As we head into the decision-making homestretch on the Edgewater Casino expansion debate, it’s hard to know what we’re being asked to bet on.
The financial ground keeps shifting. It’s as if someone keeps changing the horses in the race.
First it was a casino touted as twice the size of the existing one.
“We’re moving it across the street and doubling its size,” Paragon CEO Scott Menke told the Vancouver Board of Trade.
Based on the city’s staff report, the expanded casino is actually 3.1 times as large as the existing one.
We also heard from Menke that casinos are “safer than shopping malls.”
Meanwhile the retired head of the RCMP’s integrated illegal gaming enforcement team, Fred Pinnock, is on record as saying “other than correctional institutions, casinos have the highest density of organized crime figures anywhere.” Think money laundering.
After initial promises that “destination gamblers” would bring $100 million into the casino, a tsunami of independent observers from UBC real estate professor Tsur Somerville to local casino and hotel insiders agreed with U.K. international gambling expert Peter Collins, who told BC Business that “pretty much 90% of your revenues will come from people living within half an hour’s drive time, or maybe 45 minutes.”
Through all of this, three key numbers were held aloft in the media, editorial board briefings, city reports and public statements, all stamped with the imprimatur of a Deloitte study for an unnamed client: the expanded casino/hotel project will provide the City of Vancouver with $17 million in gambling revenue (up from $6 million today), spin off $224 million to the province of B.C. and generate $538 million in economic activity annually. One number eroded slightly when BC Lottery Corp. (BCLC) CEO Michael Graydon told Vancouver city council to expect between $12 million and $14 million, not the $17 million originally promised.
Largely on the basis of the Deloitte numbers, the BC Business Council, the Vancouver Board of Trade, the Downtown Vancouver Business Improvement Association, the BC Chamber of Commerce and various unions endorsed the casino expansion.
Now we discover, through a quiet release on Frances Bula’s blog, that an independent study on the Edgewater expansion for BCLC in September 2009 came to a radically different conclusion. Prepared by HLT Advisory Inc., it discounted expectations of destination gamblers and looked at the net impact of the expansion – after factoring in losses to other local casinos.
Its prediction of the net increase in revenue to BCLC was $47 million. Deloitte’s comparable number is 425% greater.
Similarly, Deloitte’s estimates of new gambling revenue to the City of Vancouver are more than three times higher than the HLT number ($3.6 million).
BCLC counters that the HLT report was based on an expansion with 20% fewer slots than the Deloitte report. OK, but how does that account for Deloitte’s estimates, which are 300% to 400% higher?
Why was this other document never brought into the public discussion, even though BCLC had commissioned it?
Why did BCLC tell HLT not to consider international destination tourism, but allow predictions of international tourism to underpin Deloitte’s projections? Why were the business community, the public and the city led to believe exclusively in the Deloitte study, a dubious piece of marketing hype built on assumptions rejected by BCLC in the HLT study?
Finally, do all these business associations and unions really want their city to be built around an enterprise widely known to have adverse economic impacts in other jurisdictions, promoted by fudged numbers?
Vancouver city council is expected to vote on this on April 19. It should vote it down and look for economic development that creates productive jobs without victims and myriad hidden costs.