Playing a weak hand - The Orca

Playing a weak hand

Cheryl Ziola

Gaming revenue is the lifeblood of community groups across BC. So why are gaming establishments last on the priority list to re-open?

Chances are, you’ve benefited from a community program funded from gambling revenue. Although children and youth enrolled in amateur minor sports likely aren’t aware, their activities are dependent on these gambling funds. So are many musical theatres, daycares, food banks, animal or environmental protection organizations, poverty, disability and mental health services, school parent advisory councils, aboriginal, ethnic, and seniors groups.

About 5,000 organizations across the province receive proceeds from gambling. The entire 111-page list of recipients is found at the BC government website in the Fiscal Year 2019/20 Year-End Grant Report by Community.

Last year, charities and non-profits received a total of $140 million from the net $1.4 billion (after expenses and prize payouts) in gambling revenue. Local governments hosting gambling facilities also receive 10%, reducing their dependency on property taxes.

That $140 million is actually less than the $156 million charities received in 2009, when government slashed their gaming funding. A later December 2016 audit found the number of grants has largely continued to decline over the years. Amounts paid out have stagnated, despite the relentless rise in community groups’ operating costs, insurance, rents, payroll taxes, and other inflationary pressures.

Not that long ago, charities and non-profits operated gaming establishments in BC. The charitable benefactor was used to gain community approval on contentious gaming expansion proposals. “When you play, good things happen” was the mantra used to help justify a new casino or bingo hall.

The group representing charities and non-profits, BC Association for Charitable Gaming, (BCACG) later handed over that control to the provincial government, on the promise they’d receive a net one-third of gaming revenues. That Memorandum of Agreement (MoA) was signed in 1999 with the then-NDP government’s minister of employment and investment, Mike Farnworth.

The MoA was recently cited in a 2017 BC Chamber of Commerce resolution calling for restoration of three-year gaming grants, rather than the current annual application, so community organizations could offer more long-term program certainty. Three-year guaranteed grants disappeared years ago – as did the net 33% commitment.

The community groups’ share remains about 10%, while the majority of gaming funds flow to the province’s general revenues. In February 2019, the government entered a new agreement to share 7% of total net gaming proceeds with BC First Nations, representing approximately $3 billion to be allocated over the next 25 years. The then-President of BC Association for Charitable Gaming, (BCACG) Susan Marsden said in a 2013 Globe and Mail article: “Without legislation that sets out community groups’ share of the gambling pot, charities and non-profits remain vulnerable to economic hardship or political whim.”

As Marsden noted, those programs are vital. But how will the province replace that revenue for community groups, First Nations, and governments when gaming facilities aren’t yet permitted to re-open from COVID?

There are two options: higher taxes; or borrow more. Neither are palatable.

In addition to tragically taking 167 lives in BC (at last count), COVID-19 devastated our economy, hurting businesses of all sizes, government revenues, investments and retirement funds. While the healthcare system had Dr. Bonnie Henry, the economy had no such savior.

No comprehensive playbook existed for governments to respond to an economic crisis of this magnitude, hence the hastily and haphazardly rolled out temporary aid packages, some with byzantine rules and unintended consequences. But charities and non-profits are also severely impacted, though loss of donors, investment declines and staff layoffs.

The closure of gaming facilities has created huge uncertainty for these organizations reliant on this revenue source. Many likely won’t survive. If the Vancouver Aquarium, which received $200,000 in gaming funds last year, admitted they’re facing bankruptcy, imagine what other smaller organizations are facing.

If we can safely reopen schools, fitness centres, and restaurants, and keep grocery stores and transit functional during a pandemic, we should be able to restart indoor casinos and bingo halls with similar precautions. Many elderly folks rely on these gaming venues for socialization and entertainment. The gaming sector itself also provides jobs for approximately 37,000 people, according to the BC Lottery Corporation. More than $23 billion in gaming dollars over 34 years has funded provincial, municipal and charitable programs throughout BC, not chump change.

Vegas is open for business. Monte Carlo and Macau, China casinos are open. Some Australian casinos were allowed to remain open with proper protocols in place by their health officer.

Yet, here in BC, casinos and gaming establishments remain last on the list of priorities for reopening. Our provincial health officer, Dr. Bonnie Henry, who has managed the health crisis with her trademark calmness, said casinos would be last to open, given they’re indoor environments where people, including vulnerable seniors, may congregate.

With respect, many currently open services and facilities are also indoor areas vulnerable seniors may visit. Surely with additional sanitization, plexiglass shields, spaced-out table seating, temperature checks, and requiring masks at the door, gaming facilities could be re-opened safely. We could also consider increasing online gambling limits for those who can prove source of funds, aren’t on the problem gambler list, and might not be ready to go to a casino in person.

Gaming revenues are a significant source of non-tax revenue that support provincial programs and non-government organizations throughout BC. Much of that value is multiplied by thousands of volunteers who provide sweat equity to community groups. We can’t keep our economy running on government handouts indefinitely.

Given the importance of gaming funds, there is no reason a good risk management strategy for gaming staff and players couldn’t be developed and implemented. Many worthy community groups won’t survive without one.

A former journalist and organization executive, Cheryl Ziola is a communications professional whose experience spans non-profits and charities in natural resources, the building industry, a chamber of commerce, as well as the public sector. She is a voluntary director on the executive of the Dunbar Community Centre Association and past Executive Director of the BC Association for Charitable Gaming.