Tag Archives: gaming expansion

What is Vancouver Not Vegas up to now that the mega-casino has been defeated?

Posted on September 22, 2011 | 2 comments

Thanks again to Vancouverites for all their support in this fight! We stood up and became active citizens in a non-partisan manner, and we prevailed! It was a good moment for Vancouver.

What will our organization do now?

Our coalition will continue. We think the BC public needs to know the whole mega-casino story, which has not yet been fully told.

In particular, we demand that BC charities be properly funded out of the billions already brought in annually by existing gambling in BC. Over many years, struggling community charities in this province were forced to advocate for gaming expansion in exchange for a promised percentage of the take. They received not one dollar of the millions earned in that expansion. They were betrayed, and all of BC suffers while massive handouts are given to the gambling industry.

We will:

•  Watch developments on the PavCo site at BC Place
•  Monitor the BC government’s push, via the BC Lottery Corp, to massively expand gambling in BC
•  Follow the unfolding story of the stadium roof and the way PavCo tied it to the casino plan, Paragon and the BCLC
•  Inform the public of the massive lucrative cash incentives handed over to the casino industry, an amount that far surpasses the amount given in other provinces
•  Call for a public accounting of the casino fight. How much did PavCo and BCLC – our public crown corporations – spend on their Edgewater mega-casino campaign, even before they had done public consultation? That was BC taxpayers’ money. How much was it? We demand to know.
•  Protest the massive gaming revenue cuts to charities and arts in this province. State-sponsored gambling in BC has expanded rapidly and its revenues have skyrocketed, and hundreds of millions have been spent on sweetheart industry deals and money-losing vanity mega-development projects. Meanwhile, charity and non-profit services at the heart of every BC community were gutted, separated from that enormous gambling revenue without explanation. To think that gambling was expanded in BC ostensibly for the purpose of supporting those charities! For too long, BC charities and non-profits have been pressured into advocating for expanded gambling with the promise of funding, only to see zero return for that advocacy, then be handed massive cuts. Not only is this insulting; see Pete McMartin’s comparison with how it’s done in Alberta if you really want to feel annoyed.

Enough is enough!

Please tell all your local MLA candidates that funding charities, non-profits, sports and arts is an election issue for you. You may also want to ask them to promise to clean up a gaming ministry and industry that are clearly out of control. BC is the only province fined —and fined heavily—for its tolerance of criminal transactions by FINTRAC, the federal gaming regulation authority. The gambling industry in this province is a disgrace. We need a full public discussion about gaming expansion, especially in light of the rapid extension of online gambling through websites and smartphones.

For the November municipal elections, please remind your candidates that you don’t want gaming expansion in your region!

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Gaming Grant Review an opportunity to address crisis in BC’s non-profit sector

Posted on July 12, 2011 | Comments Off on Gaming Grant Review an opportunity to address crisis in BC’s non-profit sector

Vancouver Not Vegas says the Gaming Grant Review is a welcome opportunity to address the expanding crisis in BC’s non-profit sector.

FOR IMMEDIATE RELEASE:

Vancouver Not Vegas welcomes Premier Clark’s announcement of the provincial gaming review yesterday. “We hope that as a result of this initiative, charities and non-profits will never again have to shill for the gambling industry in British Columbia,” says VNV co-founder Sandy Garossino.

Charities and the communities they serve are entitled to a clear, fair and independent grant process, and not to be pitted against one another in a race for gambling revenues. Eligibility criteria and adjudication should meet broad standards of procedural fairness, and be free of interference by the political interests of any party.

Without public notice, debate or scrutiny, the provincial government instituted rapid gambling expansion as a silent pillar of tax policy, to the point that gambling revenues now exceed corporate taxes in BC. Unaware of the larger picture or the extent of the impact on communities, the charitable sector lent critical support to this strategy. It should have understood the bargain that it made and how hungry government would become for the non-profit share of revenues it controlled. Due to severe cuts to gaming grants, hundreds of charities find themselves on the brink of collapse. Even Vancouver’s venerable Children’s Festival found itself on life support in Spring 2011. British Columbians and their families see insufficient benefit from soaring gambling revenues.

“The system is broken. We must devise a better one for the public and for the charitable and non-profit sector that serves them,” says Lindsay Brown, VNV co-founder.

We look to Premier Clark to demonstrate the government’s good faith by granting emergency interim funding to sustain any organizations close to failure while we await the outcome of the review.

Media contact:
Sandy Garossino
778-231-5230
sgarossino@gmail.com

To see discussion of this issue, follow our Twitter (@vancityVegas) and also the Twitter hashtag #BCgaming.

Below: an example of the charities who benefit (or in many cases have benefited in the past but no longer do) from local gambling establishments.


 

 

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Parents shouldn’t blow college fund at casino

Posted on March 25, 2011 | Comments Off on Parents shouldn’t blow college fund at casino

“If the mega casino were to be built, my parents would probably go there almost every week. Perhaps they could spend their money on my university tuition; it’s just a thought.”

Parents shouldn’t blow college fund at casino
Letter to the editor, Vancouver Courier

BY JENNIFER LUI
MARCH 25, 2011

To the editor:

Re: “12th and Cambie,” March 18.

I strongly disagree with the idea of building a mega casino in Vancouver. Casinos have a way of sucking the money out of everyone who goes there. The casino itself would make money, but for the family members of the customers, it is a disaster waiting to happen. As a Grade 12 student determined to go to university, I’d like my parents to spend their money on a more meaningful cause. Perhaps they could spend their money on my university tuition; it’s just a thought. If the mega casino were to be built, my parents would probably go there almost every week.

I would rather not see them constantly lose money since they usually do every time they step foot inside a casino. It’s not a pretty sight.

Jennifer Lui,

Vancouver

© Copyright (c) Vancouver Courier

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How Vancouverites feel about gambling expansion: the real numbers

Posted on March 22, 2011 | Comments Off on How Vancouverites feel about gambling expansion: the real numbers


Graphic above is from the Justason report (see below)

67% of Vancouverites believe casino expansion will bring significant social problems.

Once again, consistent with all other polls of the Vancouver public, the Ipsos poll released March 24 shows a clear and substantial majority of decided respondents OPPOSE the expansion of Edgewater Casino. Although the margin of error was large and the sample size was very small at 250 Vancouver residents, this is the third poll since February demonstrating a clear lead by expansion opponents over supporters. No poll of Vancouver residents has ever shown public support for the casino expansion, and no poll has shown support within 10 percentage points of opposition.

Below is a summary of the polling data we are aware of. Please note that the figures below reflect DECIDED respondents.  We have allocated undecideds proportionately, so the numbers are different from what you will see on the survey results themselves:

Robbins Sce Research March 14, 2011:
Oppose casino expansion:  58.5%
Support expansion:  41.5%
= 17% gap  in our favour
Margin of error: 4.37% 19 times out of 20 @ 95% confidence
Sample size 503 Vancouver registered voters who voted in the last election.
Phone poll: Vancouver City poll – Casino, Legal Aid, BC Place Roof, Citizens Initiative and Recall, Party popularity 

Justason Market Intelligence  February, 2011
Oppose expansion: 62.5%
Support expansion:  37.5%
= 25% gap in our favour
Margin of error 4.9% 19 times out of 20
Sample size of 662 Vancouver residents.
See the phone and online poll (note: pdf) 

Blue Thorn Research and Analysis Group Report, commissioned by the Province of British Columbia  July, 2007
Here is a 196 page study commissioned by the Gaming Policy and Enforcement Branch from 2007, reviewing impact and social acceptance of gambling and casinos in 4 metro Vancouver municipalities, including Vancouver:    https://www.pssg.gov.bc.ca/gaming/reports/docs/rpt-rg-impact-study-final.pdf (pdf)
Harm of gambling outweighs benefit:   63.9%
Edgewater is beneficial to community:  15.1%
Page 7 of the report (Executive Summary), or on the pdf p. 11/196:   Sample size was 1000, and INCLUDED THE OPTION OF CANTONESE, MANDARIN, OR PUNJABI RESPONSES.  This survey was weighted to balance for age, gender, and ethnicity. 

From the Executive Summary:

Vancouver has the most negative attitude toward gambling of the four communities. Their negative general attitude toward gambling has significantly increased. In 2004, 56.6% of people believed the harm of gambling outweighed benefits, increasing to 57.4% in 2005, and 63.9% in 2006. The community’s negative attitude toward the Edgewater Casino also became significantly worse. In 2004 only 26.0% believed it was likely to be somewhat or very beneficial to the community. This decreased to 24.4% in 2005 and only 15.1% in 2006.

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Nathan Edelson, Former Vancouver City Planner-Presentation to Council

Posted on March 17, 2011 | 3 comments

Presentation to City Council Opposing Casino
Nathan Edelson
March 14, 2011

As some of you may recall, I am a former Vancouver City Planner.

Like former Councillors Ladner, Puil and Ford, I am not from Las Vegas; and I don’t support the proposed casino. I am also proud to be on the same side on this issue as many others with others with whom I have worked including Tom Durrie, Herb Barbolet and John Shayler as well as the Community Arts Council of Vancouver, on whose board I serve.

My reasons are simple:
1. The process doesn’t smell right
2. The stadium roof leaks money and doesn’t look right
3. Enabling addiction to gambling as a public policy doesn’t feel right

Process
Regarding the process, the media has reported that a number of former and current public officials have been working behind the scenes or, in some cases, directly for the casino and associated facilities. Whatever their past contributions to public service – and they are considerable – I believe those who have argued that these facilities should be public priorities may have lost their way. Some have strayed so far along the path toward conflict of interest that it is unclear as to whether they have broken the law or whether the law must be fixed.

• The design of the complex is too large and will further block rather than enhance the important linkages between the Downtown Eastside, including Chinatown, and False Creek.
• The stadium roof now litters our skyline – its design is disrespectful of 3 decades of careful work to protect public views
• The stadium and the roof cost more than $560M. That these funds were spent in advance of this public hearing is disrespectful of the City’s rezoning process.
• More importantly, this is a misallocation of public funds when:

– Hundreds of homeless live on our streets
–Thousands of our children are unsafe in schools that need seismic upgrading; and
–Tim Bits are served in the emergency rooms of our hospitals

The TEAM Council on which Marguerite Ford served in the 1970’s achieved greatness.
1. It had a clear vision of a city made up of liveable, inclusive and engaged communities.
2. It also had the courage to say NO to the freeways that many experts declared were both necessary and inevitable.

The result is what is recognized as one of the most liveable cities in the world, at least for most, if not all of us.

Should you decide that you have to approve this proposal, be careful to check every detail of the permits. I helped negotiate a Community Benefit Agreement with the original owners of Edgewater so that inner city residents would be given at least 10% of the new jobs.

Many of these were contracted through Cook Studio – a social enterprise that trained low income youth. It was contracted to do offsite catering and to operate the onsite restaurant. When Paragon took over ownership of Edgewater, they cancelled the contract. This contributed to Cook Studio going bankrupt and the loss of opportunity for dozens of young people who were taking their first steps out of poverty.

I think it is important for all of us to recognize that Edgewater has been a good employer. This is why so many of its workers have taken the time to speak on behalf of the company and the pride they have in their jobs.

However, I would ask you to question Paragon as to why so many of its current workers fear that unless the casino is expanded, they may lose their jobs. If the Casino – at its current size is relocated or the license is transferred to another company, Council can help protect their jobs as a condition of development or other permissions.

More than a decade ago, Mayor Philip Owen had to wisdom to understand that addiction to illegal drugs is a public health issue. It is time for us to understand that this is also true of Addiction to Gambling.

I would suggest a Four Pillar approach to reduce government’s Addiction to Gambling.

1. The first pillar is Prevention
On one side of the chips, show the high proportion of revenue that comes from the poor;
On the other side, show where the revenues actually go; and
On the large screens show the people driven into bankruptcy, their foreclosures, divorces and innocent children.
2. The second Pillar is Harm Reduction
Develop a policy of no increase in slot machines and tables; and
Gradually eliminate highly addictive internet gambling
3. Treatment is the third pillar
Create a fair taxation policy – so that governments have the resources to provide needed public services without relying on the proceeds of gambling.
4. The fourth pillar is Enforcement
•  Work with the Province to carry out a full public inquiry into all the events that led to the proposal before you this evening. This should include the circumstances under which Paragon took over ownership of Edgewater, the proposal for more than tripling the size of the casino, the public expenditures on stadium and the public engagement process.
•  Whether or not the inquiry reveals illegal activity has taken place, it should check to make sure that the laws regulating conflict of interest are clear and adequately reflect the public’s sense of right and wrong.
•  This will help public officials – both current and former – “To know their limit; and to stay within it.”

In my view, and those of many who have spoken and will speak before you, we need to recognize that the casino is like a freeway – a Social Freeway to Nowhere. Like the TEAM Council of the 1970’s, you have an opportunity to turn this proposal down and to have staff complete much needed planning for this area.

Finally, I think it is important that the roof – the roof that would be retractable – remain for decades to come.

Like the Georgia Viaduct before it, it should serve as a symbol for the path we chose not to take. A reminder that in the early part of this century – with all of its challenges – that Vancouver’s City Council chose to work with the senior governments to house our homeless, protect the lives of our children and become the Greenest, and the most liveable place on earth – not for most of us; but for all of us.

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Unified in Action – Vancouver churches oppose casino expansion

Posted on March 9, 2011 | 3 comments

The following is an historic letter from major downtown Vancouver churches in opposition to the expansion of the Edgewater Casino. The churches are St. Andrew’s Wesley, Central Presbyterian Church, Christ Church Cathedral, First Baptist Church, and St. Paul’s Anglican Church:

Unified in Action

Clergy and Staff from Downtown Vancouver Churches

Mayor and Council
City of Vancouver

March 9, 2011

Re: Mega-Casino Opposition
Dear Mayor Robertson and City Council:

The undersigned, clergy and staff from major downtown Vancouver churches have agreed, personally and collectively, to stand in opposition to the proposed expansion of The Edgewater Casino in The Yaletown-False Creek area.

We are particularly concerned that the people of Vancouver have not been adequately consulted on the subject of gambling expansion in the city, and we are especially concerned that those who work and reside in the Vancouver downtown core have not been adequately informed of the plans to redefine life in the downtown area through the construction of this mega-casino.

We do not support the enormous expansion of the Edgewater Casino and its proximity to the soon-to-be-reopened BC Place Stadium, particularly when it is proposed to become the centrepiece of a large “entertainment complex” complete with hotels, restaurants, and other facilities.

Well documented social ills which accompany any and all casino developments are more than sufficient reasons for us to oppose this planned development. Our resistance is magnified even further when we see the scale of the casino that is proposed to be located in the heart of downtown!

We call on Vancouver Mayor and City Council to impose a moratorium on all gaming expansion in our municipality pending a full and comprehensive public review of gambling, its regulation, and the appropriate gaming revenue-sharing formula with municipalities and non-profit organizations.

From: St. Andrew’s-Wesley United Church
Rev. Gary Paterson, Senior Minister
Jennifer Cunnings, Minister of Children, Families and Seniors
Tim Scorer, Minister of Adult Formation
Michael Dobbin, Director of Development

From: Central Presbyterian Church
Rev. Jim Smith, Minister

From: Christ Church Cathedral
The Very Reverend Dr. Peter Elliott, Dean,
The Venerable Dr. Ellen Clark-King, Associate
The Reverend Alisdair Smith, Deacon
The Reverend Chris Dierkes, Curate,
The Reverend Dixie Black, Deacon

From: First Baptist Church
Rev. Darrell W. Johnson, Senior Minister
Rev. Dr. John Cuddeford, Minister
Andrea Tisher, Dir. of Music & Worship
Rev. Bob Swann, Minister of Mission & Justice
Judy Lang, Ass. Minister for Congregational Care
Pastor Janet G. Porcino, Minister of Discipleship
Luz Figueroa, Director of Children and Family Ministries
Rev. Abraham Han, Minister of Urban & Community Life

From: St. Paul’s Anglican Church
The Rev. Markus Duenzkofer, Incumbent

 

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Edgewater mega-casino fact sheet

Posted on March 2, 2011 | Comments Off on Edgewater mega-casino fact sheet

THE RAW FACTS ABOUT PARAGON GAMING’S PROPOSED EDGEWATER CASINO EXPANSION AT B.C. PLACE

ABOUT THE PROJECT

Connection with B.C. Place Stadium: direct link to stadium attendees, with a separated walkway directly to the casino from corporate suites.

Size of gambling space in the expanded Edgewater Casino: 2 football fields

Size of this casino compared to all casinos in western Canada: #1

Number of electronic slot machines in current Edgewater Casino: 520

Number of electronic slot machines in expanded Edgewater Casino: 1,500

Percentage of electronic slot revenues estimate to come from problem gamblers: 35%

Number of studies done in B.C. to determine the social, crime and financial costs of problem gamblers in this province: none

Cost of policing, addictions, suicides, fraud, courts related to problem gamblers using this casino: unknown

Estimated annual cost of a problem gambler from missed work, fraud, bankruptcies, receiverships, embezzlements: $13,200

ABOUT THE PROCESS

Date that B.C. Lottery Corporation chair Richard Turner buys shares in Paragon’s Alberta business: 2003

Date that Turner discloses that interest: 2005

Date that Turner resigns from BCLC board: late 2005

Date that Paragon Gaming purchases Edgewater Casino out of bankruptcy and installs Turner on the board of Paragon: summer 2006

Amount of donation by Richard Turner to B.C. Liberals while Paragon’s bid is awaiting a decision by Pavco in 2009: $50,000

Time between Pavco’s invitation to two short-listed companies responding to a request for expressions of interest in this $450-million project and its announcement of Paragon as the preferred proponent: less than 11 weeks

Normal time for big government projects to determine the best proponent, according to Partnerships B.C.: 12-16 months.

Number of minutes spent debating Edgewater’s expanded casino by Vancouver City Council: 0

ABOUT BROKEN PROMISES TO THE CITY OF VANCOUVER

Projected return of expanded Edgewater casino to City of Vancouver: $10 million in new revenue from gambling

Projected revenue to City of Vancouver from Edgewater’s original casino in 2004: $10-12-million in new revenues

Actual annual return of Edgewater Casino to City of Vancouver over the past two years: $6.3 million

Promise to arts groups and charities in 2004: increased funding
What charities got in 2010: 14% less than they got in 1995
What BC Lottery Corporation got in 2010: about three times as much revenue as 1995.

Promise to bingo players and their funding recipients in 2004: New Planet Bingo hall at Edgewater
Status of promise in 2011: Never delivered

ABOUT PARAGON GAMING

Number of slot machines in Paragon’s only Las Vegas operation, a sports bar: 15

Source of Paragon’s financing for Vancouver: unknown

Number of jobs promised by Paragon in 2010 bid for a casino in Missouri: 573

Number of jobs calculated by the Missouri Department of Economic Development for the same project: 280

Estimated annual revenue by Paragon in Missouri bid: $103.4 million

Estimated real new annual revenue calculated by the Missouri independent review of the same project: $21.7 million

Status of Paragon bids to build casinos in Sugar Creek, Missouri; Moncton, New Brunswick; Oxnard, California; and Ventura County, California: all failed

Answer of Unite Here, a union of 100,000 gaming workers across North America, to the question: “Is Paragon really the right company to take on this project?”: “no”

Disturbing event that occurred at Paragon’s Cree River Casino outside Edmonton in August 2010: customer murdered after a fight in a lounge that spilled outside.

ABOUT CRIME AND GAMBLING IN B.C.

The two best places to meet gangsters in B.C., according to Fred Pinnock, former Commander, Integrated Illegal Gambling Enforcement Team: in jails and in casinos

Hours of shifts of loan sharks at River Rock Casino revealed in Oct. 2006 murder trial of loan shark Lily Li: 24/7

Percentage increase in gambling-related crime reported by Richmond RCMP after River Rock’s establishment: 400%

Percentage of money-laundering and terrorism financing cases discovered in 2008-9 that took place in casinos, according to FINTRAC: 20%

Date that RCMP’s Integrated Illegal Gaming Enforcement Team issued a report to the provincial government warning of “extreme vulnerability” of casino industry to organized crime–money laundering, infiltration, loan sharking: January, 2009

Date that B.C.’s Integrated Illegal Gambling Enforcement Team was disbanded by the provincial government: February, 2009

Date that BC Lottery Corporation was fined $670,000 by FINTRAC for repeated failure to monitor suspicious transactions, the first fine of its kind in Canada: Summer, 2010

Number of dollars involved in suspicious cash 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, revealed by CBC in 2010: $8 million.

Reaction of Insp. Baxter, head of RCMP Proceeds of Crime Unit, to these transactions: “suspicious”

Reaction to these transactions of Rich Coleman, Minister of Public Safety and Solicitor-General, also in charge of raising revenues through gambling in B.C.: “not suspicious”

Number of sentences in Vancouver city staff’s 55-page report on the B.C. Place rezoning mentioning organized crime or money-laundering: 1

ABOUT THE ECONOMIC CASE

Amount listed in Deloitte report on this project as an annual capital payback from B.C. Lottery Corporation to Paragon: $16.9 million

Estimated increase in business over Edgewater’s current revenues: 180%

Percentage of North American casino customers who live within 45 minutes of the casino: 90%

Paragon’s estimate of the number of gamblers expected to come to Vancouver every day exclusively to gamble in the new casino and stay in its 648 new hotel rooms: 548.

Feb. 2011 comment by veteran hotel broker Angus Wilkinson on the demand for new hotels needed in the city: “This city doesn’t need another single hotel room.”

Amount that would have to be charged per night for a new hotel to survive financially in Vancouver, according to Wilkinson: $400/night

Average hotel room rate in Vancouver in 2010: $166/night

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When a small Richmond, B.C. casino expanded to become River Rock…

Posted on February 20, 2011 | 2 comments

Here’s what happened when Richmond, B.C.’s small Bridgeport Casino expanded to become the River Rock Casino. Vancouver Sun, October 25, 2007. Also see “Richmond sees rash of casino-related crime” on canada.com.

Casino a crime magnet: RCMP

The opening of River Rock Casino in Richmond has led to a quadrupling of casino-related crime and allowed new organized crime groups to gain a foothold in the city, according to an internal RCMP report obtained by The Sun:

Continue reading →

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Testimony of US professor Robert Goodman, non-partisan expert on gambling, economics and urban design

Posted on February 16, 2011 | 2 comments

This is a long video, but engaging and worth watching. It focuses to some extent on the impacts of gambling when it is placed near residential areas, but it is full of information relevant to any casino application in North America.

https://video.google.com/videoplay?docid=5340854873840831873

Bob Goodman is a Professor of Economic Development, Urban Planning and Environmental Design at Amherst in Massachussetts. He was retained in the early 90s by the Ford Foundation to carry out a study of the economic costs and benefits of legalized gambling. The original study was done for local governments who were trying to decide whether to allow gambling expansion. He has produced a number of major studies and economic analyses of gambling expansion throughout the 1990s and 2000s, and has been hired by both Democrat and Republican administrations and sat on numerous federal committees.

The video of Goodman was is from a 2008 public hearing for a proposed gambling expansion in Philadelphia. His study of over 200 towns has shown that with very few exceptions the introduction of gambling has had serious adverse affects on business and local economies.

It should be noted that Goodman comes from a union family and has a strong concern for jobs (he’s currently working on the job crisis in Detroit). He makes clear that he has no moral objections to gambling, and confesses that he gambles a little himself and has played in poker tournaments.

Click here for a summary of his report Legalized Gambling: Public Policy and Economic Development Issues (pdf). It summarizes his testimony before Congress and was published in the Fall 1995 edition of Economic Development Review.

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Summary of issues surrounding the Edgwater Casino expansion plan

Posted on February 16, 2011 | 2 comments

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.

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