Coming in 2016: a value added tax at the urban resort?

Sept. 24, 2013 was the anniversary of Premier Christy Clark's announcement that her chief of staff Ken Boessenkool resigned for an "incident of concern."

It was another great day for euphemisms. Let's have two.

John Winter, the CEO of the British Columbia Chamber of Commerce, is lobbying for the resurrection of the Harmonized Sales Tax. Except he’s not calling it that. Nosiree. It’s a Value-Added Tax. Get it? 

According to Barbara Yaffe in the Sept. 24 Vancouver Sun: 

“Winter says the chamber is not trying to resurrect an HST debate, which he calls 'a nonstarter' in this province. 'What we are proposing is a way to leave our HST angst behind and move B.C. forward into tax dialogues.
"By not taxing business inputs, a VAT would allow B.C. to grow its prosperity by encouraging entrepreneurs, innovators and job creators."

In a June 8, 2010 Georgia Straight editorial ("HST is key to a strong economy in B.C."), Winter used the terms in the same sentence. 

“Experience in Atlantic Canada and other jurisdictions confirms that shifting to a value-added sales tax like the HST paves the way for increased capital spending on machinery, equipment, structures, new technologies, and other productive assets.”

The HST was imposed on British Columbians by Premier Gordon Campbell on July 1, 2010. It was announced July 23, 2009, just over two months after the BC Liberals won an election in which they vowed to be disinterested in giving B.C. a VAT. In the July 23, 2009 government news release, the HST was described as a VAT.

"More than 130 countries, including 29 of the 30 OECD countries, along with four Canadian provinces, have adopted taxes similar to the HST, called value-added taxes, which reimburse most businesses for the tax they pay on their inputs."

The HST was phased out March 31, 2013 after almost 55% of those who voted opted to extinguish the tax and return to the Provincial Sales Tax. 

Winter, by the way, knows a different kind of vat. He had a three-decade management career with Molson Brewery, including presidency of its Western Canada division. 

Also on Sept. 24, Paragon Gaming unveiled its plans for "Vancouver's Urban Resort."  This, two-and-a-half months after I broke the story in Business in Vancouver about financially troubled Paragon inking a revised deal with B.C. Pavilion Corporation to lease land next to B.C. Place Stadium. The original $6 million a year toward the $514 million stadium renovation will now be $3 million if the complex gets built. 

Yes, this Las Vegas company doesn’t want us to call it the proposed, $535 million new home of Edgewater Casino or a hotel/casino complex. Especially after Vancouver city council threw a curveball and quashed its bid to expand the 75-table, 600-slot machine casino to 150 tables and 1,500 slots in April 2011. Instead, it gave Paragon the go-ahead to move the existing licence to land for lease beside B.C. Place Stadium. Paragon's original $6 million-a-year, 70-year lease was cut to $3 million in a deal agreed to in March 2013. 

The 2011-proposed casino/hotel complex

Paragon revealed the architect's drawings for the casino complex.... er, urban resort... and its investors at a Sept. 24 news conference. Evidently my invitation was lost in the mail. 

I did some digging and found the company's CEO Diana Bennett and president Scott Menke registered a company called Paragon Holdings (Vancouver Resort) ULC on Aug. 8. They are the only directors of the company. Bennett and Menke are also the sole directors of Paragon Gaming Training School Ltd. Their Paragon Development is not to be confused with Paragon Development Inc. of Richmond, whose directors are Julie Chan and Terry Lai. 

The corporate registry doesn’t yet show executives of Paragon backers 360 Vox or Dundee Corporation as directors of Paragon Holdings (Vancouver Resort) ULC. 

The 2013-proposed urban resort... yeah, urban resort

Montreal-headquartered, TSX-V-listed 360 Vox is the umbrella for Enchantment Group Hotels, Resorts and Spas, Sotheby's International Realty Canada, Blueprint Global Marketing and 360 blu. Its asset management portfolio includes Fairmont Hotels including the Empress in Victoria, Olympic in Seattle, Chateau Laurier in Ottawa, Royal York in Toronto and Queen Elizabeth in Montreal. 360 Vox is also the project marketer for the CityCenter development in Las Vegas and developer of  two resorts in Dalian, China and three hotels in Cuba. 

Those Cuban properties are the subject of 360 Vox's $25.5 million lawsuit filed in Florida against the PGA of America. Vox 360 claimed PGA cancelled its licensing deal in December 2012 to use the PGA Village Cuba and PGA National Golf Academy Cuba names. 

Dundee Corp. owns 18% of 360 Vox and both companies are chaired by Ned Goodman who, according to the Globe and Mail, sleeps like a baby. Dundee, by the way, owns 58% of oil and gas exploration, development and production company Dundee Energy Ltd. and it owns 83% of Blue Goose Capital Corp., which bought the 14,052-acre Diamond S Ranch in Pavilion, B.C., for $14.8 million. Blue Goose, according to Dundee's annual report, is “focused on the production of clean protein.” (That’s another euphemism for another day.)

Vancouver Not Vegas coalition leader Sandy Garossino was not feeling enthusiastic about Paragon's euphemism. The casino development is not welcome and will be vigorously opposed, she said. Vancouver Not Vegas has already filed a petition, seeking a B.C. Supreme Court order to overturn city council's decision to allow the relocation.

“The people of Vancouver and Vancouver city council roundly rejected the first time this mega casino was proposed. Now we have the appearance of a smaller casino but there still has been no disclosure, there are still too many questions unanswered," Garossino said. "This is really an attempt to do an end run around city council. It makes no economic sense to do such a substantial development around a casino as small as the existing Edgewater is, it’s not going to anchor a development on a scale as being advanced here. We’re very skeptical this is the reality Vancouver is eventually going to have.” 

Yes, here comes another great casino debate about an urban resort.

Which is really just a value-added casino.

Launching #LotteryLeaks

You could call it the motherlode.

It's not often that I receive more than 500 pages of documents via Freedom of Information. But here 'tis.

A compilation of several records from the files of the Gaming Policy and Enforcement Branch, the British Columbia government's regulator of gambling.

Highlights:

Page 3: Investigations of the Lake Country Winfield and District Minor Hockey Association and Comox Valley Raiders Youth Football for unlicensed raffle ticket draws.

Page 28: Allegations of illegal lottery ticket resales by Telco Management (aka CW Agencies) in Vancouver.

Page 138: Prize payment violation by a Fort St. John retailer.

Page 153: Surveillance of a Surrey retailer.

Page 177: Marijuana dealing to teenagers at the Cascades Casino in Langley.

Page 184: Sting operations in Prince George to catch sellers of lottery tickets to minors.

Page 446: Sting operations in Quesnel to catch sellers of lottery tickets to minors.

Page 485: Allegations of selling lottery tickets to minors in Nanaimo.

Page 503: Selling a used Scratch & Win ticket in Pemberton.

As always, I'm sharpening my FOI pencil. I also welcome credible, verifiable information from good sources via email or in unaddressed, brown envelopes to me, c/o Business in Vancouver (102 E. 4th Ave., Vancouver, B.C. V5T 1G2) and The Tyee (P.O. Box 88484, Vancouver, B.C. V6A 4A7).

Gambling crime investigation files

"Vice Minister" Coleman wants more sports betting

Rich Coleman wants single-event sports wagering in British Columbia.

The so-called "3-B" Vice Minister, whose portfolio includes booze, betting and a bordello (yes, read about it here), wrote in April 2010 on behalf of the B.C. Lottery Corporation to Federal Justice Minister Rob Nicholson, supporting a proposed amendment to the Criminal Code to allow single-event wagering.

Windsor, Ont., NDP Member of Parliament Joe Comartin's private member's bill is expected to soon become law with the support of the Conservative majority in the House of Commons and Senate. B.C. is planning a major relaunch of its SportsAction and PlayNow products this summer after hiring Irish sports betting giant Paddy Power.

"Provincial lottery corporations and Canadian casinos cannot compete for the potential Canadian sports betting," wrote Coleman. "Without the ability to offer the types of bets prohibited by the Code, lawful gaming offerings in Canada cannot compete with online gaming offered from outside Canada or Nevada tourist destinations like Las Vegas."

Coleman argued for a "level playing field" for lawful entities to compete with the plethora of online gambling entities that take an estimated $2 billion in bets a year. He said legalized, single-event sports gambling would "bring higher standards in responsible gambling, player protection, fairness, integrity and security to this aspect of the gaming industry as well as offer a lawful alternative to Canadian sports bettors."

"Moreover, legalizing single event betting would allow in depth and current reporting to regulators facilitating the response to suspicious activity. This would provide a much more effective way to detect and prevent attempts to 'fix' sporting events."

The text of the Coleman letter is in an Oct. 11, 2011 briefing note to Justice Minister Shirley Bond, whose portfolio included gambling until Coleman regained the responsibility on Feb. 8, 2012.

It is not known how much revenue this would bring provincial coffers, though it is likely to lead to problems. B.C. has enough problem gamblers to fill B.C. Place Stadium almost three times. Sports gambling on the Internet was pinpointed as a gateway to trouble for teenage males, according to the B.C. Problem Gambling Prevalence Study of 2008.

Five other gambling-related ministerial briefing notes are contained in the Freedom of Information documents obtained by me.

Lottery Retailer Undercover Investigation
Jan. 18, 2012 (updated Jan. 19, 2012)
"(Gaming Policy and Enforcement Branch) Investigations and Regional Operations Division has been carrying out an undercover investigation into lottery retailer theft of winning lottery tickets across the province."

Vernon Casino Patron Robbery
Dec. 2, 2011
"At 8:23 p.m. on Dec. 1, 2011, a female patron was mugged at the Vernon Lake City Casino. A male suspect stole the victim's purse and knocked her to the casino floor. The suspect then fled out an emergency door which triggered a silent alarm."

Lottery Retailer Undercover Investigation
Jan. 17, 2012
"GPEB's Investigations and Regional Operations Division has just concluded a provincewide undercover investigation into lottery retailer theft of winning lottery tickets. On Wed. Jan. 18, 2012, GPEB investigators will interview four individuals in connection with these findings."

DRAFT: Hastings Racetrack Horse Deaths
Dec. 7, 2011
"(GPEB) has received a request for "Veterinary medical reports and/or autopsies regarding all equine fatalities recorded at Hastings Racecourse in Vancouver… The response package contains 20 post-mortem, final reports from the Ministry of Agriculture's Animal Health Centre."

Harness Racing BC Concerns: 2012 Racing Season and Financial Allocations
Sept. 12, 2011 (Updated Dec. 2, 2011)
"On Aug. 29, 2011, Harness Racing BC (HRBC) CEO Doug McCallum wrote to the BC Horse Racing Management Committee, advising that HRBC had voted to reject racing dates the committee recently added to the standardbred schedule for six months in 2012. The tone of the letter suggests HRBC may approach the media with their concerns."

B.C. Government gambling issues notes

Government's gambling secrets

This time last year, Vancouver city hall was the site of the 2011 version of the great casino debate. Council eventually turned down the Paragon Gaming proposal to expand its Edgewater Casino to a site next to B.C. Place Stadium. The company is allowed to relocate the casino, if it wishes. No word yet on whether that will ever happen.

Part of the reason why the Vancouver Not Vegas coalition succeeded in defeating the expansion was new information about gambling-related crime. Now I have more.

While the B.C. government's Liquor Control and Licensing Branch proactively publishes compliance and enforcement reports on which bars and restaurants flout liquor laws, it's not so easy to get information from the parallel agency, Gaming Policy and Enforcement Branch. GPEB thinks the names and locations of licensed gambling and lottery establishments that break laws and regulations should be kept secret, whereas LCLB names names. Why is the government reasonably transparent on the booze side and not on the gambling side? Maybe because the profits are higher in gambling, where the government holds the cards through its legislated monopoly.

Anyway, I had to push hard to get documents about the government's enforcement of illegal underage gambling. I actually had to file a supplementary Freedom of Information request when the Solicitor General's ministry claimed it would take too much time and money to compile a list of violations of the section of the act that makes it illegal to sell gambling products to those under the age of 19.

Funny enough, they did have a list, for the period of Jan. 1-Nov. 29, 2011! And it offers more information (albeit often vague) about B.C.'s gambling problems.

More British Columbia gambling crime reports

PlayNow to be "Paddy-powered"

It's not every day that I receive 950 pages of documents via Freedom of Information.

It's doubly special when it arrives before St. Patrick's Day and concerns one of Ireland's biggest companies which is cheeky enough to show nudity in its corporate reports. I'm referring to Paddy Power, the Dublin-based retail and online gambling giant that is now a key partner with the British Columbia Lottery Corporation.

Read my story here about this timely relationship and the next step in B.C. gambling expansion in the Vancouver Courier.

Paddy Power wants to grow and enter the North American market. BCLC plans to re-launch its PlayNow legal online gambling website this summer (when the 2012 Olympics will occur) with a heavy emphasis on sports and event betting. Just in time for the federal government to relax Canadian gambling laws because of an NDP Member of Parliament's private member's bill.

By summer, it should be legal to bet on a single sporting event in Canada through legal channels, such as BCLC and the other provincial government monopolies. With this comes the legitimate concerns that more teenage boys will find a way to gamble and eventually become addicts. Read about the science here and watch the Gambling Boys documentary here. In addition to health, there are other worries about the proliferation of gambling and the risks of match-fixing, as chronicled by author Declan Hill.

Sports fans in Canada (particularly British Columbia) will be happy. But deficit-plagued governments across North America are revenue-hungry and, when it comes to gambling, tend only to see the benefits side of the ledger, not the costs.

All 950 pages are posted below. The file is so long, that I have included this list of highlights for your ease of browsing (with page numbers according to the Scribd.com tabulation).

Pages 2-3: The B.C. Gaming Policy and Enforcement Branch registration approval for Paddy Power.
Pages 4-5: GPEB regulations (note how sections b, h, j, m, n and p do not apply to Paddy Power).
Page 6: Paddy Power's B.C. registration certificate.
The next 70 pages deal with Paddy Power's software provider, Playtech.
Page 76: 2010 Paddy Power annual report. (Note the iPad motif, a nod to mobile gambling on tablets).
Page 242: 2009 Paddy Power annual report.
Page 378: 2008 Paddy Power annual report.
Page 482: 2007 Paddy Power annual report (inspired by the hilarious Father Ted Channel 4 sit-com. The report contains a well-endowed woman in a wet T-shirt on page 491 and an Elvis impersonator in front of Buckingham Palace on page 493).
Page 586: 2006 Paddy Power annual report. (The company marked its 18th year with a Poker magazine cover marking a Paddy Power-sponsored world record strip poker tournament on page 588, rugby player Donnacha O'Callaghan losing his shorts and a streaker losing more on page 589).
Page 688: 2005 Paddy Power annual report.
Page 774: Playtech news releases.
Page 776: Malta Lotteries and Gaming Authority corporate structure.
Page 777: Paddy Power news release on entering the French market.
Page 781: Article about Online Gaming in Kahnawake from the Nov. 6, 2011 Gaming Law Review and Economics by Kahnawake Gaming Commission lawyer Murray Marshall.
Page 791: internal GPEB email and records about the investigators' trip, travel arrangements and expenses to Dublin to inspect Paddy Power's operations.
Page 810: U.K. Gambling Commission: Licensing, compliance and enforcement policy statement.
Page 834: U.K. Gambling Commission: The Gambling Commission's betting integrity decision making framework.
Page 851: Isle of Man Gambling Supervision Commission: Online Gambling Guidance Notes for the Prevention of Money Laundering and Countering of Terrorist Financing.
Page 943: Credit Suisse Private Banking Security Agreement.


Paddy Power to re-power B.C. Lottery Corporation online gambling