Cities take a gamble on casino earnings

"We gambled and we lost."

- Vancouver COPE Coun. Fred Bass

It wasn’t quite how the cards were supposed to be played. On a muggy July morning before a long summer break, Vancouver city councillors opened their staff reports to find their city’s revenue projection for the year short by almost $2.5 million.

The bookkeepers would have to tap the last of the city’s contingency reserve – the rest allocated for snow removal and a forever-looming West Nile virus outbreak – to make up for the shortfall.

How could this have happened?

The city had been banking on a $7-million revenue windfall from the newly-opened Edgewater Casino along False Creek. Instead, competition from other municipalities saw the casino pull in only $5.4 million, and the city found itself in the awkward position of debating how to help the casino jack up its profit.

“We’ve got ourselves into a situation where we’re trying to get people to gamble,” a visibly upset NPA Coun. Sam Sullivan said at the time. “It’s unbelievable.”

We've got ourselves into a situation where we're trying to get people to gamble

And indeed, Sullivan's personal convictions against gambling aside, it's hard to argue that relaxing signage bylaws along the False Creek waterfront and granting Edgewater a liquor license, both options council will likely soon consider, couldn't somehow be seen as encouraging gambling.

At the other end of Sullivan's political spectrum, COPE Coun. Fred Bass fretted aloud over the possiblity. "I would hope that our staff doesn't go very far out of their way in chasing lost or undelivered gambling revenue," Bass said at council. "I have great reservations about gambling revenue, and if it doesn't come in, well, we gambled and we lost."

Sullivan, now running for mayor, opposed allowing slot machines in the city but relented when they were approved at Edgewater. Both he and Vision Vancouver mayoral candidate Jim Green now say there will be no further expansion of gambling in the city - after, of course, both councillors gave the final thumbs-up to permit slots at Hastings Racecourse just last month.

But it’s still a touchy subject in other areas.

Take Richmond, which saw a 250 per cent increase this year in its share of Lower Mainland casino revenue, thanks to the opening of the River Rock Casino and its 1,000 slot machines.

Now the city is counting on much of that income to fund some risky projects – like $50 million over 10 years for the controversial $155-million Olympic Oval on River Road. Mayor Malcolm Brodie has already promised the project will not see taxes go up, but what happens if the city’s share of revenues don’t add up to a jackpot?

Gambling is wrong,
whatever ways the profits from it are used

The answer has Richmond council candidate Annie McKitrick worried.

“When you allow casinos, you become dependent on it. It’s easy money,” McKitrick said in an interview yesterday. “It scares me that we’re tying something good, like the Olympics, with the casino.”

Granted, McKitrick, a school board trustee and outspoken social advocate, may already have strong views on casinos: "Gambling is wrong - whatever ways the profits from it are used," McKitrick wrote in a 2002 letter to the Richmond News.

But McKitrick points out what Vancouver city councillors learned just this summer: Counting on steadfast casino revenue numbers is indeed a gamble. "We don't know what's going to happen to casino funding in years to come," McKitrick said. "We're projecting revenues coming from casinos but really, we have no idea if they will change."

But while Richmond Coun. Evelina Halsey-Brandt acknowledges casino revenues are unguaranteed, she insists they can be a good way of keeping taxes down – as long as they are applied to capital projects like the Oval, and not to the city’s yearly operating budget.

“If I take $10 million from this year’s casino revenues and apply it to the capital cost, that cost is not going to be repeated,” Halsey-Brandt said. “Once you build something you no longer need the capital money.”

Back in Vancouver, however, Sam Sullivan says casino profits should be pumped straight into general revenue and not tied in with specific projects.

"When you tie it to speciifc objectives then you potentially get a political constituency that is now lobbying for increased revenues," Sullivan said in an interview last week. "The better way is to put it into general revenue and decide where it goes based on an analysis of the whole city's needs."

Either way, Sullivan acknowledges gambling in Vancouver is here to stay. If he's elected mayor on Saturday, the four-term city councillor will find himself in the interesting position of leading a city that welcomes gambling revenue, yet despising the very idea at the same time.

Sullivan was asked if he was now satisfied with where the city has come with gambling revenue.

"I don't have an opinion on that," Sullivan said after a brief pause. "I don't think that's what should drive our policies on the revenues we're getting off gambling. I think we've gone with the provincial government's formula. I don't actually personally endorse it."