Friday, April 28, 2023

Taking from David to Give to Goliath: Regional Casino Revenue Sharing Proposal Would Hurt Small Municipalities

Cascade Casino in the Background

Currently, municipalities in BC that host a casino receive 10% of the net gaming revenue from casinos within their municipality boundary.

In 1999, the provincial government sought to expand gaming in BC. They commissioned a “White Paper on Gaming.” One of the recommendations was that the provincial government take control of casinos, including where casinos could be located. Another recommendation was that the province allows municipalities to reject casinos from being built, but for municipalities that did allow casinos to be built or had casinos, the province would share 10% of the net gaming revenue.

Casinos aren’t a free lunch. There are social impacts, including problem gambling, economic, and policing impacts borne by the host municipality.

Langley City has a casino today because the Township of Langley rejected hosting a casino in their municipality. This rejection is why a casino opened in Langley City in 2005. In Langley City, the previous Council negotiated for a convention centre to be part of the casino complex as a condition of accepting the casino in our community.

Rejecting casinos isn’t from yesteryear. Surrey rejected a casino in 2013, which is why a casino recently opened in Delta by the George Massey Tunnel.

Municipalities that do not host a casino occasionally ask the province to update the 10% policy to enable revenue from casinos to be shared by all municipalities, not just municipalities that host casinos.

The Lower Mainland Local Government Association (LMLGA) Conference is next week. There is a proposal to “urge the Province to make the necessary legislative changes to ensure equitable distribution of casino revenue within regional districts.” This motion will be voted on by elected representatives from municipalities and regional districts in the Lower Mainland.

The following table shows the breakdown of municipalities in Metro Vancouver. It includes population estimates from 2022, what revenue municipalities that hosted casinos received in fiscal 2021/22, what municipalities would receive if an “equal distribution” of casino revenue occurred in Metro Vancouver in fiscal 2021/22, and what gains or losses in revenue municipalities would see under this “equal distribution” proposal.

Municipality Population Casino Revenue, Actual Casino Revenue, If Shared Revenue Change, If Shared
   Anmore 2,485 $35,879.61 $35,879.61
   Belcarra 716 $10,337.95 $10,337.95
   Bowen Island 4,058 $58,591.32 $58,591.32
   Burnaby 270,264 $8,726,789.37 $3,902,199.54 -$4,824,589.83
   Coquitlam 159,285 $5,450,081.61 $2,299,832.22 -$3,150,249.39
   Delta 113,347 $1,636,557.63 $1,636,557.63
   Langley City 30,084 $6,030,084.96 $434,367.03 -$5,595,717.93
   Langley Township 142,043 $2,050,884.06 $2,050,884.06
   Lions Bay 1,325 $19,130.98 $19,130.98
   Maple Ridge 96,378 $1,391,551.18 $1,391,551.18
   New Westminster 85,708 $4,850,774.73 $1,237,492.67 -$3,613,282.06
   North Vancouver, City 61,973 $894,795.50 $894,795.50
   North Vancouver, District 92,390 $1,333,970.55 $1,333,970.55
   Pitt Meadows 20,399 $294,530.42 $294,530.42
   Port Coquitlam 65,246 $942,052.63 $942,052.63
   Port Moody 36,786 $531,133.68 $531,133.68
   Richmond 222,954 $8,351,509.02 $3,219,115.37 -$5,132,393.65
   Surrey 633,234 $2,472,080.67 $9,142,932.18 $6,670,851.51
   Vancouver 706,012 $5,163,216.38 $10,193,735.39 $5,030,519.01
   West Vancouver 45,406 $655,593.32 $655,593.32
   White Rock 21,807 $314,859.79 $314,859.79
   Unincorporated Areas 30,820 $444,993.75 $444,993.75

Not surprisingly, Vancouver, Langley Township, and Surrey would get the most significant revenue boost, even if it is a bit ironic given that Surrey and the Township rejected casinos in the past. Municipalities that would lose the most revenue include Langley City, Richmond, and Burnaby.

This loss would significantly impact the budgets for smaller municipalities like Langley City and New Westminster. Langley City has around a $65 million budget, and the “equal distribution” proposal would impact our revenue by around 10%.

This money transfer to larger municipalities like Vancouver with its $2 billion budget, Surrey with its $1.2 billion budget, or the Township of Langley with its $520 million budget would not significantly impact their bottom line. For example, it would impact the Township of Langley’s revenue by less than 1%.

While having a regional casino revenue sharing sounds good on paper, it is not a justice or equitable approach.

If this motion was approved at the LMLGA conference and the Union of BC Municipalities conference later this year, and if the province did move forward with this, it would be a breach of a social contract the province made more than 20 years ago with municipalities that host casinos. This agreement and contract encouraged municipalities to accept casinos in their community. It would hurt smaller municipalities and would minimal benefit large municipalities.

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