Bill S-226 devastating for small hotels

Bill S-226 could sound the death knell for hundreds of small hotels in the prairie provinces.

If this federal Senate private members’ bill restricting the use of video lottery terminals (VLTs) to casinos, race courses and betting theatres comes into law, eliminating the machines from restaurants, lounges and taverns, it would be devastating for small hotels in rural Alberta, Saskatchewan, Manitoba, and to some extent Quebec and The Maritimes.
That’s the view that came through loud and clear at the recent HOST Saskatchewan show in Regina last month. 

Senator Jean-Marie Lapointe’s Bill S-226 has been around since April, 2003, and it came close to being passed during the last session of parliament. The bill had been passed in the Senate, had received second reading in the House of Commons, and had one more vote to become law when Prime Minister Stephen Harper prorogued parliament last year.  And it has been re-introduced into the Senate this spring.

It’s an issue that’s being addressed at the ministerial level, at the federal and provincial association level and at the grassroots level as hoteliers have been asked to write their local MPs and senators. The associations have also hired a lobbyist to represent their interests in Ottawa.

Lance Grosco

“It’s life or death for us,” says Lance Grosco, chair of the Saskatchewan Hotel and Hospitality Association. Grosco, along with his wife Joy and son Harrison, owns the Duck Lake Hotel in Duck Lake, SK, midway between Prince Albert and Saskatoon.
 
His message is not one that would resound in Ontario or BC.  Those larger provinces don’t have VLTs in small hotels. Typically, these small rural establishments have a lounge and restaurant with VLTs, plus a few guest rooms. They often have an off-license liquor store as well. VLTs were introduced as a lifesaver for these family-run businesses, whose numbers were decimated by smoking bans in the early part of this decade.

“This would cause considerably more devastation than the smoking issue.  We lost about 60 hotels over the smoking issue, and easily 100 to 125 would probably shut their doors in the first two months if this legislation were to go through.  That is the reality,” says Grosco.

“We are luckier than most because we have a pretty good business, but we would lose easily 50 per cent of our business.  Even our off sales would be cut down, because people would not stop in to make a purchase on their way to the casinos in Prince Albert or Saskatoon.

“VLTs were originally set up to help small rural hotels – thinking locally and catering to the 99 per cent of people who enjoy gambling but don’t have a problem.

“We have five machines and they provide a nice chunk of money for us.  There are a lot of small Mom and Pop operations that get as much from their VLTs as their hotels.  [Patrons] would not come if there were no machines.”

There are 1,035 VLT retailers (hotels, lounges and restaurants with licensed premises) in Alberta, 634 in Saskatchewan and a similar number in Manitoba. In each province VLTs are operated by the provincial gaming authority. They are highly regulated and limited to age and access-restricted locations. In Alberta, the machines provide annual revenues of more than $675 million, while in Saskatchewan the number is $185 million. This money is used to fund community programs under the Alberta Lottery Fund in Alberta, and for general government revenue in Saskatchewan.

At press time, possibly due to the pressure of letter campaigns by the provincial hotel associations, the Hotel Association of Canada, and others, the debate on Bill S-226 had turned from an ethical battle to a jurisdictional one, Tom Mullin, president and CEO of SHHA told CLN.

In 1985, the federal government gave jurisdiction over gaming to the provinces. Bill S-226 would be taking that away. The transfer involved a one-time payment of $100 million to the Canadian government. The debate is whether the federal government can amend the Criminal Code to pass the bill, and whether there are any loopholes in the gaming agreement.

“This legislation hurts the very fabric of our community,” says Grosco. “I paint a bleak picture. If this legislation passes, hotels will be dropping like flies.”

-- Colleen Isherwood, Editor

For more on HOST Saskatchewan go to Bill 226 concerns aired at HOST Saskatchewan and Lorane Gray retires from the SHHA.