Arena Funding Proposal Raises Concerns for Nonprofits

Alberta’s unique charitable gaming model is a valuable financial contributor to the robust nonprofit sector Albertans have come to know and rely upon.  Provincially, Alberta generates $1.44 billion in annual gaming revenue and the percentage given to nonprofits and charities is invaluable to the sector. According to the Alberta Lottery Fund’s audited 2012 financials, 88% of the Alberta Gaming and Liquor Commission’s gross proceeds from provincial lotteries were disbursed to nonprofits and charities through the Alberta Lottery Fund.

The Wildrose Party, Alberta’s Official Opposition, has recently proposed that in order to fund new sports arenas for both Calgary and Edmonton, an existing lottery game, Keno, should be re-branded, re-vamped and the proceeds directed to building the arenas.

Their proposal (see this press release): a Keno game set up in bingo halls and sports bars would be used to cover the shortfall in funding arenas in Calgary and Edmonton. The problem with this idea is threefold. First is a logistical concern; second, one must wonder if this will grow the gaming revenue for the province, or if it will instead dilute the proportion charities receive; and third, does this put Alberta’s charitable gaming model at risk?

The first concern has been a definite cause for contention; however, the logistics of the model are outside of Volunteer Alberta’s area of expertise. The Wildrose Party is proposing that in order to reach their $194 million projection, it would need to be in at least 1000 bars and pubs in Alberta. According to the Alberta Gaming and Liquor Commission, there are only 1,557 Class A Minors Prohibited Liquor Licenses in the province. This is the liquor licence that allows the use of Video Lottery Terminals (VLTs) and Slot Machines. One could assume that even if the logistics of putting Keno in over 60% of Alberta’s bars, it would be in direct competition with the VLTs that people already use to gamble, and whose revenues go into the Alberta Lottery Fund, which supports many of Alberta’s nonprofits and charities.

This brings us to the second point, revenue dilution for nonprofits and charities. Volunteer Alberta’s worry is that while some “new gamblers” may be drawn to this NHL-branded Keno game, which would grow the total gaming revenue pie, the vast majority of Keno’s revenue will come from those who would have otherwise used an alternative game where the money would be directed to the Alberta Lottery Fund. This would effectively shrink the proportion of the pie directed to Alberta’s nonprofit sector, leaving already cash strapped organizations with fewer revenue sources, while private companies would benefit.

Lastly, Volunteer Alberta is concerned that the Wildrose’s proposal would leave Alberta’s charitable gaming model at risk. If we as a province make this exemption, what is there to stop it from happening again and again in other communities in Alberta? An expansion of this approach runs the risk of further diluting and diverting gaming funds away from the nonprofit and charitable sector. While Calgary and Edmonton may benefit from the building of new arenas, Alberta’s nonprofit and charitable sector relies on funding from the Alberta Lottery Fund to provide numerous programs and services Albertans need. Programs offered through Rotary clubs, athletics clubs, arts foundations, language and cultural groups and many others that make Alberta the best province to live in. Other jurisdictions have funded public-private partnerships like arenas through a number of different means.  While it is great to experiment with new ideas, it seems like, in this case, the cure is worse than the disease.

Steve Kwasny

Stakeholder Relations Coordinator