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HomeMy WebLinkAboutCD-20-87~~~.) ,.,,tenn ~.~.~,~ w ~~Y~ ~~J1 TOWN OF NEWCASTLE REPORT File #__~~s Res . # ?, ~ ~~~ By-Law # ~ '" NESTING: DATE: GENERAL'.PURPOSE AND ADMINISTRATION COMMITTEE MAY 4, 1987 T #: CD-2o-87 SUBJECT : FILE #: 56.12.5. REPORT 'ON LOTTERY LICENSING CONSIDERATION OF A REVISED LICENSING BY-LAW AND LICENCE FEE RESTRUCTURING RECOMMENDATIONS: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. That Clerk's Report CD-20-87 be received; and 2. That the fees relating to Lottery Licensing be increased to the levels established in the revised licensing by-law; and 3. That the Clerk be authorized to implement the amended procedures respecting the licensing of "Nevada Club Instant Win" ticket sales; 4. That the revised by-law entitled "a by-law respecting lotteries" be recommended to Council for passage. BACKGROUND AND COMMENT: The Council of the Town of Newcastle enacted its first lottery licensing by-law in March 1974. The fees and procedures have not been altered since that time, although the Province has introduced additional regulatory controls. It is appropriate to review the lottery licensing process and present a new licensing by-law for Committee's consideration at this time. We have recently been advised, that the licensing of "Break-open Tickets"(Nevada Club) has been expanded to permit local Continued ...../2 Report CD~Y20-87 - 2 - May 4, 1987 ~ ~ .~(~~) councils at their discretion, to authorize the issuing of lottery licences for Nevada Club ticket sales to groups who do not own or lease a premise on a long- term basis. In a letter dated March 6th 1987, the Minister states that he has "been made aware bf a number of charitable and community spirited groups which would otherwise qualify for Nevada ticket licence, but do not own or regularly occupy premises as required by Section 3 of the terms and conditions. ..." "In order to alleviate the hardship created for some charitable groups, I hereby authorize a municipal council, in its own discretion, to grant an exemption to the requirements of Section 3, 4(b) and 17(b) of the terms and conditions provided that: (a) the licence applicant cannot meet the requirements of Section 3; or (b) the licence applicant meets the requirements of Section 3 but it is impractical to sell tickets from that location; (c) the sale of tickets is limited to ONE location only; and (d) all other sections of the terms and conditions are complied with." The draft by-law attached now contains reference to Nevada Club licensing under the "fees sections" and reflects the fee structure authorized by the Province. The Lottery schemes authorized by By-law 74-30 have been reviewed and the fees have been adjusted upward as follows: 1. The minimum licence fee is increased from $2.00 to $5.00. This covers all licenced activities where the aggregate value of the prizes does not exceed $500.00; 2. The fee applicable to all licenced activities where the aggregate value of the prizes for a single event exceeds $500.00, the fee will be 2°,6 of the value of the prizes; 3. Nevada Club fees are: Value of prizes per uni~t~;$600.00 - fee $10.00 per unit; Value of prizes per unit $800.00 - fee $12,00 per unit; Value of prizes per unit $284.00 - fee $ 5,00 per unit. Revenues from this fee structure change can only be estimated. 1986 activities show $9,000.00 is ~.ottery licensing revenues (much of this was generated during the time that the "Lady Luck" Bingo Parlour was in operation). If the fees proposed are authorized, we might anticipate revenues being generated in 1987, closely approximating the 1986 actuals. 1987 estimated revenues were set at $1,200.00, based upon the reduction of revenues from bingo licensing. Continued ...../3 Report CD-20-87 - 3 - May 4, 1987 '~ ~ ~ ~~ Staff would recommend approval of the new lottery licensing fee structure detailed in this report, and as well, recommend approval of the by-law. Copies of the following documents are attached for information: 1. Eopy of the proposed lottery licensing by-law; 2. Ministry of Consumer and Commercial Relations letter 003, received March 11th 1987; 3. Ministry of Consumer and Commercial Relations letter dated March 6th 1987, received March 11th 1987; 4. Terms and Conditions under which the Break-open Ticket Licence is issued (Nevada Club); 5. Terms and Conditions under which the Lottery Licence is issued. Respectfully submitted, Recommended for Presentation to the Committee 1 1 4 j~ sf ,_ l °' ~',_ David W. Oakes, B.A.,A.M.C.T.,C.M.O., Town Clerk. ~ ,. ~ ~ . pp ~~ ~ V Lawrence~~E Kotseff, M.C.I.P., Chief Administrative Officer. DWO/ms Attachments. Consumer and Consommation Commercial et du Ontario Relations Commerce 416/963 .~5- ~/ 4 J ~: ~~ ~ n F~ 1 ~ `? f } > ~' C t 'r ~ itp~~~n ~~ .~. ~.Cs`E1 k INTERPRETATION LETTER - 003 This document replaces interpretation dated November 17, 1986. INTRODUCTION Since 1970, after an Canada, charitable conduct and manage licence being issued proceeds from these charitable or reli Provincial authority Section 190(1>tb> of letter - 001 amendment to the Criminal Code of or religious organizations may lottery schemes pursuant to a by the Province of Ontario. The lotteries must be used for a gious object or purpose. The • over licencing is governed by the Criminal Code. In 1970, for the purpose of administering the Province's licencing program and fulfilling the Province's role as the party responsible for charitable gaming, the Lotteries Branch of the Ministry of Consumer and Commercial Relations was created. That same year, the Lieutenant-Governor of Ontario assented to Order-in-Council 274170 in which the province designated to municipalities some of the responsibilities for issuing licences for lottery schemes. The Order-in-Council set up the authorities for licencing and established the basic criteria for assessing licence applications. The province established terms and conditions for licencing and developed standard licencing forms for use province-wide, as authorized by both the Criminal Code and Order-in-Council. The province, by joining with the municipalities, created a system of checks and balances wherein .all licences whether issued locally or by the Lotteries Branch had two layers of approval. The Lotteries Branch continues to supply the guidelines, terms and conditions and licencing material to the municipalities and reviews copies of all municipal licences issued. At the same time, the Branch seeks municipal approval before issuing a licence itself. - 2 - The major portion of licencing is done by .the municipalities, with the Lotteries Branch licencing unorganized territories and specified lottery events with prize boards aver municipal licencing limits. This joint licencing practice continues today with municipalities issuing over 90°h of lottery licences. However, as the volume of activity has increased, so have problems faced by the various licencing bodies. The province, as designated under Section 190 of the Criminal Gode, must provide the framework for interpretation and liaencing province-wide. The following interpretative guidelines are distributed for that purpose. STATEMENT OF INTERPRETATION A responsibility of the Lotteries Branch is to ensure the legal, proper, fair and equitable administration of charitable gaming in Ontario. Over the years, questions and concerns have developed in the minds of the public and lottery licencing officials regarding eligibility for licencing. To be eligible the applicant for a licence must: (a) qualify as a charitable (b) be responsible for the the lottery scheme, and (c) use all of the proceeds charitable or religious or religious organization, conduct and management of from the lottery for a object or purpose. An organization is considered to be charitable if no part of its income is paid or otherwise made available for the personal benefit of any of its proprietor(s), members or shareholders, and if one of its primary aims and normal activities includes projects and undertakings having a charitable object or purpose. Order-in-Council 274/70 defines "charitable object or purpose" to be any object or purpose for: t. THE RELIEF OF POVERTY: This has been interpreted to include but is not limited to assistance to the disadvantaged such as directly providing funds or goods, providing social services or programs or facilities aimed at the disadvantaged. 2. EDUCATION: This has been interpreted to include but not limited to the provision of opportunity, supplies or facilities. - 3 - 3. THE ADVANCEMENT OF RELIGION: This has, been interpreted to include but is not limited to the provision and maintenance of places of public worship as well as other religious objectives. 4. or ANY PURPOSE BENEFICIAL TO THE COMMUNITY: This has been interpreted to include but is not limited to the community as a whole without discrimination so that the purposes have a truly public character; this may also include but is not limited to certain cultural, ethnic, native, historic or heritage pursuits and their physical facilities; community projects undertaken by service organizations; improvement of quality of health, medical research, treatment programs, preventative programs, and their physical facilities; sporting and recreational public facilities; amateur sporting leagues or associations administering activities solely for children or youth development; amateur athletic associations dedicated to provincial, national or international levels of competition and playing by non-modified rules sanctioned by the appropriate provincial sports governing body. The most important reason for permitting charitable gaming is to raise maximum funds for a "charitable abject or purpose". The organizational structure of the licence applicant is secondary so long as its services are performed without profit and its principal aims and objectives include the necessary element of benefit to the community. If a licencing officer has doubt about the intent of a licence applicant, the proposed recipient charity might be invited to make application for the tlicence. Once the licence is issued, all. proceeds or profits must be used for a "charitable object or purpose". An organization's proposed use of proceeds must be consistent with and restricted to their main objects and purposes as set out in their application for licence. Licences should also be allocated and limited to raising such funds as demonstrated by proven financial need ,and budgetary requirements. - 4 - Subgroups and auxiliaries have often been formed to circumvent municipal or provincial quotas. Subgroups often quote parent organization's charter numbers. A licenaing decision is based on what a group is; and if that includes being part of a whole, then it is the whole or parent entity which ought to be licenced, especially if the parent is a local entity. it is the licencing officer's responsibility tc ensure that licences are issued in accordance with the law. To this end, licencing officers must advise superiors and elected officials that licencing must be carried out within the parameters defined by law. LOTTERIES LICENCING BRANCH March 6, 1987 1 \ / I ~ ® ~I„ ~ ~,~ l~ ~ Ontario _ Dfficeofthe Ministry of Ministere de la 416/963-0311 555YongeStreet Inister Consumer and Consummation Toronto, Ontario M7A2H6 Bureau du Commercial et du Ministre Relations Commerce March 6, 1987 TO ALL MUNICIPAL COUNCILS In December 1985, terms and conditions for the issue of Nevada ticket licence were sent to all municipalities by the Lotteries Branch of my ministry. I approved those terms and conditions and 1 strongly recommend they be complied with by all licensing officials. However, I have been made aware of a number of charitable and community spirited groups which would otherwise qualify for Nevada ticket licence, but do not own or regularly occupy premises as required by Section 3 of the terms and conditions. Indeed, many of these groups were in receipt of licence alnd committed to worthwhile projects when the terms and conditions were issued. In order to alleviate the hardship created for some charitable groups, I hereby authorize a municipal council, in its own discretion, to grant an exemption to the requirements of Sections 3, 4(b) and 17(b) of the terms and conditions provided that: ...2/ 2 - (a) the licence applicant cannot meet the requirements of Section 3; or (b) the licence applicant meets the requirements of Section 3 but it is impractical to sell tickets from that location; (c) the sale of tickets is limited to ONE location only; and <d> all other sections of the terms and conditions are complied with. Where an exemption has been granted, a municipal council must ensure the licencee complies with ALL OTHER TERMS AND CONDITIONS and the recipient charity receives maximum proceeds from the sale of Nevada Tickets. c MONTE KWINTER Minister ~~ 77T 1- ~~, Ministry of Consumer and Commercial Ontario Relations SCHEDULE A TERMS AND CONDITIONS UNDER WHICH THE LOTTERY LICENCE IS ISSUED It is a condition of each licence that: (a) the licencee shall comply with sections 189 and 190 of the Criminal Code of Canada; (b) the licencee shall comply with all the terms and provisions set out in the application for licence; (c) the licencee shall maintain all funds raised in a separate account and shall maintain such records for such period of time as,may be prescribed by the Minister; (d) the gross receipts derived from the lottery shall be used for the charitable or religious object or purpose as set out by the licencee in the application for licence, less the cost of the prizes awarded and such reasonable and necessary adminis- irativeexpenses actually incurred in the management and conduct of the lottery, provided the expenses do not exceed such limits as may be prescribed by the Minister; (e) such officers as the municipal council or the Minister may appoint, and all Peace Officers shall, at all reasonable times, have direct and unencumbered access to enquire into the nature, management and conduct of the proceedings for which the licence has been granted, either prior to, during, or after the conclusion of such proceedings; (f) the licencee shall conduct or allo~•i to be conducted only the type of game or games provided in the application and the licence; (g) the licencee shall produce the licence upon demand; (h) the licencee shall submit to the licencing authority, not later than 30 days after the holding of each licenced lottery, a written report showing, (i) the total gross receipts deriving from the lottery, (ii) the total value of all prizes actually awarded, (iii) an itemized listing of the administrative costs actually incurred in the management and conduct of such lottery, (iv) the total of cash proceeds donated for charitable or religious purposes as set forth in the application of the licencee, and the name and address of the payee. Each raffle lottery shall also be subject to the following additional terms and conditions: (a) each individual raffle lottery must have a licence; (b) the winner or winners shall be determined and publicized in the manner set out in the application; (c) the charitable or religious organization managing and conducting the licencee) raffle shall, (i) indicate on the fcce of the tickets the name and address of the orgonization, the location, the date, the time at which the draw is to be held, the number and nature of the prizes to be awarded, the number of the ticket, and the name of the printer, (ii) provide for the consecutive numbering of tickets, (iii) retain all unsold tickets and counterfoils of sold tickets for a period of not less than 90 days from the date of the draw, and' produce them fo a Peace Officer or such other person as the municipal council or the Minister may appoint, (iv) indicate in its application the number of tickets to be printed for sale. NOTE: A licencee shall not: (a) use the services of a person or organization to conduct and manage the lottery on its behalf, for a fee or other valuable consideration; (b) permit the pyramiding of games; (c) permit games of a type or kind known as razzle dazzle, roll down, three card monte, punch board, coin table, or ony dice games; (d) in the case of a licenced lottery type scheme at a bazaar, offer any prize having a value in excess of 5100 or charge in excess of fifty {50) cents for o chance to secure a prize. 06007 ed 178 Vl~ (-<~ ors ANO CONdIITIONS [JtaJEft YaIICIi THE Bz~uc-o~ Tlc~:r isc~E Is Isom ( BoTT.-T~c) It is a condition of each licence that: (1) The licencee shall comply with Sections 189 and 190 of the Criminal Code of Canada . (2) (a) the licencee shall comply with all the terms and conditions set out in the application for licence. (b) an application for Break-Open Tickets shall be made either: (i) to the local Municipal Council in those Municipalities where all Break-Open Ticket licences are issued by `that blunici.pality with the exception of the .provisions contained in Section 5, or, in all other cases (ii) to the Lotteries Branch, after appropriate approval is obtained from the local Municipal Council or Band Council where the sales are proposed to take place. .~) A Break--Open Ticket Licence shall only be issued to a charitable or religious organization which owns or regularly occupies premises at which tickets will be . offered for sale. (9) (a) Each applicant for a licence shall specify one designated location at the address where all Break-Open Tickets will be sold. If a licence is issued, tickets shall not be sold at any place other than the location designated in the•application and specified on the licence. . ~ (b) The designated location specified pursuant to this section shall not be a public, commercial retail location,'nor a location licenced by the L.L.B.O. as a public tavern or beverage room. (5) Break-Open Tickets may be sold in association with another Social Gaming event provided that: (i) she tickets are sold under a licence issued by the Lotteries Branch pursuant to Section 2(b)(ii) (ii) the licence is issued only to the charitable or religious group(s) conducting the other event(s) at the location where the tickets are to be sold (iii) all terms and conditions for the sale of Break-Open Tickets and the conduct of the other event(s) are complied with. (6) No licence shall be issued for a period exceeding six months. (7) A licence shall be issued only for the sale of Brea'c-Open Tickets which retail for a maximum of .50G and conform with the ticket quantities, prices and prize payouts as provided below; scratch-off or other forms of break-open tickets are not permitted. The value of any prize awarded shall not exceed $100.00. ;OMMON N0. OF•TICKETS PRICE PER GROSS UNIT NO. OF WINNING PRIZES ICEN E'EE NAME PER UNIT TICKET REVENUE TICKETS PER UNIT PER UNIT UNI Regular _ t6f8 or $ .50 $ 834 or 224 $600,00 $,10.0 1664 $ 832 Super 2184 $ .50 $1092 224 or $800.00 $12.OQ ' 228 Junior 1668,or $ .25 $ 417 224 $284.00 $5.00 • .1664 $ 416 ,_ y~ ~l 5 `~ . ~ ~ 1. ~~ - 2 - (8) - The licencee shall forward a copy of: the licence to the manufacturer" or the distributor from which tickets are to be purchased. ' (9) TYie~applicant shall supply, upon the' request 'of the licencing authority, a • signed right of access from the distributor and the manufacturer of the tickets for which the application is submitted. (10) The' licencee shall indicate on the face of the tickets the name of the organization, the numbers and amounts of the prizes to be awarded, the price of a ticket, the serial number of the ticket, the licence number and the name of the manufacturer of the ticket. (11) Tine'licencee shall maintain all funds raised in a separate acc~aynt. Such account s a ~ e'appropriately designate3 and into it shall ne aepvs~Led all and only monies received from the operation of the Break-Open Ticket Lottery less the cash payments made for-prizes and administrative expenses. All ~.,;+ha,-a,eai~ frnm c„r}, r9Pa;anated lottery.account shall be exclusively by cheque ex enses incurred in the operation oY the lottery or Lor the a1 ourseu~enc ai net proceeds derived for one or more charitable object or purposes. The comntng ings o monies erive rom e con uct o a lottery with any other funds o t e icencee or monies erive rom Bre -Open Tickets Lottery with (12) The gross receipts .derived .from the sale of Sreak-Open Tickets shall be -used for•the charitable or religious objects or purposes set out by the licencee in the application for the licence less all reasonable costs actually expended for the paymectt of prizes, .the purchase of tickets, administrative costs and licence fees. (13) All proceeds derived from the sale of Break-Open Tickets shall be used for a c aria ~ or re ~.gious o Sec or purpose-in Ontario. (14) No part of the proceeds derived from the conduct of a Break-Open Ticket Lottery .shall be applied to the premises at which the sale of Break-Open Tickets is .authorized unless the use of the proceeds for such purpose shall enhance the ability of the licencee to perform services of public good or welfare, and written permission is obtained from the Licencing Authority. The maximum amount of, proceeds which any licencee may expend on the premises shall not exceed twenty-five percent of the total net proceeds derived from the conduct of the lottery. ~ . (15) No licencee shall offer for sale any ticket or number of tickets not contained in ajar, box or other container in which all tickets of the given unit have been placed for sale. (16) When the number of tickets within the container has been apparently reduced by one-half, t o licencee s a re i e con ainer y a ing an a rtron uni (17) (a) The licencee shall designate a bona-fide member or members of the organization to be primarily responsible for the sale of tickets, the payment of prizes and tl~e keeping of all required records. (b) The actual handling or selling of tickets shall not be delegated to any ~ organization, company, entity, or to any other person who is not a bonafide membe_r`of the licencee. ' (18) No persc spa 1-~ tic et. (19) No persc Tickets. exceed who is in any way associated with the sale of Brea] ~ernutted to purc ase a tic et or participate in the w: or organization shall receive any remuneration for sell Maximum administrative expenses for the' sale of tick one (20) The licencee shall not sell any ticket at a price other than the price appearing on the face of the ticket. C~- ~1 ~ ~e~) - 3 - (21) All Break-Open Tickets shall be opened by the purchaser at the premises stated on~the licence and all wiruiing tickets shall be exchanged for cash on the day of. sale. • (22) Winning tickets shall be defaced by the seller at the time of prize payout.. (23) Eactr licencee will be held responsible for and shall guarantee the payment of all winnings. (24) 3'he licencee shall post the Break-Open Ticket Licence in a conspicuous place at t o prem~.ses w ere is e s .are ing so (25) The licencee shall obtain invoices for all Break-Open Tickets urchased and retain a invoices or a pert o no ess t an two years. (26) Each licence+~shall at all times maintain complete security over the Break--Open Tickets in its possession and all funds associated therewith.• For control of inventory purposes, all stock must be stored and kept i.n one fixed location iri order to'permit, if requested, the periodic reconciliation of stock usage and cash flow. (27) (a) 'The licencee shall not permit any person under the age of sixteen years to purchase a ticket. ' (b) The licencee shall not extend credit, accept cheques or accept payment by way of credit card for 'the purchase of any Break-Open Tickets. (28) Each licencee shall submit a report on the sale of Break-Open Tickets as set out in Form BOTL-R. (29) Such officers as the Minister and Municipal Council may appoint, and all Peace Officers shall, at all reasonable times, have direct and unencumbered access to enquire into the nature, management and conduct of the proceedings for which the licence has been granted, either prior to, during, or after the conclusion of such proceedings. (30) A licence may be suspended, cancelled or renewal refused by the issuing authority for breach of any term or condition. (31) The Minister may, at any time, suspend or cancel a licence for the breach of any term or condition, or where; in his opinion, to do so is in the public interest.