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Slots on Ferries a Complicated Bet, Warned Finance Ministry

Blindsided regulator detailed many concerns after transportation minister's public announcement.

By Andrew MacLeod 16 Oct 2014 | TheTyee.ca

Andrew MacLeod is The Tyee's Legislative bureau chief in Victoria. Find him on Twitter or reach him here.

After Transportation Minister Todd Stone announced BC Ferries' proposal to put slot machines on its vessels last year, the finance ministry began compiling a list of concerns that ranged from the need to rewrite provincial gambling laws to the likely violation of the federal criminal code.

Records released to The Tyee in response to a freedom of information request show the finance ministry had a dozen "considerations" about the Nov. 2013 proposal, and that Stone had already taken the idea to cabinet without consulting the branch of the finance ministry that regulates gambling in the province (see sidebar).

In a Feb. 2014 email, a finance ministry official noted Premier Christy Clark supported Stone's plan.

A record titled "Contemplation of Slot Machines on BC Ferries" outlines several difficulties, including the fact that under provincial law it's illegal for a private company like BC Ferries to negotiate hosting gambling. "A significant amount of policy work, consultation and legislative drafting is likely required prior to introduction of slot machines on ferries operated by BC Ferries," it said.

Referring to the Gaming Control Act, the document said, "Although the announcement of slots on ferries was made by BC Ferries and the Ministry of Transportation and Infrastructure, under the [law] the decision to conduct, manage and operate casino gaming including slots or to establish or relocate a gaming facility is made by government or BCLC not... by someone (such as a private company like BC Ferries) that wants to have a casino."

BC Ferries was a Crown corporation up until 2003 when the BC Liberal government reorganized it as a private company.

The ministry officials advised, "It should be seen that the Ministry of Transportation is working on and promoting this rather than BC Ferries."

Following that advice would require some backtracking, since BC Ferries has previously said the idea came out of a 2012 community engagement process. Records obtained by The Tyee earlier also indicate a representative of BC Ferries contacted BCLC to discuss possible gambling on ferries in April 2012.

Who's the host?

Further complicating matters is the fact that the Gaming Control Act requires that a "host local government" will provide the location for any casino, bingo hall or other gambling facility in the province.

BC Ferries is not a local government and does not do land use planning, so to allow gambling on board would mean that the law needs to be rewritten or have exceptions added, said the finance ministry document.

However, the ferries do dock in places like Sidney, Delta, Nanaimo and West Vancouver that are local governments. Those communities would at the very least need to be publicly consulted with, the document said, and might well have a claim on 10 per cent of revenues to which host local governments are entitled.

It was unclear what revenues would go to BC Ferries, whether they would be treated as other service providers and how much money the company might expect, it said.

First Nations, which could be affected or have claim to waters the ferries pass through, would need to be consulted, the document said.

So would the Union of B.C. Municipalities, which has a Memorandum of Understanding with the province that says it's up to local governments "to direct and define the extent, scope and type of casino and bingo gaming within their boundaries. It also affirms the ability of local government to decide whether slot machines or other similar devices could be placed within their boundaries." Changing the MOU would likely require public consultation, it said.

Allowing gambling on ferries might also require a change to the Coastal Ferry Act, and the BC Ferry Commissioner, who regulates ferry services, would need to determine the potential impacts.

To comply with the Gaming Control Act it would also be necessary to re-define "gaming facility," the document said. "Preliminary legal advice indicates that an area within a ferry likely cannot be described as a 'facility' for casino gaming as a ferry's primary use is a facility for transporting vehicles and passengers and not gaming."

And then there's this overarching concern: "The Province, through the [Gaming Policy Enforcement Branch,] published policy, specifically prohibits slots in any location other than a gaming facility. Gaming public policy would have to be redefined."

Criminal Code trouble

Even if concerns with provincial control can be worked out, the proponents will likely have to deal with Ottawa as well.

The finance ministry document said the fact that ferries travel in coastal waters puts them under federal jurisdiction. While the federal Criminal Code allows for gambling on cruise ships, it specifies that the definition "does not include such a ship that is used or fitted for the primary purpose of transporting cargo or vehicles."

The allowance for gambling on a "cruise ship" does not appear to apply to ferries, and indeed rules them out. "On a plain reading of the definition, it is unlikely it would apply to a BC Ferry which is fitted for the primary purpose of transporting vehicles," the authors wrote.

While they didn't get into the details, they noted that some BC Ferries routes -- including the Swartz Bay to Tsawwassen route where Stone said slots would first be introduced -- go through international waters. "Notably, some ferry routes cross waters under the jurisdiction of the United States," it said. "These intergovernmental circumstances would have to be considered and managed. The Ministry of Transportation and Infrastructure will need to seek fulsome legal advice in this regard."

The authors also highlighted the Oct. 16, 2013 report that provincial health officer Perry Kendall wrote for the minister of health, which is also referenced in several briefing notes for Finance Minister Michael de Jong.

"The report noted that increasing access to products such as slot machines appears to be increasing gambling related risk in B.C.," it said. "Experience further suggests that one of the strongest methods for reducing the incidence of problem gambling is to restrict or centralize access to Electronic Gaming devices within communities. In light of this recent report, expansion of slot machines would likely garner negative media scrutiny."

Instalment, power costs

The finance ministry note was among 242 pages the ministry released regarding the proposal to put slot machines on BC Ferries. Several pages were censored or withheld in their entirety under sections of the Freedom of Information and Protection of Privacy Act regarding policy advice or recommendations, legal advice, disclosure harmful to law enforcement, disclosure harmful to the financial or economic interests of a public body and disclosure harmful to personal privacy.

A Dec. 18, 2013 briefing note for Finance Minister de Jong included some detail on the revenue and cost considerations. "The revenue and cost estimates may be impacted by changes required to ferries to allow for the establishment and operation of slot machines on ferries," it said.

For example, "there may be a need for some construction on the ferries to facilitate the installation of the slot machines, which weigh between 150-270 lbs and require steel infrastructure to bolt to facility, creating additional weight," it said. "Each slot machine also requires heavy power usage, up to 700 watts per slot."

The upshot of that was, "The fuel budget could be affected."

Also, it said, "The area with the slot machines in it would have to be staffed." Another briefing note said, "As BCFC ferries are a public space, BCLC expressed concerns about the need to restrict access to minors on ferries."  [Tyee]

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