The City of Richmond could soon find itself in the red when it comes to budgeted casino cash for 2016, after an appreciable drop in recent revenues at the Rock.
The city generally makes conservative estimates for its 10 per cent annual share in River Rock Casino and Resort’s net gaming revenues. However, by the end of June, the city has only received $8.84 million, or 49 per cent of the budgeted amount for 2016.
The city’s gaming revenues peaked in 2014, at $21 million. Last year revenues fell to $19.5 million. For 2016, the city budgeted for $18 million. The city’s share of revenue for the second quarter of 2016 is down 12 per cent, compared to the same period in 2015. If the expected total revenue for 2016 isn’t reached, less money will be allocated to its “major capital community facility replacement” reserve account, where surplus money is typically pocketed. It would be the first time since 2005 that revenues didn’t meet expectations.
According to a report from Richmond’s finance department, the dip in revenue is mainly attributed to a decrease in high-limit gambling.
Some high rollers appear to be spooked by a new British Columbia Lottery Corporation policy.
Late last year BCLC, as part of an anti-money laundering initiative, set new conditions for VIP players, including a requirement for high rollers to demonstrate the source of funds used to purchase gaming chips.
The report noted the casino’s overall revenues decreased by 14 per cent in the second quarter of 2016, compared to last year.
Since River Rock opened in 2004, the city has received $167.8 million from gaming revenues, distributed by the Province of B.C; this averages about $14 million per year, although the past four years have well exceeded that mark.
City council has utilized the money in various ways, although the majority of it is said to be used for one-time capital projects and expenditures, as to not impact the city’s operating budget and thus property taxes.
Last year marked the first of 10 years whereby $5 million of gaming revenue would go toward paying off a loan for the new Minoru pool and seniors’ centre, presently under construction.
The city has previously spent $50 million of casino cash for the construction of the Richmond Olympic Oval.
Another $39.1 million has gone to other capital projects.
For 2016 revenues and beyond, council set a new streamlined policy that would set aside budgeted money in a specific manner: General capital reserves will receive 30 per cent of all budgeted revenues, community grants (including about $1.2 million for Gateway Theatre) will get 15 per cent, the Council Community Initiatives account will see two per cent, Minoru pool will get a fixed $5 million and the city will pay for four additional police officers (presently costing $700,000 total). Any remaining money would go to the “major capital community facility replacement” reserve (Grant provision) account. This year the city budgeted $3.9 million for this account, but could see less.
With the new spending policy, social and community grants saw a roughly $600,000 bump (70 per cent) in annual funding, however none of the new money has since been allocated. Presently, about $549,000 sits in a “grant provision” reserve account.
Last year council created its “initiatives” account by allocating $3 million in unallocated reserve money to it. Since then, council has approved $1.2 million in spending for new, unique Canada 150 celebrations in 2017.
