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Table of ContentsThe Lotteries Commission of New Brunswick
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The Honorable Norman Betts,
Minister of Finance
Province of New Brunswick
We are pleased to submit to you the Annual Report of the Lotteries Commission of New Brunswick for the fiscal year ended March 31, 2000.
J.E. Mallory
Commissioner
E.L. MacKinnon
Commissioner
The New Brunswick government does not directly operate lotteries but is a shareholder in the Atlantic Lottery Corporation (ALC) and in the Interprovincial Lottery Corporation (ILC). The Atlantic Lottery Corporation is a jointly owned corporation of the four Atlantic provinces. In 1999-2000, it offered in the New Brunswick market the following products: video lottery, breakopen games, the regional online games: "Pik 4," "Atlantic Choice," "TAG," "Super TAG," "Proline" and the instant ticket games: "Auto Plus," $1 "Scratch and Win," $2 "Extended Play," $5 "Super Pack," "Loto Bingo," "Loto Crossword" and a Special Occasion game. The ALC also handles and markets the products of the Interprovincial Lottery Corporation. The ILC is a jointly owned corporation of the 10 Canadian provinces. In 1999-2000, its products were "Super 7," "Lotto 6/49," and "Mega Millions" - all national lottery games.
The deputy minister of Finance and the president and CEO of the NB Investment Management Corporation represented the Province on the board of directors of the Atlantic Lottery Corporation. The president and CEO of the NB Investment Management Corporation also represented the Province on the board of directors of the Interprovincial Lottery Corporation.
Licensing regulations govern the licensing of all bingos, raffles, etc., in the province. The regulations are designed, in part, to ensure that the money raised from these sources is used for community, non-profit benefit and to ensure that the public is treated honestly and fairly. The Criminal Code of Canada requires that such activities be licensed by the Province.
A total of $21,225 was collected in licensing fees for the year in question.
On March 23, 2000, the New Brunswick government announced a restructuring of departments and changes in some programs. As a result, the responsibility for licensing and enforcement was transferred from the Revenue Division of the Department of Finance to the newly-formed Department of Public Safety. The change took effect April 1, 2000. The responsibility for gaming policy continues to reside with the Lotteries Commission and Department of Finance.
The investigations can vary greatly in terms of complexity and duration. Some may involve a brief inspection of an approved video lottery site, to assure that the site is in compliance with the rules and to assure that there are no illegal gambling products. Others may involve a lengthy site approval process or an in-depth undercover investigation and background check arising from a complaint. These investigations can, at times, last a period of weeks. The unit also completes routine inspections of bingo sites licensed to charitable non-profit groups, and inspectors must also investigate complaints in regard to these operations.
The following lists the types of gaming inspections/investigations conducted during the 1999-2000 fiscal year:
"The number of identified violations as a percentage of investigations/inspections by Revenue Division staff."
From the investigations/inspections table, covering 1999-2000 the ratio of violations indicates a very high degree of compliance for gaming activities conducted in the province.
In 1999-2000, earnings from two separate instant types of games were earmarked for a trust fund in support of the arts ($700,000) and a trust fund in support of sport ($500,000). The first $10 million in video lottery earnings was earmarked for the Environmental Trust Fund, in accordance with legislation.
New Brunswick's share of the 1999-2000 net profit of the Atlantic Lottery Corporation was $86,784,737. This was a decrease of 0.1% over the previous year. New Brunswick earned 25.6% of Atlantic Lottery Corporation (ALC) profits.
Total ALC lottery sales in New Brunswick in 1999-2000 were $244.4 million. The following games accounted for the indicated percentage of the total:
| Video lottery | 44.5% | |
| Scratch 'n Win games | 20.5% | |
| Breakopen ticket games | 4.8% | |
| Online games (6/49, Super 7, TAG) | 30.1% |
The regulation requires that prize payouts from the video lottery program not be less than 80 per cent and not more than 90 per cent of the dollars played in the video lottery machines.
Note: For 1999-2000, some video lottery game programs have slightly exceeded the maximum allowable 90% payout.
The regulation was amended in fiscal year 2000-2001, making the maximum allowable percentage payout 91%. This change will enable continued operation of these games but it is not expected to have an impact on player behaviour.
31 MARCH 2000
LOTTERIES COMMISSION OF NEW BRUNSWICK
NOTES TO FINANCIAL STATEMENTS
31 MARCH 2000
1. Summary of significant accounting policies
New Brunswick's share of Atlantic Lottery Corporation Inc. profit2. Contributed surplusThe profit of Atlantic Lottery Corporation Inc. is distributed to each of the four Atlantic Provinces or their lottery agencies. The Lotteries Commission of New Brunswick's share for the current year represents the calculated profit of the Atlantic Lottery Corporation in New Brunswick as determined by the Amended and Restated Unanimous Shareholders' Agreement signed August 8, 2000.
Payments to the Province of New Brunswick
The Lotteries Commission of New Brunswick remits the profits it receives from Atlantic Lottery Corporation Inc. to the Province of New Brunswick. Beginning in 1999, Atlantic Lottery Corporation began advancing these funds during the month rather than paying the full amount in the subsequent month.
The profits from certain types of lotteries have been designated as revenue for specific trust funds operated by the Province of New Brunswick. Annual lottery profits designated for the Arts and Sport Development Trust Funds have each been set by the Province at a minimum of seven hundred thousand dollars and five hundred thousand dollars respectively. Video lottery profits paid annually to the Environmental Trust Fund have been capped by the Province at ten million dollars.
The Lotteries Act provides that the First Nations may be paid 95% of all profits received from the Atlantic Lottery Corporation Inc. for the operation of video lottery on reserves having agreements with the Province. Where these agreements are in place the Province also rebates all provincial earnings from the sale of breakopen tickets sold on reserves. As of 31 March 2000, five First Nations have signed agreements involving lottery revenues: Fort Folly, Oromocto, Woodstock, St. Mary's and Burnt Church. The Province has one other signed agreement which is with Madawaska-Maliseet. It does not, however, receive any lottery revenues by way of the agreement.
Investments
The New Brunswick government does not operate any lottery but the Province is a shareholder in Atlantic Lottery Corporation Inc. and in the Interprovincial Lottery Corporation. Atlantic Lottery Corporation Inc. is a jointly-owned corporation of the four Atlantic provinces and is responsible to develop, organize, undertake, conduct and manage lotteries in Atlantic Canada. Atlantic Lottery Corporation Inc. also markets and handles regionally the products of the Interprovincial Lottery Corporation. The Interprovincial Lottery Corporation is a corporation jointly owned by the ten Canadian provinces.
The investments in Atlantic Lottery Corporation Inc. and Interprovincial Lottery Corporation are carried at cost. Net profits of these corporations are distributed annually to the shareholders.
This amount represents funds paid by the Province of New Brunswick on behalf of the Lotteries Commission of New Brunswick to Atlantic Lottery Corporation Inc. and the Interprovincial Lottery Corporation in exchange for share capital.3. Other revenue
The Province of New Brunswick requires that charitable/non-profit groups pay a small fee for their licenses for gaming activities such as bingo, raffles etc. Fines issued under the Lotteries Act relating to the video lottery program are also included in this account.4. Statement of transactions with the Province of New Brunswick
5. Contract dispute
The New Brunswick Court of Appeal overturned a Court of Queens Bench decision which had favoured the Lotteries Commission in a court action brought about by another party. The amount recorded is the actual amount of the costs of the award, damages, interest and disbursements.
This schedule includes only active games at March 31, 2000.
