British Columbia·Analysis

Ready for a casino debate? BCLC wants one anyway

In a world as data-driven as the gaming industry, the B.C. Lottery Corporation is launching the prospect of not one, but two new Lower Mainland casinos with just a pair of news releases based on an analysis the public can't see.

Provincial health officer questions lottery corporation's 'uni-dimensional' approach to expansion

BCLC says it believes untapped market potential exists for the operation of new casinos on the North Shore and south of the Fraser. (Wayne Parry/The Associated Press)

In a world as data-driven as the gaming industry, it's hard to believe the B.C. Lottery Corporation is launching the prospect of not one, but two new Lower Mainland casinos with just a pair of news releases based on a market analysis the public can't see.

BCLC announced plans this week to ask municipal and First Nations leaders on the North Shore and south of the Fraser if they'd be interested in taking advantage of what the Crown corporation estimates to be the potential for a combined $90 million in "incremental revenue".

Local governments get a 10 per cent cut of the profits. It may sound like the kind of business opportunity that usually comes your way via a mass mail-out with a lot of exclamation points — only in this case, there's less fine print.

'Not a health impact assessment'

BCLC spokeswoman Angela Koulyras says the market analysis was done by HLT Advisory, a Toronto-based agency which works with the gaming sector to provide what it calls "usable, achievable and measurable advice".

They didn't look at social risk; they didn't look at the potential economic impact on other businesses; they didn't look at community attitudes.

B.C. Provincial Health Officer Dr. Perry Kendall says the public is entitled to a complex weighing of the benefits and costs of casinos. (CBC)

And besides, says Koulyras, the report contains "competitive information" so it's kept confidential to protect the business interests of both the Crown corporation and their service providers.

"The analysis looks at population trends and traffic patterns, transportation access, revenue potential; it's not a health impact assessment," Koulryas says.

"That is something we would be working with the community in terms of consulting local stakeholders and Ministry of Health representatives, once we've narrowed down the selected community that is interested in hosting a gaming facility."

Cart before the horse?

That's an approach provincial health officer Perry Kendall — author of a 2013 report advising a "public health approach to gambling" in B.C. — might call 'cart before the horse'.

Kendall says he was struck by how "uni-dimensional" BCLC's focus appears to be: "Here's a potential market. People would gamble. And we would get revenue from it."

Contrary to what you might think, Kendall is not a wet blanket on the subject of gambling expansion. But what he says is needed, even at this early stage, is a more complex balancing of facts to help taxpayers make up their minds.

Who are the target clientele? Do they live in the community or elsewhere? Do some already classify as problem gamers — or is there potential for new addicts to develop?

Are these people with discretionary income? What would they spend their cash on if the option of a casino didn't exist: a house, a car, clothes? And where would the casino employees come from?

"That's a more comprehensive analysis of a business case to a community," Kendall says.

He says the situation underscores an inherent contradiction in BCLC's promotion of a product whose dangers it is publicly committed to curbing; any 'analysis' of market opportunities should at least give a passing nod to that responsibility.

Market saturation?

Without a doubt, BCLC is a huge contributor to the provincial economy, generating more than $1.3 billion last year in net income for the benefit of provincial and community programs.

But both Surrey and Vancouver have seen divisive debates in recent years over gambling expansion.

A bitter debate in 2013 over a proposed casino in Surrey resulted in the rejection of the project in a 5-4 split between city councillors.

Surrey rejected a proposal for a $100 million casino in 2013 by a 5-4 city council vote. And while Vancouver city councillors ultimately approved a plan for an existing casino to move into a proposed $535 million "urban resort", they refused to allow any new slot machines and tables.

BCLC says its table games, slot machines and bingo games are available in 29 communities across B.C. through 17 casinos (including two at racetracks), six bingo halls and 19 community gaming centres.

But even the corporation's own financial documents raise questions about how much more the market can bear.

According to BCLC's 2014-2015 annual service plan report, 90 per cent of B.C. adults live within a 30-minute drive from a casino or community gaming facility.

The corporation's 2016/17-2018/2019 service plan says BCLC's "two major business units (lottery and casino) are mature and face market saturation." The core player base is getting older.

The same service plan says B.C. is encountering increased competition from Washington and Nevada casinos, online gaming, fantasy sports and social gaming.

Licence stems from public trust and support

So where are the opportunities identified by the analysis that calls for new casinos?

The documents may provide a clue.

High-limit table games have been making up for sagging lottery revenues, according to BCLC's annual reports. (AP Photo/Vincent Yu)

In 2013, BCLC brought more than two dozen new high-limit table games to the River Rock casino in Richmond and the Edgewater casino in Vancouver. As a result, the net win during Chinese New Year 2014 went up 30 per cent in Lower Mainland casinos.

"We currently benefit from an international player base that chooses to spend its discretionary dollars in our local casinos and specifically on high-limit table games," says the 2014-1015 annual report.

"As a result, we are exposed to the risk that these players may choose to spend their time and money outside B.C. or on activities other than gaming."

Is it possible that BCLC — like the real estate industry and the provincial government — wants to claim its share of what appears to be a huge influx of money coming from China?

Kendall's 2013 report found that while the prevalence of problem gambling in B.C. is relatively low, it has been increasing. Between 2002 and 2007, the number of people with the most severe form of problem gambling more than doubled, increasing from 13,000 to 31,000.

If expansion comes at anyone's cost — it's most likely to be them.

Kendall didn't call for a moratorium on new casinos, but rather for "balancing the known negative impacts of gambling with its potential benefits."

That's an approach BCLC has publicly endorsed.

"Our licence to operate stems from public trust and support," the corporation says in its last annual report.

"We plan to be open about our business plans and the impact of those plans, so that BCLC is better understood and welcomed by British Columbians."

That begins with the facts — something taxpayers might want before they're willing to roll the dice.

About the Author

Jason Proctor


Jason Proctor is a reporter in British Columbia for CBC News and has covered the B.C. courts and mental health issues in the justice system extensively.


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