- »Manitoba Annual Report Shows Mixed Results
Manitoba Annual Report Shows Mixed Results
The annual 2018-2019 report from the Manitoba Liquor & Lotteries Corporation is out, and the bottom line is positive. It seems that cannabis operations saved the day for revenue. Profits for liquor and gambling were down for the fiscal year.
Even so, the Manitoba government wants to award more of the revenue from video lottery terminals to veterans’ groups going forward.
MLLC and Gambling
It’s important to look at the types of gambling overseen by Manitoba Liquor & Lotteries (MLLC).
The regulatory agency was originally formed in 1993 to oversee lotteries but merged with the Liquor Control Commission in 2013 to become what it is today. Now, it oversees the lottery, which includes online games and video lottery terminals (VLTs), as well as other online gaming via the PlayNow website, including online poker, casino games, online bingo, and some sports betting. There are also two Winnipeg casinos and many hotels, lounges, and legions with VLTs.
Simply stated, the purpose of Manitoba Liquor & Lotteries is “to make the greatest possible contribution to the economic and social well-being of our province”.
2018-2019 Fiscal Year
The actual 2018-2019 fiscal year for MLCC ended March 31, 2019. When those results were made public, the leading numbers were positive. The annual report put a bit of a different spin on them.
Overall revenue was $1,434.8 million, which was up 1.2% ($17.1 million) over the previous year. Net income exceeded $616 million for the latest year, which was up from the $610 million of the 2017-2018 fiscal year.
Casino revenues were up $1.6 million over the previous year, though VLT revenue was down $5.2 million. Officials attributed the VLT number to aging terminals that were in the “decline phase of their lifecycles”. Liquor revenues were down $5.8 million.
Profits, on the other hand, were down for casinos and liquor. Casino profits were down $1.8 million year-on-year with $74 million in the latest report. Liquor made $278 million in liquor profits, but that was down $5.5 million.
The revenue and profit differences came to be with increased costs of sales for the online gaming site, VLTs, and table games in casinos.
However, added revenue came into play with the sale of non-medical cannabis, which was legalized in October 2018. That delivered revenue of $27 million for the year. And net income from lotteries increased from $53 million last year to $61 million in the 2018-2019 year.
Social Responsibility Funding
The overall profit decrease led to less money allocated for social responsibility funding, which is 2% of net annual income. This money goes to organizations and programs dedicated to addiction research and prevention. Social responsibility also includes evaluating product risks and evidence-based evaluations regarding treatment for addiction and harm minimization.
The latest year contributed $8.2 million, as opposed to nearly $10 million in the previous year. And of the amount committed to social responsibility, there was $2 million that went unspent. That is now carried forward to the 2019-2020 year.
Not long after the annual MLLC report emerged, the Manitoba government made a decision to reallocate some of the VLT revenue to afford a larger percentage to veterans’ groups.
Premier Brian Pallister announced, per CTV News, that legions will soon receive 30% of VLT revenue instead of the current 25%. This move was in line with a campaign promise from the September provincial election.
Pallister said that many legions are in serious need of money for facility improvements and potential upgrades. The new level of funding will add approximately $600,000 to overall annual funding.
This may just be the beginning. The Manitoba government is in the process of launching an extensive review of the Manitoba gambling industry, something first discussed in 2018. The study could take more than a year. However, it will help lawmakers decide where gambling should be permitted, how much should be allowed, and what changes need to be implemented to gaming revenue allocations.
First Nations Consideration
The gambling review will also take into consideration a proposal by First Nations to build and operate a casino in Winnipeg.
According to the annual report, revenue for existing Winnipeg casinos increased by $1.6 million from the previous year. VLTs drew more revenue, table game revenue increased, and a new poker room at Club Regent Casino attracted more players. Also, the new bingo terminals proved popular.
Previous proposals for a new Winnipeg casino have been dismissed due to a saturation of the market. But an extensive study might provide more detail and a most positive outlook.
First Nations does operate casinos in Manitoba, but Winnipeg is a more attractive market.