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BCLC saves money by spending more

By Contributor
December 18th, 2014

It appears the way the B.C. Lottery Corporation saves money is by spending more.

The BCLC tried saving money by offering buyouts, but the planned failed miserably when more employees took the gold-plated offer, that cost the crown corporation $25 million.

BC Minister of Finance Michael de Jong said Wednesday the lottery corporation restructuring exercise in March designed to cut operating costs by $20 million ended up costing $25 million.

The restructuring had corporation managers offering early retirement and severance packages to employees 50 years and older to reduce terminations.

However, more than the 68 people thought to take the offer — 142 — took advantage of the offer of 18 months severance for some employees, regardless of their length of service.

“Not a particularly shining example of effective execution,” said de Jong. “All in all the report reveals and confirms that there were some important failings within the HR management section of the corporation.”

The review included 25 recommendations for the lottery corporation, including several aimed at strengthening business and management planning and saving money.

The review found that BCLC has strong oversight tools to manage lottery operations, responsible gambling programs are being delivered effectively, and management and regulation of the gaming industry promotes fairness and game integrity.

The corporation generates net win (total gaming revenue after prizes are paid) of approximately $2.1 billion annually, with about half of the revenue going to support priority areas like health care, education and social programs.

Overall, BCLC’s operations are aligned with government’s priorities.

“This review shows BCLC is generating steady revenues that support public programs and services, community organizations, and local governments that host gaming operations,” said de Jong.

“The recommendations from this review will help improve cost-management and business operations, to ensure the proceeds of gaming continue to benefit the citizens of B.C.”

The review makes 25 recommendations to BCLC for improvement, including several where the corporation can be better aligned with government’s priority of cost containment, and strengthen BCLC strategic and business planning. Government has accepted and is implementing two recommendations for B.C.’s gaming regulator, the Gaming Policy and Enforcement Branch (GPEB), and one recommendation directed at government with respect to roles and responsibilities of Crown corporation board members.

GPEB regulates the gaming industry in B.C., including BCLC, casinos, lotteries, online, charitable gaming and horseracing.

BCLC is a Crown corporation that delivers lottery services through a network of approximately 3,800 locations and 42 gaming facilities operated by contracted service providers comprising of 17 casinos, 18 community gaming centres and seven commercial bingo halls.

BCLC has accepted all review recommendations and is moving quickly to implement them.

Quick Facts:

  • The Province receives more than $1.1 billion annually ($1.17 billion in 2013-14) in gaming revenue to support healthcare, local governments and thousands of community organizations.
  • The Province shares gaming revenue with local governments that host casinos and community gaming centres in British Columbia.
  • Since 2001, the Province has provided more than $1.7 billion in gaming grants to community organizations. Of all provinces, B.C. distributed the most government gaming revenue to non-profit community organizations.
  • Local governments that host a gaming facility receive 10% of the net gaming revenues from the facility, and have full authority to spend these revenues where there is public benefit to the community.
  • In 2013-14 the Province distributed approximately $87 million to host local governments.
  • The Province’s Responsible Gambling Strategy creates public awareness of risks associated with gambling, delivers gambling in a manner that encourages responsible gambling and informed choice, and provides treatment and support to those impacted by problem gambling.
  • This year, the Province and BCLC are providing approximately $9.5 million for responsible gambling: $6 million for the Provincial Responsible and Problem Gambling Program, $3.5 million for BCLC’s responsible gambling initiatives.
  • In addition, the government and BCLC are providing $2 million over five years for the University of British Columbia Centre for Gambling Research.
  • British Columbia Lottery Corporation (BCLC) is a Crown corporation reporting to the Minister of Finance.

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