HomeMy WebLinkAboutCRPS-08-154 - Increase of Licensing Fees for Bingo EventsI L REPORT 74
Report To: Councillor B. Vrbanovic, Chair and Members of the Finance
and Corporate Services Committee
Date of Meeting: September 29, 2008
Submitted By: R. Gosse, Director of Legislated Services/City Clerk
Prepared By: Patricia Harris, Manager of Licensing
Ward(s) Involved:
Date of Report: September 19, 2008
Report No.: CRPS-08-154
Subject: INCREASE OF LICENSING FEES FOR BINGO EVENTS
RECOMMENDATION:
That the fee per bingo event being charged to organizations conducting bingo in Kitchener be
increased from $120.00 to $125.00 for licences coming into effect January 1, 2009, and further;
That the fee per bingo event being charged to organizations conducting bingo in Kitchener be
increased from $125.00 to $130.00 for licences coming into effect January 1, 2010.
BACKGROUND:
In May 2007, the Alcohol and Gaming Commission of Ontario put in place a new bingo revenue
model across the province. Licence fees are no longer based on the amount of prizes awarded,
but are now a flat fee per session. A municipality may charge a licence fee per session of up to
$165.00.
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Prior to July 31, 2007, two bingo halls operated in Kitchener. On July 31, 2007 Bingo Country
located at 1356 Weber Street East was sold to Pentagon Gaming Inc. who owns K-W Gaming
Centre located at 501 Krug Street which resulted in the closure of Bingo County on Weber
Street. All charitable organizations that were operating bingo at Bingo Country have been
relocated to the hall at 501 Krug Street so their ability to raise much needed funds has not been
affected. This had a negative impact on the city, through lost bingo licensing revenue and a
positive impact on the charities and hall operator through increased revenues.
Although Bingo Country closed, the workload for licensing staff did not decrease significantly
because the same numbers of charities continue to operate in Kitchener and there has been an
increase in reporting required by the new revenue model.
The workload of licensing staff has increased slightly this year since staff began overseeing the
scheduling of bingo events. This was done to allow for all groups to be treated equally and
ensure that all groups have the same ability to raise funds for their respective charities. In 2009
each organization will hold 2 bingo sessions per month unless they have requested fewer
sessions.
K-W Gaming Centre, located at 501 Krug Street is one of the most profitable bingo halls in
Ontario. There are currently 67 non-profit and charitable organizations holding bingo at K-W
Gaming Centre and raising funds for their particular charity.
The following chart shows the average revenue received since the revenue model came into
effect.
Year
Average Share
Average Total for Month
May 2007 (two halls
operating)
$378.00/event
$1512.00 (4 events)
2007 (one hall operating)
$884.00/event
$1768.00 (2 events)
2008
$969.00/event
$1938.00 (2 events)
Mississauga
$165.00 per event
The current earnings show an increase of $169.00 per month compared to a year ago. An
increase of $5.00 per session for licence fee will reduce monthly revenue by $10.00. This is
based on the current event shares. The Charity Association and hall operator have the ability to
increase the average share through increased attendance and because the licence fee is a flat
fee, the City would not benefit from any increase in increased revenue.
Ten percent of all bingo wins (gross receipts minus prizes) is legislated to be set aside for a
marketing fund in each hall. The purpose of the fund is to support the establishment of a
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marketing plan and the marketing activities it calls for. Approximately $20,000/month is
deposited into this fund each month to be used to increase awareness of the bingo hall, with the
hope of increasing patron attendance, therefore increase revenue.
In August 2008, approximately $100,000.00 was given back to the charities and hall operator
from the marketing fund because the money was not utilized for marketing purposes. It would
appear that this fund is not being used to its full potential.
A recent survey of other municipalities indicate that licence fees range from $90.00 to the
maximum $165.00 per event with a majority of municipalities charging the maximum fee.
MUNICIPALITY
LICENCE FEES CHARGED
London
$90.00 per event
Cambridge (average share approx. $750.00)
$100.00 per event
Hamilton
$165.00 per event
Stratford
$165.00 per event
Windsor
$165.00 per event
Mississauga
$165.00 per event
Markham $165.00 per event
Ottawa $165.00 per event
FINANCIAL IMPLICATIONS:
Staff is proposing a licence fee increase of $5.00 per session beginning January 2009 and a
further $5.00 increase in 2010. This increase will have a slight impact on the charities.
The bingo hall has seen a positive impact due to the new revenue model and any changes in
the fee will not have any effect on their operations.
A flat $125.00 licence fee per each bingo
approximately $8,360.00 for 2009 which will
continue to stabilize lottery licensing revenue.
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session will result in a budget increase of
assist to offset increased costs and help to