Alberta should use a lottery to help fund a new arena in downtown Edmonton and Calgary, suggests Wildrose opposition leader Danielle Smith.

“The City of Edmonton would get a magnificent downtown facility, the Edmonton Oilers would get a new home and Alberta taxpayers wouldn’t be on the hook for any of it," Smith told reporters Thursday.

Smith said an existing digital game could cover the $100-million gap in the funding deal reached last year between Oilers owner Daryl Katz and Edmonton city council in five years.

The bingo-style game called KENO raised just over $3.1 million in revenue last year in Alberta where it is featured in 88 bingo halls, casinos and gaming rooms, said Smith.

However, in British Columbia, the game generated nearly $235 million in revenue last year and is played in about 4,000 locations, which includes sports bars and pubs, she said.

The game could raise as much as $20 million each year towards the arena project, with an equal amount going to Calgary for a new arena, she said.

Smith said her proposal would require significant co-operation between the Alberta Gaming and Liquor Commission, the cities of Edmonton and Calgary and the respective NHL franchises to work.

"We believe this could be the solution that fills the funding gap while respecting taxpayers at the same time,” Smith said.

An official in Alberta Finance Minister Doug Horner's office says they are examining the potential for gaming to help fund these kinds of projects, but it's in the very early stages.

Lottery idea called 'corporate welfare'

Edmonton city councillor Kim Krushell says the KENO idea is worth looking at but she has some reservations.

"There have been lottery attempts in the past and they haven't been successful," she said. "But you can look at the numbers in British Columbia and it might be an option for consideration. In the end we'll see what the province decides to do."

Scott Hennig from the Canadian Taxpayers Federation says the lottery could divert funds that would normally go towards charitable organizations to professional hockey teams.

"Moving money around from charities who are currently the beneficiaries of lottery funding to give it to private business owners so they can prop up their businesses and benefit themselves is a bad model," he said. "It's corporate welfare."

Gary Smith from the Alberta Gambling Research Institute worried about the effect of adding more options to an already saturated marketplace.

"This would expand gambling considerably and put it in publicly available places just like VLTs are now," he said. "So it would probably add to the addiction problem."