A government review of the B.C. Lottery Corporation finds it delivers programs effectively, and promotes fairness and game integrity, Finance Minister Michael de Jong announced today with the release of the review report.

But the Crown corporation needs better business-planning practices and service provider management to meet government’s operational, revenue and accountability expectations. Government will be working closely with the board and executive of B.C. Lottery Corporation (BCLC) to ensure all recommendations are addressed.

The review found that BCLC has strong oversight tools to manage lottery operations, responsible gambling programs are being delivered effectively, and management and regulation of the gaming industry promotes fairness and game integrity. The corporation generates net win (total gaming revenue after prizes are paid) of approximately $2.1 billion annually, with about half of the revenue going to support priority areas like health care, education and social programs. Overall, BCLC’s operations are aligned with government’s priorities.

The review makes 25 recommendations to BCLC for improvement, including several where the corporation can be better aligned with government’s priority of cost containment, and strengthen BCLC strategic and business planning. Government has accepted and is implementing two recommendations for B.C.’s gaming regulator, the Gaming Policy and Enforcement Branch (GPEB), and one recommendation directed at government with respect to roles and responsibilities of Crown corporation board members.

GPEB regulates the gaming industry in B.C., including BCLC, casinos, lotteries, online, charitable gaming and horseracing. BCLC is a Crown corporation that delivers lottery services through a network of approximately 3,800 locations and 42 gaming facilities operated by contracted service providers comprising of 17 casinos, 18 community gaming centres and seven commercial bingo halls.

BCLC has accepted all review recommendations and is moving quickly to implement them.

The BCLC Crown review was completed as part of government’s commitment to review all major Crown corporations. Government wants to ensure Crowns are making every effort to keep controllable costs to a minimum, and the review process provides an external perspective that helps identify opportunities for improvement.

Quote:

Minister of Finance Michael de Jong -

“This review shows BCLC is generating steady revenues that support public programs and services, community organizations, and local governments that host gaming operations. The recommendations from this review will help improve cost-management and business operations, to ensure the proceeds of gaming continue to benefit the citizens of B.C.”

Quick Facts:

• The Province receives more than $1.1 billion annually ($1.17 billion in 2013-14) in gaming revenue to support healthcare, local governments and thousands of community organizations.
• The Province shares gaming revenue with local governments that host casinos and community gaming centres in British Columbia.
• Since 2001, the Province has provided more than $1.7 billion in gaming grants to community organizations. Of all provinces, B.C. distributed the most government gaming revenue to non-profit community organizations.
• Local governments that host a gaming facility receive 10% of the net gaming revenues from the facility, and have full authority to spend these revenues where there is public benefit to the community.
• In 2013-14 the Province distributed approximately $87 million to host local governments.
• The Province’s Responsible Gambling Strategy creates public awareness of risks associated with gambling, delivers gambling in a manner that encourages responsible gambling and informed choice, and provides treatment and support to those impacted by problem gambling.
• This year, the Province and BCLC are providing approximately $9.5 million for responsible gambling: $6 million for the Provincial Responsible and Problem Gambling Program, $3.5 million for BCLC’s responsible gambling initiatives.
• In addition, the government and BCLC are providing $2 million over five years for the University of British Columbia Centre for Gambling Research.
• British Columbia Lottery Corporation (BCLC) is a Crown corporation reporting to the Minister of Finance.

Learn More:

The BCLC Crown review is available at: https://www2.gov.bc.ca/assets/gov/british-columbians-our-governments/services-policies-for-government/internal-corporate-services/internal-audits/bclc-review.pdf

BCLC’s response to the Crown review is available at: http://corporate.bclc.com/media-centre/bclc-news/news-search.html

A backgrounder follows.

Media Contacts:

Jamie Edwardson
Ministry of Finance
250 356-2821

BACKGROUNDER

Recommendations and implementation status

In total there are 28 recommendations. Government and BCLC have accepted all recommendations as applicable to their organization.

1. BCLC should establish critical success factors for its lottery retailers in order to evaluate performance and report on results.
2. BCLC should ensure that agreements with service providers include comprehensive performance standards.
3. BCLC and the Ministry of Finance should conduct a review of service provider commissions for gaming facilities to ensure an appropriate and effective structure.
4. BCLC should explore potential cost containment opportunities available through the reduction of vendors and platforms.
5. BCLC should evaluate options to improve inventory management systems.
6. BCLC should develop a clear set of criteria for gaming facility procurement.
7. BCLC should conduct a comprehensive post-implementation review of the GMS project that includes benefits realization.
8. BCLC should ensure a consistent approach to administering the VSE program across gaming facilities and eGaming.
9. BCLC should develop outcome based performance measures for responsible gambling.
10. GPEB should develop comprehensive policies and standards to support the integrity of gaming.
11. GPEB should implement a risk based approach to direct its activities in assessing compliance with gaming policies and standards.
12. BCLC’s board and executive should ensure that sufficient, appropriate and timely information is communicated and that strategies are appropriately challenged.
13. Government should reinforce the roles and responsibilities for board members and executive within Crown corporations.
14. BCLC should establish performance measures linked to corporate goals for each business unit.
15. BCLC should establish an IT Steering Committee with representation from key functional areas across the organization.
16. BCLC should develop plans for the decommissioning and replacement of key legacy systems that are expected to be retired.
17. BCLC should ensure that BCP and DRP plans are developed, implemented and periodically tested.
18. BCLC should enhance its tracking and reporting of information security incidents, and communicate incident management policies to BCLC staff.
19. BCLC should ensure that security and privacy requirements for the protection of player information are implemented and followed by service providers.
20. BCLC should ensure that corporate data is classified and that data ownership is fully inventoried.
21. BCLC and the Ministry of Finance should develop a comprehensive cost containment framework.
22. BCLC should standardize its project portfolio management framework including key performance indicators.
23. BCLC should monitor project budget variance by comparing actual project cost to the baseline budget.
24. BCLC should ensure that the business case process is sufficiently rigorous to allow for fully informed decision making and accountability.
25. BCLC should ensure its procurement practices support the achievement of value for money.
26. BCLC should be able to demonstrate the effectiveness of its overall marketing expenditures.
27. BCLC should develop more challenging and comprehensive holdback measures.
28. BCLC should improve planning and oversight over staffing and compensation initiatives.

Media Contacts:

Jamie Edwardson
Ministry of Finance
250 356-2821