MLA Advisory Committee to Review Eligible Organizations Access to and Distribution of Proceeds from Licensed Casino Events

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1 MLA Advisory Committee to Review Eligible Organizations Access to and Distribution of Proceeds from Licensed Casino Events MLA Doug Griffiths, Chair MLA Dave Rodney MLA Doug Elniski - Advice to Minister - March 2010

2 MLA Advisory Committee to Review Eligible Organizations Access to and Distribution of Proceeds from Licensed Casino Events 2010 Table of Contents Comments from the Chair Executive Summary Introduction MLA Committee Purpose Scope Objectives Background The Criminal Code Alberta s Charitable Gaming Model Casino Regions and Access Proceeds Distribution Volunteer Requirements Current Situation Waiting Period Access Proceeds Earned Distribution of Proceeds Annualized Proceeds Volunteer Requirements Consultation Summary Consultation process Consultation Findings Summary Access Distribution of Proceeds Number of Volunteers Committee Findings Access Distribution of Proceeds Volunteer Requirements 31 March 2010

3 MLA Advisory Committee to Review Eligible Organizations Access to and Distribution of Proceeds from Licensed Casino Events 2010 Recommendations Volunteers Proceeds and Access Appendix Terms of Reference News Releases Consultation Analysis Letter to Stakeholders Background Paper and Consultation Questions List of meeting dates and locations Names of Participating Organizations AGLC Policies 31 March 2010

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6 Executive Summary In September 2009, a committee of MLAs was appointed by the former Solicitor General and Minister of Public Security, Mr. Fred Lindsay. The purpose of this MLA committee was to conduct a review of the Alberta Gaming and Liquor Commission s (AGLC) policies regarding access to licensed casino events by eligible organizations, the distribution of proceeds from licensed casino events to these organizations, and the number of volunteers required to conduct casino events. Current Situation Alberta has 19 traditional casino facilities located in different regions throughout the province. Edmonton and Calgary each have five, Red Deer has two and the remaining seven casino regions each have one. The total number of charities assigned per casino facility ranges from a low of 244 in the Fort McMurray region to a high of 524 in Lethbridge. Each year, there is the potential to schedule 3,458 two-day casino events in Alberta s casino facilities (182 events per casino). Because there are more eligible charities than there are casino events in a year and because they are not evenly distributed throughout the province, there is a waiting period to hold a casino event. The waiting period to hold a casino event varies considerably across the province from 16 months in Fort McMurray and Medicine Hat to 34.5 months in Lethbridge. Between casino regions, proceeds earned can vary considerably. This is due to various factors including, among other things, population base, economic conditions, or size of casino. Proceeds averaged over the previous eight quarters have ranged from a high of $77,486 in Edmonton to a low of $18,011 in the St. Albert/Camrose pooling region. Annualized proceeds are a calculation of the estimated proceeds per year it is not the actual proceeds per event. There are two primary factors that determine annualized proceeds ; the waiting period and the proceeds per event. Using an average from January 2007 to December 2009, annualized proceeds range from a high of $46,971 in Calgary to a low of $6,972 in Camrose. At present, casino events in Calgary and Edmonton require a minimum requirement of 25 volunteers. Events outside of those cities require a minimum volunteer requirement of 15 volunteers. Consultation Summary A total of 1,408 participants representing 910 eligible organizations participated in 15 regional consultations between September and December The Committee received 416 eligible written submissions ( , mail and fax). Casino operators and casino advisors were provided with the opportunity to comment on the number of volunteers. 31 March i -

7 Committee Findings The Committee heard that charities throughout Alberta are very satisfied with Alberta s charitable casino model. Although charities suggest some efficiencies may exist in terms of volunteer responsibilities, they are willing to provide the volunteers required to conduct the events. There are concerns with the distribution of proceeds to charities and the access of charities to the various casino regions. The Committee finds that the concerns are a direct result of the variability in the proceeds earned throughout the province, both in terms of the proceeds per events and the annualized proceeds. The Committee and the charities consulted during this review are all very aware that there is a limited amount of casino proceeds available and that any amendments to policies that impact the distribution of proceeds or the access to casino regions results in a reallocation of those casino proceeds. Committee Recommendations Number of Volunteers Recommendation 1 The Committee is not recommending any major changes to the number of volunteers within the charitable casino model. However, wherever possible, the Committee recommends that the AGLC Board minimize the time and effort required by volunteers in the conduct and management of the casino event and provide for flexibility for volunteers, while ensuring the operating mind remains that of the charity. Proceeds and Access Recommendation 2 The Committee recognizes that risk should be minimized or shared amongst charities and therefore, the Committee recommends that: within a quarter, all proceeds to charities with a casino event at the same casino should continue to be equal; and within casino regions with more than one casino where charities can choose from more than one casino to hold their casino event, all proceeds should continue to be equal. Recommendation 3 The Committee recognizes that the proceeds from table games are earned directly from the conduct and management of those games by eligible organizations within the casino region; therefore, those charities within the casino region should receive the proceeds from those table games. 31 March ii -

8 Recommendation 4 The Committee recognizes that communities surrounding cities with casino facilities contribute to the proceeds of casino events within those cities; therefore, a region should be created around Edmonton, such as a greater Edmonton casino region (similar to the existing casino region around Calgary) and electronic gaming proceeds should be distributed equally amongst casino events located within the casino region surrounding Edmonton and casino facilities located within Edmonton. (Currently, this is the case with the Calgary casino region that surrounds Calgary). Recommendation 5 The Committee recognizes that casino region boundaries outside of Edmonton and Calgary are arbitrary; therefore, electronic gaming proceeds should be shared equally amongst charities assigned to casino regions outside of Edmonton and Calgary. Recommendation 6 The Committee recommends that casino region boundaries outside of Edmonton and Calgary should be optimized by minimizing the variance in the waiting period between casino events between casino regions, while also taking into account travel considerations to casino facilities. 31 March iii -

9 Introduction Alberta s charitable gaming model provides an opportunity for charitable and religious organizations 1 to conduct and manage over 3,400 casino events each year. In , eligible organizations received $199 million from casino events. 2 The proceeds to charities have grown since when charitable casino proceeds were $122 million. Although the total amount of gaming proceeds is lauded by charities, many have expressed concerns with how these proceeds are distributed or shared amongst groups. A primary reason for this concern is that there are more groups eligible to conduct casino events (over 7,000 charities) than there are available licensed casino events each year (3,458). The eligible groups are not evenly distributed across the province, meaning that there are some areas that have a high number of charities sharing one casino facility. As well, some casino facilities generate more revenue than others, meaning that the charities that conduct and manage events in regions with better performing casino facilities receive greater proceeds. Another concern expressed by some charities is the difficulties associated with finding volunteers to work the casino event. MLA Committee In September 2009, a committee of MLAs was appointed by the former Solicitor General and Minister of Public Security, Mr. Fred Lindsay. The Committee was comprised of three MLAs: Mr. Doug Griffiths (MLA for Battle River-Wainwright), as Chair, 3 Mr. Dave Rodney (MLA for Calgary-Lougheed), as member, and Mr. Doug Elniski (MLA for Edmonton-Calder), as member. Purpose The purpose of the MLA Committee was to conduct a review of the Alberta Gaming and Liquor Commission s (AGLC) policies regarding access to licensed casino events by eligible organizations and the distribution of proceeds from licensed casino events to these organizations to ensure that: 1. Proceeds are equitably distributed to eligible organizations; 2. Eligible organizations are able to continue to deliver their programs/services; 3. The policies are current, specific, clear, transparent, and accessible to eligible organizations; and 4. The policies comply with the requirements of the Criminal Code (Canada), the Gaming and Liquor Act and the Gaming and Liquor Regulation. 1 Charitable and religious organizations are referred to as charities through the remainder of this report. 2 In 2001, the Government of Alberta implemented the First Nation Gaming Policy. The policy is based on Alberta s charitable gaming model and applies to First Nation casinos that are located on reserve land. In 2008/09, an additional $53 million was earned by Host First Nation charities at casinos located on First Nation reserves. 3 On September 17, 2009, Mr. Doug Griffiths (MLA Battle River Wainwright) replaced Mr. Rob Anderson (MLA for Airdrie-Chestermere) as Chair of the committee. 31 March

10 Scope The MLA Committee was to act in an advisory capacity to the Minister responsible for the AGLC and make recommendations to the Minister on the following matters: 1. The criteria to be used to determine equitable access by eligible organizations to licensed casino events, including consideration of casino region boundaries and suggestions for improved access; 2. The criteria to be used to determine equitable distribution of casino proceeds (i.e. from slot machines and table games) to eligible organizations from licensed casino events throughout Alberta and suggestions for improved distribution; and 3. The number of volunteers required to conduct casino events. Objectives The following were the objectives for the review: Conduct stakeholder consultations with eligible organizations throughout Alberta. Research and analyze the potential criteria that may be used to determine equitable access by eligible organizations to licensed casino events. Research and analyze potential criteria that may be used to determine equitable distribution of casino proceeds. Provide an analysis of options considered to improve the access and distribution of proceeds to eligible organizations. Research and analyze the number of volunteers required to conduct a casino event. Make recommendations to the Minister. 31 March

11 Background The Criminal Code The Criminal Code (Canada) bans all forms of gambling in Canada, with specified exceptions. Two of those exceptions are set out under section 207 of the Criminal Code. The first exception allows Provincial governments to conduct and manage gaming activities alone, or in conjunction with other provinces. The second exception allows a Provincial government to issue licences to charitable or religious organizations to conduct and manage non-electronic forms of gaming, as long as the proceeds go toward charitable or religious purposes. A summary of the relevant provisions under section 207 are as follows: Section 207(1)(a) where the provincial government conducts and manages all gaming activities (an exclusive requirement for any electronic gaming operation); and Section 207(1)(b) where a licensed charitable or religious organization conducts and manages (non-electronic) gaming activities pursuant to a licence issued by a provincial authority and provided that the proceeds of the gaming activity are used for charitable or religious purposes. The phrase conducts and manages articulates the fact that the fundamental decisions regarding gaming activities, in the above two exceptions, must lie with the provincial government or a charitable or religious organization. This is also referred to as the operating mind. For simplicity, the organization with the authority to make fundamental decisions is used to differentiate the two main forms of gaming: Section 207(1)(a) where the provincial government has authority is termed Provincial Gaming or Provincial Lotteries. Section 207(1)(b) where the charitable or religious organization has the authority is termed Charitable Gaming. Section 207(1)(b) states that it is lawful: for a charitable or religious organization, pursuant to a licence issued by the Lieutenant Governor in Council of a province or by such other person or authority in the province as may be specified by the Lieutenant Governor in Council thereof, to conduct and manage a lottery scheme in that province if the proceeds from a lottery scheme are used for a charitable or religious object or purpose Each province within Canada has chosen to implement a unique combination of provincial and charitable gaming activities. Some jurisdictions have taken a very handson approach, where the province conducts and manages most, or all, gaming activities in the province. Other jurisdictions have taken a more hands-off approach, where the province conducts and manages electronic gaming and allows charitable and religious organizations to conduct and manage bingo, pull tickets, and raffles. Alberta is the only Canadian jurisdiction where charitable and religious organizations conduct and manage non-electronic gaming activities within casino facilities. 31 March

12 Alberta s Charitable Gaming Model Alberta employs a charitable gaming model. Within this model, casino, bingo, raffle and pull ticket events may only occur when eligible religious and charitable organizations apply for and receive a licence from the AGLC to conduct and manage the gaming activity. Eligible organizations earn proceeds from their direct involvement in the gaming activities. This model is distinct in Canada with respect to the relatively high involvement by charitable organizations. In other jurisdictions, the government typically plays a more prominent role in conducting and managing gaming activities, receives most of the proceeds, and distributes the proceeds as it deems appropriate. This is particularly true with respect to casino facilities in other provinces. In Alberta, charities are specifically licensed to conduct and manage table games, such as roulette, blackjack, and poker, at two-day events at traditional casino facilities. In return, charities receive the proceeds from the table games and pay a fixed fee to the facility operator. Other than licence fees, the AGLC receives no share of the proceeds from these activities. According to the Criminal Code (Canada), only a province or its agent, which in Alberta s case is the AGLC, may conduct and manage electronic gaming, such as slot machines. Although charities play no direct role in the operation of slot machines, they receive a 15 percent commission from slot machine net sales. A commission is paid by the AGLC to charities because the slot machines are running during the charities licensed casino events. The majority of proceeds to charities are from slot machines. In , charities received about $63 million from table games and over $136 million from electronic gaming at casino facilities. Casino Regions and Access There are 19 traditional casino facilities located throughout Alberta. Not every community in Alberta has a casino facility. Charities are generally assigned to the nearest casino (outside of Edmonton or Calgary) meaning that casino regions have been defined. In general, the casino region boundaries take into consideration factors such as travel time and distance and the number of casinos in a region. The following map shows the current casino boundaries. 31 March

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14 The number of charities within each region has significantly increased over time with some regions increasing faster than others. In 2000, there were under 4,000 charities eligible to hold a casino event. In 2010, there are over 7,000 charities eligible to hold a casino event at any one time. Access to casino facilities is currently guided by the following principles: Nearest Casino Access Casino proceeds should be distributed back to the communities or regions from which they came. Typically, charities are licensed to conduct two-day events at casino facilities in the community or region where they conduct their program delivery. Casino regions are defined so that licensed charities are generally assigned to their nearest casino for their event. Charities Access to Edmonton and Calgary Only charities located within Edmonton and Calgary or those providing province-wide services are permitted to receive a licence for a casino event in Edmonton and Calgary casino facilities. In addition to ensuring that casino proceeds are distributed back to the communities from which they came, many charities in the larger urban centres of Edmonton and Calgary support a larger client-base. This includes the provincial charities which provide services throughout Alberta. AGLC Board Policies specifically related to access to casino facilities are located in: Section Casino Terms and Conditions and Operating Guidelines. Proceeds Distribution Prior to 1996, charities that conducted casino events could actually lose money. Losses were incurred when the total prizes paid out were greater than the total bets placed during a given casino event. There were times when a charity would conduct an event on a day when attendance was low at a casino and incur a loss. Also, the casino facility fee had to be paid before the charity received any proceeds. As facility fees increased, charities made less (or no) money. Facility operators even offered no-loss insurance to charities so they wouldn t end up having to pay more than they earned. Two changes were implemented in 1996 to address these issues: First, the fixed facility fees were capped at an amount equivalent to a percentage of proceeds. Second, the pooling of charitable proceeds was made mandatory at all casino facilities. This evened out the disparity in net revenues between different casino events at the same casino facility. All charities that held an event in the same three-month period at one casino facility pooled their proceeds and losses and each received the same pool payout. 31 March

15 The pooling of revenues ensured that charities working the less active mid-week time slots would receive the same amount of revenue as those working on the prime weekend time slots. In 1998 and 1999, further changes directed that the charity commission on slot machines be pooled within a city. All charities holding a casino event within the same quarter in the same city pooled their slot machine proceeds. Subsequently, the AGLC s Licensing Policy Review of 2001 recommended that charitable proceeds from casino table games be pooled by city. These changes created a more equitable distribution of casino proceeds to charitable groups which operate within the same community. Citywide pooling eliminated the competition to hold an event in a more profitable casino within the same community. Today, the distribution of casino proceeds is based on the following principles: Revenue Pooling Charities holding casino events at a casino within a city or region should receive the same proceeds from the events. Regions with more than one casino facility pool proceeds across all casino facilities in the region. Revenue (or regional) pooling ensures that within a city or region, a charity volunteering at a lower-performing casino receives the same proceeds as a charity with an event in a higher-performing facility. This is the case in Edmonton (five casino facilities), Calgary urban (five casino facilities), and Red Deer (two casino facilities). Revenue pooling also occurs between the Camrose and St. Albert regions (2 casino facilities). Prior to the opening of the Camrose casino, charities that are currently located within the Camrose casino region were located within the St. Albert casino region. Therefore, for historical reasons, proceeds are pooled within the two regions. Within the city of Calgary, one of its six casino facilities within the Calgary city limits is designated as a rural casino to service the charities within the Calgary rural casino region which surrounds Calgary. Electronic gaming proceeds are pooled amongst all six casino facilities. The Calgary rural casino does not pool table game proceeds. Quarterly Pooling Charities within a pooling region should receive a similar amount of proceeds regardless of the day of the week they hold their event. Proceeds are typically higher on weekends than weekdays. Quarterly pooling ensures charities that conduct events in the same casino during the same quarter all receive an equal amount of proceeds. Volunteer Requirements Pooling should only occur among similar size traditional casino facilities since minor and major casino facilities have different volunteer requirements. 31 March

16 This is the case with Edmonton and Calgary (major casino facilities) and Red Deer and St. Albert/Camrose (minor casino facilities). Events in major casino facilities require more effort (minimum requirement is 25 volunteers) on the part of the charity than events in minor casino facilities (minimum requirement is 15 volunteers). AGLC Board Policies specifically related to the distribution of casino proceeds are located in: Section Casino Terms and Conditions and Operating Guidelines; and Section 23 - Casino Licensee Terms and Conditions. Volunteer Requirements In Alberta, charities are licensed specifically to conduct and manage table games in casino facilities and, as a result, earn proceeds from the table games. The charitable casino event licensee is required to provide volunteers for various key financial positions during the casino event. Charitable volunteers have no direct role or involvement in the operation of slot machines during the charitable casino event, but are paid a commission for allowing the province to operate slot machines during their licensed casino event. This commission to charities is 15 percent of net proceeds from electronic gaming. In general, minor casino facilities (those with between one and 15 table games) require a minimum of 15 volunteers and major casino facilities (those with 16 or more table games) require a minimum of 25 volunteers. However, charities with not enough volunteers to conduct an event alone may apply for a joint venture licence with another group. Volunteers work in the cash cage or the count room and fill the positions of: General Manager and Alternate Banker Cashier Count Room Supervisor Chip Runner Count Room staff (Counter, Sorter, Amalgamator) Independent registered gaming workers, Casino Advisors, are hired by charities to assist charitable groups in the conduct of their casino event. The first four positions must be filled by members of the charity. Other positions can be recruited outside of the charity s membership. AGLC Board Policies specifically related to volunteer requirements are located in: Section Casino Terms and Conditions and Operating Guidelines; and Section 27 to 37 - Casino Licensee Terms and Conditions. 31 March

17 Current Situation Waiting Period - Access At present, there are approximately 7,000 charities eligible to hold a casino event at a casino in Alberta. These charities are not evenly distributed throughout the province and are not evenly distributed throughout the designated casino regions. There is a low of 244 charities in the Fort McMurray region and 246 in the Medicine Hat region up to a high of 1,682 charities in the Edmonton region. The 19 casino facilities are located in different regions throughout the province. Edmonton and Calgary each have five, Red Deer has two and the remaining regions have one. Therefore, as shown in Table A, the number of charities assigned per casino ranges from a low of 244 in the Fort McMurray region to a high of 524 in Lethbridge. Each year, there is the potential to schedule 3,458 two-day casino events in Alberta s casino facilities (182 events per casino). Because there are more eligible charities than there are casino events in a year and because they are not evenly distributed throughout the province, there is a waiting period to hold a casino event. The waiting period to hold a casino event varies considerably across the province from 16 months in Fort McMurray and Medicine Hat to 34.5 months in Lethbridge. The majority of charities deliver their programs within the designated casino region where they are assigned to conduct their casino event. This is primarily because the service area for most charities is a single community. In February 2010, there were 261 provincial charities. These are charities which provide services throughout the province and are permitted to choose the casino region in which they will hold their casino event. The majority, 56 percent, hold their casino events in Edmonton, 38 percent hold their events in Calgary and the remaining events are held at other casino facilities throughout the province. Provincial charities are included in the Number of Charities within the region in Table A. Table A: Number of Charities per Casino Casino Region Number of Casinos Number of Charities 1 Charities per Casino Waiting Period Between Events (months) Fort McMurray Medicine Hat Calgary Urban 5 1, Edmonton 5 1, Calgary Rural Red Deer St. Albert Camrose Grande Prairie Lethbridge Totals 19 7,046 1 Number of licensed charities on waiting lists in each region as of February 1, March

18 Proceeds Earned Distribution of Proceeds Due to the implementation of pooling principles as described previously, the distribution of proceeds to charities within each region are the same for each charity that held a casino event within the quarter. Between casino regions, proceeds earned can vary considerably. This is due to various factors including, among other things, population base, economic conditions, or size of casino. Proceeds averaged over the previous eight quarters have ranged from a high of $77,486 in Edmonton to a low of $18,011 in the St. Albert/Camrose pooling region (Table B). Within the city of Calgary, one casino has been designated as a casino to service the Calgary-Rural region. In keeping with the pooling principles, all electronic proceeds are pooled between all six casino facilities located within the city of Calgary. The Calgary- Rural casino does not pool table game proceeds with other Calgary casino facilities. Table B: Casino Proceeds to Charities Casino Region Table Proceeds Electronic Proceeds 31 March Proceeds/ Event 1 Edmonton $26,405 $51,081 $77,486 Calgary $34,564 $40,981 $75,544 Fort McMurray $5,776 $54,061 $59,837 Calgary Rural 2 $5,029 $40,981 $46,010 Grande Prairie $3,686 $33,690 $37,376 Lethbridge $3,465 $31,994 $35,460 Red Deer $1,803 $24,830 $26,633 Medicine Hat ($60) $20,015 $19,955 St. Albert 3 $926 $17,085 $18,011 Camrose 3 $926 $17,085 $18,011 1 Average of proceeds per event paid out to charities from January 2007 to December Calgary Rural casino pools slot proceeds with all other Calgary casino facilities. 3 Proceeds are pooled for the St. Albert and Camrose casino facilities. Annualized Proceeds Annualized proceeds are a calculation of the estimated proceeds per year It is not the actual proceeds per event. There are two primary factors that determine annualized proceeds ; the waiting period and the proceeds per event. Waiting period is the length of time that each charity must wait between holding casino events in its region. Waiting period can be affected by changing the number of casino facilities within a region, or by changing the number of charities within a particular region. Proceeds per event is the dollar share of proceeds from the casino event that a charity receives. Proceeds per event can be affected by changing the revenue generated by the casino or by pooling revenue from a number of casino facilities among the charities. By taking proceeds per event and factoring in the waiting period, the amount of casino proceeds to each charity on an annual basis, or annualized proceeds, are determined.

19 Annualized proceeds are calculated by dividing proceeds per event by the waiting period in years. Annualized proceeds combines the effects of the waiting period and the proceeds per event into a single indicator. For example, although the proceeds per event are higher for charities in Red Deer ($26,633) than Medicine Hat ($19,955), the difference in waiting periods to hold a casino event between Red Deer (33 months) and Medicine Hat (16.2 months) means that on an annualized basis, charities in Red Deer received $9,685, while charities in Medicine Hat received $14,782. Because proceeds per event and the waiting periods to hold a casino event vary considerably across the province, there is considerable disparity in annualized proceeds. Using an average from January 2007 to December 2009, annualized proceeds range from a high of $46,971 in Calgary to a low of $6,972 in Camrose. Table C outlines the waiting period in each casino region, the number of charities eligible to hold a casino event in each region, the average proceeds raised per casino event, and the annualized proceeds using an average over the last eight quarters. Table C: Proceeds to Charities, Waiting Period and Annualized Proceeds Region Table Electronic Total 1 Waiting Period No. Annualized 3 Charities 2 Calgary $34,564 $40,981 $75, $46,971 Fort $5,776 $54,061 $59, $44,599 McMurray Edmonton $26,405 $51,081 $77, $41,884 Calgary Rural $5,029 $40,981 $46, $17,041 Medicine Hat ($60) $20,015 $19, $14,782 Grande $3,686 $33,690 $37, $13,509 Prairie Lethbridge $3,465 $31,994 $35, $12,334 Red Deer $1,803 $24,830 $26, $9,685 St. Albert $926 $17,085 $18, $7,803 Camrose $926 $17,085 $18, $6,972 1 Average of proceeds per event paid out to charities from January 2007 to December Number of licensed charities on waiting lists in each region as of February 1, Annualized proceeds are calculated by dividing proceeds per event by the waiting period in years. Volunteer Requirements At present, casino events in Calgary and Edmonton require a minimum requirement of 25 volunteers. Events outside of those cities require a minimum volunteer requirement of 15 volunteers. Some charities and casino operators have requested that the number of volunteers required to conduct an event be reviewed. 31 March

20 Consultation Summary Consultation Process All charitable organizations licensed or slotted for casino events were provided the opportunity to participate in the province-wide consultation. A letter announcing the consultation was sent to all licensed/slotted charitable organizations the same day as the announcement of the review. Eligible organizations were invited to participate in regional consultation meetings (discussion groups) and/or provide a written submission. To provide a common base for feedback on the three key issues, questions were created by which submissions could be made. An overview of the issues and the AGLC s operating principles were presented with the questions in order to establish a common understanding. The questions enabled eligible organizations to present feedback on current principles in which the AGLC operates and provide suggestions for improvement and alternative approaches. Information regarding the consultation process consisting of background information on the distribution of casino proceeds to licensed charities, key questions to focus the input from stakeholders, and schedule/registration for consultation meetings, written submission instructions and contact information was made available on the AGLC website. Regional consultation meetings were scheduled in each of the following locations: Grande Prairie Edmonton Lethbridge Fort McMurray Camrose Medicine Hat St. Albert Red Deer Calgary Each consultation meeting lasted approximately two and a half hours. The meetings were facilitated by the Community Development Branch of Alberta Culture and Community Spirit. The Committee members listened to discussions and sought clarification of views expressed. A 15 minute presentation outlining the issues and challenges with the current principles was presented by the Director of Licensing and Charitable Gaming from the AGLC. Participants took part in group discussions with the focus on the three consultation questions. Each group was asked to record their discussion and to report back key points of discussion. Feedback was collected at the end of the meeting. Eligible organizations were also encouraged to provide written submissions through mail, fax or . The deadline for written submissions was November 20, A total of 1,408 participants representing 910 eligible organizations participated in 15 regional consultations. The Committee also received 416 eligible written submissions ( , mail and fax) between September and December The original deadline, October 30, 2009, was extended. 31 March

21 Casino operators and casino advisors were provided with the opportunity to comment on the number of volunteers. Consultation Findings Summary A total of 416 eligible individual submissions were received across ten casino regions. Feedback was gathered from a total of 160 stakeholder tables during the 15 sessions held in nine locations throughout the province. (Additional information is provided in the Appendix) Access Individual Submissions Individual organizations were asked if some boundaries should be moved to help equalize wait times across the province. Of the 362 submissions that addressed wait times, 45 percent responded No, while 34 percent responded Yes. Of those who said Yes, 61 percent were from Camrose, Calgary Rural and Red Deer. Of those who said No, 77 percent were from Edmonton and Calgary. Charities assigned to Fort McMurray and Medicine Hat tended to lean toward not moving boundaries. Twenty-one percent of the 362 organizations did not directly answer the question. When asked if casinos within Edmonton and Calgary should be accessible only to charities within these regions as well as provincial charities, 33 percent responded Yes, while 21 percent responded No. Of those who said Yes, 86 percent were from Edmonton and Calgary. Of those who said No, 77 percent were from outside of Edmonton and Calgary with the most significantly opposed regions being Camrose, Calgary Rural, and St. Albert. Forty-six percent of the 362 organizations did not directly answer the question. Key factors for consideration in moving boundaries included travel (time, distance, cost, and safety for volunteers), the effect on wait times, demographics (population and density), differences between urban and rural regions, number and recruitment of volunteers, and the population that is served by the charities. Generally, urban referred to Calgary or Edmonton. Travel was considered a priority factor for all but one region. Other than travel, equitable wait time was the focus for those outside of Edmonton and Calgary. Those within Edmonton and Calgary considered population density and the population base that the charity serves. The most frequently recurring alternatives for addressing wait times included: Changing the boundaries to include a metro concept, that is, greater Calgary area and/or greater Edmonton area; Pooling all or some proceeds; Reducing the number of charities by applying stricter eligibility criteria and better screening; Having flexible boundaries allowing for rotations and charity choice, e.g., access to Edmonton, Calgary, or Fort McMurray on a limited time basis; and 31 March

22 Combining urban and rural boundaries or opening urban boundaries, e.g., Calgary and Calgary Rural, Edmonton and Camrose. Regional Sessions Stakeholders were asked if some boundaries should be moved to help equalize wait times across the province. Of the 160 tables overall, 47 percent responded No, while 43 percent responded Yes. No direct answer was recorded or could be implied for 10 percent of the tables. When asked if casinos within Edmonton and Calgary should be accessible only to charities within these regions as well as provincial charities, approximately 47 percent responded Yes, while 24 percent responded No. No direct answer was recorded or could be implied for 29 percent of the tables. Key factors for consideration in moving boundaries included travel (time, distance, cost, and safety for volunteers), the effect on wait times, demographics (population and density), differences between urban and rural costs and proceeds, and the distribution of proceeds. The most frequently recurring alternatives included: Combining urban and rural boundaries, e.g., Calgary and Calgary Rural, Edmonton and Camrose; Having flexible boundaries allowing for rotations and charity choice; Changing the boundaries to a greater area concept, e.g. north and south, moving Calgary boundaries north; Reducing the number of charities by applying stricter eligibility criteria and better screening; and Pooling all or some proceeds. Distribution of Proceeds Individual Submissions Individual organizations were asked if proceeds from casino events should be distributed back to the communities or regions from which they came (current policy). Of the 397 submissions that addressed proceeds, 53 percent responded Yes, while 13 percent responded No. Of those who said Yes, 78 percent were from Edmonton and Calgary. Calgary Rural, Fort McMurray, Grande Prairie, Lethbridge, and Medicine Hat charities tended to agree with this statement. Of those who said No, 70 percent were from Camrose, St. Albert, and Red Deer. Thirty four percent of the 397 organizations did not answer this question directly. When asked if charities holding casino events within a quarter and having the same volunteer requirement should receive the same proceeds within the region (current policy), 54 percent responded Yes, while 7 percent responded No. There did not appear to be any significant regional trends. Thirty nine percent did not answer the question directly. 31 March

23 The most frequently recurring alternatives for distributing proceeds included: Pooling proceeds province-wide (among the top three response for nine regions); Distributing proceeds based on an equal basis (among top three responses for six regions Calgary Rural, Camrose, Grande Prairie, Medicine Hat, Red Deer, and St. Albert); Distributing proceeds based on charity characteristics such as size and needs (among top three response for three regions Calgary, Edmonton and Fort McMurray); Distributing proceeds based on the number of volunteers (based on volunteer hours) (9 percent of respondents top three response for two regions Red Deer and St. Albert); and Seeking supplemental funding sources for charities (among top three responses for one region Calgary). Regional Sessions Stakeholders were asked if proceeds from casino events should be distributed back to the communities or regions from which they came (current policy). Of the 160 tables overall, 64 percent responded Yes, while 28 percent responded No. No direct answer was stated or could be implied for 8 percent of the tables. When asked if charities holding casino events within a quarter and having the same volunteer requirement should receive the same proceeds within the region (current policy), 64 percent responded Yes, while 12 percent responded No. No direct answer was recorded or could be implied for 24 percent of the tables. The most frequently recurring alternatives for distributing proceeds included: Pooling proceeds province-wide; Increasing the percentage of government allocation of proceeds to charities; Changing the boundaries to equalize proceeds; Distributing proceeds based on charity characteristics; and Distributing proceeds based on volunteer numbers or hours. Number of Volunteers Individual Submissions Individual organizations were asked if the number of volunteers required to conduct and manage a casino event should be decreased or remain the same. Of the 352 submissions that addressed volunteers, 69 percent suggested the number remain the same, 6 percent suggested the number decrease and 2 percent suggested the number increase. There did not appear to be regional differences. 31 March

24 The most frequently recurring alternatives for changing volunteer numbers included: Allowing charities to run joint casinos; Casinos being more flexible about volunteer positions; Having the number of volunteers decided by the casino or advisors; Reducing the number of volunteers required; Allowing charities to share volunteers or compiling a list of additional volunteers; and Charities giving up their casino event if they had insufficient volunteers. Regional Sessions Stakeholders were asked if the number of volunteers required to conduct and manage a casino event should be decreased or remain the same. Of the 160 tables overall, 69 percent suggested the number remain the same, 14 percent suggested the number decrease, and 1 percent suggested the number increase. The most frequently recurring alternatives for changing volunteer numbers included: Casinos being more flexible about volunteer positions; Allowing charities to run joint casinos; Allowing charities to share volunteers or compiling a list of additional volunteers; Eliminating or decreasing the number of chip runners; and Charities giving up their casino event if they had insufficient volunteers. Casino Operator Submissions The Alberta Charitable Casino Operators (ACCO) met with the MLA Committee and provided a written submission stating their support for charitable casino model and the continued involvement of charities and volunteers in operating casino events. Options were presented that do not advocate the elimination or reduction in importance of charities or volunteers. The preferred option by ACCO recommends the reduction of volunteers to a minimum of two (one of which would be the General Manager) with the elimination of count room volunteer positions and replacing them with existing casino staff members. This option would also include the elimination of the casino advisor positions. The other option is to maintain the volunteer count room staff except the count room supervisors. The count would be done each morning with existing casino staff coordinating the volunteers with the General Manager (volunteer) providing an oversight role. Under this option, the count room advisor would not be required. However it was noted that the benefits and costs in this option would not be as significant as the first option. In summary, the ACCO is advocating the preferred option with a higher split of the table proceeds (5 percent minor casinos and 10 percent major casinos) to cover the additional expenses which would be incurred. 31 March

25 Casino Advisor Submissions All registered casino advisors were encouraged to provide a written submission concerning the number of volunteers required to hold a casino event. In addition, the MLA Committee met with representatives of the Registered Casino Advisors Association of Alberta (North and South regions) who suggested that the number of volunteers could be reduced to a general manager, banker and 1 to 2 chip runners per shift, but emphasized their desire to maintain the charitable model and the volunteer contribution. A total of ten individual and group submissions were received. The main theme identified in the advisors feedback is the need for the number of volunteers to remain the same with the caveat of greater flexibility. The top areas noted by the advisors include: the possibility of some positions to be staffed with paid employees either of the charity or the casino; the ability for one volunteer to hold more than one position throughout the two day event; the ability for charities to access volunteers through other means such as advertising or sharing volunteers with other organizations; and reducing the event to one day casinos. Two submissions discussed the possibility of reducing the number of volunteers. 31 March

26 Committee Findings In general, the Committee heard that charities throughout Alberta are very satisfied with Alberta s charitable casino model - the only one of its kind in Canada where charities conduct and manage table games and receive a direct benefit from their involvement. Although charities suggest some efficiencies may exist in terms of volunteer responsibilities, they are willing to provide the volunteers required to conduct the events. However, there does appear to be some concerns with the distribution of proceeds to charities and the access that charities have to the various casino regions. The Committee finds that the concerns are a direct result of the variability in the proceeds earned throughout the province, both in terms of the proceeds per event and the annualized proceeds. Generally, charities in the current casino regions with low annualized proceeds support changes to the access of distribution policies that have the potential to increase proceeds from casino events. This is primarily the case for the St. Albert, Camrose and Red Deer casino regions. Generally, charities in the current casino regions with high annualized proceeds do not support changes that have the potential to decrease proceeds from casino events. This is primarily the case for the Edmonton, Calgary and Fort McMurray casino regions. The Committee and the charities consulted during this review are all very aware that there is a limited amount of casino proceeds available and that any amendments to policies that impact the distribution of proceeds or the access to casino regions results in a reallocation of those casino proceeds. Access The Committee heard that boundaries and their associated waiting period is a concern for charities currently assigned to the Camrose, Calgary Rural and Red Deer regions. These three casino regions currently have a relatively longer waiting period between casino events. Charities within Edmonton, Calgary, Fort McMurray and Medicine Hat tended to not want adjustments made to boundaries or to equalize wait times. These four casino regions currently have the shortest waiting period between casino events. The Committee heard that charities within Edmonton and Calgary think that access to Edmonton and Calgary casinos should be limited to charities within Edmonton and Calgary as well as provincial charities. Charities in close proximity to Edmonton and Calgary generally disagreed. The Committee also heard that the key factors for consideration in assigning charities to casino regions should be travel, wait times, and population. Those outside of Edmonton and Calgary tended to lean towards equalization of wait times. Those within Edmonton and Calgary pointed towards taking into account population density and the population base served by the charities. 31 March

27 Although the Committee heard suggestions to review the eligibility of charities, this was outside of the scope of the review. In the interest of all charities throughout Alberta, the Committee believes that the waiting period to hold a casino event should be equitable throughout the province. In an ideal situation, all charities would have access to a casino event at equal intervals. The Committee is also aware that considerations such as transportation routes, casino placement and the uneven geographic distribution of charities throughout the province makes developing equal waiting periods between casino events impossible. The Committee recognizes that casino regions outside of the two major urban centres of Edmonton and Calgary are in some ways arbitrary in terms of the boundaries. In the past, these casino region boundaries have been developed so that charities have generally been assigned to the nearest casino while also attempting to even out the waiting period among the casino regions. The Committee ascertains that boundaries must be utilized to divide charities amongst the casino regions so as to avoid large discrepancies in the waiting period to hold a casino event, but that travel must be a key consideration. The Committee also believes that due to the province-wide delivery of their services, provincial charities should be able to access any of the casino facilities located throughout the province. The Committee heard that a greater Edmonton and/or greater Calgary area should be explored. Distribution of Proceeds The Committee heard that a number of policies related to the distribution of proceeds are working. This included the quarterly pooling of proceeds and the pooling of proceeds in regions with more than one casino. The Committee also heard that charities believe that the proceeds from casino events should be distributed back to the communities or regions from which they came. However, those with lower proceeds did not agree. That said, charities also indicated that proceeds should be distributed equally with alternatives such as province-wide pooling and distributing proceeds on an equal basis being the top mentioned alternatives to the current model. It was also clear to the Committee that charities depend on the proceeds from gaming to deliver their many worthwhile programs and services. Charities generally supported change if the change implied a potential increase in proceeds and did not support change if it implied a decrease in potential proceeds. Although the Committee heard suggestions to increase the total pool available to charities, in the Committee s determination, this was outside of the scope of the review. 31 March

28 If there were no pooling or sharing of proceeds among charities, on any given day, a charity could win or lose proceeds at a specific event. Therefore, policies that minimize the risk from individual charities or that share the risk among charities are a positive feature in the distribution of proceeds. Quarterly pooling is an effective way to ensure that no charity is disadvantage by holding a casino event on any particular day. Pooling of proceeds is also an effective way to ensure that no charity is disadvantaged by holding a casino event at a particular casino. This is particularly true in cities with more than one casino. Charities recognize that, in the charitable casino model, charities provide volunteers to conduct and manage the table games at casino facilities and that they receive a commission from the electronic gaming conducted at the casino by the AGLC. It is a requirement of Section 207(1)(a) of the Criminal Code that the province must conduct and manage electronic gaming. In this respect, table games proceeds are earned by charities and electronic gaming proceeds are earned by the AGLC. The Committee also recognizes that not all communities within Alberta can sustain a casino facility. However, the Committee also recognizes that the communities that surround a casino facility contribute to its proceeds. Volunteer Requirements The Committee heard that charities value Alberta s charitable gaming model. Most charities did not propose any amendments to the number of volunteers required to conduct and manage a casino event. The Committee also heard that the primary areas of concern for charities include: Coordination of casino events between two or more eligible organizations; and Flexibility with volunteer positions. The Committee heard that charities see an opportunity to improve the charitable casino model if AGLC Board policies: Delegated the decision on the number of required volunteers to the casino or casino advisors; Permitted charities to share volunteers; Eliminated or decreased the number of chip runners; and Required charities to give up casino events if the charity had insufficient volunteers. The Committee also heard that the Alberta Charitable Casino Operators would support a reduction in the number of volunteer positions and that Casino Advisors recommend greater flexibility for volunteer positions. 31 March

29 The Committee understands that all gaming in Canada is illegal other than the exceptions that are explicit in the Criminal Code (Canada). Under section 207(1)(b), charities can conduct and manage a gaming activity in accordance with a licence issued by the Province. The volunteer involvement in Alberta casino facilities satisfies the conduct and management requirement under the Criminal Code and is a fundamental component of the charitable casino model. To eliminate the volunteers from the casino event would not only bring an end to the charitable model, but would require that the Province conduct and manage the casino table games pursuant to its authority under s.207(1)(a) of the Code. Given that Alberta s charitable casino model requires charities to conduct and manage casino events, the Committee found that in order to maintain Alberta s charitable gaming model, the charity must remain the operating mind of the casino event. 31 March

30 Recommendations Volunteers Recommendation 1 The Committee is not recommending any major changes to the number of volunteers within the charitable casino model. However, wherever possible, the Committee recommends that the AGLC Board minimize the time and effort required by volunteers in the conduct and management of the casino event and provide for flexibility for volunteers, while ensuring the operating mind remains that of the charity. Proceeds and Access The Committee determined that access to casino events and the distribution of proceeds from casino events should be assessed together. Given that: Table games are conducted and managed by eligible charities and the proceeds from table games are a direct result of their efforts; and Electronic gaming at casino facilities is conducted and managed by the AGLC, an Agent of the Government of Alberta. The Committee recommends the following principles be implemented in regard to the distribution of proceeds from casino events and access to casino facilities: Recommendation 2 The Committee recognizes that risk should be minimized or shared amongst charities and therefore, the Committee recommends that: within a quarter, all proceeds to charities with a casino event at the same casino should continue to be equal; and within casino regions with more than one casino where charities can choose from more than one casino to hold their casino event, all proceeds should continue to be equal. Recommendation 3 The Committee recognizes that the proceeds from table games are earned directly from the conduct and management of those games by eligible organizations within the casino region; therefore, those charities within the casino region should receive the proceeds from those table games. Recommendation 4 The Committee recognizes that communities surrounding cities with casino facilities contribute to the proceeds of casino events within those cities; therefore, a region should be created around Edmonton, such as a greater Edmonton casino region (similar to the existing casino region around Calgary) and electronic gaming proceeds should be distributed equally amongst casino events located within the casino region surrounding Edmonton and casino facilities located within Edmonton. (Currently, this is the case with the Calgary casino region that surrounds Calgary). 31 March

31 Recommendation 5 The Committee recognizes that casino region boundaries outside of Edmonton and Calgary are arbitrary; therefore, electronic gaming proceeds should be shared equally amongst charities assigned to casino regions outside of Edmonton and Calgary. Recommendation 6 The Committee recommends that casino region boundaries outside of Edmonton and Calgary should be optimized by minimizing the variance in the waiting period between casino events between casino regions, while also taking into account travel considerations to casino facilities. 31 March

32 Terms of Reference September 10, 2009 MLA Advisory Committee to Review Eligible Organizations Access to and Distribution of Proceeds from Licensed Casino Events Background Alberta s charitable gaming model provides an opportunity for charitable and religious organizations to conduct and manage over 3,400 casino events each year. In , these organizations received $243.9 million in gaming proceeds. The proceeds to charities have almost doubled since when charitable casino proceeds were $122 million. Although the total amount of gaming proceeds is lauded by charitable and religious groups, many have expressed concerns with how these proceeds are distributed. At the heart of the matter is the fact that there are more groups eligible to conduct casino events (6,973 charities) than there are available licensed events each year (3,458). The eligible groups are not evenly distributed across the province, meaning that there are some areas that have a higher number of eligible charities per casino event than other areas resulting in differing wait times between casino events. As well, the casinos do not perform the same. Some casinos generate more revenue than others, meaning that the charities that conduct and manage events in regions with better performing casinos receive greater proceeds. At the centre of the charitable casino model is the requirement for charities to conduct and manage casino events by providing volunteers. Eligible organizations earn proceeds from their direct involvement in table games at casinos and, in return, charities receive the proceeds from the table games, from which they pay a fee for service to the facility operator. Although charities play no direct role in the operation of slot machines, they receive a 15 per cent commission from slot machine net sales. The majority of proceeds to charities are from slot machines. In , charities received about $72.6 million from table games and over $171.3 million from slot machines and Keno at casinos. A number of stakeholders, including some charities and operators, believe that the number of volunteers required to conduct and manage a casino event should be reviewed. Purpose To conduct a review of the Alberta Gaming and Liquor Commission s policies regarding access to licensed casino events by eligible organizations and the distribution of proceeds from licensed casino events to these organizations to ensure that: 1. Proceeds are equitably distributed to eligible organizations; 2. Eligible organizations are able to continue to deliver their programs/services; 3. The policies are current, specific, clear, transparent, and accessible to eligible organizations; and 4. The policies comply with the requirements of the Criminal Code (Canada), the Gaming and Liquor Act and the Gaming and Liquor Regulation.

33 Scope The MLA Committee will act in an advisory capacity to the Minister responsible for the Alberta Gaming and Liquor Commission (i.e. the Solicitor General and Minister of Public Security) and make recommendations to the Minister on the following matters: 1. The criteria to be used to determine equitable access by eligible organizations to licensed casino events, including consideration of casino region boundaries and suggestions for improved access; 2. The criteria to be used to determine equitable distribution of casino proceeds (i.e. from slot machines and table games) to eligible organizations from licensed casino events throughout Alberta and suggestions for improved distribution; and 3. The number of volunteers required to conduct casino events. The charitable gaming model which provides an opportunity for eligible organizations to conduct and manage over 3,400 casino events each year is not within the scope of this review. Eligibility of charities and religious organizations and the use of casino proceeds are not within the scope of the review. In 2003, a review of Alberta s policies on eligibility for charitable gaming licences and use of proceeds from charitable gaming activities was conducted by Yvonne Fritz, MLA for Calgary Cross. The comprehensive review included consultation with charities, industry stakeholders and the public. Objectives The Committee will: Conduct stakeholder consultations with eligible organizations throughout Alberta. Research and analyze the potential criteria that may be used to determine equitable access by eligible organizations to licensed casino events. Research and analyze potential criteria that may be used to determine equitable distribution of casino proceeds. Provide an analysis of options considered to improve the access and distribution of proceeds to eligible organizations. Research and analyze the number of volunteers required to conduct a casino event. Make recommendations to the Minister. Committee Membership/Support Committee MLAs will be appointed by the Minister by a Ministerial Order. The Committee will consist of one Edmonton, one Calgary, and one MLA outside of Edmonton or Calgary. Administrative, technical and report writing support for the Committee will be provided by the Alberta Gaming and Liquor Commission. If required, legal support for the Committee will be provided by Alberta Justice. Reporting Requirements The Committee will report to the Solicitor General and Minister of Public Security. The Committee will make recommendations to the Minister by March 31, The Minister will consider the recommendations of the Committee and bring forward recommendations to Cabinet for consideration.

34 News release September 10, 2009 Review explores solutions for pooling casino dollars, decreasing wait times for charities Edmonton... An MLA committee will examine aspects of the province s charitable gaming model and make recommendations on how to improve wait times and the pooling of proceeds from licensed casino events to eligible charitable groups. The committee will also review the number of volunteers a group needs to provide to conduct and manage charitable casino events. This three-member panel was appointed by Fred Lindsay, Solicitor General and Minister of Public Security, responsible for the Alberta Gaming and Liquor Commission (AGLC). The committee comes in response to concerns raised by some charities that proceeds and wait times between events vary throughout the province. Charities also expressed difficulty in recruiting and retaining enough volunteers to support their activities including casino events. Alberta has a unique charitable gaming model that allows eligible organizations to benefit from casino events, said Lindsay. These charities earn revenue from casinos to support their many worthwhile causes and we want to help ensure the charitable casino model and gaming proceeds continue to serve the best interests of these groups. In , almost 3,500 licensed charities earned $252 million in proceeds from casino events. The MLA Committee consists of: Chairperson Rob Anderson, MLA Airdrie-Chestermere and Parliamentary Assistant to the Solicitor General and Minister of Public Security; Dave Rodney, MLA for Calgary-Lougheed; and Doug Elniski, MLA for Edmonton-Calder. We look forward to meeting with the various licensed organizations and hearing their insights and ideas, said Anderson.. From there, we ll review the options and make recommendations. Meetings will be held with charities throughout the province between October 5 15 and written submissions will be accepted until October 30. A final report with recommendations will be completed by March 31, Backgrounder: Alberta s charitable casino model Media inquiries may be directed to: Christine Wronko, Communications Alberta Gaming and Liquor Commission Phone: To call toll-free within Alberta dial Rob Anderson Committee Chairperson Phone:

35 ANALYSIS OF CONSULTATION FOR THE MLA ADVISORY COMMITTEE ON DISTRIBUTION OF PROCEEDS FROM LICENSED CASINO EVENTS March 19, 2010

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