British Columbia Lottery In The Dock

Things are reportedly not good at British Columbia Lottery Corporation, the organisation that launched the first online gambling program in Canada. Though much of this is not directly connected to online gambling, it may impact this activity in Canada.

The issue came to the fore through a review of the BC Lottery operations, which was subsequently discussed in the provincial parliament. The major finding of this review was that a voluntary retirement program that was meant to cut costs by $20 million, ended up costing the corporation $25 million. The employees were offered early retirement and severance packages to reduce future salary costs. The idea was to eliminate 68 positions. But 142 people took advantage of the offer. Finance Minister Mike de Jong commented, “Not a particularly shining example of effective execution,”

Other failings included details of lavish spending on employees and managers, lack of adequate enforcement, few internal controls, the lack of vigilance of money-laundering enforcement since funding was cut in 2009 for a dedicated RCMP money-laundering squad and the selling of lottery tickets to minors.

The review came up with 25 recommendations for the British Columbia Lottery Corporation. De Jong said the lottery corporation is implementing the recommendations and that such errors will not be made in the future. However, the opposition is not buying the story. New Democrat gaming critic David Eby said that the provincial government has sugar-coated a report that raises serious concerns about BC Lottery.

On the positive side the report said the lottery corporation generates revenues of $2.1 billion annually after paying out prizes to winners. About half of the earnings support health care, education and social programs. Lottery board chairman Bud Smith added that the corporation is set to deliver record revenues this year and is the third-most profitable company in British Columbia. However, almost the entire revenue comes from the lottery part of the operations. The online gambling venture has contributed only 3% of the revenues despite the passage of five years since launch.

Ultimately the cost of all these errors of omission and commission are passed on to the online casino players. As a result better managed foreign operators licensed in offshore jurisdictions offer more attractive products and promotions, resulting in low interest in the BCLC online casino website. Last month on the eastern side of Canada there had been talk of allowing private companies into the online gambling arena. It is time for that debate to be held nationally.

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