BC arts cuts - gaming money evaporates effective immediately

Allyson McGrane
Distribution of gaming revenue in BC for fiscal year 2008/09

In the beginning, gaming was called gambling.  And it was illegal in Canada under the Criminal Code starting in 1892.  But then in 1901,  a key exemption emerged - gambling was legal if it was a raffle at a bazaar held for charitable or religious purposes.  By 1906, the federal government allowed lottery schemes to be run by charitable and religious organizations.  Thus began the intimate connection of gambling and charities.

Click to enlarge graphic.

Slowly other forms of gambling were allowed - bets on horse racing (1910), select games of chance at agricultural fairs and exhibitions (1925), and gambling on the premises of social clubs if the operator did not take a cut (1938).   Then in 1969, a federal amendment to the Criminal Code allowed federal and provincial governments to conduct lotteries - which led to a struggle between the two levels of government over gambling revenues.  Several provinces began to create lottery corporations and the federal government established a national lottery in support of the 1976 Montreal Olympics.  Competition ensued.  Eventually in 1985, the federal government amended the Criminal Code to grant the provinces and their agencies the sole legal right to conduct or have conducted lotteries and games of chance.  Thus in BC we have the BC Lottery Corporation (a Crown corporation operating under the Gaming Control Act of BC) and the BC Gaming Policy and Enforcement Branch (a government bureaucracy regulating gaming).

Charities have maintained the right to earn gaming revenue through ticket raffles, social occasion casinos, wheels of fortune, a casino at the PNE, bingos and poker games.  Such activity must be licensed by the BC Gaming Policy and Enforcement Branch.  In 2008/09, BC charities earned $20.7 million through their own licensed gaming activities.   However, a much larger percentage of their gaming revenue has been earned by the gaming activities run by the province and its licensed gaming operators.  This funding is paid out by the Gaming Policy and Enforcement Branch through various granting programs including Direct Access, Bingo Affiliation, Bingo Association, Special One Time Grants and BC 150 grants.  For arts organizations in BC, funding provided through gaming grants amounts to approximately $20 million in recent years - which is more than the entire annual budget of the BC Arts Council (even before it was recently cut by 40%).

The key question here is:  why did charities start getting gaming funds in the first place?  Well, back in the good old days when gaming was gambling, it was seen as a vice or sinful activity.  So gambling when the proceeds went to charity created a societal legitimacy.  Even today, the BC Lottery Corporation points to community benefits of helping charitable and community organizations when justifying its own activities. The BCLC website has a section called Good Causes with a feel-good story about the BC Wheelchair Sports Association and more story links for Pacific Assistance Dogs Society, Nanaimo Marine Rescue, Campbell River Children's Choir and the Orphaned Wildlife Rehabilitation Society.  Perhaps the best part is the logo posted twice on the web page which claims:  "When you play GOOD things happen." 

Interestingly enough, the BC Lottery Corporation web site does not have any feel-good stories about how the vast majority of BC's net gaming revenue goes directly to the province through its consolidated revenue fund and the health special account.  Nor is there an update about the recent freeze and how the BC Liberals have decided to redirect funding this year.  According to a message sent to community organizations on August 27, 2009, Housing and Social Development Minister Rich Coleman explains that a number of changes are being made to the community gaming grant program effective immediately.  Due to "unprecedented global economic challenges" the province is making difficult decisions in order to continue funding core services and priorities.  As a result, limited arts and culture activities will be funded and BC Arts Council programs will be funded by the community gaming program.  In addition, all multi-year grants are cancelled including those promised to many organizations last year.  Most important, there is no reconsideration or review available - all decisions are final.

Starting on August 27, many arts organizations have reported receiving letters which deny funding through the Direct Access Gaming program.  Some have also reported letters which promise that their BC Arts Council funding will be paid out by the BC Gaming Policy and Enforcement Branch.  Such a payment method is highly unusual... but it does allow the provincial government to claim that it is continuing to "ensure ongoing support for British Columbia's vibrant arts and culture community."  It may even help the government claim that the gaming funds are directly benefiting community groups in BC.  What thischoice of distribution means for the future of arts funding through gaming is certainly an open question.

It is intriguing to note that in early August 2009, the BC Lottery Corporation decided to raise its weekly online play limit from $120 / week to $10,000 / week.  According to BCLC representatives, the action is a response to player demand.  NDP critic Shane Simpson claims it is a cash grab by a desperate government.  Gambling expert Colin Campbell (a criminologist at Douglas College) believes the move is an attempt to capture more of the legal online gaming revenue - which our government estimates is growing at a rate of 20 per cent a year. 

Perhaps it is becoming clear that the provincial government wants to maximize its own share of this growing gaming industry and minimize the payouts to community organizations.  In BC, the total revenues from commercial gaming in 2008/09 were approximately $2.61 billion.  Net gaming revenue for the province was about $1.08 billion. Only $156.3 million was redistributed to charities (including arts organizations).  This year, that number will be much smaller.  And it is likely that gaming revenues will only continue to rise. 

I would like to close with one final thought.  According to the official Hansard records of June 14, 1991, MLA Christopher D'Arcy (representing Rossland-Trail) made some comments about  the distribution of what was then called public lottery dollars.  He reminded members of the legislature that when the lottery program was first established in 1974, the purpose of lottery moneys was to support amateur sports, heritage activities and culture in British Columbia.  He raised questions about transparency about several grants awarded through the system in place at that time.  One thing he said is particularly on point for 2009 and I would like to quote from the Honourable Christopher D'Arcy:  "For this amount of money, public funds - some would argue, voluntary tax contributions to British Columbia - there is more than ever a need not only for justice and fairness to be done and openness to happen with the disbursement of these lottery funds, which after all belong to the communities whence the money came, but for fairness to be seen by the people of British Columbia to be done.  It does not help the image of the government of the day or indeed of the Legislature in general to have the feeling out there that there are hundreds of millions of dollars of lottery funds annually being disbursed one way or another without any public scrutiny, really. It's a "trust us" situation on the part of the provincial government." 

You see, Premier Campbell, those gaming funds belong to us.  They are intended to support community groups directly.  In fact, you tell the people who gamble that their money is going to a good cause.  Please - put your money where your mouth is.