Nova Scotia

Provincial VLT revenues slow after four years of growth

Recent year-over-year growth in video lottery terminal revenues slowed in 2017-18, and the provincial lotteries and casino corporation is preparing for them to eventually drop.

Revenues also up at casinos in Halifax and Sydney

VLT revenue in Nova Scotia increased for the fourth year in a row in 2017-18, but the provincial lotteries and casino corporation is preparing for the trend to reverse. (Mike Groll/Associated Press)

Recent year-over-year growth in video lottery terminal revenues slowed in 2017-18, and the province's lotteries and casino corporation is preparing for them to eventually drop.

"Video lottery is a mature product and unlikely to be a sustainable source of revenue for government in the long term," reads the 2018-19 business plan for the Nova Scotia Provincial Lotteries and Casino Corporation, released Tuesday.

Those same words were printed in the 2017-18 business plan, but numbers from the last few years appear to back up the statement.

Years of growth follow years of decline

Although forecasted VLT revenues have increased every year since 2014-15, the pace has slowed. By year, forecasted revenue since 2014-15 has been $113 million, $133 million, $135 million and $135.2 million in 2017-18. This growth followed five years of declines, going from $147 million in 2008-09 down to $106 million in 2013-14. 

The estimate for VLT revenue in 2018-19 is $139.2 million.

Bob MacKinnon, the corporation's CEO, said VLTs are stable at the moment but "we really won't see growth in that business line over the long run and our short to midterm objective is just to keep it stable."

Changing habits

MacKinnon said they're seeing changing consumer preferences, including more people gambling online rather than going to a location with VLTs.

The Crown corporation has 2,082 VLTs in bars and other establishments around the province. A 2011 provincial attrition policy calls for machines to be removed from circulation when a venue shuts down. Since that time, 155 machines have been retired.

The policy does not apply to machines located on First Nations, which are not administered by the province's lotteries and casino corporation.

Casinos see gains

Gambling profits are used to help government programs such as health care, education and road maintenance.

The 2018-19 business plan also shows improved performance by the province's two casinos over projections for 2017-18. MacKinnon said that's because of renovations and increased efforts to improve customer experiences in Sydney and Halifax, but also because the corporation had anticipated construction in the Cogswell Road area of Halifax and a corresponding effect on the casino nearby.

"That has not yet happened, so that's part of the favourable result."

About the Author

Michael Gorman is a reporter in Nova Scotia whose coverage areas include Province House, rural communities, and health care. Contact him with story ideas at michael.gorman@cbc.ca

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