Pete McMartin, Vancouver Sun January 7, 2011 5:29 AM
Since 1997, the B.C. Lottery Corporation has paid out more than $400 million in gambling revenues to B.C. casino operators so that they can recoup their capital costs. The payments, called facility development commissions, or FDCs, constitute three per cent of the casinos' "net win" -- the revenue remaining after prizes have been paid out. The FDCs, BCLC spokesmen say, are then remitted to the casino operators based on each casino's profitability. All 17 casinos in B.C. have received FDCs. The BCLC and the provincial government consider the payments as performance commissions that, to use the BCLC's terminology, have to be "earned" by the casino operators. In this way, according to the BCLC, casino operators are encouraged to build high-quality facilities. Any way they are viewed, however, FDCs are symptomatic of a provincial government dependent on gambling revenues, and of its interest in seeing those revenues increase. The FDCs, and payments introduced under the Liberal government in 2006 called Accelerated Facility Development Commissions (AFDCs), have gone toward paying down a significant portion of casinos' capital costs. Since 1997, B.C. casinos have spent a total of $960 million on capital costs. The $400 million in FDCs and AFDCs paid out so far (the exact figure is $400,101,352.55) constitutes 42 per cent of all capital costs for casinos in the province. And since FDCs and AFDCs are based on a percentage of the revenue generated by casinos, and since that revenue has increased dramatically in the last decade, the amounts of FDCs and AFDCs "earned" annually have grown proportionately. According to figures supplied by the BCLC, in 2001-02, casino operators received $16.5 million in FDCs. In 2009-10, they received $40 million.(more)
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