British Columbia National Democratic Party (BC-NDP) leader John Horgan considers it disconcerting that critical information was withheld, in the conflict of interest audit conducted by the BC government on former British Columbia Lottery (BCLC) Chief Michael Graydon. Last Tuesday, Mr. Horgan disclosed that they have obtained government records showing that during his BCLC tenure, Mr. Graydon had a direct hand in recommending the change in revenue-sharing formula between the provincial lottery corporation and casinos with low-limit blackjack and roulette offerings.
Documents requested and obtained by the NDP through the Access to Information Act (Freedom of Information Law), provide proof that Mr. Graydon had put together the business case to support the changes that entitle casino operators to a sixty (60) percent revenue share, as opposed to the previous forty (40) percent share. The reversal of revenue sharing formula favoring casino operators, was accordingly included in a directive issued by the head of the Gaming Policy and Enforcement Branch in March 06, 2014.
Mr. Graydon’s conflict of interest in pushing for the revenue-share changes became apparent, as the former BCLC Chief carried this out, while surreptitiously negotiating employment terms with his current employer Paragon Gaming. The NDP considers it alarming that the audit report conducted in relation to the conflict of interest issue, did not mention Mr. Graydon’s active role in endorsing the said amendment that now benefits his new employer and other casino operators as well. The government audit report stated that it was established that Mr. Graydon was in conflict of interest. However, the audit report also stated that there was no proof indicating that Paragon benefited from Mr. Graydon’s murky ethical lapse.
In last Tuesday’s parliament hearing, NDP critic David Eby directed his inquiry to Finance Minister Mike de Jong. The provincial Finance Minister reasoned that although casino operators put forward the proposed increase in revenue-share during Mr. Graydon’s tenure, the actual approval was made some months after the latter officially resigned from his post at BCLC.
According to Minister de Jong, they proceeded with the proposal because it was for the benefit not only of Paragon but also, of all casino operators. He explained that the objective of the revenue change was to allow operators to increase player base. Doing so resulted to increased customer patronage and subsequently, increase in the overall revenue earned and shared by casinos and the provincial government. In effect, public interest has been served, as more funds now flow to the provincial coffers through the BCLC. Such funds are used for significant educational, health care, public safety and other services that benefit British Columbians.
Minister de Jong added that when the July 2014 audit report established Mr. Graydon’s conflict of interest in connection with his job-switch, they have since instituted a series of control measures to prevent the recurrence of such incidents.
Still, NDP leader John Horgan remarked the government’s decision to give BC casino operators a very profitable break as untimely , considering that most everyone else are into belt-tightening initiatives. Besides, the NDP leader noted that the BC Finance Minister did not support the claims of increased revenues with documentation.