Here’s what happened when Richmond, B.C.’s small Bridgeport Casino expanded to become the River Rock Casino. Vancouver Sun, October 25, 2007. Also see “Richmond sees rash of casino-related crime” on canada.com.
Casino a crime magnet: RCMP
The opening of River Rock Casino in Richmond has led to a quadrupling of casino-related crime and allowed new organized crime groups to gain a foothold in the city, according to an internal RCMP report obtained by The
… River Rock opened in June 2004, replacing a smaller casino run by Great Canadian on Bridgeport Road in Richmond. The report found no evidence that River Rock has increased criminal activity in the 500-metre radius around the facility. But calls for service at the casino itself were up sharply.
In the first six months of 2003, according to the report, the RCMP received 32 calls for service from the Bridgeport casino. In comparison, during the first six months of 2006, the Mounties received 137 calls from River Rock — a four-fold increase.
Those calls included:
— 20 cases of impaired driving; 10 cases of disturbing the peace;
— Seven cases of uttering threats;
— Six cases of fraud;
— Six cases of assault;
— Three cases of cocaine possession.
Blank said it’s not fair to compare the two casinos, because River Rock is a full-service resort — with a hotel and theatre — whereas Bridgeport was only a gambling venue. He said River Rock gets about 15,000 visitors a day, compared to 1,000 at the old casino.
At a news conference in August, Richmond RCMP Supt. Ward Clapham said his detachment was struggling to keep up with crime at River Rock. Clapham said three of five kidnappings in Richmond this year have involved possible gambling-related extortion and two of the 11 kidnappings in 2005 were gambling-related. There have also been at least two suicides in Richmond related to gambling debts, he said.
Long video, but engaging and worth watching.
Goodman is a Professor of Economic Development, Urban Planning and Environmental Design at Amherst in Massachussetts. He was retained in the early 90s by the Ford Foundation to carry out a study of the economic costs and benefits of legalized gambling. The original study was done for local governments who were trying to decide whether to allow gambling expansion.
The video of Goodman was is from a 2008 public hearing for a proposed gambling expansion in Philadelphia. Goodman makes clear that he has no moral objections to gambling and is himself a gambler. His study of over 200 towns has shown that with very few exceptions the introduction of gambling has had serious adverse affects on business.
Click here for a summary of his evidence before Congress (pdf). It was published in the Fall 1995 edition of Economic Development Review.
This post is for those interested in some of the more technical details surrounding the Edgewater Casino application. To read the full application, visit the City of Vancouver site.
1. No Adequate Notice to Public
The application before Council is described as a re-zoning application by PavCo (crown corporation BC Pavilion Co). Included, but not detailed in the public notice, is a second application by Edgewater Casino for a by-law amendment licensing approximately 1000 new slot machines and 75 new slot machines; Notices mailed only to residents within a 2 block radius of the project, etc.
No notice to public of scale of expansion: gaming floor equivalent to two NFL football fields (114k sq. ft)
2. Due Diligence gaps
a) Calculation of expected revenues only, no calculation of expected costs–policing, counseling, housing homeless;
b) No report on mental health and addiction issues/social ills;
c) Policing report is one paragraph long. Only one sentence respecting organized crime, money laundering. No estimate of impact or cost to manage. No weapons policy or enforcement provisions in a casino/hotel/sports complex. No reference to the RCMP report cautioning about extreme vulnerability to organized crime and infiltration.
d) Background check of Paragon Gaming–corporate profile misrepresented in public materials. No assessment of suitability to operate a major project of this scale.
3. Key Information Relevant to Public Review
PavCo represents that there is no risk to the taxpayer in the corporate structure of the project; however:
The BC Lottery Corporation Facility Development Commissions (FDC) and Accelerated Facility Development Commissions (AFDC) cover roughly 42% of casino capital development expenses.
Do FDC’s and AFDC’s extend to ancillary buildings such as hotels, restaurants, theatres, and parkades?
Projections indicate the cost of the complex will be approximately $450 million. 42% is almost $190 million in public money. The BC Lottery Corporation has budgeted for capital expenditures of $346 million over the next 3 fiscal years. What percentage of that will go into the Edgewater development?
a) Public disclosure of all financial commitments
b) Public disclosure of the deal structure: Is there an incentive to overbuild? How are expenses calculated and netted out?
4. Irregularities in the BC Lottery Corporation and PavCo Bid Process
a) BC Lottery Corporation board chair Richard Turner purchases shares in Paragon Gaming (operating in Alberta) in 2003. Share purchase violates board code of conduct, and is not disclosed until 2005.
b) In late 2005 Turner resigns from BCLC board. Summer 2006 Paragon Gaming purchases Edgewater Casino out of bankruptcy and installs Turner on the board of Paragon.
c) Fall 2008, City plan for Northeast False Creek is amended to permit major casino at request of PavCo.
d) March 2009, PavCo puts out an RFEI (Expressions of Interest), with an 18 day window. Only two respondents, including Paragon, reply. While the Paragon bid is before PavCo during the RFP phase one month later, Turner issues a $50k cheque to the BC Liberal Party. Paragon Gaming is the successful bidder
e) Autumn 2009 Turner places a phone call to Minister Kevin Krueger advising that Paragon will withdraw if the roof is not built per plans.
What were all the communications between Richard Turner and PavCo in the period 2005-2009?
5. Criminal Concerns
2006: Richmond loan shark Lily Li is murdered. Evidence emerges at trial that loan sharks operate on shifts 24/7 inside River Rock Casino;
2009, January: RCMP special unit IIGET (Integrated Illegal Gaming Enforcement Team) issues a report to government warning of “extreme vulnerability” of casino industry to organized crime–money laundering, infiltration, loan sharking. No resources to investigate suspected money laundering. Concerns expressed about perception of conflict of interest and corruption. Most information redacted from report.
2009. February: IIGET disbanded
2010/ Summer: BC Lottery Corporation fined by FINTRAC for repeated failure to monitor suspicious transactions. First fine of its kind in Canada.
2010/August-October: CBC investigates over $8 million in suspicious transactions at 2 casinos in Metro Vancouver, including $460k in 20’s in plastic bags, and a suitcase with $1.2 million in casino chips.
Insp. Baxter, head of Proceeds of Crime Unit, calls transactions suspicious. Solicitor General Rich Coleman, also responsible for gaming, disagrees that transactions are suspicious and publicly disagrees with Baxter.
Conclusion: Weak BCLC enforcement of rules of conduct and poor compliance and oversight of casinos, leaving the industry vulnerable to uncontrolled criminal conduct and potentially to infiltration.
6. Paragon Gaming: Parent Co of Edgewater
All other projects and operations are on First Nations reserves in the US and Canada. All are small market. No international tourism expertise. No expertise with the Asian market.
BC’s model: Closed door bidding process with a single (geographically pre-selected) casino applicant, and no public input.
By contrast, Missouri recently awarded a casino license in an open, public, competitive bidding process, with multiple applicants and more than one physical location. The successful bidder demonstrated both strong community support via a referendum, and strong local roots in the community. Paragon Gaming was one of the bidders in this process, but was unable to garner a single vote of support from the Missouri Gaming Commission.
US small market casino operations have notoriety, particularly vis-à-vis political corruption. In more than one instance, individuals with some connection to Paragon Gaming or their advisors have been implicated, charged, or convicted on political corruption charges. A detailed background check on Paragon Gaming is recommended, including investigation of the relationship of Paragon principles with Milton McGregor and Robert Sigler (shareholder in Paragon Gaming Missouri) of Alabama.
Above, before Edgewater mega-casino (and before the white stadium roof was replaced by spiky retractable roof). In the photo directly above, you can see the existing Edgewater casino which occupies the green glass building in the forefront, also known as the Plaza of Nations built for Expo ’86. The City plans to allow the demolition of this glass building. The new Edgewater Casino has triple the capacity of the current operation.
Below, planned Edgewater mega-casino butted up against the Cambie bridge end of BC Place Stadium. It looks as if the huge stadium girders have been downplayed in these drawings. Don’t be fooled; it’s enormous. It only looks modest because it’s adjacent to a massive stadium.
A picture is worth a thousand words. What are yours? Write the Mayor and Council and tell them what you think. Public hearings are this Thursday, Feb. 17, sometime after 7:30 pm, so don’t delay.
Three members of our Vancouver Not Vegas! Coalition speak out against the proposed Edgewater mega-casino.
This casino plan can be defeated. It’s looking promising, but we need your help to win. No Dice!
1. JOIN our website – subscribe on the right-hand sidebar. This allows us to send you (infrequent) info & appeals for help.
2. Sign up to speak City Council at the Feb. 17 public hearings – Tell them “No Dice.” Dial 311 or 604-873-7191. Or simply come sit in the gallery with us.
3. Write to Vancouver Mayor and Council. Use the City of Vancouver feedback form or Click here to write your own email. email@example.com, firstname.lastname@example.org, email@example.com, firstname.lastname@example.org, email@example.com, firstname.lastname@example.org, email@example.com, firstname.lastname@example.org, email@example.com, firstname.lastname@example.org, email@example.com, firstname.lastname@example.org, email@example.com, firstname.lastname@example.org
4. Sign our Petition.
5. Volunteer! Send us an email.
Thank you, Vancouver! This is OUR home. Don’t let them roll the dice on our city’s future.
Position Statement of the Vancouver Not Vegas! Coalition
Our position: On February 1, 2011, Vancouver City Council passed a motion calling for a full public review of gaming in the Province of BC.
1. The Vancouver Not Vegas! Coalition asks Vancouver City Council to pass a moratorium on the granting of new gaming licenses in Vancouver until that public review has taken place;
2. We further ask that City Council sever the appended Edgewater application for increased slot machines and gaming tables from the PavCo Re-Zoning Application of 777 Pacific Boulevard. We ask that the Edgewater application be re-commenced ab initio with proper notice to the public of the extent of the expansion sought.
This is the first anniversary of the Olympics Opening Ceremonies. Today Shane Koyczan joins our coalition against the Edgewater mega-casino and against gaming expansion in Vancouver and in BC in general. You probably remember Shane’s electric slam poetry performance at the 2011 Games ceremony – if you don’t, you can see it below. Thanks to Shane for lending his name to this fight. “We are More!”