottery
Terminals (VLT's), became common place across the North American gambling landscape.
It is important to note that much of the third wave of gambling has generally occurred in the absence of public consultation. Where the public has been involved in deterrnining whether gambling should be expanded in their respective communities they have, for the most part, opposed such measures. Rather, gambling expansion has been typically promoted by governments and certain business interests. Consumers, however, have shown a strong desire to gamble and they tend to accept the new forms of gambling as soon as they are introduced.
The rise of casino gambling as part of the third wave of gambling - and in particular the growth of urban casinos - present complex urban planning challenges. In order to better understand the issues associated with urban casinos, the context and issues of the gambling landscape industry must first be set forth. This includes a brief discussion 10
of the variables and characteristics of gambling, the types of games, the early history of gambling and the first two waves of gambling.
2.2. The Early History of Gambling
For as long as society has existed, so has gambling. Bolen notes that "in one form or another, gambling has been present in all cultures, all periods of time and widely participated in by those of all societies and social strata" (Bolen 1976, 7). In fact, and although subject to debate, it is suggested by Abt et. al that gambling could have had a role in the history of society itself"... with Adam and Eve wagering a stake, their innocence, in the hope of adding knowledge to that stake" (Abt et. al. 1985, 9). The following are but a few examples of gamblings presence throughout early history. The
Egyptians were believed to gamble, and compulsive gamblers of the day were sent to the pyramid rock quarries to work off their "markers" (Bolen 1976, 7). In early Greek time, gambling was common even though it was a sin, causing Aristotle to note "thieves and robbers at least take great risks for their spoils while gamblers gain from their friends to whom they ought rather to give" (Martin 1996, 4). Many of the traditions that initially developed around gambling are now common in today's society. Historical references to gambling, such as lady luck and sandwich (which was named after the Earl of Sandwich, who invented the snack so as to not interrupt his gambling) are common references today
(Bolen 1976, 10). Despite attempts throughout history to morally outlaw gambling, and bids to criminalize or regulate gambling, societies desire to gamble has remained steadfast.
2.3. The Gambling Explosion
Gambling has exploded throughout North America in recent years. To better understand the extent to which gambling has become so common in society, a clear understanding of the accounting terminology is required. Often, and particularly in the 11
popular press, the citing of gambling dollars can be unclear. The foUowing are the key gambling concepts and their definitional meanings.
Handle
The gross amount of money wagered on any form of gambling (Abt et. al. 1985, 260). For example, in British Columbia the "handle," or the amount of money wagered on lotteries in 1995/96, was $793.6 million (KPMG 1997, B-20).
Gross Gambling Revenue
The handle less pay out prizes or prizes or winnings returned to players (Christiansen 1997, 7). As Christiansen goes on to note, "gross gambling revenues, NOT handles, are the statistics through which one form of gambling may be compared to another, to other businesses, other industries, other forms of consumption, and to the general economy (Christiansen 1997, 7). Citing the British Columbia lottery example further, the gross gambling revenue in 1995/96 was just under $400 million (KPMG 1997, B-2).
The third wave of gambling, which will be discussed in Section 2.9, has brought gambling levels to new heights year-after-year throughout North America. As Figure 1 illustrates, the growth of gambling in the United States has been dramatic, both in terms of handle and revenue. Between 1982 and 1996, U.S. gambling revenue, or the amount consumers spent on gambling, grew from $13.6 billion, to a record $62.3 billion, accounting for an average annual growth rate of 11.4%. The United States handle grew from $164.6 billion in 1982, to a record $7683 billion in 1996, accounting for an average annual growth rate of 11.6%. 12
Figure 1
Gambling Handle and Revenue in the United States - 1982 - 1996 in billions (CS)
1982 1996 Year
Source: Christiansen 1997, 9-13.
Ffighhghting the significance of gambling revenue in society today, Christiansen provides an interesting comparison of gambling revenue as a portion of the U.S. leisure economy in Figure 2. In the United States, consumers spend in excess of eight times the amount they do on gambling as compared to going to the movies.
Figure 2
The U.S. Leisure Economy - 1996 - $616 (C) billion
Filmbox office | $7 73
Spectator sports 3 $825 Non-sport live ertertanmert gg§g $12.05 Cruise ships .$5 $9.04 Video games j§3 $9 30 Recorded music M—l $16 38 Flowers & plants •••ffig $19 65 Gambling gross revenue Durabletoys &goods Commercial arnjsemerts Non-durable toys & goods Publication Other recreation
Video,audio,and computer $106.90 Theme Parks M $9 43 Lei sure hotels MffflMMM $24.8! 1 $0.00 $20.00 $40.00 $60.00 $80.00 $100.00 $120.00
$ (C) billions
Source: Christiansen 1997, 42. 13
Canada has also experienced a considerable increase in gambling, which will be detailed in
Chapter 3.
2.4. The Contextual Variables and Structural Characteristics of Gambling
Prior to discussing the major forms of gambling, the variables of gambling in general and the characteristics of the games will be presented in order to assist in gaining a >- better understanding of gambling. This analysis assists the reader to understand that gambling games differ, which is very important when exanrining the role of gambling in society. Abt et. al. use this analysis from a structural functionalism perspective to assist in better understanding gambling and the games, and note that the importance of this is that
"each form of commercial gambling will be seen to have unique characteristics, and [we] will show that these characteristics have profound implications for the formal control of gambling" (Abt et. al. 1985, 39).
Abt et. al. describe the four major contextual variables related to commercial gambling activities:
Place The place, or location, is a critical variable of gambling which is often over-looked. For example, casinos, racetracks and lottery betting estabhshments, will be directly impacted by their location and accessibility to people. This is especially true when discussing the issues associated with an urban casino.
Situation or Environment The environment of a casino, which is often detached from the real world, is very different frompurchasin g a lottery ticket from a comer grocery store.
Ownership and Operation The ownership and operation of gambling has very little direct interaction with the consumer. The public generally does not seem to find issue with gambling in a private casino or purchasing a lottery ticket through a governmental agency. This issues does, however, have important larger sociological issues as it relates to the state promoting gambling interests where it is a direct beneficiary. 14
Purpose This variable involves reviewing how the legislative and statutory framework for legalized gambling reflects the social function, and how comparable the two are (Abt et. al. 1985, 44-47).
In addition to the above gambling variables, Abt et. al. also discuss the key structural characteristics of the various commercial gambling games which distinguish one game from another. The characteristics are as follows:
• Frequency of opportunities to gamble - the rate by which one is able to gamble, ie; a weekly lottery, daily horseraces or non-stop slot machine action.
• Payout interval- the timing of gambling payout. Often related to the frequency of opportunities to gamble, in the sense that more frequent games usually have more immediate payout intervals, ie. slot machines. Frequency and more immediate payouts often results in faster rates of play.
• Range of odds -certain games have fixedodd s that are know in advance of the games, and other games odds may be established by the betting of the event at hand.
• Stakes - the amount wagered on a game. Stakes can range from a .25 cent slot machine, to a $1 dollar lottery, to an open ended casino game. For example, casino gambling, where odds and stakes are variable, and the play is frequent, a players fiscal position, or net gambling worth, can change greatly in a very short period of time.
• Price of gambling - is the amount of money retained by the operator of gambling games, and equates to the losses of the gamblers. Different games have different prices. For example, a lottery may have a price in excess of 50% and certain casino games may have a price less than 2%.
• Player participation and the exercise of skill - relates to various skill levels and participation of games. For example, buying a lottery ticket and counting cards in blackjack involve differing levels of player participation and skill.
• The probability of winning a particular bet and payout ratio - are generally inversely related.
• Association of gambling with other activities - such as betting of an NFL football game, or going to a casino resort which offers activities other than gambling. 15
• Credit - increases the risk of unafordable losses.
• Intrinsic play value and the extent of knowledge requiredfor a particular gambling activity - games such as lotteries, which are passive forms of games, have limited intrinsic value. Various casino games, which are more active types of games, have a much higher level of intrinsic value (Abt et. al. 1985, 40-44).
According to Abt et. al., the importance of analyzing gambling and games from the above perspective is that it offers the reviewer the following:
At the micro-level of sociological analysis the gambles (that is, the particular risky choices offered by commercial games), structural characteristics, and contextual variables of each commercial game are significant determinants of gambling behaviors. At the macro-level these structural features largely determine the relative appeal of the various games or the substitutability of one gambling for another....(Structural characteristics govern the extent and intensity of public participation in commercial gambling. Each game stimulates a characteristic mix of gambling behaviours, a fact that should be a fundamental consideration in formulating gambling policy (Abt et. al. 1985, 47).
2.5. The Gambling Debate
Gambling has historically been a controversial subject, and the third wave of gambling is no different in this regard, with the public caught in the middle of the debate.
Opposition from gambling has come from religious leaders, secular critics, moral reformers and some elected officials. Support for gambling comes frompublicl y traded gambling companies, governments dependent on gambling revenues and those in related gambling industries, all of which have a vested interest in the continued legalization of gambling and to further gambling expansion (Abt et. al. 1985, 3-6). Neither side of the debate brings an objective view to the table, nor do they analyze the variables and characteristics of gambling, causing Abt et. alto suggest that "both sides have failed to develop a perspective permitting a reasoned analysis of the interrelationships among gambling, games, situation, structures, and participants" (Abt et. al. 1985, 5). Supporting 16
the lack of reasoned arguments surrounding gambling expansion, Eadington states that
"recent debates regarding legalization of casinos have brought out exaggerated and inaccurate claims of economic benefits fromproponent s and of social costs from opponents" (Eadington 1996, 7).
Throughout the gambling expansion debate, however, consumers have shown a strong desire to gamble, for good or bad, causing Abt and her colleagues to conclude that
"(t)he issue of whether to allow gambling is moot. It is allowed. The debate should therefore be how to devise meaningful policies and effective laws and regulation for commercial gambling" (Abt et. al. 1985, 6). As will be discussed in Section 2.9 below, gambling has became a legitimate form of entertainment in North American society, and the debate in society should therefore logically reflect the economic and social issues of gambling.
2.6. The Major Forms of Gambling
Having established the key variables and characteristics of gambling, the following section will review the major forms of commercial gambling. The major commercial gambling games in North America are: state operated lotteries, and other state operated numbers games, video lottery terminals (VLT's), private, charity and native casinos
(including deep-water ships and cruise-to-nowhere casinos), card rooms, bingo and pari- mutuel wagering.
For the purposes of this report, the major forms of the gambling industry that will be discussed are:
1. State lotteries and VLTs; 2. Pari-mutuel wagering; and 3. Casinos. 17
The above represents the vast bulk of legal gambling in North America. In fact, state lotteries, VLT's and casinos account for 85% of the U.S. gambling market in 1996
(Christiansen 1997, 15), and an estimated 80% in Canada (KPMG 1997). Each form will be discussed in more detail below, taking into account the key variables and characteristics of each particular game.
2.6.1 State Operated Lotteries, VLT's and Other Number Games
According to Abt et. al. "a lottery may be defined as a game in which chances to share in a distribution of prizes are determined by lot, or drawing. For a lottery to constitute gambling three elements must be present: chance, consideration and prize"
(Abt et. al. 1985, 55). Today's lotteries have evolved from the introduction of the New
Hampshire Sweepstakes in 1964, which, at the time, was a new development in commercial gambling. The initial New Hampshire Sweepstakes was conducted twice a year and tickets were purchased for $ 3 (U.S.), producing very little intrinsic value and were rather unpopular with poor economic results (Abt et. al. 1985, 56). Lotteries were revolutionized in 1970 when New Jersey introduced a lottery with ticket sales of .50 cents and weekly draws, resulting in instant success by the lowering of stakes and increasing the gambling frequency (Abt et. al. 1985, 57). Since this time, lotteries across North America have continued to evolve by increasing the frequency, stakes and level of participation.
In addition to the more conventional lotteries, today, consumers often have the choice of scratch and win lotto tickets, pull-tabs, sports action, KENO and VLT's.
Different jurisdictions across North American have legalized some, or all, of these new lottery games. In the process of the lottery game expansion, the games have gone from a bi-annual, and rather passive form of gambling; to mcluding numerous, and often more active forms of gambling. VLT's, and to a lesser extend Keno, are seen as very active forms of gambling, due to the frequency of play. Opposition to VLT's, in particular, has 18
been very pronounced, with critics citing their addictive nature and often referring to thern as the "crack cocaine" of gambling (Smith and Azmier 1997, 2).
2.6.1.1. The Contextual Variables of Lotteries
Place Lottery games are generally located in a wide range of locations, such as: grocery stores, gas stations, bars, restaurants and news-stands.
Situation
Lottery games have become common place in everyday life.
Ownership and Operation Starting with the New Hampshire Sweepstakes, modern North American lotteries have been owned and operated by the state, partly as a result of the previous scandals that occurred with private lotteries in American history (this will be discussed in more detail later). More recently, however, Connecticut and Wisconsin have considered and debated the possibilities of privatizing their state lotteries. Christiansen notes that having the private sector operating lotteries would "push consumption of lottery products to undreamed of levels. And that possibility in turn raises another: would this be in the public interest" (Christiansen 1997, 66). Nevertheless, governments have increasingly looked towards new, faster, and increased player participation lottery games, such as Keno and VLT's, in an effort to increase revenues. Purpose Lottery games were largely instituted to raise revenues for the government (Abt et. al. 1985, 62-68).
2.6.2. Pari-Mutuel Wagering
According to Abt et. al. "in pari-mutuel-mutual betting bettors wager among themselves, rather than against a bookmaker. Payouts, or winning prices, are a function of the handle less the operator's percentage divided by the number of winning tickets" (Abt et. al. 1985,83). Pari-mutuel wagering consists of three gambling forms: horse racing, being the most popular, greyhound racing and jai-alai. Horse racing will be the form of pari-mutuel wagering discussed as it is the most common in North American society. In terms of the gambling characteristics of pari-mutuel wagering, it generally involves a high 19
degree of skill and perhaps requires the highest level of intelligence of all gambling forms, due to the complexity of the game. (Abt et. al. 1985, 85).
2.6.2.1 The Contextual Variables of Pari-Mutuel Wagering
Place Horse racing tracks are destination oriented proving certain geographic barriers to play, unlike purchasing a lotto ticket at thousand of corner stores, excluding off-track betting (OTB). In recent years, however, pari-mutuel wagering has been in decline as consumers have multiple types of gambling available to them.
Situation or Environment The environment of the race track is very different than that of the "outside world," with a separate social culture.
Ownership and Operation Typically privately owned enterprises with state regulation. Over time, the government has come to play an increasingly larger role in the pari-mutuel industry.
Purpose The pari-mutuel industry exists both for a revenue function and an economic function. There exists an entire horse racing industry, for example, which contributes an economic imperative beyond that of a traditional lottery (Abt et. al. 1985, 93-100).
2.6.3. Casinos
Casino gambling, more than any other form of gambling, involves a wide range of games that tend to be very action oriented. Thus, the nature of the games, and the action oriented appeal, provide casino gambling a broader public appeal, stimulate higher per capita play and extract higher per capita losses than all other forms of commercial gambling (Abt et. al. 1985, 70).
2.6.3.1 The Contextual Variables of Casinos
Place Casinos have been typically removed from major populations and located generally in rural areas. A more recent trend has been the emergence of urban 20
casinos. Abt et. al note that the 1976 U.S. Federal Commission on the Review of the National Policy Toward Gambling concluded the following regarding casino locations:
densely populated areas are likely to find it much more difficult (than has Nevada) to cope with the effects of overindulgence. If Nevada style casinos were legalized in heavily urban areas, participation by low-income people can be expected to result in increased social problems and an expanded need for government services, thereby offsetting in whole or in part any advantages derived from the stimulation of local businesses (Abt et. al. 1985, 78).
The Commission, based on the above, concluded that:
any legalization of casino gambling be restricted by the State to relatively isolated areas where the impact on surrounding populations can be minimized. Although the Commission realizes that such a principle might not appeal to State policy makers who wish to stimulate existing resort areas, it nonetheless believes that the likely social effects of legalized casino gambling outweigh purely economic considerations (Abt et. al. 1985, 79).
The issue of casino locations, and the tends thereof, will be discussed in more detail later.
Situation or Environment Casinos provide an environment that is very detached from the real world, proving gamblers an escape.
Ownership and Operation Casinos are generally controlled by major corporations, both private and public. In Canada, the legal ownership of casinos, is slightly different due to the Criminal Code, which will be discussed in Chapter 3.
Purpose Casinos have generally been introduced to raise revenue and to promote economic development (Abt et. al. 77-83).
2.1. The First Wave of Gambling
The first wave of gambling that swept across the United States was in the form of public and private lotteries, and they were used, in large part, to help.finance the new colonies. McGowan writes that the early lotteries during this period were used mainly for 21
educational institutions and public interest projects, with notable universities such as
Harvard and Yale, conducting lotteries to help finance their development (McGowan
1994, 7). Lotteries expanded considerably to help finance the Revolutionary War, and later, to help finance major public works projects, such as bridges, road and water works, for rapidly growing states and cities (McGowan 1994, 12).
Just prior to the decline of the firstwav e of gambling, Dombrink and Thompson discuss the extent of gambling in the Unites States noting that, "by 1831, eight states ran
420 lotteries, selling $66 million in tickets, which was five times as great as the federal budget that year" (Dombrink and Thompson 1990, 10). However, not all was well with
America's love affair of gambling. A shift in the moral tide in the U. S, with the spread of
Jacksonian morality, and numerous lottery scandals, resulted in the collapse of the first wave of gambling (Rose 1995, 16). One such scandalous example was the Washington,
D.C. lottery, which was established to help pay for city improvements, and ended in scandal when the ticket broker skipped town. A court case ensued, and went all the way to the Supreme Court of the United States, declaring that the city was responsible and held liable to pay the winner (McGowan 1994, 13). By 1862, every state in the nation, except Kentucky and Missouri, had banned all forms of lotteries.
2.8. The Second Wave of Gambling
The lottery, and other forms of gambling, such as casinos, formed the second wave of gambling in an effort to help pay for the devastating effects of the Civil War and the expansion of the western frontier. The ravished southern states turned to lotteries to help pay for major capital improvements (McGowan 1994, 14). The second wave of gambling witnessed the spread of other forms of gambling, such as horse racing, and the introduction of casinos, particularly in the west, in the form of saloon / bordello / gambling halls which became the center of entertainment in many emerging towns. Other cities, 22
such as Kansas City, Denver, Chicago, New York and San Francisco, all experienced the growth and effects of gambling halls (Dombrink and Thompson 1990, 10).
It was, however, the Louisiana Lottery scandal of the 1890's that brought an end to the second wave of gambling in the United States. Once again, lotteries helped finance major public works, as was the case with the Louisiana Lottery where the proceeds of
r which were used to build the first waterworks in New Orleans (McGowan 1994, 14). The
Louisiana Lottery was the first truly national lottery held on a weekly basis, with some $3 million in prize money distributed annually. The organizers and promoters of the lottery, making an estimated $3 million to $5 million per year, attempted to bribe the state legislator to renew their very profitable license (McGowan 1994, 14-15). Rose notes that the Louisiana Lottery scandal "led to the passage of strong anti-lottery laws... and a complete prohibition of state lotteries, which lasted nearly 70 years (Rose 1995, 16).
2.9. The Third Wave of Gambling
The third wave of gambling, and the most pronounced wave of gambling to date, began with the Great Depression, when the State of Nevada re-legalized casino gambling in 1931 (Rose 1995, 17). The big boom, according to Rose, began in 1964 when New
Hampshire introduced the first state operated lottery in North America (Rose 1995, 17).
Commercial gambling is now one of the fastest growing industries in North America and has become an integral part of North America society. It is hard to imagine that less than
35 years ago, it was not possible to purchase a lottery ticket legally in North America.
Yet, today, the ability to purchase a lottery ticket from the corner grocery store is available in most jurisdictions in North America and the act of doing so has become a social norm, to an extent.
One of the primary reasons for the explosion of legalized gambling has been the governments revenue imperative. Governments gambling revenue imperative, according to Abt et. al., is the "... most important single influence on the evolution of gambling laws 23
and policy in the United States" (Abt et. al. 1985, 156). According to Rose, "many cities and states feel themselves under severe economic pressure. Gambling revenue appears to be both painless and voluntary, especially when compared with imposing or raising a local income tax or sales tax" (Rose 1986, 14). In fact, the introduction of the New Hampshire
Sweepstakes arose because the state was constitutionally prohibited from levying a progressive income tax, and thus, had to look to other revenue sources, such as lotteries
(Abt. et. al. 1985, 56). More recent gambling expansion has occurred as governments have been pressured to find alternative sources of funding in an era of reduced government budgets and as a means to curtail deficits (Campbell 1994b, 267).
The importance of the government legalizing and legitimizing gambling is discussed by Abt et. al:
...The wholesale dismantling of gambling prohibitions currently underway reflects a deeper social process. For the first time in our long history of risking money on chance gambling is being formally legitimated. There is an important distinction to be made here. Legalization is something that happens on a given day by the action of a State or its voters. Legitimation is conferred by social institutions within a changing cultural context. It is a process, not a discrete act, occurring over years or even generations. But it is happening now. A devil is being exorcised fromgamblin g games, and Americans are granting themselves absolution from a traditional sin. Commercial gambling is entering the American social structure and assuming a place alongside sports, theme amusement parks, television, packaged vacations, and so on as a major leisure activity institution (Abt et. al. 1985, 148).
Campbell notes that Abt and her colleagues "astute analysis is also applicable to the transformation of how gambling is perceived in Canada (Campbell 1994b, 265). As
Campbell argues, through the efforts of the government and private gambling interests, the institutionalization and legitimization of gambling is now a fact of life in North America:
In earlier periods, gambling interests lacked institutional legitimacy. Over the course of the twentieth century, the partnership of the state and the private gambling industry, more recently in the form of lottery suppliers, 24
hotel-casino operators and even non-profit organizations, has built an institutional foundation on which gambling now rests (Campbell 1994, 271).
Rose notes that "gambling has boomed exactly because the law of supply and demand works" (Rose 1995, 18). Prior to the legalization of gambling in North America, and even today with widespread legalized gambling, societies desire to gamble has been evident throughout the landscape in friend and family nickel and dime Saturday night poker games and universal betting on NFL and/or NHL pools. However, as Rose notes, once certain forms of gambling were legalized, it opened the door to further gambling legalization, even if the legalization occurred in a neighbouring jurisdiction (Rose 1986, 8-
13). Commenting further, Rose notes that:
Once the idea of legalized gambling has been accepted, even if only in an isolated area, discussion can be directed away from morality and toward cost/benefit analyses of various other games that might be put into place. It becomes increasingly difficult for the police and prosecutors to enforce those gambling laws that are still on the books. There are increasing cries for reform and for a relaxation of the laws against all forms of gambling (Rose 1986, 13).
Jurisdictional competition among governments for gambling dollars has also been a contributing factor to gambling expansion. Once one jurisdiction introduces a certain form of gambling, siphoning off dollars from a competing jurisdiction, a legal gambling war erupts between the jurisdictions (Rose 1986, 15). This point was illustrated earlier with the subsequent state lotteries that developed following the New Hampshire
Sweepstakes. Competition for gambling dollars, while typically regional in nature, can also be international in scope with countries competing for gambling dollars. In fact, and as will be shown later, one of the reasons for the provincial government in British
Columbia to expand gambling was in an effort to compete with the Washington State gambling market. 25
Additionally, as governments become dependent on gambling revenues, they are more apt to introduce new and expanded forms of gambling in an effort to increase the contributory revenues derived from such games. Thus, the state, often working in conjunction with private gambling interests, becomes an active promoter of gambling. To understand this phenomenon, Rose suggests that the notion of the government actively promoting a consumer product such as lottery tickets is rather unique, and not typically witnessed for other consumer products (Rose 1986, 16).
While Rose tends to focus his comments on gambling in the United States, the states love affair with gambling is not restricted to his home land noting, "Canada,
Australia and Europe have the legal gambling bug as bad or worse [than the United
States]. And nothing compares to the percentage growth of lotteries, casinos and pari- mutuel betting in the newly freedforme r Soviet bloc" (Rosel995, 18). It is important to note, however, the gambling wave sweeping across the Canadian landscape has differed from that of the United States and other jurisdictions. According to Campbell, much of the recent gambling expansion that has occurred in Canada since 1969 has been in the absence of major public debates and or government analysis. In the United States, for example, the Commission on the Review of the National Policy Toward Gambling undertook a major study of gambling in the 1970's (Campbell and Lowman 1988, xx).
And, more recently, the National Gambling Impact Study Commission is now studying the economic and social impacts of gambling in the United States in light of the recent gambling explosion. Yet, in recent history, no such major gambling analysis of the
Canadian gambling landscape has been initiated.
2.10. Casino Growth and the Rise of the Urban Casino
Starting in 1988, casino gambling moved to the forefront of the third wave of gambling as jurisdictions across North America looked towards casinos as an economic salvation. In an effort to stimulate economic development and enhance revenues, 26
governments across North America legalized casino gambling. Prior to 1988, major commercial casinos existed in Nevada and Atlantic City. In the United States, by 1995, there were 25 states with permitted casinos (Eadington 1996, 3), and today, in Canada, every province has charitable casinos and 5 provinces also have full service casinos
(KPMG 1997, 8). Today, for example, casino gambling in the United States alone accounts for 50% of consumer gambling expenditures (Christiansen 1997, 15).
As Eadington notes, "the driving force for casino legalization has been a desire by political jurisdictions to capture the economic benefits that come along with creation of this new and lucrative industry" (Eadington 1996, 5). One of the major casino trends to emerge has been the rise of the urban casino causing some writers to suggest that casino gambling would be the new wave of urban economic development, with most states having casino gambling by the year 2000 (Hunter and Bleinberger 1995, 1). While this has not occurred - and in fact by the mid-1990's casino gambling expansion, urban or otherwise, had slowed considerably due to political and economic factors (Eadington
1996, 3) - the issue of urban casinos continues to have profound implications for society and policy makers alike.
2.10.1. Casino Locations
Eadington provides the following classification for casinos and suggests that there are four types of casino locations:
1. distant from urban population concentrations in areas with natural tourist attractions (for example, Monte Carlo, Deauville, the Gold Coast, The Bahamas, Lake Tahoe, Baden Baden);
2. outside of urban populations concentrations in settings that may or may not have natural tourist attractions, but which are conveniently located relative to urban concentrations (for example, Las Vegas, Reno, Atlantic City, Sun City in Bophuthatswana, the Highlands outside Kuala Lumpur, Malaysia); 27
3. in major urban centres, but established in such a manner that access by the local population is discouraged, constrained or prohibited (for example, London, Berlin, SeouL Cairo, Istanbul); or
4. in major urban centres, and which are openly accessible to local and regional populations (for example, Adelaide, Perth, Melbourne, Sydney, Montreal, Windsor/Detroit, Kansas City, St. Louis) (Eadington 1995, 166).
Typically, casinos have been located in areas that are distant from urban populations, as it was believed that having casinos close to working-class populations in urban areas was a dangerous proposition as casinos were seen to predatory in nature (Eadington 1995, 166).
Goodman also notes that "in order to reduce access to large populations of the urban poor, gambling casinos were historically located in remote rural locations" (Goodman
1994, 113). More recently, however, there has been a systemic shift in casino locations with the introduction of the urban casino.
2.10.2. The Urban Casino
Prior to the mid-1980's, the only type of casinos located in an urban setting were rather non-descript, relatively invisible and highly restrictive (Eadington 1995, 166). The charitable casinos located throughout Vancouver could be classified within this above genre. However, as Eadington notes, "beginning in the mid-1980's, easily accessible casinos in urban areas have started to emerge (Eadington 1995, 166). Two Australian cities - Perth and Adelaide - were the first cities to introduce major commercial casinos in
1985, with other cities such as Brisbane, Melbourne, Sydney, Auckland, Christchurch,
Amsterdam, Rotterdam, New Orleans, Kansas City, St. Louis, Montreal, Windsor and
Winnipeg introducing major urban casinos in the early 1990's (Eadington 1995, 166).
Other cities, such as; Halifax, Sydney, Hull and Regina, have followed the above trend with the opening of urban casinos (Smith and Hinch 1996, 42). Chicago, Boston,
Philadelphia, Hartford, Bridgeport (Eadington 1995, 178) and Vancouver have all debated the possibility of introducing major casinos. Currently, the city of Detroit is discussing the 28
introduction of several major casinos, in part, to combat the recently opened Windsor casino which draws a significant portion of its market share from the Detroit area.
The introduction of urban casinos has profound implications for urban policy makers. As Hall and Hamen note "we are witnessing a transformation in urban development policies whereby casinos, along with other attractions and events, are being utilized as large -scale urban redevelopment mechanisms and in the creation of new destination images" (Hall and Hamen 1996, 30). This, in effect, was the context in which the Seaport Centre Casino proposal was presented. Perhaps the main rationale for locating casinos in an urban context is the suggestion that doing so will assist in the enhancement of tourism. Smith and Hinch, however, have noted that the Canadian experience has tended not to support such a proposition with the exception of the Windsor casino and to a lesser extent the Dawson City casino (Smith and Hinch 1996, 44). In
Australia, however, urban casinos have been used extensively to promote tourism and stimulate economic development. Hall and Hamen note that "(c)asinos have therefore become integrated with urban revitalization measures, such as waterfront redevelopments, festival marketplaces, convention centres, and sports facilities" (Hall and Hamen 1996,
35).
Much still needs to be learned of the urban casino, and its economic and social impacts. Because it is relatively a recent phenomenon, there has been a lack of detailed policy analysis on the impacts of locating casinos in major population areas. It is perhaps timely that the United States in undertaking a comprehensive review of recent gambling trends which should assist in gaining deeper understanding of the issues associated with gambling expansion in general, and the urban casino phenomenon. Several writers have nevertheless expressed concern with locating major casinos in an urban setting.
Commenting on the recent shift from locating casinos in a rural setting, or removed from major local populations, to locating them in an urban setting, Eadington notes that: 29
Perhaps of greatest significance in this process of change has been the decline in the belief that casinos in cities would create substantial social damage. In light of the fact that, for the most part, urban casinos are just beginning to appear on the scene in the early 1990's, this may turn out to be an erroneous position (Eadington 1995, 167).
One of the principal issues of locating casinos is an urban context is the extent to which the local residents will gamble, versus the degree to which tourists will be attracted to the casino. The Seaport Centre debate focused on this issue in great detail, as will be shown in Chapter 4. Smith and Hinch have concluded that within the Canadian context, casinos that have promoted themselves as tourist attractions have tended not to become such, with the exception of the Windsor and Dawson City casinos (Smith and Hinch 1996,
44). Where casinos fail to attract tourists, but rather attract the local population, Rose offers the following biting commentary:
Everywhere throughout history and throughout the world, where casinos have catered to local people, they have been outlawed in a few years. A casino acts like a black hole sucking money out of the local economy. No one cares if you suck money out of tourists, but large-scale casinos that do not bring in more new tourist dollars than they take away from local players and local businesses soon findthemselve s outlawed (Rose 1995, 29).
2.11. Conclusion
Gambling has undergone a major expansion during the last half of the 20th century. The major driving forces behind the third wave of gambling have been the governments gambling revenue imperative, promotion of expanded gambling from private business interests and non profits and pent up consumer demand for new gambling games.
Abt and her colleagues have concluded that gambling, due in large part to the expansion, has now become a legitimate social institution. The widespread introduction of casinos emerged as a significant trend of the third wave of gambling. Starting in the mid-1980's, urban casinos became the flavour of the day, providing policy makers new issues to face relating to gambling and society. The following two chapters examine gambling in Canada 30
and British Columbia, setting the framework for a case study on the Seaport Centre casino proposal for downtown Vancouver. While Seaport Centre ultimately failed, an examination of the debate illustrates the issues associated with locating a casino in an urban context. 31
Chapter 3
Gambling in Canada
3.1. Introduction
As was discussed in Chapter two, different gambling games have different characteristics, and gambling's role within a specific jurisdiction will have its own rational for existing based on the legislative framework that prevails, and purpose therein. Similar to the trend in the United States, Canada has also undergone a massive explosion in legal gambling in recent years. Chapter three will examine the legal framework for gambling in
Canada, including a discussion on the role and history of the Criminal Code of Canada as it pertains to gambling and the evolution of the legal framework of gambling in Canada. A brief discussion on the extent and types of gambling that exist in the different provinces will establish the context for discussing gambling in British Columbia in chapter 4.
3.2. Gambling in Canada - A Chronology of Canadian Gambling Legislation
The federal government, through the Criminal Code of Canada, establishes the legal framework under which gambling operates in Canada. The Code, first introduced in
1892, has undergone a series of amendments pertaining to gambling, resulting in the gradual and ongoing relaxation of gambling laws in Canada (Campbell 1994a, vi). The following section will discuss the major changes that have affected the legal status of gambling in Canada. An understanding of the role of the federal government and the evolving legal status of gambling is required prior to discussing gambling in British
Columbia. 32
3.2. J. The Early Criminal Code Years
The federal Criminal Code of Canada regulates gambling in Canada. At the time the Criminal Code was enacted in 1892, the federal government incorporated into it the
1886 Act regulating lotteries and games of chance under the section Offenses against religion, morals and public convenience, which stated that, "keeping common gaming houses, conducting lotteries, cheating at play, and gambling in public conveyances were prohibited" in Canada (Campbell 1994b, 25). The Code was amended in 1900 to allow for small raffles to be conducted at religious and charitable bazaars for fund raising purposes, and in 1906, the Code was again amended to introduce the term "lottery scheme," which would become an important phrase in the evolution of gambling in Canada for how it has since been interpreted (Campbell 1994b, 25). Similar to the experience in the United States, the early introduction of gambling in Canada was seen as an effort to raise money for community minded projects.
3.2.2: The Miller Bill
The Miller Bill of 1910 was the first major national debate regarding the status of gambling in Canada, with moral reformers opposed to gambling and racing promoters supporting legal gambling. The Miller Bill was a private members Bill attempting to criminalize horse race betting, which arose as a direct result of extensive lobbying on the part of the Moral and Social Reform Council of Canada (MSRCC), who were opposed to horse race gambling and wanted the Criminal Code amended to reflect their position
(Campbell 1994b). The Miller Inquiry commenced on January 18, 1910 to publicly discuss and receive statements for and against the proposed measures to outlaw horse race bookmaking (Campbell 1994b, 120-124). As has become common when publicly debating the status of gambling in society, where positive and negative economic arguments are presented, the Miller Bill was no different in this regard with opponents of the Bill presenting economic arguments in favour of continued legal horse race betting
(Campbell 1994b, 129). 33
When the Bill was introduced to the House, after considerable debate and negotiations between supporters and opposition, a compromise was reached that allowed for continued on track horse race betting and prohibition of off track betting (Campbell
1994b, 170). Campbell notes that:
Much to the chagrin of the moral reform movement, the concerted effort to those who held a vested interest in gambling successfully persuaded state authorities that betting on racetracks, if properly limited and controlled, was an acceptable, rational recreation moderately enjoyed by many Canadians (Campbell 1994b, 175).
The success of the racetrack industry in defeating the Miller Bill would be short lived, however. The outbreak of World War I gave the moral reform movement another attempt to outlaw horse race betting in Canada, as Canadians saw it as an extravagance during war time restraint (Campbell 1994b, 177). The Borden government of the day passed an Order-in-Council on August 1, 1917 outlawing horse race betting during the war and immediately thereafter (Campbell 1994b, 183).
3.2.3. The Rutherford Royal Commission (1919-1920)
Following World War I, Prime Minister Borden appointed Dr. J.G. Rutherford to inquire into race track betting in Canada. The moral reform movement of the day was strongly opposed to the appointment of Rutherford, who was the former Veterinary
Director General and Live Stock Commissioner, as he was charged by the reformers as being openly opposed to the previous Miller Bill, and was a supporter of racetrack gambling (Campbell 1994b, 184). Following public hearings across Canada, Rutherford recommended the re commencement of racetrack betting, and rescinding of the 1917
Order-in-Council (Campbell 1994b, 184). Rutherford also recommended further changes to racetrack betting in Canada, making pari-mutual wagering machines compulsory and estabhshing take-out rates for racetrack operators (Campbell 1994b, 185). The result of a decade of debating racetrack betting in Canada was that, as Campbell states, "a spike was 34
driven into the heart of the [moral reform movements] anti-racetrack gambling campaign"
(Campbell 1994b, 186).
3.2.4. 1925-1950
In 1925, amendments to the Code were presented to outlaw horserace betting publications, which was defeated, and an exemption to agricultural exhibitions and fairs was granted against gambling prohibitions after considerable lobbying from fair organizers who once again used the economic argument to support gambling (Campbell 1994b, 208 -
211). As the depression took hold in Canada in the 1930's, movements began to emerge supporting the introduction of lotteries as a way to raise revenue for cash strapped governments geared towards social programs, such as for the funding of hospitals
(Campbell 1994b, 214). Once again, a private member attempted to introduce a Bill, this time, however, it was in support of gambling by proposing the introduction of an Irish
Sweepstakes type of lottery in Canada (Campbell 1994b, 215). One of the reasons cited in support of introducing a sweepstakes in Canada was that the Irish Sweepstakes, while being illegal in Canada, was very popular. Before the decade was out, there were five different attempts, all of which were unsuccessful, to introduce government operated lotteries (Campbell 1994b, 225). In 1938, the Code was successfully amended to allow gambling by charities and religious organizations so they could pursue their objectives
(Campbell 1994b, 225).
3.2.5. The 1954 Joint Committee
Following a major review of the Criminal Code of Canada between 1949 and
1954, which did not examine the legal status of gambling in Canada due to its controversial nature, a federal commission was formally appointed in 1954 to , among other things, examine the role of gambling in Canada. The 27 member Joint Committee of the Senate and House of Commons on Capital and Corporal Punishment and Lotteries, while directed to review lotteries in Canada, expanded its terms of reference and reviewed a wider scope of gambling (Campbell 1994b, 229). After hearing extension delegations, 35
and receiving numerous written submissions, both in support and in opposition of the introduction of lotteries, the Committee concluded that there should be no state lotteries in Canada (Campbell 1994b, 234).
3.2.6. The 1969 Amendment
The 1960's ushered in a new area of gambling legislation in Canada. While the
1954 Joint Committee concluded that legal lotteries should not be permitted in Canada, by
1961 the federal government was discussing the possibility of introducing state operated lotteries in Canada (Campbell 1994b, 234). Further, between 1963 and 1967, there were six separate private member bill attempts to introduce lotteries in Canada (Campbell
1994b, 235). "Pro-lottery public sentiment gathered momentum during the late 1960's"
(Fletcher - Gordon 1987, 92). Illustrating the movement towards the legalization of lotteries in Canada, Fletcher - Gordon writes that a petition with 300,000 signatures was presented to the federal government asking them to legalize lotteries citing that an estimated $100 million was being spent by Canadians on foreign lotteries (Fletcher -
Gordon 1987, 92).
Additionally, much of the lottery sentiment taking place in Canada coincided with the introduction of the first legal lottery in North America - the 1964 New Hampshire
Sweepstakes. It was perhaps the City of Montreal that was the strongest supporter of the legalization of lotteries in Canada. Montreal's revenue imperative was driven, in part, by their deep financial commitments and expected deficits resulting from Expo 67 and the
1976 Olympics (Campbell 1994b, 236). In 1969, with "remarkable ease" (Osborne 1989,
63), the Liberal government of the day passed into law the legalization of lotteries in
Canada. And, in 1973, the federal government introduced the Olympic Lottery Fund to raise money for the 1976 Montreal Olympics, followed in 1976 by the creation of Lotto-
Canada (Campbell 1994b, 246). Commenting on the impact that the 1969 landmark changes to the Criminal Code had on gambling in Canada, Campbell states that: 36
The 1969 amendment to the Criminal Code marked the transformation of policy regarding various forms of gambling from deferral prohibition to provincial regulation. Intended to permit both federal and provincial governments - as well as charitable and religious organizations - to generate revenues by conducting games of chance such as lotteries, the amendment has resulted in a significant growth in the amount of real dollars annually expended by Canadians on state-operated lotteries or state- licensed gambling activities (Campbell 1994b, 240).
There were other significant changes in gambling policy following the 1969 amendment. The importance of the 1906 amendment to the Criminal Code, wherein the term lottery scheme was incorporated into the Code, would play an important role in the determination of various provincial government gambling laws and policies based on their respective interpretation of the phrase. Campbell notes that Alberta "has been at the forefront of lottery scheme gaming" (Campbell 1994b, 241) by their liberal interpretation of the phrase to include such games of chance as bingo, blackjack, roulette, and baccarat
(Campbell 1994b, 242). In 1975, the province of Alberta granted a short-term license for a casino to generate fluids for charities which "...proved to be a milestone in the evolution of casino gaming in Alberta, and, indeed, in Canada" (Campbell 1994b, 244).
3.2.7. The 1985Amendment
With the federal government now directly involved in lotteries with the creation of
Lotto-Canada in 1976, several provinces worked together to "squeeze the federal government out of the lottery marketplace" (Campbell 1994b, 247). The legal control over lotteries became a major topic, as witnessed by the 1979 election whereby lotteries became one of the central issues, and later as evidenced by court cases between the federal and provincial government over the control of lotteries in Canada (Campbell 1994b, 247).
In 1985, however, an agreement was reached between the two levels of government and the federal government subsequently announced that they would change the Criminal
Code providing the provinces the sole right to conduct lotteries and games of chance in return for a $100 million payment by the provinces (Campbell 1994b, 248), and a further 37
payment of $24 million per year indexed (Fletcher - Gordon 1987, 94). In addition to the above change, Campbell notes that there was one other significant change to the Code which permitted provinces to "operate lotteries and lottery schemes through a computer, video device or slot machine (Campbell 1994b, 249). Provinces were now also allowed to operate VLT's and slot machines. Interestingly, native gambling, which has become a major issue in recent years, was not considered during the 1985 amendments, much to their disapproval.
3.3. The Legalization and Legitimization of Gambling in Canada
Similar to the experience of the United States, where Abt and her colleagues have written that gambling has become legitimated through the actions of the state, the continued relaxation of gambling laws in Canada over the last 100 years has resulted in the legitimization of gambling in Canada. Campbell states that one of the major results of the last 100 years of legalization of gambling in Canada "...has been the growing dependence of provincial levels of the Canadian state of gambling revenues and the consequent development of their institutional self-interest in gambling laws and policies" (Campbell
1994b, 253). The evolution of lotteries in Canada illustrates the above statement.
Commenting on the role of lotteries in society, Osborne and Campbell note that "since
1969, lotteries have become fully entrenched in Canadian culture" (Osborne and Campbell
1988, 130). Campbell summarizes the effect of the above documented gambling changes to the Code by stating that:
the sections of the Canadian Criminal Code which pertain to gambling have undergone numerous revisions over the past 100 years. Changes in the Code since 1892 have represented a gradual but sustained move toward greater liberalization of gambling law. The history of Canadian law represents a clear transition from a criminal prohibition to a legalization. Correspondingly, it represents a consistent pattern of lesser federal responsibility and greater provincial authority over activities that have considerable economic significance (Campbell 1994b, 251). 38-
The last major public review of gambling occurred with the 1954 Joint Committee.
Since this time, there has been no major national public process on the role of gambling in
Canadian society, despite the significant changes that occurred to the Code in 1969. and
1985. This process is very different than that of the United States where the federal government has taken a very active role in the debate of gambling in society through the establishment of two major gambling commissions in the last 20 years. Having now established the history and legal framework of gambling in Canada, section 3.4 below, will examine gambling in Canada, and establish the context for an examination of gambling in
British Columbia in the following chapter.
3.4. Canada's Gambling Landscape
Since the wholesale transfer of gambling jurisdiction to the provincial governments as part of the 1985 amendment to the Criminal Code, varying provinces have taken different approaches in terms of the role of gambling in their respective jurisdictions. One consistent pattern across the country has been the dramatic growth of gambling, a pattern that is not dissimilar to that what occurred in the United States. Much of the gambling growth in Canada occurred during the recession of the late 1980's and early 1990's as governments searched for new revenue sources. Figure 3 illustrates the growth of gambling in Canada in recent years. Gross gambling revenues in Canada have increased from $4.3 billion in 1992/93, to $7.1 billion in 1995/96, accounting for a 64% increase.
While the type, policy structure and extent of gambling may differ from one province to another, the trend throughout the country has been towards an increase in all types and forms of gambling operations. Every province in the country has charitable casinos, bingo and lotteries. Newfoundland is the only province in the country that does not have pari-mutual wagering. 39
Figure 3
Gross Gambling Revenue Growth in Canada - 1992/93 - 1995/96
1992/93 1993/94 1994/95 1995/96 year
Source: KPMG 1997, 15
Currently, Quebec, Ontario, Manitoba, Nova Scotia and Saskatchewan have major casinos in operation, providing governments the opportunity to generate substantial revenues. Of the 13 major casinos in the country, the Windsor casino generates the largest amount of money, with $577.3 million in gross gambling revenues and providing the government
$401.1 million in revenue for 1995/96 (KPMG 1997, 10). The newly opened Casino
Niagara may well replace the Windsor casino as the largest money generator, as it will be the largest casino in the country with some 96,000 square feet of gambling area, and will contain 3,000 slot machines and 123 gambling tables (KPMG 1997, 10).
The governments' revenue imperative has been an important factor in the growth of major casino gambling in Canada during the 1990's. Additionally, consumer demand for casinos, and other forms of gambling, have also contributed to the increase and growth of gambling across North America. As Christiansen notes, "casinos are spreading across
North America like wndfire ... it (casino growth) is being fueled by massive unsatisfied consumer demand for blackjack and slot machines" (Christiansen, 1994, 4). Supporting the consumer demand argument, Foot and Stoffman have stated that "the arrival of casinos in localities that once shunned them is largely a normal market response to surging demand" (Foot and Stoffman 1996, 125). Foot and Stoffman go on to state that, based on 40
demographic trends and consumer demand in Canada, "gambling in general will be a major growth industry for the foreseeable future" (Foot and Stoffman 1996, 125). The above movements underscore, however, the importance of the need of policy makers to understand all aspects of gambling, both positive and negative, so that proper gambling policies can best be implemented.
More recently, VLT's have been the largest contributing factor to the rise of gambling in Canada (KPMG 1997, 11), and again illustrate the governments gambling revenue imperative. First introduced in Canada in 1990, VLT's have become a significant factor in the gambling landscape in Canada, and illustrate the governments revenue imperative as they tend to produce the highest return to of all gambling games to the government. Currently, Quebec has the highest number of VLT's with some 14,994 terminals generating gross gambling revenues of $310.6 million and government revenue of $140.4 million in 1995/96. Ontario, however, is in the process of implementing 20,000
VLT's province wide. Alberta generates the highest amount of revenue from VLT's with
$512.8 million in gross gambling revenue and government revenues of $409.9 million in
1995/96. Illustrating the governments revenue imperative in their mad rush to implement
VLT's, KPMG concluded as part of their analysis on gambling in Canada, that "the largest revenue growth (in Canada) has come from video lottery terminals...and they provide little additional employment and have bruited tourism potential" (KPMG 1997, 1). With the recent introduction of slot machines in British Columbia, every province in the county has some form of electronic gambling, be it VLT's, slot machines or similar types of devices, a pattern not yet even established in the United States gambling explosion.
3.5. Conclusion
A review of the history in gambling in Canada illustrates a gradual and sustained shift towards increased legalization and legitimization of gambling. Today, governments have become dependent on the revenues derived from gambling. Much of the recent 41
gambling expansion initiatives across the county have been done so in pursuit of the governments revenue imperative, and have often been stimulated by provincial deficit considerations and/or economic difficulties and recessions. At the same time, however, consumers of gambling games have tended to adopt the new games as they are introduced, particularly slot machines and casinos. Having established the legal frameworko f gambling in Canada, the following chapter will explore the history and evolution of gambling in British Columbia. 42
Chapter 4
Gambling in British Columbia
4.1. Introduction
British Columbia's gambling landscape has evolved significantly since the 1969 and
1985 amendments to the Criminal Code. The gambling pattern in B.C., as elsewhere in
North America, has been continued expansion. Today, gambling is big business in B.C. with a handle of $1.68 billion, and gross gambling revenue of $633 million. Consumers in
British Columbia spend in excess of seven times the amount of money on various forms of gambling than they do on going to the movies. Chapter four will examine the recent history of gambling in British Columbia, discuss the governments policy reviews of gambling, and detail the current gambling landscape in the province illustrating the extent to which gambling exists in the province. The discussion of the recent history of gambling in the province, and depth of the gambling market, will establish the framework in which the proposal for Seaport Centre was proposed. Chapter 4 will also discuss the government's recent, and not too successful, initiative to expand gambling in the province.
Recently, the gambling landscape in British Columbia has been fluid and tumultuous as the provincial government, acting on the revenue imperative, has attempted to introduce new games resulting in lawsuits by local governments and charity organizations against the province. On both above counts the province lost. Such activity underscores the importance of the regulatory gambling body, in this case the province of
B.C., to have a clear understanding of the purpose of gambling in society, as was discussed earlier. 43
4.2. The Rise of Legal Gambling in British Columbia
Having now established the legal history of gambling in Canada, and the transfer of legal gambling jurisdiction from the federal government to the provincial governments,
Section 4.2 will discuss the recent history of gambling in British Columbia. Particular attention will bepaid to the post 1969 period after the amendment to the Criminal Code of
Canada, and the impacts the changes had to gambling in B.C. Irnmediately following the
1969 amendment to the Code, the provincial government passed an Order-in-Council which permitted the province to conduct public gambling and began to issue licenses to charitable and religious organizations, and agricultural fairs and exhibitions to conduct
"lottery schemes" (BC Gaming Commission 1988, IQ-1). The following sections will discuss the evolution of legal gambling in the province of British Columbia.
4.2.1. The Rise of the Lottery In British Columbia
Following the 1969 amendment to the Criminal Code, and the passing of the provincial Order-in-Council pertaining to gambling, the next major gambling event to occur in B.C. was in 1974, when the province joined Alberta, Manitoba and Saskatchewan to form the Western Canada Lottery Foundation (WCLF). As each member in the WCLF was responsible for the marketing of lotteries in their respective province, the BC government passed the BC Lottery Act which governed the conduct of lotteries and established the BC Lottery Branch as the regulator (BC Gaming Commission 1988, IQ-l).
The BC Lottery Act stipulated that the revenues derived from the lottery was to be designated for "...cultural or recreational purposes for preserving the cultural heritage of the Province" (BC Gaming Commission 1988, ITJ-2). In 1976, as revenues from the newly formed lottery began to increase, the Act was amended to state that the money could be used for "other purposes" (BC Gaming Commission 1988, IJJ-2) providing the government with more flexibility to spend its newly found source of revenue. In 1985, the
B.C. government decided to withdraw from the Western Canada Lottery Foundation because the other provinces refused to move the WCLF headquarters fromWinnipe g to 44
Kamloops (Fletcher - Gordon 1987, 95), and they established the BC Lottery Corporation pursuant to the BC Lottery Corporation Act (BC Gaming Commission 1988, HI-2).
4.2.2. The Rise of Charity Casinos in British Columbia
Between 1970 and 1984, pursuant to the 1970 Order-in-Council, casino gambling took place in British Columbia on a rather hmited basis to raise money for social and charity purposes. The regulations stipulated that a charity gambling event could not take place at permanent sites. Casino events were further limited to a $2.00 bet limit, six blackjack tables and unhmited roulette wheels and wheels of fortune with 35% of the approximately $1000 generated from each designated event to charities (BC Gaming
Commission 1988, DI-3). In 1982, during this era of minor casino gambling, the Great
Casino Supply Company was incorporated and assisted in the operation of the charity gambling events. By 1983, Great Canadian was offering charities a guaranteed 35% of the proceeds with the rermining money distributed as follows; 2% to the government, 28%, plus admission fee, to the promoter who booked the room and arranged for advertising and entertainment, and 35% to Great Canadian (BC Gaming Commission 1988, ITJ-4).
Today, Great Canadian is the largest charity casino operator in the province.
By 1986, there were 32 casino companies operating in the province as charity casino gambling become more, popular. Further contributing to the rise of charity casino gambling were changes in the regulations from a bet limit of $2.00 to $5.00, and the increase in blackjack tables from six to ten (BC Gaming Commission 1988, ffl-4). Casino companies had now established permanent casino locations and were operating 7 days per week. Given the ad hoc development of charity casino gambling in the province, problems began to emerge, "most of which were associated with financial discrepancies" (BC
Gaming Commission 1988, ffl-4) and they were mainly the result of lack of experience and supervision. In an attempt to control the problems associated with the charity casinos, new regulations were implemented that reduced the betting limits^ number of games allowed and hours of operation, limited the amount of charity casino events that could 45
take place on a weekly basis and adjusted the win distribution by increasing the charities stake to 50% and the provincial license fee to 5% (BC Gaming Commission 1988, IJJ-4).
The above changes impacted the charity gambling industry by reducing the management companies from 32 to 12, who in turn changed their policies and the once guaranteed percentage paid to the charities (now 50%) was no longer guaranteed, but rather, the charities were paid last, often receiving less than the required 50% (BC Coming
Commission 1988, m-4).
On April 1, 1987, the provincial government announced new casino regulations, including; a freeze on new charity casino gambling licenses, increasing the bet limit from
$2.00 to $5.00; confirming the charity take at 50%; increasing the provincial fee to 10%
(Fletcher - Gordon 1987, 113); and the creation of a 7 member BC Gaming Commission whose mandate would be to regulate the charity casino, bingo and certain ticket lotteries.
The newly formed BC Gaming Commission was instructed to report back providing the government with a comprehensive report on gambling in British Columbia (BC Gaming
Commission 1988, m-4).
In the 1980's, discussions began to emerge regarding expanded casino gambling in
British Columbia. Interestingly, in the April 1, 1987 press release distributed by the province detailing changes to casino gambling, the potential introduction of a new form of gambling was raised. The Attorney General instructed the newly formed BC Gaming
Commission to analyze the following in its report, "(the) comprehensive report will also involve the Ministry of Tourism, Recreation and Culture in a joint assessment of the deskability of policy for destination resort and tourism oriented gaming activities"
(Province of British Columbia 1987, 5). Moreover, Fletcher - Gorden also reported that during this time period, private sector interests were raising the possibility of introducing
"world class" casinos in resort areas such as Whistler (Fletcher - Gordon 1987, 113).
Additionally, following EXPO 86 in Vancouver, and during the governments disposition of the land, certain business interests in the province approached the government about 46
mcluding casinos as part of their development proposal. Thus, while Seaport Centre was the most significant debate regarding large scale casinos in British Columbia to date, the notion of such estabh'shments had a prior history in the province.
4.2.3. The Rise of Bingo and Other Games in British Columbia
In addition to the rise of lotteries and charity casinos in British Columbia, bingo, social clubs and raffles also became a factor in the new gambling landscape of British
Columbia. Pari-mutual wagering in British Columbia had already been a fact of life in BC for some time, and nationally, it had existed since the turn of the century. Bingo played an important role as a fundraising mechanism for charities. In 1984, however, a "bingo industry" in BC began to emerge as private business interests capitalized on the new landscape and developed major bingo halls that could seat between 500 and 1000 people
(Flethcer - Gordon 1987, 105). By 1987, the bingo industry was largely established with some 63 commercial bingo halls throughout the province (BC Gaming Commission 1988, m-3).
4.3. BC Gaming Commission - Report of the Status of Gaming in British Columbia
Pursuant to the provincial government announcement on April 1, 1987, the newly formed BC Gaming Commission released its report on the status of gaming in BC on
January 1, 1988. The report dealt with a wide range of gambling issues in British
Columbia, but did not examine the role of lotteries and pari-mutual wagering as these operated under separate legislation. In the process of preparing the report, the
Commission traveled throughout the province and received briefs from 500 groups and individuals, and presentations from 60 mdividuals and organizations, many of whom were involved in the gambling industry (BC Gaming Commission 1988,1-1). Listed below are the major findings of the report. 47
4.3.1. Structure and Role of the Commission
The Commission suggested a reorganization for the way that charity gambling worked in the province to "bring unity to the gaming structure" (BC Gaming Commission
1988,1-3). The Commission also recommended the creation of a new provincial statute -
The Public Gaming Act. Ten years later, however, comprehensive gambling legislation still does not exist in the province. In the mterim, the Commission suggested that a
Lotteries Advisory Committee (LAC) be established to better coordinate gambling in the province with a representative from the BC Gaming Commission, BC Racing Commission and BC Lottery Foundation.
4.3.2. Casino Gaming
The Commission recommended for the continued freeze on new casino locations, but that the freeze on charities allowed to participate in casino gambling be lifted. In
1988, the Commission estimated that some 20,000 and 15,000 people play bingo and frequent casinos respectively on a daily basis in the province (BC Gaming Commission
1988, IJ-1), and the Commission stated that "charity casino fund raising is here to stay in
B.C." (BC Gaming Commission 1988, V-9).. The Commission further recommended'that there be no increase in betting limits or hours of operations. The Commission also discussed the role of slot rriachines in charity casinos stating that, "the Criminal Code of
Canada requires that there be no slot machines allowed anywhere in Canada within charity gaming locations....and that whatever else our charity casinos may evolve into in the future, they should be slot-machine free" (BC Gaming Commission 1988, V-l). Today, the governments position is fundamentally different whereby they recently announced the inclusion of slot machines in charity casinos - driven in large part by their revenue imperative.
4.3.3. Destination Casinos in the Province
As part of their 1988 report, the BC Gaming Commission reviewed the role a major destination casino could play in the province. The Commission noted that while 48
they were preparing their report, in fact, they were approached by several groups interested in locating major commercial casinos - two groups proposing casinos on the
EXPO 86 site and a third group proposing a casino at the Pacific National Exhibition (BC
Gaming Conrmission 1988, VI-3). The Connnission concluded:
A destination resort casino in a rural community with a minimal population base surrounding it is unlikely to be a financial success...On the other hand, a well run, firstclas s casino that is advertised as a tourist asset, would we believe, be successful in a major population centre (BC Gaming Commission 1988, VT-3).
The above, in essence, is what Seaport Centre was proposed as. The Commission went on to note, however, that further analysis and research would be required before undertaking such an initiative in the province.
4.4. The Gaming Review Committee - The Lord Streifel Report
The Gaming Review Committee was the next major review of gambling in British
Columbia. Two MLA's - Margaret Lord and Dennis Striefel - upon the request of the
Attorney General and Minister of Government Services, presented a report on gambling in
British Columbia in January 1993. The major assumptions of the report were that: gambling will continue to be lawful in the province; charities will continue to be a stakeholder; the government will continue to rely on gaming proceeds as a significant source of revenue; and the social costs of wide open gambling are unacceptable to the government (Gaming Review Committee 1993, 1). The Review Committee conducted a series of meetings with various gambling stakeholders, and received some 1,071 submissions.
4.4.1. Major Findings of the Gaming Review Committee
The following list highhghts the major findingso f the Gaming Review Committee: 49
• Numerous groups called for the estabUshment of some form of comprehensive gambling legislation.
• Concerns were raised about the ability of charitable organizations to maintain their gambling revenue, and some form of protection of said revenues.
• Opposition as raised fromvariou s religious organizations, and certain individuals, to the existing level of gambling in the province and the rise of problem gambling.
• Calls from the gambling industry for expanded gambling were expressed; in terms of expanded gambling hours, higher bet hmits and the introduction of new forms of games.
• Support was received from the Gaming Commission and BC Lottery Corporation for expanded gambling, including the introduction of VLT's in the province (Gaming Review Committee 1993, 23).
One year after the release of the Gaming Review, the province would find itself in perhaps the most significant gambling debate to date with the announced Seaport Centre Casino proposal (which will be discussed in detail in Chapter 5). The provincial government, in response to the Seaport Centre proposal, conducted another provincial gambling review.
The Report of the Gaming Policy Review, setting the framework and direction for gambling in the province, was issued in October 1994.
4.5. Report of the Gaming Policy Review
Following the highly charged Seaport Centre debate, the provincial government announced the findings of the Gaming Policy Review. Once again there was a series of guiding principles for the review. They included: continued support for charitable gambling, continued support of the horse-racing industry, gambling should continue to provide government revenues for socially beneficial purposes, support for First Nations economic development and self-sufficiency, the displacement of illegal gambling and any expansion of gambling should be done in such a manner to minimize the negative impacts of gambling (Ministry of Government Services 1994, ii). Of the above guiding principles, 50
the role of First Nations in the provincial gambling landscape was now, for the first time, a formal government policy consideration.
4.5. J. Major Findings of the Gaming Policy Review
The following list highhghts the major findings of the Gaming Policy Review:
• For profit, Las Vegas style casinos would not be permitted in B.C.
• The 1987 freeze on charity casinos would be lifted and an increase in charity casinos would be explored, including discussions with First Nations groups.
• The expansion of electronic bingo.
• The introduction of 4,600 - 5,000 VLT's in the province, to be owned and operated by BC Lottery Corporation. The report concluded that the introduction of VLT's is a means to combat the estimated 10,000 illegal "grey machines" operating in the province, and they would generate an estimated $120 million in annual provincial revenue.
• The province would conduct a First Nations Summit to explore how they could participate in the new gambling policy of moderate expansion.
• The new government gambling revenues would be dedicated to socially beneficial purposes.
• Once again, a new comprehensive gaming act would be introduced in the province.
4.6. The Gambling Landscape in British Columbia
Having now established the recent history of gambling in B.C., the following section will discuss the province's gambling landscape. Gambling in British Columbia is big business, with a handle of $1.68 billion and gross gambling revenue of $633 million for
1995/96. The three main forms of gambling in British Columbia include lottery products, pari-mutuel wagering on horse racing and charitable gambling (casinos, bingo, raffles and pull-tabs). In 1995/96, the province of British Columbia generated 1.5% of its revenue from gambling, which is the smallest percentage of any Canadian province (Smith and
Azmier 1997, 6). Per capita expenditure on gambling in British Columbia is $231, 51
significantly lower than the national average is $350 (KPMG 1997, 1). The lower per capita gambling expenditures and smaller percentage of government gambling revenue is largely a result of the fact, that until recently, British Columbia was the only province to not have VLT's, or similar types of electronic gambling machines. Figure 4 illustrates the three gambling industries in the province.
Figure 4
B.C.'s Gambling Landscape - 1995/96
Caritable Gambling
Pari-Mutuel
Lottery Products
$ million
Source: KPMG 1997, B-2 and BC Lottery Corporation 1997, 2.
In terms of comparing B.C.'s gross gambling dollars to the general economy, which as Christiansen notes is the key measure of the relationship and scope of gambling in a given area, Figure 5 places B.C.'s gambling economy into perspective. Consumers in
British Columbia spent an estimated $633 million dollars on various gambling games in
1995/96. To better understand the magnitude of this figure, B.C. residents spent an estimated $77 million on motion pictures and $358 million on packaged travel tours in
1997. 52
Figure 5
B.C.'s Leisure Market
0 100 200 300 400 500 600 700- $ million
Source: Statistics Canada, Compusearch 1997 and Various B.C. Government Gambling Statistics 1
The following sections deal with the various individual forms of gambling in British
Columbia and illustrates their respective contribution to the gambling landscape in the province.
4.6.1. Lotteries and Number Games in British Columbia
Lottery sales have increased 22 consecutive years in British Columbia (BC Lottery
Corporation 1997, 4), and have become a significant source of revenue for the
government, illustrating the governments revenue imperative of the lottery, the mission
statement of the B.C. Lottery Corporation states:
As the major advocate on gaming policies and the principal operational agency of commercial gaming within the jurisdiction of British Columbia, British Columbia Lottery Corporation will contribute significantly to government revenues and economic growth through providing top- quality entertainment in the public in a socially responsible manner (BC Lottery Corporation 1997, 2). [emphasis added]
To achieve the above mission statement, the BC Lottery Corporation operates a wide
range of lottery and number games in the province. These include mass market games
1 Gross gambling numbers are based on government 1995/96 numbers and the other leiusre numbers are based on 1991 Census data, adjusted to reflect 1997 consumer household data, as calculated by Compusearch. 53
such as: Lotto 6/49, BC/49, Extra and Instant, accounting for total sales in 1995/96 of
$580.8 million. As revenues frommas s market games have plateaued in recent years, BC
Lottery Corporation has increasingly looked towards niche market and social games.
These include: Sports Action, Club Keno, Daily 3 and Breakopen games. In 1995/96, these niche games and social games accounted for a total of $216 million in sales, with the largest portion coming Breakopen tickets which had total sales of $150.5 million.
Figure 6 below illustrates the dramatic growth of lotteries in British Columbia over the last 22 years. Lottery sales have increased from $5.0 million in 1975, to $797 million in 1996, and government revenues increased from $5.0 million to $244.1 million over the same period.
Figure 6
BC Lottery Sales - 1975 - 1996
LO co r^- co cn CD i— cvico^Lncor-^cocncD-.— OJCOTTLOCO r-s_ I---- r"--. ["•-- oo co oo oo oo oo oo oo oo oo CTT> CO en cn cn co cn CD co co co cn cn co co cn CO CO cn CO CO CO CO CO CO CO CO CO Year
Source: British Columbia Lottery Corporation, 1996.
The more important figure, however, is the gross revenue collected from lotteries - or the amount consumers spent on lottery games. In 1996 for example, of the total $797 million in lottery game sales, $416.7 million was paid back to consumers in prize money. This results in total consumer spending of $380.3 million. Figure 7 illustrates the breakdown, in terms of percentage, of how the revenue of the BC Lottery Corporation is distributed. 54
Figure 7
Breakdown of the Lottery Revenue
O p e ra 1io ns 8% R e ve nue 31 %
prizes Commissions BP^ 7% P rinling 52% 2%
Source: BC Lottery Corporation 1997, 1.
Residents of British Columbia are able to purchase lottery tickets at some 2,200 lottery retail locations and breakopen tickets are available at 1,200 retailers at adult-only social settings (BC Lottery Corporation 1997, 10).
4.6.2. Pari-Mutual Wagering
Horse racing in British Columbia falls under the jurisdiction of the BC Racing
Commission, which was established pursuant to the Horse Racing Act (KMPG 1997, E-
4). There are seven race track locations in the province including: Hastings Park
Racecourse in Vancouver, Fraser Downs in Cloverdale, Sandown Raceway in Sidney, Kin
Park in Vernon, Sunflower Downs in Princeton, Sagebrush Downs in Kamloops and
Desert Park in Osoyoos (British Columbia Racing Commission Annual Report 1996, 3).
In 1995/96, there was $273.5 rnilhon wagered at BC race tracks and teletheatres with gross gambling revenues of $54.7 million. The total breakdown of horse wagering is as follows: 84% of the gambling took place at Hastings Park and Cloverdale race tracks,
15% in teletheatres and the remaining 1% elsewhere in the province (KPMG 1997, B-2).
A total of 875,227 people attended horse racing events at the seven race tracks in 1996, drawing more participants than either the Vancouver Canucks or Vancouver Grizzlies 55
(British Columbia Racing Commission Annual Report 1996, 4-7). As well, there exists 22 teletheatres throughout the province providing and broadcasting horse racing and betting.
4.7.3. Charitable Gambling in British Columbia
There are four forms of charitable gambling in British Columbia: casinos, bingo, raffles and pull tabs. In 1995/96, the total handle for charitable gambling in the province was $537.7 million, with gross gambling revenue of $232.5 million. Funding for charitable gambling is directed towards charities that might otherwise seek government funding (Auditor General, 1997, 14), with over 4,700 charities benefiting from gambling dollars (Ministry of Government Services 1994, 5). Casinos and bingo are the two major forms of charity gambling.
In 1995/96, $357.9 million was wagered at charity casinos throughout the province, with gross gambling revenues of $88.8 mulion (KMPG 1997, B-2). Prior to the new gambling policy, which will be discussed in more detail in section 4.8.1, revenues derived from charity casinos were divided as follows: 50% to charities, 40% to the casino operator or management company and 10% to the provincial government (KPMG 1997,
B-2). There are currently 17 charity casino locations throughout the province, 9 of which are situated in the Lower Mainland accounting for 80% of the casino gambling in the province (KPMG 1997, B-2). Figure 8 shows the location of the charitable gambling facilities in the province. Attached as Appendix A is a listing of the casino locations and their fiscal performance for 1995/96.
In 1995/96, $255.4 million was wagered at charity bingo throughout the province, with gross gambling revenue of $109.8 million (KPMG 1997, B-2). Once again, prior to the new gambling policy, revenues for bingo were distributed as follows: 61% to charities,
34% to the operators and 5% to the provincial government. It is estimated that 25% of the bingo gambling took place in each of the Lower Mainland and Vancouver Island, with the rest occurring elsewhere in he province (KPMG 1997, B-2). A total of $55.1 million 56
Figure 8
Charity Casino and Bingo Locations in British Columbia
Source: Ministry of Employment and Investment, 1997 57
was wagered in various ticket raffles, pull tabs and other charity games, with gross gambling revenues of $33.9 million. Charity gambling in the province has grown from a handle of $502.1 milhon in 1992/93, to a handle of $668 minion by 1995/96, with the largest growth coming from charity casinos. Figure 9 shows the trend of charity gambling in British Columbia from 1992/93 to 1995/96.
Figure 9
Charity Gambling Handle in British Columbia 1992/93 - 1995/96
R affles and Other
Bingo
Casinos
1992/93 1993/94 1994/95 1995/96
Source: British Columbia Gaming Commission 1997, 1
4.7. Recent Gambling Developments in British Columbia
Driven once again by their revenue imperative, due in part to dechning provincial revenues, the government recently announced a new gambling expansion initiative. The process started in September 1996, when Deputy Premier Dan Miller announced, with the support of Premier Clark, that the government was considering the introduction of a destination resort "Monaco" style casino. Illustrating the governments revenue imperative, and facing a potential $1 billion deficit, Miller stated that "a destination resort casino geared at wealthy tourists could go a long way toward easing the province's financial woes" (Beatty 1996, Al). Miller further announced that Vancouver would be one of the favoured sites for the location of the new destination casino causing the City of
Vancouver to quickly announce their opposition, once again, to having a major casinos 58
located within its jurisdiction (Bula 1996, BI). By December 1996, the government announced that it was undertaking a study to explore the introduction of major casinos in
B.C., and that it was expecting the results within 2 months (Beatty 1996, Al).
By January 1997, serious opposition began to surface in response to Miller's destination casino proposal. On January 25, 1997, moments before a major public rally opposing the introduction of major casinos in the province, Premier Clark "ruled out a Las
Vegas style casino and promised he won't force expanded gambling on communities that don't want it" (Lee and Hunter 1997, Al). The very next day, however, Clark stated
"he's still interested in expanding gaming opportunities - including the possibility of putting electronic gaming machines in existing charity casinos" (Lee 1996, A15). According to
Clark, the main reasons for expanding gambling in the Province was the competition from neighbouring jurisdictions, declining BC gaming attendance and provincial government budget concerns. Following the review of gambling in the province, the government announced its new gambling policy on March 13, 1997.
4.7.1. British Columbia's New Gambling Policy
The following details the province's new gambling policy:
• Las Vegas style casinos and Video Lottery Terminals (VLT's) would not be introduced in BC.
• Existing charity casinos would be enhanced to allow them to compete with casinos in Washington state. Changes included increasing the maximum bet limit to $500 as of May 1, increasing the hours of operation to 14 hours per day and the introduction of new games and the placement of slot machines in charity casinos.
• Existing charity revenues of $130 million would be protected, and any increase in government revenues would largely be used to protect health care and education.
• The government would consider new charity gaming facilities, and destination gaming facilities. Local government support would be needed for new charity and destination gaming facilities, and additional local costs would be taken into account when considering new destination facilities. . 59
• The province would establish funding for dedicated police and prosecution resources to address illegal gaming, the estabh'shment of a gambling addiction program and that there would be a rninimum gambling age of 19 in the province.
• The newly formed Lottery Advisory Committee, which was formed pursuant to the Lottery Act, would oversee the announced gambling expansion. (Province of British Columbia 1997, 1-2).
The government further announced on March 17, 1997.that destination casinos would be similar to charity casinos, having a maximum of 30 gaming tables and 300 slot machines, and that a formal Request for Proposal (RFP) would be issued within 90 days for expanded gambling in the province (Province of British Columbia 1997, 1). The governments goal of competing with cross border gambling in Washington, where it was estimated that 80% of the states casino patrons were Canadian, had an affect. In June of
1997, Showboat Inc., a major U.S. casino operator, announced that it was withdrawing from their proposed $15 million casino north of Bellingham due to the expanded gambling announcement in British Columbia (Eng 1997, 3). Moreover, in August 1997, the Lummi casino, one of four Washington State casinos, announced it was closing down its operation stating that the changes in BC had severely impacted their business (Bell 1997,
Bl).
4.7.2. Request For Proposals - Destination and Charitable Gaming Facilities
On July 31, 1997, the provincial government released their RFP for new gambling facilities in British Columbia. The RFP illustrated the conditions, including the revenue distribution, and process for which expanded gambling would occur in the province, based in large part on the new gambling policy announced in March 1997. Additionally, the government once again announced that comprehensive gaming legislation would be drafted. The deadline for submissions pursuant to the RFP was November 28, 1997.
The government announced on December 2, 1997, that 49 proposals were received for additional charitable and destination gaming facilities in the province
(Province of British Columbia 1997, 1). Following an internal review of the various 60
submissions, the government further announced on January 6, 1998, that 32 gambling (23 casino and 9 bingo) facilities qualified to proceed to the next stage of the evaluation process, having received local government support. Ten of the facilities did not receive local government support, and therefore rejected, and the remaining seven proposed for the City of New Westminister, which would require further clarification as to then resolution (Province of British Columbia 1998, 1). Appendix B lists the proponents and locations for the proposed new gambling facilities.
4.7.3. BC Governments Revenue Imperative Rolls Snake Eyes
While the government was proceeding with its gambling expansion, and facing considerable opposition, major problems began to emerge in their ad-hoc approach to expanded gambling. First, the City of Vancouver, having been historically opposed to gambling expansion, implemented city by-laws opposing the introduction of slot machines.
The provincial government nevertheless proceeded with the installation of the new slot machines that were announced as part of their new gambling policy. The City of Surrey was also strongly opposed the introduction of slot machines, and used its local government powers, through strict parking and other by-law enforcement, in an attempt to combat the new machines.
The Province contested the City by-law in the Supreme Court of B.C. The Court ruled on December 19, 1997, that the City of Vancouver acted within its jurisdiction to ban slot machines. The provincial government is currently in the process of appealing the above court decision. Problems also emerged within the BC Gaming Commission itself.
On December 10, 1997, five of the six BC Gaming Commission members announced their mass resignation, citing that most of the Commission's power had been usurped by the newly formed Lotteries Advisory Commission (Bellett 1997, A6), which was established to implement the governments new gambling policy. Figure 10 details the current regulatory environment for the operation of gambling in British Columbia. Figure 10
British Columbia's Regulatory Framework for Gambling
Section 207 Criminal Code
Minister of Employment Attorney General and Investment
Investigs tion and Charitable Gaming Lott eries Rac ing Au dit
Order-in-Council Lottery Horse Racing Tax Horse Racing Act Corporation Act Act
Gaming Audit and BC Gaming Commission Lottery C orporation Collection of a tax Rac ing Investigation Office on parimutuel wagering Comm ission
Lottery Advisory Committee
Raffle, fair and Casino and bingo Gambling Expansion Retail stores, exhibition organizers hall operators and Slot Machines bars, and pubs
Members of the public
Source: Adapted from KPMG 1997, Auditor General 1997 and updated to include the roll of LAC 62
Perhaps more significantly, in early December 1997, the government was sued by the Nanaimo Charity Gaming Association, acting on behalf of 78 different charities, challenging the governments new revenue distribution process that was announced as part of their new gambling policy (Fong 1997, A3). The provinces new gambling distribution allocated the bulk of the additional proceeds collected from the new gambling policy to the provincial government. On January 14, 1998, the Supreme Court of B.C. ruled that the provincial governments new revenue sharing scheme announced as part of their gambling policy was a violation of the Criminal Code, and that the additional money raised should go to the charities. The new revenue scheme would have produced a drastic shift in gambling dollars from charities to the provincial government, as illustrated in Table 1, which details how gambling dollars in the province would have been distributed under the new scheme.
Table 1
Effects of New Provincial Gambling Distribution
(in millions of dollars)
Net Bingo/ Owners/ Casino Win Charities Operators Government
199 111 73 14 270 118 95 57 550 118 196 236 630 135 225 270 700 151 248 301 800 172 248 344 Source: Supreme Court of British Columbia 1998, 14
The governments first reaction to the court case was that they could not return the money as it went into general revenue and spent on health care and education (Beatty and Hunter
1998, Al). Further, as reported by Palmer, Minister Dan Miller suggested that one option available to the government would be to "expel the charities from the gambling halls 63
altogether, take direct control of the gambling business, and dispense whatever portion of the proceeds to the charities that cabinet deems fit" (Palmer 1998, A18). However, after considering their legal and political options, the government announced on January 21,
1998, that they were refturjing the $24.5 million that they had illegally collected under their gambling policy since October 31, 1997, back to the charities. Illustrating the governments revenue imperative of the gambling expansion, Justice Owen-Flood concluded that:
The Government of British Columbia has undertaken to expand both charitable and Government gaming in the province... The real ambit of the new [revenue sharing] thus becomes apparent: it encourages and facilitates a massive and unparalleled expansion of charitable gaming in British Columbia and then enables the Government to take the largest piece of this greatly enlarged pie... The rationale offered by the Lottery Advisory Committee for the expansion of gaming in the Province is the fact that the Government needs more money (Supreme Court of British Columbia 1998, 28). [emphasis added]
The above court cases illustrate the problems when there is not a clear purpose established for the role of gambling in society, in this case, casino gambling, and the unintended negative consequences that result of such inaction. Various provincial governments have been stating that they intend on introducing comprehensive gambling legislation in the province for the last 10 years. Yet, to date, no such gambling legislation exists. Rather, the governments revenue imperative has driven their ad-hoc gambling policy with poor results, as illustrated by the two recent court case defeats. One of consequences of the recent court decisions is that the government may now have to introduce comprehensive gambling legislation. In so doing, it would be wise for them to conduct a open public discussion of the role of gambling in British Columbia.
4.7.4. Gaming Policy Recommendations
Following the release of the damaging court decision, the provincial government
announced a gambling review process to be headed up by Frank Rhodes - a long time civil 64
servant. In late February of 1998, Frank Rhodes released his report which contained the following recommendations:
• Effectively shift control of charity gambling in the province to the government.
• Establish a minimum charity trust for the distribution of gambling revenues whereby the charities would receive a guaranteed $125 million annually, plus a CPI adjustment for subsequent years. The bulk of new gambling revenues would continue to flow to the provincial government.
• Gaming initiatives, structures and authorities should be consolidated in a provincial Gaming Act. The Lotteries Advisory Committee should conduct stakeholder consultation with a draft prepared for March 31, 1999, with the release of a White Paper and public discussion.
• The British Columbia Gaming Commission should be fully reconstituted as soon as possible (Rhodes 1998, 37-43).
Illustrating the revenue imperative of the provincial government, Rhodes concluded that "gaming policy in British Columbia has been developed ... for the purpose of delivering a stable and growing income to charities and an important and relatively new source of funds to general government revenues" (Rhodes 1998, 40). To make matters worse, the Nanaimo Community Bingo Association launched a further lawsuit against the government claiming that all of the charity gambling money the provincial government has collected since 1987 has been illegal, and have asked the courts that the government grant back to the charities an estimated $200 million (Beatty 1998, Al). Minister Farnworth, the new minister in charge of gambling in B.C., stated publicly that the federal government should amend the Criminal Code in Canada due to the British Columbia court case loss.
Farnworth stated that billions of gambling dollars are at risk across the country, and that the federal government should legalize governments taking a share of charity gambling dollars ( Beatty 1998, Al). 65
4.8. Conclusion
Gambling in British Columbia is a well established industry. With the transfer of gambling jurisdiction from the federal government to the provinces, British Columbia has taken an active roll in the development of gambling in the province, often as a means of generating revenue. A review of the gambling landscape in the province illustrated the scope and depth of gambling, higluighting how large of an industry gambling is in the province. With gross gambling revenues of $633 milhon in 1995/96, consumers in British
Columbia spend in excess of seven times the amount of money on gambling than they do going to the movies.
The review of the evolution of gambling policy and the various games in British
Columbia illustrated a consistent trend towards gambling expansion. The governments most recent attempts to expand gambling have been problematic. Interestingly, the problem areas have emerged where there does not exist comprehensive legislation. Both the pari-mutuel industry and lottery industry in the province operate under comprehensive legislation. Charity gambling, however, does not operate under comprehensive legislation, despite the fact that various governments have been stating that they intend to introduce such legislation for the past ten years. Rather, the government conducts charity gambling through an Order-in-Council. As part of the provinces new gambling policy, the government once again announced that they plan on introducing comprehensive gambling legislation. It appears as though this would be timely and appropriate.
The role of casinos in British Columbia's gambling landscape has been a contentious and difficult issue in the province since the 1980's. Several attempts have been made to introduce major commercial casinos in the province, all of which have not succeeded in gaining the necessary public, local government and provincial approval. The rise of the urban casino marked a significant change in gambling policies throughout North
America, and had a direct impact on the gambling discourse in British Columbia. The 66
following Chapter will examine the proposed Seaport Centre - a major urban casino complex proposed for the waterfront of downtown Vancouver. 67
Chapter 5
A Case Study of the Seaport Centre Casino Proposal
5.1. Introduction
On February 24, 1994, Vancouver Land Corporation (VLC), and Mirage Resorts
Ltd (a major Las Vegas casino company), announced the Seaport Centre Casino proposal.
Seaport Centre was a $750 million dollar development proposed for the central waterfront port lands in downtown Vancouver. The timing of the proposed Seaport Centre casino complex coincided with the rise of the urban casino phenomenon that emerged in North
America in the early 1990's. The previous chapter on gambling in British Columbia set the context of gambling in the province by illustrating that B.C. has a substantial and growing gambling industry, which, for the most part, is oriented towards satisfying British
Columbian gambling desires. The proponents of Seaport Centre claimed that their proposal was more than just a casino complex - it would be a a tourist-oriented urban destination resort complex.
On October 4, 1994, following the Gaming Policy Review, the provincial government announced that major Las Vegas style casinos would not be permitted in the province - killing the proposed Seaport Centre complex. The following chapter will review the Seaport Centre casino proposal, the context in which it arose, the debate surrounding the casino proposal and the issues associated with an urban casino. The case study and analysis of Seaport Centre provides a good framework for understanding the issues associated with an urban casino complex, and how they directly impact urban planning considerations. 68
5.2. The Context of Vancouver's Proposed Urban Casino
As was discussed in Chapter 2, casinos moved to the forefront of the gambling expansion wave, and specifically, the rise of the urban casino emerged as a new phenomena in gambling. The Seaport Centre proposal was part of this new gambling movement. Elsewhere, major urban casinos were proposed during the 1980's and 1990's for cities such as: Chicago, Hartford, Bridgeport, New York, Boston, Philadelphia, Gary
(Indiana), Detroit, Los Angeles, Miami, Houston and Toronto, all of which were unsuccessful and did not obtain the necessary approvals. Urban casinos were introduced in the 1980's and 1990's in: Kansas City, St. Louis, Perth, Adelaide, Brisbane, Canberra,
Melbourne, Sydney (Australia), New Orleans, Montreal Winnipeg, Windsor, Halifax,
Sydney (Nova Scotia), Hull, and Regina, with varying levels of success.
The Seaport Centre proposal also came at a time when there was a well established gambling industry in British Columbia, so that the notion of gambling was not new in the province. Rather, what was new was the type and form of gambling proposed with the
Seaport Centre casino complex. Chapter 4 discussed in detail the rise of gambling in the province, and illustrated the significance it plays in terms of consumer expenditures and as a means of generating revenue for the provincial government. When examining British
Columbia's leisure industry, it was show that consumers spent 8.2 times the amount of money on gambling than going to the movies in 1997, or 7.8 times the amount they spent
on live concerts and staged performances in the same year. The context in which Seaport
Centre was proposed is important as it came at a time of unprecedented gambling
expansion in North America, and elsewhere, and where urban casino proposals became the trend of the day.
5.3. How Seaport Centre was Born: The VPC Proposal Call
The Seaport Centre casino complex was proposed for the Central Waterfront Port lands owned by the Vancouver Port Corporation (VPC) - a federal crown corporation. 69
Figure 11 details the Central Waterfront Port lands, and their context vvithin downtown
Vancouver. In the fall of 1992, a joint approval process was agreed to between the City of Vancouver and the VPC for the development of the Central Waterfront Port lands.
During the spring of 1993, VPC and the City of Vancouver conducted numerous public open houses, workshops and meetings with community and interest groups on the planning and development of the lands (Vancouver Port Corporation 1994). In the summer of 1993, VPC commenced an international call for Expressions of Interest (EOI) for the development of the 48 acre site, to contain some 2.6 million square feet of buildable area. Conditions pertaining to the EOI were that the VPC required proponents to develop a new cruise ship terminal and convention centre at no cost to the taxpayer, and to generate additional revenue for the VPC (Vancouver Port Corporation 1994, 3).
The Vancouver Port Corporation received 12 submissions from Canadian and international development companies in the fall of 1993. Phase two of the development process involved the short listing of the initial twelve to seven. In December 1993, four companies submitted detailed submissions for the right to develop the Central Waterfront
Port lands. While the VPC was undertaking their EOI process, the public process with the
City of Vancouver and members of the public, was also continuing. In the fall of 1993, public open houses, workshops and meetings with community and interest groups were conducted to discuss the draft policy guidelines for the port lands. The policy guidelines were approved by the City of Vancouver and the Vancouver Port Corporation in February
1994 (Vancouver Port Corporation 1994).
5.3.1. The Casino Genie Comes out of the Bottle
One month after the close of the VPC's EOI, Vaughn Palmer of the Vancouver
Sun broke the story on a proposed casino to be developed on the port lands by VLC and, at that time, an unnamed American casino company (Palmer 1994, A18). The following day, the Vancouver Sun further reported that Mirage Resorts and VLC had proposed a major commercial casino as part of their development proposal for the port lands (Lee 70
Figure 11
Vancouver's Central Waterfront Port Lands
m 111
Source: KPMG 1994 71
1994, B1). The casino debate in Vancouver had now taken center stage. On February 17,
1994, as part of the ongoing public process, the City of Vancouver approved the overall general development guidelines of the VPC lands, but Council also unanimously approved a motion that their support for the guidelines did not include a casino (Lee 1994, Al).
Councilor Clarke stated that "council is not going to approve one (casino), and if the
(provincial) government changes the rules, we're saying they should hold a full public consultation process" (Lee 1994, Al). It became clear, even prior to the formal announcement of Seaport Centre, that the City of Vancouver had serious concerns with locating a major casino on the waterfront.
On February 24, 1994, the Vancouver Port Corporation (VPC) formally announced that the Vancouver Land Corporation and Mirage Resorts Incorporated were the winning bid to develop the 48 acre Central Waterfront lands in Vancouver. The proposed Seaport Centre was described by VLC and Mirage Resorts as a tourist-oriented urban destination resort complex, and would have included a 125,000 square foot commercial casino. With the Seaport Centre announcement anticipated, the Provincial government had announced the previous day, the estabhshment of a special project to develop a comprehensive gaming policy to regulate gaming in British Columbia.
Therefore, the fate of the Seaport Centre casino proposal rested with the provincial government and its gambling policy review.
5.4. The Proponents Behind Seaport Centre
The Seaport Centre proposal was a joint venture between Vancouver Land
Corporation (VLC) and Mirage Resorts Incorporated, and was to be located on lands
owned by the Vancouver Port Corporation (VPC). Ownership of Seaport Centre was proposed as follows: 72
British Columbia Partners and Investors • VLC Properties Ltd. 20% • B.C. Business and Public 10.5% • First Nations Ownership 10% • British Columbia Labour 10.5% TOTAL 51%
Operating Partner • Mirage Resorts Incorporated 49%
Source: Vancouver Land Corporation, 1994.
Specifically, VLC would be responsible for the design and construction of the complex, the provincial government, as a requirement of the Criminal Code of Canada, would own the casino and Mirage resorts would have financed, managed and operated the complex.
5.4.1. Vancouver Land Corporation
Vancouver Land Corporation was formed in May 1989, as a joint venture between the City of Vancouver and numerous British Columbia pension funds, for the purpose of developing affordable rental housing on lands owned by the City. Initial investors in VLC included; the City of Vancouver who invested $2 million and provided the company 80 year leases on 14 parcels of land throughout Vancouver (Schreiner 1992, 11), and 29
British Columbia union pension funds who put up a significant equity contribution. At the time of the Seaport Centre casino proposal, the City of Vancouver had divested some
90% of its original $2 million investment in VLC, and it did not have an interest in the
Seaport Centre Casino proposal (Vancouver Land Corporation 1994, 1). In addition to developing affordable rental housing, VLC was also engaged in other forms of real estate development. Today, the company has been renamed to Greystone Properties and it is now one of the largest real estate development companies in British Columbia.
5.4.2. Mirage Resorts Incorporated
Mirage Resorts has been credited as being one of the most innovative gambling companies in the world. Mirage Resorts owns several major casinos and is a publicly traded company on the New York Stock Exchange. In 1989, Mirage Resorts opened the 73
first major resort to be developed in Las Vegas in 15 years - The Mirage - which was a
$880 million, 3049 hotel, casino and entertainment development located on 100 acreas of land (Mirage Resorts Incorporated Press Release 1994, 2). According to the company,
"The Mirage has become the standard by which all other casino properties around the world are measured. It has established all-time record levels of revenue for both the casino as well as the non-casino operations" (Mirage Resorts Incorporated: A Brief
History 1994, 2). At the time that Mirage Resorts was proposing the Seaport Centre casino complex, it was also proposing similar types of urban gambling facilities for
Hartford, Toronto, Houston and Miami; all of which did not receive the necessary public approvals.
5.5. The Seaport Centre Proposal
Seaport Centre was described by its proponents as the largest single phased project ever to be developed in Vancouver. According to the proponents, Seaport Centre "would be British Columbia's firstinternationa l destination resort offering a full range of cruise ship, guest, convention, and entertainment amenities" (Vancouver Land Corporation
1994). Seaport Centre, as depicted by an artists rendering in Figure 12, was described by the proponents to encompass the following:
• Over $250 million new tax revenue annually to government. • A minimum of $750 million private sector investment. • New pier and cruise ship terminal with two berths for state-of-the-art cruise ships. • New Sea Bus and Helijet terminals. • 270,000 square feet of convention centre expansion. • 1,000 room, destination resort hotel. • State-of-the-art facilities for entertainment and the performing arts. • European-style health and fitnesscentre . • Childcare services and facilities. • World class dining, banquet and host facilities. • Retail promenade with shops and boutiques. • Atrium lobby entry and display area. • Public plaza, presentation areas, public outdoor concourse and waterfront walks. 74
Figure 12
Artist Rendering of Seaport Centre
Source: Vancouver Land Corporation, 1994 75
• 125,000 square foot casino • Over 2 million square feet built in a single phase (Vancouver Land Corporation 1994).
The one fundamental element to the proposed development was the 125,000 square foot casino component. According to the proponents, if the provincial government, as part of its gambling review, did not allow for large scale casinos, then the proposal would die, stating that the casino was the only way to pay for the project.
And while the casino became the focus of the public debate, the proponents of
Seaport Centre, and in particular Mirage Resorts, put forth the notion that Seaport Centre was more than just a casino. Seaport Centre was presented as being a tourist-oriented urban destination resort complex. Combing new port facilities for the cruise ship industry, expanded trade and convention facilities, a 1,000 room hotel and a variety of entertainment and retail venues, Seaport Centre was a important proposal in that it would have provided much needed civic facilities and public amenities. The problem was, however, that it also contained a substantial casino component which was the economic engine that made it possible to offer the extensive public facilities. Policy makers were presented with a controversial development proposal.
5.5.1. Seaport Centre Development Program
The proposed scale and size of the Seaport Centre complex presented significant urban planning considerations. In terms of design and planning specifics, the proposed
Seaport Centre would have had a total of 2,251,300 square feet of buildable area, as outlined below in Table 2. The casino component represented 125,000 square feet of the total buildable area, or 5.5%. Despite the relative size of the casino compared to the overall complex, the focus of the debate regarding Seaport Centre was on the casino component. From the City of Vancouver's perspective, following a comprehensive pubhc review process, they had already approved the development of 2.6 million square feet of 76
Table 2
Proposed Building Program of Seaport Centre
Resort Centre Square Feet Gaming Area 125,000 Interior Atrium (hotel) 12,000 Public Circulation (Int.) 63,000 Showroom / Theatre 30,000 Restaurants / Kitchens 76,100 Family Arcade 18,000 Retail 45,700 Restrooms 8,500 Service Bars 4,300 Lobby Bar 5,400 Registration 3,600 Front Desk Support 8,400 Nightclub / Entertainment (Cirque du Soleil) 45,000 Executive Offices 16,000 Casino / Hotel Warehouse 60,000 Casino Back of House 16,000 Casino / Hotel Back of House 50,000 Resort Area Sub Total 587,000
Hotel (1,000 rooms, 22 stories) 660,000
Convention Centre 270,000 Loading Dock 45,000 Convention Centre Sub Total 315,000 Transportation Facilities Cruise Ship Terminal 347,000 Cruise Ship Restaurant / Shops 30,000 Seabus / Heliport 57,000 Transportation Facilities Sub Total 434,000
Promendade Promenade Retail / Restaurants 33,300 Plaza / Outdoor Concourse 222,000 Promendade Sub Total 255,300
TOTAL 2,251,300
Parking 1,449,000 Total Gross Buildable Area 3,700,300
Source: KPMG 1994, 6. 77
buildable area for the port lands. The key City of Vancouver issue, therefore, was the casino component; and the planning implications of an urban casino for Vancouver.
5.5.2. Seaport Centre: The Economic Projections
The proponents of Seaport Centre presented the opportunity for significant positive economic benefits with the introduction of their project. Jobs, year-round tourism, government revenue and significant public amenities were detailed as the key benefits associated with the introduction of Seaport Centre. As the casino debate raged on in the province, the proponents of Seaport Centre engaged the services of KMPG, among others, to conduct an economic projection analysis of the casino complex. KPMG offered the following examples of the economic benefits that would derive from the
Seaport Centre complex.
• Total on-site employment at Seaport Centre was estimated at 6,900 jobs.
• Total net additional employment derived from Seaport Centre was estimated to be 7,400- 12,300 jobs.
• The federal and provincial governments would generate $194,500,000 in GST, PST and payroll taxes during the three years of construction.
• Ongoing annual revenues of $256,6000,000 in GST, PST payroll taxes, gaming taxes, hotel room taxes, income and capital taxes and property taxes. The federal government would be the largest beneficiary with revenues estimated at $151,300,000, the provincial government would generate an estimated $89,000,000 and the City of Vancouver would generate an estimated $16,300,000 from property taxes.
• Additional annual government revenues of $52,000,000 would be generated from new convention centre and cruise ship business.
• Seaport Centre would provide two new 900 - 1,000 foot cruise ship berths, a new Seabus and Heliport terminal, and a 270,000 square foot convention centre at an estimated cost of $217,000,000 (KPMG 1994, 1-33).
Jobs, public amenities and substantial government revenues where presented as the key benefits associated with Seaport Centre. In addition to the above, the proponents 78
suggested that the possibility existed for the re-development of the former Woodwards building to include 200 units of non-market housing, and a new downtown campus for
Simon Fraser University (Vancouver Land Corporation 1994). With respect to government revenues, interestingly, the City of Vancouver received the smallest portion of the potential economic benefits; but, as will be discussed later, the vast bulk of the issues that pertain to an urban casino are those of a local nature.
5.6. Seaport Centre: The City of Vancouver Casino Review Process
The City of Vancouver conducted a comprehensive five step review of the proposed Seaport Centre proposal. The review consisted of: a comprehensive discussion paper on casinos, numerous public information meetings, a detailed economic impact analysis on the proposed casino, public polling and a public hearing on Seaport Centre.
All of the above processes took place concurrently, and independently, of the provincial governments Gaming Policy Review. The case study of Seaport Centre, and the process conducted and issues which the City of Vancouver identified, provide a good working framework of identifying the urban planning and policy issues associated with major urban casinos. As was noted above, the City of Vancouver had already conducted a public review process, and had reached agreement in principle on the built form for the VPC lands. The casino was the main issue for review.
5.6. J. Step J: City of Vancouver Casino Review - A Discussion Paper
In August 1994, the City of Vancouver released its casino discussion paper, providing a background on the issues of major casinos, and the possible effects of large scale casinos on Vancouver's conrmunities. The report stated that "large-scale casinos are an increasingly frequent presence on the north American urban landscape. Such projects bring with them the promise of enormous revenues - and the risk of significant public costs" (City of Vancouver 1994a, 2). The report identified nine major discussion issues related to the introduction of an urban casino in Vancouver, many of which had significant 79
urban planning considerations. The followings sections will highlight each one of the discussion issues.
5.6.1.1. City Image
The City identified Vancouver's image to consist of the following elements: a spectacular natural setting, environmentally sustainable and humanly scaled, safe, clean streets, supportive of neighbourhoods, culturally diverse, socially responsible and a relaxed healthy lifestyle (City of Vancouver 1994a, 6). The introduction of a major urban casinos could bring profound shifts in Vancouver's city image, causing the City to conclude that, "as Vancouverites ponder the potential costs and benefits of casinos, they will have to ask themselves if they want one of the key symbols of our community to be a major casino, with all of the associations it inevitable carries with it" (City of Vancouver
1994a, 7).
5.6.1.2. Business, Tourism and Cultural Industries
It was estimated by the proponents of Seaport Centre that there would be 15,000 visitors to the casino on a daily basis. The issue of the amount of new wealth created is a key economic issue related to casinos, in terms of who will be gambling at the casino. In fact, the City report concluded that, "the single most important factor is the creation of new wealth in the local economy" (City of Vancouver 1994a, 8). Analysis was conducted to determine the visitor profile of Seaport Centre, in terms of the breakdown of casino patrons between: 1) local residents, 2) existing tourists and 3) new tourists. Table 3 details the breakdown of proposed casino patrons as estimated by the proponents of
Seaport Centre and the City of Vancouver. 80
Table 3
Seaport Centre Casino Profile
New Existing Local Tourists Tourists Residents Seaport Centre Proponents 50% 20% 30% City of Vancouver 30% 30% 40% Source: City of Vancouver 1994a, 9.
Given Vancouvers significant tourism industry, the City also identified possible impacts a major urban casino would have on the existing and predicted tourism economy in Vancouver. Issues such as hotel capacity, new hotel developments, conventions and the cruiseship industry would all be impacted with the introduction of a major urban casino in
Vancouver. Moreover, competition for the consumers dollar would also be effected as the casino would compete with other cultural and entertainment venues in the City.
5.6.1.3. Jobs
Typically, job creation is one of the major arguments presented by the supporters of casinos. Seaport Centre was no different in this regard. It was estimated that Seaport
Centre would have created an estimated 3,200 jobs, with an average income of $33,000, with additional benefits of approximately $10,000 (City of Vancouver 1994a, 13).
Further, Seaport Centre would create an estimated 1,800 on-site construction jobs and
1,800 off-site construction jobs (City of Vancouver 1994a, 14).
5.6.1.4. Problem Gambling
Problem gambling is perhaps the most significant issue when dealing with all types of gambling, and particularly when dealing with the issue of casino gambling. While the vast majority of people who gamble treat it as a form of entertainment, there is a small portion of society for which compulsive gambling is a significant issue. The City of
Vancouver report stated that "most studies put the prevalence rate of problem gambling between 3 and 6 percent of the adult population" (City of Vancouver 1994a, 15). The 81
social and public health costs of compulsive gambling are significant, but are "extremely difficult to calculate" (City of Vancouver 1994a, 16). Using an analysis of the social costs of gambling, the City of Vancouver estimated that "pathological gamblers may already cost society over $700 million per year in the Lower Mainland (City of Vancouver
1994a, 16).
5.6.1.5 Crime and Policing
The introduction of a major casino in downtown Vancouver would have direct impacts on crime patters and policing resources. By virtue of the fact that you would have some 15,000 people attending the casino of a daily basis, the numbers of crime committed will increase due to the increase in people. The City of Vancouver concluded that "the impact of a major casino on police services in Vancouver will likely be significant... an increase of police personnel, with appropriate training and equipment, may be needed to respond to the demands a casino will make on police resources" (City of Vancouver
1994a, 19).
5.6.1.6. Adjacent Areas
Issues such as traffic and pedestrian patterns, parking and utility services would all be impacted by a major casino, with the greatest impact on the surrounding neighbourhoods of the casino (City of Vancouver 1994a, 20). Major size casinos, such as that proposed for Seaport Centre, also have significant urban design considerations and implications. The City concluded that "(they did) not find any models, especially in cities with character such as Vancouver, where civic design objectives have consistently prevailed over a casino's functional or marketing detenrjinants" (City of Vancouver 1994a,
21).
5.6.1.7. Housing and Real Estate
The proposed location of Seaport Centre, next to the downtown eastside and home of a significant stock of the cities single room occupancy (SRO) hotels, was a major planning consideration. The City stated that "SRO's could be put into jeopardy by a 82
casino because of demand for budget tourist accommodation, for inexpensive housing for casino employees, or for those seeking jobs in casinos" (City of Vancouver 1994a, 23).
Additionally, impacts to land values surrounding the casino would also impact planning policies.
5.6.1.8. Existing Gaming
The City identified possible negative revenue impacts to the charity casino industry, as a large scale casino would be able to offer patrons a larger variety of services and games. If charity casino revenue were negatively impacted, the City could come under pressure from various charity organizations for government funding.
5.6.1.9. Municipal Government Revenues and Expenses
The introduction of a major casino in Vancouver would have direct and substantial impacts on the municipal finances.Th e City identified financeissue s such as property taxation, community amenity contributions, business license fees and casino revenue- sharing. All of these would have to be resolved and dealt with as part of a major casino development in the City of Vancouver.
5.6.2. Step Two: Public Consultation Process
Following the release of the City Casino Discussion Paper, a series of public information meetings were held. The City of Vancouver conducted an extensive consultation process to inform residents of the Seaport Centre proposal, and to seek public input. Seven public meetings were conducted with some 700 people attending. Of the public who attended the meetings, 87% opposed or had serious concerns about locating major casinos in Vancouver and 7% supported them (City of Vancouver 1994b,
Appendix E). A concerned group of citizens who opposed the Seaport Centre - the No
Casino Committee - were an active force at all of the public meetings distributing anti- casino literature and obtaining signatures for their petition in opposition to Seaport Centre
(City of Vancouver 1994b, Appendix E). 83
In addition to conducting public meetings, the City also met with 13 interest groups, such as; The No Casino Committee, Vancouver Planning Commission, Urban
Development Institute, Gastown Heritage Area Planning Committee, Tourism Vancouver and the Urban Design Panel. Six of the groups opposed major casinos in Vancouver, two were in support and the remaining did not provide an official position (City of Vancouver
1994b, Appendix E). The City also established a Casino Talkback line, with the vast majority of comments received being in opposition to major casinos in Vancouver.
Extensive letters and petitions were received by the City, again with the majority being opposed to Seaport Centre. The comments received through the public process were that the negative costs associated with major casinos would outweigh the economic benefits, increased crime associated with a major casino, concerns over the loss of affordable housing and a negative impact to Vancouver's city image (City of Vancouver 1994b,
Appendix E).
5.6.3. Step Three: Public Polling
The City of Vancouver commissioned Nova Quality Research Ltd to conduct a poll "to determine the opinion of Vancouver residents about the Seaport casino, in particular, and about major casinos in the City of Vancouver, in general" (City of
Vancouver 1994c, ii). Two samples of 384 respondents were drawn, one being for the
City of Vancouver and the other consisting of a Downtown Vancouver sample. Of those questioned, 93.8% had heard of the Seaport Centre casino proposal. The respondents were asked if they opposed or supported the development of Seaport Centre specifically,
and if they opposed or supported major casinos in the City of Vancouver generally. Table
4 details the results of the casino poll. 84
Table 4
Results of the City of Vancouver Casino Poll
Seaport Vancouver Casino Casinos VANCOUVER RESPONDENTS Support / Support somewhat 30.20% 22.10% Neutral 4.90% 2.10% Oppose / Oppose somewhat 52.40% 63.80% Depends 1.80% 6.30% No Opinion 10.70% 5.70% DOWNTOWN RESPONDENTS Support / Support somewhat 32.80% 24.50% Neutral 4.20% 4.20% Oppose / Oppose somewhat 48.70% 55.20% Depends 3.40% 8.60% No Opinion 10.90% 7.60% Source: City of Vancouver 1994c, 5
The polling indicates that downtown Vancouver residents were less opposed to the
Seaport Centre complex, and casinos in Vancouver generally, than were the wider
Vancouver residents.
5.6.4. Step Four: City of Vancouver Casino Economic Impact Analysis
The City of Vancouver conducted an economic impact analysis of major casinos in the City as the fourth step in their process. The report examined the economic impacts of a stand alone casino facility, and to a lesser extent, a casino resort project. The report concluded that "a casino in Vancouver would have a large and positive economic impact on the City of Vancouver" (Kunin 1994, i). It was estimated that 15,000 daily patrons attending a major casino in the City would spend an estimated $328.5 million to $410. 6 million annually, which would result in new incremental spending in Vancouver ranging from $352.8 million to $672.8 million per year (Kunin 1994, i). Moreover, the report concludes that an estimated $75.1 million to $121.7 million in provincial government 85
revenue would have been generated from a major casino in Vancouver (Kunin 1994, 33).
The report did not examine issues other than those of economics, as they were being considered as part of the other city processes.
5.6.5. Step Five: Casino Public Hearing
The fifth, and final step in the City of Vancouver casino review, was a three night public hearing where City council received delegations and submissions from the public on major casinos in the City. A total of 44 delegations presented their views before Council, with the majority of those appearing before Council being opposed to major casinos in he
City of Vancouver. In the end, and following a comprehensive casino review process,
City Council voted against major casinos in Vancouver.
5.7. A Summary of the City of Vancouver Casino Review Process
The casino review process the City of Vancouver conducted provides a good illustration of the urban planning issues associated with a major urban casino. The review process was extensive and open, allowing citizens to debate the costs and benefits of major casino in the City. Many of the issues the City identified in their discussion paper on major casinos are those of a local nature. Thus, while the senior levels of government in Canada have the legislative power to introduce various forms of gambling, when it comes to major urban casinos, it is the local governments and their respective communities that are most impacted.
In the case of Seaport Centre, the vast bulk of the money estimated to be generated by the casino would have had the largest benefits to the senior levels of government. The City of Vancouver would have derived the least economic benefits, and yet, would have had to deal with the majority of the issues associated with a major urban casino. In the end, the City of Vancouver staff report concluded that "from a purely economic stand-point, the available information indicates that a casino...would mean 86
significant economic activity for Vancouver" (City of Vancouver 1994, 3). However, while Seaport Centre contained significant public benefits, in terms of job creation, positive economic activity, and the provision of major public amenities, the City decided that a major casino was not part of the city image they were trying to present.
5.8. A Discussion on the Aftermath of Seaport Centre
The objective of the case study was to illustrate the issues associated with a major urban casino. While the proponents offered substantial public benefits associated with
Seaport Centre, and the City of Vancouver analysis confirmed that there were indeed substantial positive economic benefits associated with the proposed development, both the provincial and City governments opposed the project. The process the City of Vancouver - conducted illustrates the issues local governments face when considering a major urban casino. Some of the issues raised by the City of Vancouver are easier to quantify than others. For example, the Seaport Centre casino would have generated an estimated 5.5 million visits per year, providing municipal officials significant logistic issues to deal with.
On the other hand, the impact a major casino would have on Vancouver's city image is more difficult to quantify. In the end, the City of Vancouver conducted a comprehensive analysis to determine the impacts associated with a major urban casino providing a good framework for analyzing such issues. Had public sentiment been different, Vancouver could have followed several other North American cities and embraced an urban casino.
Following the Seaport Centre debate, significant public policy issues emerged as a direct result of the collapse of the casino proposal. First, in an effort to develop much needed expanded trade and convention centre facilities for Vancouver, and which were part of the Seaport Centre complex, the provincial government set forth a development process for their development. The provincial government established a three step process for the development of the new trade and convention centre. First, in June 1995, the provincial government released an Expressions of Interest for the development of 87
expanded trade and convention centre facilities. Three proponents - Concord Pacific
Developments Corp., Marathon Realty and Greystone (formerly "VLC) working in conjunction with the VPC - submitted proposals for the expanded trade and convention centre facility. All three of the proposals advanced to the second phase of the process, which was a formal Request for Proposal (RFP) state. Greystone was the only proponent to submit a proposal, and in November 1997, the provincial government announced that
Greystone was the preferred proponent and they would advance to stage three of the process. Stage three, which is currently underway, is the detailed negotiations between
Greystone and the province to reach agreement on the financial structure of the development - in effect - who is going to pay for the facility. In fact, this issue has been the major item throughout the 2 1/2 year long process. The provincial government has stated throughout the process that they do not have the capacity to finance the development, and have looked for some form of a public private partnership. Had Seaport
Centre proceeded, the government would not be faced with this issue as the casino would have financed the convention centre facilities.
The second significant public policy issue to emerge in the death of Seaport Centre has been the ongoing attempts to re-develop the former Woodwards building. The
Seaport Centre casino complex offered the potential for the redevelopment of the
Woodwards building to include 200 units of non-market housing, and would have provided a location for a new downtown SFU campus. Today, one of the major issues the
City of Vancouver is experiencing is the declining social and physical environment in the downtown Eastside. Fundamental to this issue is the role of the abanded Woodwards building and the need to redevelop it in a manner that will not undermine the importance the downtown Eastdside plays in the provision of SRO housing for the City. While
Seaport Centre offered the potential for the redevelopment of Woodwards, and for the provision of 200 much needed non-market housing units, the City of Vancouver properly 88
identified other possible gentrification issues of Seaport Centre which could have been detrimental to the downtown Eastside.
The third major issue to emerge following the collapse of Seaport Centre has been the governments ill-fated attempts to expand gambling in the province. Acting on then- revenue imperative, and as was discussed in Chapter 4, the provincial government has undertaken a gambling expansion initiative in the province in an effort to raise revenue for
the provinces declining fiscal position. In doing so, however, the province is merely( expanding gambling and using it to generate revenue with little or no consideration to obtaining positive public benefits that can be derived from gambling. Communities throughout the province are going to have to experience all the negative effects with expanded gambling, with no real tangible positive benefits. The province has expanded gambling for its own political reasons. Seaport Centre, at the very least, would have contributed significant public amenities and enhanced Vancouver's tourism economy.
5.9. Conclusion
The case study on Seaport Centre provides a good overview of the urban planning issues associated with a major urban casino. In reviewing the Seaport Centre casino proposal, it was illustrated that the City of Vancouver conducted a comprehensive review process. It was also shown that many of the issues associated with a major urban casino complex are those of a local nature. In British Columbia, it is the provincial government that establishes the gambling policy and derives the largest economic benefit of gambling money. Yet, when dealing with major casinos, it is local governments that are faced with the vast bulk of the issues, with little or no revenue benefit. The case study on Seaport
Centre provides other urban planning policy makers a positive framework when dealing with such an important issue as a major urban casino. Rather than taking a background role to the provincial government, or embracing the temples of chances without thought, the City of Vancouver actively, and independently, reviewed the Seaport Centre casino complex in an objective and fair manner. In the end, however, Vancouver opposed the casino complex for effectively not fitting into the City's image, despite the potential for positive economic benefits. 90
Chapter 6
Gambling and Urban Casinos in British Columbia: Planning and Policy
Implications
The third wave of gambling in North America has produced a dramatic increase in the amount and type of gambling in society. More recently, the rise of the urban casino emerged as part of the third wave of gambling, providing complex urban planning considerations. As the literature review, analysis of gambling in Canada and British
Columbia, and the case study on the proposed Seaport Centre casino proposal illustrated, the expansion of gambling is a complex public policy issue, with direct planning implications. Governments across North America have adopted gambling as a means to stimulate revenue, and to generate economic development, tourism and employment. The research illustrated how British Columbia, in a manner similar to other jurisdictions across
North America, has adopted gambling as a major means of generating revenue.
Moreover, the research, and case study on Seaport Centre, further illustrated that
Vancouver experienced the movement to introduce a major urban casino at the same time as many other jurisdictions across North America. It is one of the major conclusions of this thesis that the City of Vancouver casino review process for Seaport Centre was an exemplary and thorough analysis of how urban casinos impact planning considerations.
As such, the review model and process the City of Vancouver conducted, is a sound framework for other planners when faced with the issue of urban casinos.
6.1 Major Findings
The preceding chapters have reviewed the third wave of gambling sweeping across
North America, discussed the legal history of gambling in Canada, documented the policy history of gambling in British Columbia, and detailed in a case study of Seaport Centre the 91
issues associated with an urban casino. The major findings of the thesis are presented below.
6.1.1. The Third Wave of Gambling and the Governments Revenue Imperative
The third wave of gambling sweeping across North America has resulted in a massive expansion of gambling in the last half of the 20th century. The result, as Abt and her colleagues have noted, is that governments have both legalized and legitimized gambling in society; where today, gambling is seen my many as being just another form of entertainment. One of the major driving forces behind the third wave of gambling has been the governments revenue imperative. Increasingly, governments have looked toward gambling as a means of generating money, jobs, economic development and tourism.
This, coupled with consumer demand, has resulted in a dramatic growth in the amount and types of gambling in North American society.
6.1.2. The Rise of the Urban Casino
One of the new trends to emerge out of the third wave of gambling has been the rise of the urban casino. Operating under their revenue imperative, governments in the
1980's and 1990's looked towards the introduction of casinos as a means of generating money. For the most part, prior to this time, casinos were located in remote areas away from major urban populations. However, starting in the late 1980's and early 1990's, jurisdictions began to discuss the introduction of major urban casinos that were geared to attracting the local population, among others. Major urban casinos were proposed for
Chicago, Hartford, Bridgeport, New York, Boston, Philadelphia, Gary (Indiana), Detroit,
Los Angeles, Miami, Houston, Toronto and Vancouver, all of which were unsuccessful and did not obtain the necessary approvals. At the same time, however, urban casinos were introduced in Kansas City, St. Louis, Perth, Adelaide, Brisbane, Canaberra,
Melbourne, Sydney (Australia), New Orleans, Montreal, Winnipeg, Windsor, Halifax,
Sydney (Nova Scotia), Hull and Regina. The new gambling policy trend of urban casinos provided policy makers, and planners with a new phenomenon in gambling. 92
6.1.3. Gambling in Canada and the Transfer of Power to the Provinces
The federal government in Canada is the legal controlling authority of gambling through the Criminal Code of Canada. Over the years, through various amendments to the Criminal Code, there has been a gradual relaxation of gambling laws in Canada. The pattern of continued legalization, and growth of gambling in Canada, followed a similar pattern as that of the United States. The big boom of the third wave of gambling occurred with the introduction of the first legal state lottery in North America this century - the
New Hampshire Sweepstakes in 1964. Five years later in 1969, the federal government amended the Criminal Code and introduced lotteries in Canada, driven in large part by their revenue imperative. In 1985, the federal government effectively transferred power of gambling to the provincial governments, who have in turn used gambling as a major means of generating revenue. The examination of gambling in Canada illustrated how there has been no major national public debate on the role of gambling since the 1950's; whereas during the same time, the Untied States has undertaken two major national reviews of gambling in the last 20 years.
6.1.4. High Stakes Gambling in British Columbia
The chapter on gambling in British Columbia detailed the extent to which the province has taken an active role in the use and promotion of gambling. Shortly after the legalization of lotteries in Canada, British Columbia adopted the games as a means of generating revenues, and have had 22 consecutive years of lottery sales growth.
Additionally, the province has a long history of pari-mutual wagering and charity gambling. It was detailed how two of the major forms of gambling (lotteries and pari- mutual wagering) operate under comprehensive legislation. Major public policy issues have emerged in the area of charity gambling, however. It was noted that this sector of the gambling industry operates under a simple Order-in-Council - while governments have been stating that they intend on introducing comprehensive gambling legislation for 10 years. The recent provincial government, driven by their revenue imperative, attempted 93
rather unsuccessfully to expand charity gambling in the province. The province lost several court cases as a result of their new gambling expansion policy, and have now stated that they intend on introducing new gambling legislation. In doing so, they should conduct an open public dialogue on the role of gambling in British Columbia.
6.1.5. Vancouver's Dance With the Seaport Centre Casino Proposal
The Seaport Centre casino proposal for downtown Vancouver was part of the rise of the urban casino movement that swept across North America. The debate surrounding
Seaport Centre demonstrated how the vast bulk of the issues associated with an urban casino have direct planning implications. In an effort to identify the impacts of Seaport
Centre, the City of Vancouver established a comprehensive five step casino planning review process. As the case study illustrated, urban casinos have a wide range of profound planning implications. Urban casinos present urban planners with issues such as city image, business, tourism, cultural industries, jobs, problem gambling, crime and policing, impacts to adjacent areas, housing and real estate, impacts to existing gambling and municipal government revenues and expenses.
It is the central conclusion of this thesis that the review the City of Vancouver conducted illustrated the planning issues associated with urban casinos, and further provides planners a good template for dealing with an urban casino proposal. The methodology and approach the City of Vancouver undertook to analyze the Seaport
Centre casino proposal was a fair and comprehensive review.
6.2. Gambling Policy Issues and Planning Imphcations
For the planning profession, the preceding chapters demonstrated how the evolution of gambling policy in North America, and the expansion of various forms of gambling games, of which the rise of the urban casino was one recent development, have direct and substantial planning imphcations. In the case of gambling policy, the Canadian context is one where the senior levels of government direct new gambling policies and 94
initiatives. Yet, and as was illustrated with the Seaport Centre case study, it is local governments and planners that are left to deal with the vast bulk of the issues associated with urban casinos. Thus, it is important for planners to understand the policy issues of gambling, and the trends within the industry (such as the rise of the urban casino), so they are better able to provide technical planning advice to the local governing authorities when faced with such issues.
The complexity for planners when dealing with a public policy issue such as gambling was illustrated during the Seaport Centre debate. For example, at the time of the casino proposal, the City of Vancouver already had a well established gambling industry. In the City of Vancouver there existed several hundred locations to purchase lottery tickets, there exists The Hasting Park race track and numerous charity bingo and casino locations, all of which served a local gambling market for the most part. Seaport
Centre offered the ability to bring a new element of gambling into the Vancouver market - one which could have provided substantial infrastructure improvements and the potential to attract new tourism dollars - but in the end, it was decided politically that the City of
Vancouver was opposed to a major urban casino. The City of Vancouver planning review process was able to nevertheless identify the impacts that an urban casino such as Seaport
Centre would have generated. And while the City review process concluded that there were substantial positive economic benefits with the proposal, other planning issues such as city image carried the day, and City council decided to oppose major casinos.
In the end, it is important for planners when dealing with an issue such as gambling that they have a sound understanding of the larger policy issues. Understanding that the governments revenue imperative has driven much of the recent gambling expansion is important for planners, as it is often the senior levels of government implementing gambling policy based on this notion. Yet, many of the issues associated with gambling are those local in nature. The City of Vancouver casino review process clearly highUghted the extent to which a major urban casino would have impacted planning considerations. 95
To that end, the provincial government as part of their new gambling expansion initiative recognized the impact of casinos and required local government consent for new casino locations. Thus, from a senior government policy perspective, the province tied the expansion of casinos directly to a local governments planning considerations. It is within this context that the planner needs to understand the larger gambling policy so they can best provide sound advice on how their respective community could be impacted by such a proposal. As the third wave of gambling is sweeping across North America, the importance of planners understanding the larger gambling policy so they can plan for local issues becomes all the more important.
6.3 Areas for Further Research
Gambling is a complex policy issue. This thesis examined recent North American gambling movements, and analyzed gambling in British Columbia and the attempt to introduce a major urban casino in Vancouver. Many other gambling issues need to be addressed further:
1. Similar to the major gambling reviews undertaken in the United States by the federal
government, the federal government in Canada should establish a national review of
gambling in Canadian society. The thesis research illustrated that the last national
review of gambling in Canada was in the 1950's. Since this time, gambling has
undergone a fundamental shift, and a greater understanding of the its role in society is
required. The discussion should strive to provide a better understanding of the
positive and negative aspects of gambling.
2. As gambling levels continue to increase across North America, much more research is
required on the issues of problem gambling. This may be the most important gambling
issue requiring attention. Governments gambling revenue imperative is not a single
sided balance sheet. 96
3. Many of the urban casinos that were introduced as part of the third wave of gambling
have been operating for the better part of the 1990's. Further research should be
conducted to analyze how the casinos impacted their respective conmiunities -
providing urban planning policy makers with detailed research data.
4. In the Province of British Columbia, the current charity gambling structure should be
replaced with comprehensive gambling legislation, similar to how the other gambling
sectors operate in the province. In doing so, the government should conduct an open
public debate of the role of charity gambling in the province. (
97
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Smith, Garry, and Azmier, Jason. 1997. "Gambling and the Public Interest" Canada West Foundation. Calgary
Smith, G. J. and Hinch, T.D. 1996. "Canadian Casinos as Tourist Attractions: Chasing the Pot of Gold" Journal of Travel Research. Winter 1996, p.37-45.
Statistics Canada, Compusearch. 1997. "Statistics"
Supreme Court of British Columbia. 1998. "Reasons for Judgement of the Honourable Mr. Justice Owen-Flood" Vicotria. 101
Vancouver Land Corporation. 1994. "Overview of the Proposal Seaport Centre: An International Destination Resort. Spring 1994
Vancouver Port Corporation. 1994. Central Waterfront Profile. Spring 1994.
Vancouver Port Corporation. 1994. Press Kit.
Whyte, Keith S. 1997. "Analysis of the National Gambling Impact Study Commission Act" Gaming Law Review. Vol. 1, No. 1, 1997,p9-14. 102
APPENDIX A
Charitable Casino Facilities in B.C.
Geographical Facility Name/Address Casino Management Existing Tables Area Companies
Lower Mainland Holiday Inn Great Canadian Casino 30 2477 Heather Street Company Ltd. Vancouver, B.C. V5Z 4H3
Richmond Casino Great Canadian Casino 30 8440 Bridgeport Road Company Ltd. Richmond, B.C. V6X 3C7
Newton Casino Great Canadian Casino 30 13538 - 73rd Avenue Company Ltd. Surrey, B.C. V3W 2R6
Renaissance Casino Great Canadian Casino 24 1133 West Hastings Street Company Ltd. Vancouver, B.C. V6E 3T3
Mandarin Centre Gateway Casinos Inc. 30 3rd Floor, 611 Main Street Vancouver, B.C. V6A 2V5
Royal Towers Gateway Casinos Inc. 30 140 - 6th Street New Westminster, B.C. V5T 1J5
Royal Diamond Casinos Inc. Royal Diamond Casinos Inc. 30 Plaza of Nations B106 - 750 Pacific Blvd. S. Vancouver, B.C. V6V 5E7
Clarion Hotel Villa Gateway Casinos Inc. (Jan 98) 30 4331 Dominion Street Burnaby, B.C. V5G 1C7
Grand Casino Grand Casino 30 Quality Inn 725 S.E. Marine Drive Vancouver, B.C. V5X 2T9 103
Geographical Facility/Name/ Address CasinoManagement Existing Tables Area Companies
Vancouver Island Mayfair Casino Great Canadian Casino Company 17 3075 Douglas Street Ltd. Victoria, B.C. V8T 4N3
Red Lion Casino Great Canadian Casino Company 9 3366 Douglas Street Ltd. Victoria, B.C. V8Z 3L3
Nanaimo Casino Great Canadian Casino Company 15 115 Chapel Street Ltd. Nanaimo, B.C. V9R 5H2
Southern Interior Kelowna Casino Lake City Casinos 13 1633 Pandosy Street Kelowna, B.C. V1Y 1P6
Kamloops Casino Lake City Casinos 9 124 Victoria Street Kamloops, B.C. V2V 1Z4
Vernon Casino Lake City Casinos 9 2801 - 33rd Street Vernon, B.C. V1T5S8
Other Billy Barker Hotel Royal Casino 7 308 McLean Street Quesnel, B.C. V2J 2N9
Wagers Casino Wagers Casino 12 490 Vancouver Street Prince George, B.C. V2L 2P2 104
Commercial Charitable Bingo Facilities in B.C.
GeorgrapbJcal Facility Name/Address Bingo Management Existing No. of Area Companies Seats
Lower Mainland Newton Square Bingo Country Bingo Country 566 . * 7093 King George Highway Surrey, B.C. V3W 5A2
Royal City Bingo Canacemal Investment Inc. 450 555 - 6th Street New Wesrjninister, B.C. V3L 5H1
Tri-City Bingo Palace Pacific Fundraising Ltd. 450 3210 St. John Street Port Moody, B.C. V3H 2C9
Chilliwack Rainbow Bingo Fred Grumprich 500 45515 Knight Road Sardis, B.C. V2R 3J7
Abbotsford Bingo B.C.S Properties/ 550 30835 Peardonville Road c/o Harwood Industries Abbotsford, B.C. V2S 4N9
Cordial Hall/Killarney Killarney Community 460 2215 East Pender Street Centre Society Vancouver, B.C. V5L 1X5
Langley Bingo Palace K & T Properties 500 19664 - 64th Street Langley, B.C. V2Y 1H3
Haney Bingo Palace Bemie Stoelzle 600 11887 - 224th Street Barry Tyldesley Maple Ridge, B.C. V2X 6B1
Jackpot Bingo Partners Management Ltd. 350 #204 - 877 East Hastings Street Vancouver, B.C. V6A 3Y1
Royal Canadian Legion #57 Royal Canadian Legion #57 250 32608 Fraser Crescent Mission, B.C. V2V 1B4
Starship on Main Royal Canadian Legion #177 600 2655 Main Street Vancouver, B.C. V5T 3E7 105
Georgraphlcal Facility Name/Address Bingo Management Existing No. of Area Company Seats
Vancouver Island Valley Bingo Palace Pacific Fundraising Ltd. 400 2871 Kilpatrick Avenue Courtenay, B.C. V9N 6P4
Inkspots Norman Henderson Gordlay 500 15 Craig Street Duncan, B.C. V9L 1V6
NCBA Bingo Country 600 601 - 495 Dunsmuir Street Nanaimo, B.C. V9R6B9
Harbour City Bingo Hall Harewood Investments 462 #501, 530-5th Street Nanaimo, B.C. V9R 1P1
Dob City Association 370 34486 - 3rd Avenue Port Alberni, B.C. V9Y4E3
Nordley's Bingo Hall Sons of Norway 185 4866 Bute Street Port Alberni, B.C. V9Y 3M3
River City Bingo Tymar Management Inc. 250 7010 Duncan Street Powell River, B.C. V8A 1V9
711 Bingo Emporium Estate of Helen Boas 320 713 John Street Victoria, B.C. V8W 1M8
Bingo Bingo 319968 B.C. Ltd. 166 820 Esquimau Road Victoria, B.C. V9A 3M4
Campbell River Bingo Hall Pacific Fundraising Ltd. 450 151 St. Ann's Road Campbell River, B.C. V9W 4C5
Langford Drop-In Bingo Columbus Enterprises Ltd. 350 #105 - 777 Goldstream Avenue Victoria, B.C. V9B 2X5 106
Georgraphical Facility Name/Address Bingo Management Existing No. of Area Company Seats
Victoria Bingo Palace Pacific Fundraising Ltd. 600 3400 Tillicum Road Victoria, B.C. V8Z 4H3
Lower Elks Bingo Hall B.P.O. Elks 220 231 - 6th Street Courtenay, B.C. V9N 1L9
Southern Interior Brock Bingo Hall Brock Bingo Inc. 600 100 - 1800 Tranquille Road Kamloops, B.C. V2B 2Y4
Penticton Bingo Palace Pacific Fundraising Ltd. 420 602 West Ekhart Road Penticton, B.C. V2A 2B5
Fairweather Bingo Hal! Terrim Properties Ltd. 550 1015 Fairweather Road Vernon, B.C. V1T 8T8
Rocky Mountain Bingo Terrim Properties Ltd. 523 209 - 16th Avenue Cranbrook, B.C. VIC 5S8
Dabbers Bingo Hall Thomas Capozzi 513 597 Bernard Avenue Kelowna, B.C. V1T 6N9
Kelowna Bingo Palace Goldw'mg Invest (Saskatoon) 600 2781 Highway 97 N Ltd. Kelowna, B.C. V1X 4J8
Charities Hall Bingo Association leases hall 570 1224 - 8th Avenue Kamloops, B.C. V2C 2Y4
Lucky Dollar Bingo Palace John Becher 525 4410 Legion Avenue Terrace, B.C. V8G 1N6
Lucky's - The Bingo Centre Merle Gardner 497 267 Borland Avenue Williams Lake, B.C. V2G 1R4
Eagles Bingo Hall Fraternal Order of Eagles 300 1505 Bay Avenue #2838 Trail, B.C. V1R4B4 107
Georgrapbical Facility Name/Address Bingo Management Existing No. of Area Company Seats
Other BMC Bingo Barn Sandra Brown 217 4607 - 55th Street Fort Nelson, B.C. VOC 1R0
Play It Again Bingo Hall Colleen Anderson 540 1395 Sixth Avenue Merle Gardner Prince George, B.C. V2L 5L6
Cariboo Country Bingo Hall Colleen Anderson 320 374 McLean Street Quesnel, B.C. V2J 2N9
Bear Mountain Bingo Hall Doug Keith 450 10033 Ninth Street Bear Mountain Construction Dawson Creek, B.C.
Good Time Bingo Hall John Major 600 490 Vancouver Street Prince George, B.C. V2L 5N2
Rainbow Bingo Hall Glenn Guise 400 10320 - 100th Avenue Fort St. John, B.C. V1J 1Y9
Totem Convention Centre Shelley & Ron Wagner 300 201 Crestview Drive Prince Rupert, B.C. V8J 2Z6 108
British Columbia Charitable Casino Results
Casino open 8 hours per day maximum, not necessarily 7 days per week, tables not necessarily open all 8 hours. April 1, 1996 to March 31.1997 (S25 Bet Limits Maximum).
Win Revenue % of » # of Table _ Location ^ Drop excluding % Win Total Rake Plus Revenue - ($ Millions) ($ Millions) ($ Millions) COAST CASINO ROYAL TOWERS HOTEL, New Westminster 10,364 $34.9 $8.3 23.7* $8.8 9.2%
GOLD PLATE HANEY MOTOR HOTEL • 668 1.1 0.1 11.9% 0.1 0.1%
GRAND CASINO QUALITY INN, Vancouver 9.169 35.5 7.7 21.8% 8.1 8.5%
GREAT CANADIAN CASINO CO. LTD. NEWTON CASINO. Surrey 9,438 29.7 7.3 24.6% 7.9 8.4% HOLIDAY INN ON BROADWAY. Vancouver 10,653 53.4 12.6 23.6% 13.3 14.0% RICHMOND ENTERTAINMENT CENTRE. Richmond 10,863 56.7 14.3 25.2% 15.1 15.9% RENAISSANCE HOTEL. Vancouver 8,469 28.1 6.6 23.4% 7.7 8.1%
GREAT CANADIAN CASINO CO., (Vancouver Island) CASINO MAYFAIR. Victoria 5,185 16.3 4.0 24.7% 4.3 4.5% DORCHESTER HOTEL. Nanaimo . 4,727 9.5 2.6 27.2% 2.9 3.1% RED LION INN, Victoria 2.907 6.0 1.4 22.7% 1.5 1.6%
LAKE CITY CASINOS LTD. KAMLOOPS CASINO, Kamloops 3,115 6.0 1.6 27.2% 1.7 1.8% KELOWNA CASINO. Kamloops 4,339 9.1 2.1 23.4% 2.3 2.4% VERNON CASINO. Vernon 2.553 4.1 1.2 28.1% 1.3 1.4%
PRINCE GEORGE CASINO HOLIDAY INN, Prince George 3,678 5.9 1.6 26.3% 1.6 1.7%
ROYAL CASINO BILLY BARKER INN, Quesnel 986 0.9 0.2 26 .5 % C.3 0.3%
ROYAL DIAMOND ROYAL DIAMOND CASINO, Vancouver 9,090 39.9 9.9 24.7% 10.4 10.9%
VANCOUVER CASINO ROYAL MANDARIN CENTRE. Vancouver 9,364 32.8 7.5 22.8% 7.7 8.1%
105,568 $370.1 $88.9 24.0% $95.4 100%
* Closed, November 30, 1996, re-locating to Burnaby to open January 1998: (Totals may not add, due to rounding) NOTE: Games allowed (eg. mini-baccarat), bet limits ($500 maximum) and hours of operation (now 14 hours per day) have all changed since April 1,1997. June Casino results were: - revenue (win plus rake): $13.3 million, all casinos. - all casinos: $1,534 per table per day (some casinos only operated 8 hours maximum). - one larger casino: $2,784 per table per 14 hour day. 109
REVENUE SUMMARY-CASINOS AND BINGO HALLS
Bingo Halls in British Columbia, 1996/97 Data
Sales Per No. of Name Location Address Annum Seats {Millions Campbell River Bingo Hall . Campbell River 151 St. Ann's Road, Campbell River, BC V9W 4C5 S8.2 450 Valley Bingo Palace Courtenay 2871 Kilpatrick Avenue. Courtenay, BC V9N 6P4 4.9 400 Lower Elks Bingo Hall Courtenay 231 6th Street, Courtenay. BC V9N 1L9 1.3 500 Inkspots Duncan 15 Craig Street. Duncan, BC V9L 1V6 4.4 700 NCBA Nanaimo 601 - 495 Dunsmuir Street, Nanaimo, BC V9R 6B9 7.0 462 Harbour City Bingo Hall Nanaimo 501 - 530 5th Street. Nanaimo. BC V9R 1P1 8.4 370 Dob City Port Albemi 3486 3rd Avenue. Port Albemi, BC V9Y 4E5 4.0 185 Nordley's Bingo Hall Port Albemi 4866 Bute Street, Port Albemi, BC V9Y 3M3 1.7 250 River City Bingo Powell Rwer 7010 Duncan Street. Powell River. BC V8A 1V9 1.3 320 711 Bingo Emporium Victoria 713 Johnson Street. Victoria, BC V8W 1M8 2.9 166 Bingo Bingo Victoria 820 Esquimalt Road, Victoria. BC V9A 3M4 4.2 350 Langford Drop-In Bingo Victoria 105 - 777 Goldstream Avenue, BC V9B 2X5 4.1 600 Victoria Bingo Palace Victoria 3400 Tillicum Road. Victoria. BC V8Z 4H3 4.7 220 Vancouver Island $57.1 4.973
Penticton Bingo Palace Penticton 602 West Ekhart Road. Penticton. BC V2A 2B5 $4.9 420 Brock Bingo Hall Kamloops 100 - 1800 Tranquille Road, Kamloops, BC 7.4 654 Charities Bingo Hall Kamloops 1224 8th Avenue, Kamloops, BC V2C 2Y4 6.4 570 Fairweather Bingo Hall Vernon 1015 Fairweather Road, Vernon, BC V1T 8T8 5.5 550 Rocky Mountain Bingo Cranbrook 209 16th Avenue. Cranbrook, BC VIC 5S8 4.2 523 Dabbers Bingo Hall Kelowna 597 Bernard Avenue, Vernon. BC 5.2 513 Kelowna Bingo Palace Kelowna 2781 Highway 97N, Kelowna. BC 7.4 600 Eagles Bingo Hall Trail 1505 Bay Avenue, Trail, BC V1R4B4 1.1 300 Southern Interior $42.1 4.130
Newton Square Bingo Country Surrey 7093 King George Highway. Surrey, BC V3W 5A2 $8.4 566 Royal City Bingo New Westminster 555 6th Street, New Westminster, BC V3L 5H1 7.9 450 Tri-City Bingo Palace Port Moody 3210 St. John Street, Port Moody, BC V3H 2C9 3.9 450 Chilliwack Rainbow Bingo Sardis 45515 Knight Road, Sardis, BC V2R 3J7 5.0 500 Abbotsford Bingo Abbotsford 30825 Peardonville Road. Abbotsford. BC V2S 4N9 9.9 550 Langley Bingo Palace Langley 19664 64th Street. Langley. BC V2Y 1H3 8.4 500 Haney Bingo Plot Maple Ridge 11887 224th Street, Maple Ridge. BC V2X 6B1 5.7 650 Royal Canadian Legion No. 57 Mission 32608 Fraser Crescent, Mission. BC V2V 1B4 0.9 250 Starship on Main Vancouver 2655 Main Street, Vancouver, BC V5T 3E7 17.9 500 Cordial HaU/Killamey Vancouver 2215 East Pender Street, Vancouver, BC V5L 1X5 1.3 460 Jackpot Bingo Vancouver 204 - 877 East Hastings Street. Vancouver, BC 2.0 350 Lower Mainland S71.3 5.226
BMC Bingo Barn Fort Nelson 4607 55th Street, Fort Nelson. BC VOC 1R0 $0.9 217 Play-It-Again Bingo Hall Prince George 1395 Sixth Avenue. Prince George, BC V2L 5L6 2.8 540 Good Tune Bingo Hall Prince George 490 Vancouver Street, Prince George, BC V2L 5N2 12.0 600 Cariboo Country Bingo Hall Quesnd 374 McLean Street, Quesnel, BC V2J 2N9 1.4 320 Bear Mountain Bingo Hall Dawson Creek 10033 Ninth Street, Dawson Creek, BC 3.6 450 Lucky Dollar Bingo Palace Terrace 4410 Legion Avenue, Terrace, BC V8G 1N6 4.2 525 Lucky's - The Bingo.Centre Williams Lake 267 Borland Avenue. Williams Lake. BC V2G 1R4 3.8 497 Rainbow Bingo Hall Fort St. John 10320 100th Avenue, Fort St. John, BC V1J 1Y9 2.8 400 Totem Convention Centre Prince Rupert 201 Crestview Drive. Prince Rupert. BC V8J 2Z6 3.9 300 Northern Interior $35.4 3,849 (Totals may not add, due to rounding.) Province 5206.4 18,178 An additional 250 "stand alone* bingo events are held annually (for example, one night per week in a church hall) with sales totalling $22.3 million for the year. Proposed New Gamblin g Facilites for British ColMmbja
Destination Casino Charity Casino Destination Bingo Hall Charity Bingo Hall 21 Proposals Two Proposals Seven Proposals Two Proposals Location/Proponent Location/Proponent Location/Proponent Location/Proponent
1 Beecher Bay First Naiions Reserve 1 Burnaby 1 Beecher Bay First Nations Reserve 1 Burnaby Beecher Bay Casino Corp. 471438 B.C. Ltd. Beecher Bay Casino Corp. 427967 B.C. Ltd. 2 Hope First Nations Reserve 2 Bumaby 2 Osoyoos First Nations Reserve 2 Kitimat Charles C. Colombe 54738 BC. Ltd Desert Flower Casino Corp Canadian Manufactuers Outlet 3 Adams Lake First Nations Reserve 3 Tsawwassen First Naiions Reserve Charles C. Colombe Ll.DC Inc. 4 Osoyoos First Nations Reserve 4 Musqueam First Nations Reserve on Sea Island Desert Flower Casino Corp. Musqueam 4444 Slahal Entcrtaimcnt Inc. 0 5 Invcrmcre First Nations Reserve 5 Shearwater Eagle Rock Joint Venture Shearwater Marine Ltd. 6 Pouce Coup 6 Toquaht First Nations Reserve Hearts Casino Corp. Touquaht Gaming Corp. 7 Kamloops First Nations Reserve 7 Westbank First Nations Reserve Kamloops Indian Band Gaming Inc. 511269 BC. Ltd. 8 Penticton Lake City Casinos Ltd. 9 Tsawwassen First Nations Reserve LLDC Inc. 10 Musqueom First Nations Reserve on Sea Island Musqueam 4444 Slahal Entenaiment Inc. II Prince Rupert Pacific Gaming Ltd. 12 Powder King Mountain Powder King Mountain Resort Inc. 13 Shearwater Shearwater Marine Ltd. 14 Penticton First Nations Reserve Sodak Gaming Inc. 15 Wells The Jack O'Clubs Gaming Hall Ltd 16 Toquaht First Nations Reserve Touquaht Gaming Corp. 17 Campbell River Trillium Gaming Inc. 18 Merrill First Nations Reserve Trillium Gaming INc. 19 Westbank First Nations Reserve Westbank Casino Corp 20 Penticton 467768 B.C. Ltd. 21 Cranbrook First Nations Reserve 554381 B.C. Ltd.
Source. Ministry of Employment and Investment 1998,1 -2