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Casino profits boost Nanaimo’s bank account
Nanaimo could see the end to its six-year casino revenue losing streak.
The City of Nanaimo anticipates its cut from Great Canadian Casinos will jump almost nine per cent from last year, making it the first increase in gambling dollars since 2007.
Revenue at the slots and gaming tables has been slipping year-over-year. The streak started in 2008 when the city’s share of casino revenue dropped by more than $176,000 to $3 million. The following year it fell $274,000 and by 2012 it was down to $2.3 million.
The casino blames competitive gaming centres and cautious spending – a result of the economic downturn. Ultimately, taxpayers pay the price for revenue losses.
As a host city to a casino, the municipality gets 10 per cent of the gambling cash flow pulled in after prizes. It’s one of the few revenue alternatives to taxation and with no strings attached, city officials can use it to fund nearly anything they want, according to Brian Clemens, the city’s director of finance.
The dollars have been used to pay for policing, social grants and the Nanaimo Museum and if there are shortfalls, city officials look to other means to cover the costs, including taxation. Clemens said the effects of reduced revenues has been offset with reserves – banked when coffers were flush with casino dollars – but money ran out this year. If the city had seen revenue fall again, the losses would have had to be funded by reduced costs or increased taxes, he said.
The city had anticipated $2.3-million in casino revenue in this year’s budget and is now looking at a potential $2.5 million. The increase will top up the reserve fund for any future losses. The budget is usually based on casino revenue the year previous, but the financial director says the city will have to decide if it bumps the number up to reflect this year’s increase or err on the side of caution.
“It could be criticized either way. Some people will say if you know it will be $2.5 million why not automatically increase [the budget] because that means $200,000 less in taxes,” he said. “But given the trends of the last few years I am not confident it will be the same.”
Chuck Keeling, executive director of stakeholder relations for the Great Canadian Gaming Corporation, says the revenue uptick is likely because of last year’s $5-million casino upgrade and a revamped and more pedestrian friendly Port Place Shopping Centre. A proposed passenger ferry and conference centre hotel could also be a boon to the casino, but Keeling said it is waiting to have more confidence in its business case before it contemplates growth. A $50-million expansion has been on hold since 2009.
“Is it an anomaly? Is it something temporary? Hopefully not,” he said, of the influx in revenue this year. “Is it significant enough to look at a more significant expansion? Not yet.”