Industry Reports

Evaluations Following Gateway Casinos Strike Open Discussion about Potential Tax Hike

A total of 19 weeks of casino strike came to an end a couple of weeks ago and Gateway Casinos guaranteed significant improvement to the work conditions for almost 700 workers. However, this brought with itself the hard hit of sinking gambling taxes, affecting Kelowna the least out of all four communities in the meantime.

The inevitable impact of the casino workers picketing was something the gaming field feared ever since the beginning of the strike. Since they took matters to the streets, gaming facilities they work at were rendered without a crucial workforce to maintain operation afloat. Now estimations have been done in an attempt to see how far this damage goes when it comes to gambling revenue and its benefits for Kamloops, Kelowna, Penticton, and Vernon.

Impact of the Extensive Picketing

It has been confirmed that the town of Vernon which took the hardest blow of CA$400,000 in gambling payments losses as a result of the strike will not be able to compensate for this amount by increasing the gaming taxes. The region saw only CA$162,000 generated by the gaming operation which continued. What should be pointed out is that the city of Kelowna along with the remaining three communities utilize funds generated through gambling operation for the benefit of various beautifications around the town.

Some 10 percent of the gambling taxes go to reconstructions and refurbishing around town in the form of Host Local Government Payments. In the meantime, this was also the town seeing the lightest impact as it lost only CA$38,000 over fiscal 2018 Q2 of the province. Kamloops was deprived of CA$200,000 and managed to bag only CA$520,000 over the first three months of the casino workers strike. Its operation was boosted by Chances Casino which remained open for casino patrons.

Penticton was the third city which took the blow as a result of the picketing, witnessing some 64-percent surge which equals CA$354,000. This is how at the end of the first three months of the strike the city was able to write down payments of CA$208,000 only. Both Vernon and Penticton rely solely on Gateway Casinos operation when it comes to gambling offerings and when there is a strike of this magnitude, it affects them.

Vernon is the City Hit the Hardest Out of All Four

Tax hiking was one of the proposed approaches for eliminating the negative impact of the long strike, but upon further estimations, there is no use of such. The City Council of Kamloops weighed the possibility of increasing taxes for some time, but according to Dave Hallinan, the community’s Planning and Procurement Manager this is not mandatory for the time being.

In order to avoid this, the city could simply postpone some of the upcoming projects for development to next year, when the budget will be available to cover them. Meanwhile, there are city projects which will inevitably take the blow and this will call for seeking investment elsewhere.

As for Vernon, while the casino strike was still in progress local officials were acting accordingly and making projections as to reduce the negative consequences of it. Lake City Casino is the venue overseen by Gateway Casinos in the region.