Alberta gambling revenues comparable to energy revenues

Gambling revenues are fuelling Alberta’s government, with income comparable to both oil and gas.

Residents in the Alberta province of Canada like to gamble, and to a lesser extent enjoy throwing back the odd alcoholic beverage, it appears from recent survey results published by the National Post newspaper this week.

So much so, that revenues from gambling (Cdn$1.3 billion) and alcohol (Cdn$700 million) rival those from energy resources like conventional natural gas and crude oil income.

The newspaper reports that in the current budget year royalties from conventional natural gas are forecast to hit only Cdn$1.9-billion this year - way down from the Cdn6 billion of four years ago. Estimated conventional crude oil income for the year is also projected to reach about the same amount.

The numbers continue a trend from the 2009-10 fiscal year, and as the National Post observes, are part of an intriguing trend in which government income from gambling and alcohol consumption is increasingly rivalling that which it derives from the province’s geological wealth.

"It’s a reliable source [of revenue] and they depend on it. That’s the worrisome thing,” Robert Williams, a co-ordinator with the Alberta Gaming Research Institute, told the newspaper, adding that Albertans are already near the top of per-capita gambling in Canada, spending an average Cdn$951 per person in 2009 - far more than almost every other province. [Ed. note: see following story for Stats Canada numbers]

Revenues from alcohol and gambling are key to social program funding, the report notes, with government income from alcohol going into general revenue for spending, while gambling dollars are allocated to the Alberta Lottery Fund, which then distributes the cash among hundreds of groups and agencies in the province.

"You’ve got a real variety of where the money goes,” said Lynn Hutchings-Mah of the Alberta Gaming and Liquor Commission. “The grants do go back to support a lot of volunteer and community projects and initiatives.”

Alberta faces a record Cdn$4.8-billion deficit this year, and revenues from oil and gas are declining.

Bob Ascah, director of the University of Alberta’s Institute for Public Economics, said low natural gas revenues are part of a new reality in the province, at least for the next few years.

He told the National Post that several factors are driving the decline, including falling conventional gas production and growing shale gas activity in the United States, which has reduced U.S. reliance on Canadian gas.

Ascah said he expects to see Alberta taking a considered look at forays by British Columbia, Quebec and some Maritime provinces into online gambling, along with the possibility that Ontario may also be making such a move. Such a venture could provide much needed new income sources that aren’t tied to volatile oil and gas.

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