Tag Archives: BC Lottery Corp

Please help support Adriane Carr’s Motion B4 asking for removal of Michael Graydon & for a restrictive covenant

We are asking our supporters to come to City Hall on WEDNESDAY July 23 [NOTE: this is a change from Tuesday July 22] to support a motion being put forward to Vancouver City Council by CouncILLOR Adriane Carr.

[Update late Tues: Adriane’s motion got a seconder – George Affleck. This means the motion will be presented tomorrow, Wednesday, sometime before noon most likely. The committee meeting starts at 9:30 and Adriane’s motion is 4th on the list. But we’ll update you regularly! Please plan on coming!]

WITH YOUR HELP we can force Michael Graydon’s ouster as CEO of Paragon Gaming.
Michael Graydon BCLC
AND
 
We can get Council to impose a restrictive covenant banning gambling expansion on Edgewater’s new site.
Councillor Adriane Carr will table a motion on Tuesday, July 22, asking that Vancouver Council request the Gaming Policy and Enforcement Branch to direct his removal, AND for an anti-expansion restrictive covenant to be placed on the BC Place lands as a Development Permit condition. The motion will then be put forward to Wednesday for discussion.
WE NEED YOU TO COME TO COUNCIL AND SPEAK TO THIS MOTION (if speakers are allowed, and we’ll know that on Tuesday) ON WEDNESDAY MORNING at 9:30.
Please register by CALLING 311 before 5 pm on Monday, or by REGISTERING IN PERSON on Tuesday by 9:15.
Say you want to speak to Councillor Carr’s motion B4.
Tell City Council that Michael Graydon and Paragon Gaming have to pay for their misconduct. We need government with the guts to say no to special treatment for insiders.
Thanks so much!
More background here:

Vancouver Not Vegas calls for Graydon to be removed from Paragon Gaming

Vancouver DPB

FOR IMMEDIATE RELEASE: Vancouver Not Vegas calls for Michael Graydon to be removed from Paragon Gaming

Vancouver, July 11, 2014:  Following the report of the BC government’s internal auditor, Vancouver Not Vegas renews its February 13th call for the Gaming Policy and Enforcement Branch (GPEB) to block PV Hospitality (a Paragon Gaming-related company) from employing Michael Graydon.

“The government has the power to halt Mr. Graydon’s employment with Paragon and must act decisively to protect the public trust and integrity of the gaming industry,” says Ian Pitfield, a retired lawyer and member of Vancouver Not Vegas.

“The public can’t trust Michael Graydon, it’s that simple.” says Sandy Garossino, spokesperson for Vancouver Not Vegas. “This goes far beyond his $125,000 severance package. He will guide PV Hospitality through the BCLC development subsidy program, which might amount to as much as $100 million or more. The fox is in charge of the henhouse, and our government has to step in.”

The public interest must be protected in the face of the auditor’s report and statements by BCLC board chair Bud Smith, which demonstrate that Mr. Graydon:

  • Violated BCLC’s conflict of interest guidelines
  • Provided incomplete or inaccurate information to the BCLC board
  • Breached the no-contact provision of his resignation settlement
  • Maintained access to confidential BCLC material for 10 days post-employment

The auditor further found that other casino service providers expressed concern that Mr. Graydon’s knowledge could provide an advantage to Paragon Gaming.

In related news, Paragon Gaming currently co-owns and manages the Eagle River Casino, a small truck stop operation in Whitecourt Alberta, which has filed for bankruptcy, owing $100 million to creditors.

NOTE: Please also see our prior statement of February 13, 2014
http://vancouvernotvegas.ca/2014/02/vancouver-not-vegas-calls-on-province-to-block-graydon-appointment/
– 30 –
Media contact:
Sandy Garossino
Please TEXT queries to:
778-231-5230

Michael Graydon BCLC
Michael Graydon, now of Paragon Gaming, formerly CEO of BC Lottery Corp

 

Brazen Conflict of Interest by Former CEO Exposes Feeble Governance at BCLC

Michael Graydon BCLC

FOR IMMEDIATE RELEASE: Vancouver, Feb. 7, 2014

Brazen Conflict of Interest by Former CEO Exposes Feeble Governance at BCLC

The resignation of Michael Graydon as CEO of BC Lottery Corporation (BCLC) to assume the role of president of PV Hospitality ULC in which Paragon Gaming Corporation is a partner raises serious conflict of interest and BCLC governance concerns says Vancouver Not Vegas.

“It’s a grave concern that the BCLC, which oversees an industry requiring the highest standard of integrity and transparency, would permit a departure of this kind from expected ethical standards”, says founding member Ian Pitfield.

“The Federal Government applies post-employment restrictions to public office holders.  Why should the Province not insist on the same restrictions for senior employees of Crown Corporations?” Pitfield asks.

The Vancouver Not Vegas coalition calls for an investigation into the circumstances surrounding this move, and asks the BC government to answer the following questions regarding this and other governance issues within BCLC (BC Lottery Corp):

  • When did Michael Graydon begin employment discussions with Paragon, a company of which he was the regulator?
  • What assurances or commitments did he make to Paragon, his future employer, while he was in discussions with them concerning compensation, terms, etc?
  • What knowledge did the BCLC have of employment discussions between Graydon and Paragon, and did it approve it?
  • Why, after BCLC chair Richard Turner bought shares in Paragon Gaming in 2004, did the BCLC not institute a firewall policy preventing employment or financial relationships between senior executives. board members and regulated corporations?
  • Senior management at BCLC are in possession of significant confidential financial information pertaining to all gambling operators in BC. It’s unthinkable that it has failed to safeguard that trust by preventing conflicting employment agreements for senior executives.

It is unthinkable that BCLC has failed to safeguard the trust by prohibiting key employees from assuming employment with regulated gaming companies for a period of two or three years following retirement or resignation. But today’s news is only one chapter in a history of governance breakdowns.

Documented lapses in governance at BCLC include:

  • Unprecedented $700K FINTRAC fine in 2010
  • Documented loan-sharking, money-laundering in casinos
  • BCLC Chair Richard Turner’s acquisition of shares in Paragon in 2004, and subsequent move to become director.

Today’s revelation, combined with a repeated pattern of inept governance points to a rudderless corporation unable to exercise basic control over its key operations.

– 30 –

Media contacts:

Sandy Garossino
Please TEXT queries to:
778-231-5230

Ian Pitfield
604-828-5494

http://vancouvernotvegas.ca
See also this original story.

VNV responds to renewed plans for massive downtown Vancouver casino

Sept 24, 2013

Full text of our statement today in response to Paragon Gaming’s announcement of renewed plans to build a massive casino “resort” in downtown Vancouver.

Vancouver Not Vegas responds to Paragon Gaming announcement 
September 24, 2013

In 2011 Vancouverites united and spoke with one voice that we don’t want a mega-casino in our city.  This is not who we are, nor the values we want to project about our city.  We do not choose to offload the cost of government onto the weak and the vulnerable. And we’re not alone. Cities across Canada are telling governments they’ve had it with the relentless attempt to force gambling into our communities.

Yet despite a resounding 11-0 vote in Vancouver City Council that rejected the proposal, here we are again.

Yet again there has been no transparency, no disclosure, no public consultation of a massive casino project.  Yet again a glamourous shiny announcement of a half-billion dollar project is foisted on the public with few details.

The most important feature of the Paragon announcement is the information still being withheld from the public.

  1. No disclosure of the planned casino floor space. Vancouver City Council, with no public debate on this key point, approved a rezoning of over 2.5 acres of casino floor space for this site—that’s over 2 NFL football fields.
  2. No disclosure of the very significant public subsidies going into the construction and maintenance of the development.  Does the BC Lottery Corporation facility development contribution remain at $16.9 million annually, as outlined in the Deloitte Report issued in 2010?
  3. No disclosure of the public subsidy in the form of the 50% lease discount negotiated with PavCo.  These lands were supposed to help pay for the stadium roof.  Now the lease won’t even pay the interest on the debt.

This is a terrible deal for both the City of Vancouver and the Province of BC.  If Edgewater cannot expand its slot machines and gaming tables, it’s a business certainty that revenues to the province and the city will fall, because Edgewater’s expenses are about to rise precipitously.  There are no independent pro formas detailing projected earnings. It’s vital to remember that the Edgewater Casino has never met the original revenue promises it made to the city upon which its original license was granted.

End to end, this is a money losing proposition that will only add to the millions of dollars the public loses annually in the operation of BC Place.

Vancouver Not Vegas has filed a petition in BC Supreme Court contesting the relocation.

Statement by Sandy Garossino on behalf of VNV
Text queries to 778-231-5230

Addendum:

Video via here.

Vancouver Not Vegas! Co-founder Launches Petition to Halt Casino Move to BC Place

Vancouver Not Vegas Co-Founder Lindsay Brown has filled a petition in BC Supreme Court seeking to overturn the decision by Vancouver City Council approving the relocation of Edgewater Casino to BC Place Stadium.

“To this day the people of Vancouver still have no idea of what is being planned for the casino development on the BC Place Stadium site, yet Council has essentially written Paragon and PavCo a blank cheque by approving the relocation,” says Vancouver Not Vegas co-founder Lindsay Brown.” Once again plans are being made behind closed doors at City Hall, apparently to be dropped on the public when it’s too late for us to have a voice, but this time Council has granted its approval in advance. The BC Place site is a Vancouver landmark affecting thousands of residents, and we don’t know what’s happening there. We need to be part of the discussion this time around – if there is a “this time around.” ”

“Council consistently treated this application as a re-zoning matter, and has not recognized the requirements of provincial legislation governing decisions around gaming licenses,” adds retired justice Ian Pitfield, a coalition supporter. “The community was not provided with any particulars of the relocation proposal. It was only told about an expansion.”

During the public hearings in the spring of 2011, Paragon Gaming, the owners of Edgewater Casino, strongly stated that relocation without an expansion of their license was not an acceptable solution, and offered no amended plan for the public or Council to review. Council voted to approve only the relocation of the Edgewater Casino against the applicant’s wishes and without public consultation respecting any revisions. The City has not complied with the Gaming Control Act and Regulations.

________________________________

Note: Letters sent from Ian Pitfield to City Hall and to the Minister responsible for Gaming beginning in late May 2011 have remained unanswered or have elicited only uninformative replies.

Vancouver Not Vegas now awaits a response from City Council regarding our petition. We are very pleased by Vision Vancouver/COPE’s promise of a moratorium on gaming expansion in Vancouver, however the question of PavCo’s intentions for the BC Place Stadium site remains urgent.

Letter from retired judge Ian Pitfield


Retired BC judge Ian Pitfield

PavCo boss needs to get casino facts straight

Re: “More facts than fiction needed in gambling debate” – Podium op/ed from BC Pavilion Corp. CEO Warren Buckley – issue 1116; March 15-21)

Warren Buckley seems to have difficulty differentiating between fiction and fact.

He says that “at 110,000 square feet the casino is about the size of a single football field.” The city planning report calls for a casino of up to 114,000 square feet. A quick Google search of football-field dimensions yields the answer of 57,600 square feet – roughly half the size of the proposed casino. While that is the American football field, the comparable Canadian playing surface is 64,350 square feet, excluding the end zones. Whatever dimensions are used, the fact is that at 114,000 square feet, the casino would be 2.62 acres. It’s certainly not “about the size” of one football field.

One can have about as much confidence in Mr. Buckley’s calculation as one can have in his statement that the City of Vancouver will derive $23 million annually from the operation of the proposed casino-hotel complex. Approximately $6.3 million is already earned from the existing Edgewater Casino. Another $6 million will come from property taxes.

Neither PavCo nor the BC Lottery Corp. (BCLC) acknowledges that property tax will be payable, however the proposed site is developed. The real increase in revenue to the city would then be a maximum of $11 to $12 million. For many reasons that estimate is more likely fiction than fact.

Continue reading

Summary of issues surrounding the Edgwater Casino expansion plan

UPDATE: here is a fuller summary of issues with the Edgewater Casino expansion (PDF with hyperlinks).

This post is for those interested in some of the more technical details surrounding the Edgewater Casino application. To read the full application, visit the City of Vancouver site.

Procedural Issues

1. No Adequate Notice to Public

The application before Council is described as a re-zoning application by PavCo (crown corporation BC Pavilion Co). Included, but not detailed in the public notice, is a second application by Edgewater Casino for a by-law amendment licensing approximately 1000 new slot machines and 75 new slot machines; Notices mailed only to residents within a 2 block radius of the project, etc.

No notice to public of scale of expansion: gaming floor equivalent to two NFL football fields (114k sq. ft)

2. Due Diligence gaps

a) Calculation of expected revenues only, no calculation of expected costs–policing, counseling, housing homeless;
b) No report on mental health and addiction issues/social ills;
c) Policing report is one paragraph long. Only one sentence respecting organized crime, money laundering. No estimate of impact or cost to manage. No weapons policy or enforcement provisions in a casino/hotel/sports complex. No reference to the RCMP report cautioning about extreme vulnerability to organized crime and infiltration.
d) Background check of Paragon Gaming–corporate profile misrepresented in public materials. No assessment of suitability to operate a major project of this scale.

3. Key Information Relevant to Public Review

PavCo represents that there is no risk to the taxpayer in the corporate structure of the project; however:

The BC Lottery Corporation Facility Development Commissions (FDC) and Accelerated Facility Development Commissions (AFDC) cover roughly 42% of casino capital development expenses.

Do FDC’s and AFDC’s extend to ancillary buildings such as hotels, restaurants, theatres, and parkades?

Projections indicate the cost of the complex will be approximately $450 million. 42% is almost $190 million in public money. The BC Lottery Corporation has budgeted for capital expenditures of $346 million over the next 3 fiscal years. What percentage of that will go into the Edgewater development?

a) Public disclosure of all financial commitments
b) Public disclosure of the deal structure: Is there an incentive to overbuild? How are expenses calculated and netted out?

4. Irregularities in the BC Lottery Corporation and PavCo Bid Process

a) BC Lottery Corporation board chair Richard Turner purchases shares in Paragon Gaming (operating in Alberta) in 2003. Share purchase violates board code of conduct, and is not disclosed until 2005.
b) In late 2005 Turner resigns from BCLC board. Summer 2006 Paragon Gaming purchases Edgewater Casino out of bankruptcy and installs Turner on the board of Paragon.
c) Fall 2008, City plan for Northeast False Creek is amended to permit major casino at request of PavCo.
d) March 2009, PavCo puts out an RFEI (Expressions of Interest), with an 18 day window. Only two respondents, including Paragon, reply. While the Paragon bid is before PavCo during the RFP phase one month later, Turner issues a $50k cheque to the BC Liberal Party. Paragon Gaming is the successful bidder
e) Autumn 2009 Turner places a phone call to Minister Kevin Krueger advising that Paragon will withdraw if the roof is not built per plans.

What were all the communications between Richard Turner and PavCo in the period 2005-2009?

5. Criminal Concerns

2006: Richmond loan shark Lily Li is murdered. Evidence emerges at trial that loan sharks operate on shifts 24/7 inside River Rock Casino;
2009, January: RCMP special unit IIGET (Integrated Illegal Gaming Enforcement Team) issues a report to government warning of “extreme vulnerability” of casino industry to organized crime–money laundering, infiltration, loan sharking. No resources to investigate suspected money laundering. Concerns expressed about perception of conflict of interest and corruption. Most information redacted from report.
2009. February: IIGET disbanded
2010/ Summer: BC Lottery Corporation fined by FINTRAC for repeated failure to monitor suspicious transactions. First fine of its kind in Canada.
2010/August-October: CBC investigates over $8 million in suspicious transactions at 2 casinos in Metro Vancouver, including $460k in 20’s in plastic bags, and a suitcase with $1.2 million in casino chips.
Insp. Baxter, head of Proceeds of Crime Unit, calls transactions suspicious. Solicitor General Rich Coleman, also responsible for gaming, disagrees that transactions are suspicious and publicly disagrees with Baxter.

Conclusion: Weak BCLC enforcement of rules of conduct and poor compliance and oversight of casinos, leaving the industry vulnerable to uncontrolled criminal conduct and potentially to infiltration.

6. Paragon Gaming: Parent Co of Edgewater

All other projects and operations are on First Nations reserves in the US and Canada. All are small market. No international tourism expertise. No expertise with the Asian market.

BC’s model: Closed door bidding process with a single (geographically pre-selected) casino applicant, and no public input.

By contrast, Missouri recently awarded a casino license in an open, public, competitive bidding process, with multiple applicants and more than one physical location. The successful bidder demonstrated both strong community support via a referendum, and strong local roots in the community. Paragon Gaming was one of the bidders in this process, but was unable to garner a single vote of support from the Missouri Gaming Commission.

US small market casino operations have notoriety, particularly vis-à-vis political corruption. In more than one instance, individuals with some connection to Paragon Gaming or their advisors have been implicated, charged, or convicted on political corruption charges. A detailed background check on Paragon Gaming is recommended, including investigation of the relationship of Paragon principles with Milton McGregor and Robert Sigler (shareholder in Paragon Gaming Missouri) of Alabama.

PUBLIC FORUM Feb. 9 on massive casino expansion for Vancouver – come & be heard!

Democracy consists, unfortunately, in citizens showing up to meetings. Sad fact, but true!

Please join us:

Chinese Cultural Centre
in Chinatown
(Stadium-Chinatown skytrain station)
7 pm, Wednesday February 9
(See the Facebook event page)

50 East Pender Street between Carrall and Columbia
(travel instructions to the site, click the link above)

Please come out. You will have fun, meet a mix of people, and feel good about helping us demonstrate our numbers. Bring your ideas and your concerns about the proposed Edgewater mega-casino.

If we approve this mega-casino in Vancouver—if this public land is effectively given away to a sketchy Vegas company on an endless 70 year lease—we will never be able to get rid of it. Is this the image we want for Vancouver, internationally? No other major Canadian city has put a casino in its downtown core, or even close to residential areas. Once we go down this path, we can’t turn around. They don’t just want to put this casino in our downtown, they want to make this the biggest casino in Western Canada, and to have it built by a company that has only ever built truck stop, highway-side, trailer park casinos. The City of Vancouver has not done studies that indicate what the true economic costs of a casino are, but they easily make up a sum in the millions. And for what, $17 million a year? That’s not enough of an inducement for Vancouver – that’s a pittance in the City budget. This is a bad idea. Come out and have your say.

Vancouver will only be forced to make the right decision if the citizens of Vancouver show up and get involved.

Thank you!