Historical Background of Bingo and Bingo Alberta
Bingo’s Early Days in Alberta
In Alberta, bingo has always been about charities and remains resolutely so today. As a result of bingo’s direct connections to its charities, it is more a community-of-interests than an industry, unlike casinos. Taking its DNA from its charities, bingo is diverse as it represents different interests in different Alberta communities.
Bingo has played a unique and positive role in Alberta society even prior to the province joining Confederation in 1905. Early pioneer families played bingo in church basements and community halls as a form of social activity and the proceeds directly benefited churches and the communities. The cost of playing bingo was within the means of most families and the prizes were equally modest, such as hams, turkeys and crafts. Simple dried corn kernels, reflective of economic hard times for many, marked bingo cards for numbers called. The proceeds of bingo advanced the work of charities and church organizations in almost every community across the province.
Annual agricultural fairs provided both horse racing and bingo, the only forms of legal gambling at the time, where the bingo prizes were slightly more substantial, e.g., small kitchen appliances, silverware and glassware, and blankets.
During this period of the province’s history, bingo wasn’t seriously considered as gambling even though it fell under the jurisdiction of the Criminal Code of Canada.
Beginning in the 1960s bingo moved to a new level as charitable groups including service clubs began to utilize bingo as a major fund-raiser for building hockey arenas, baseball parks and new community halls to meet the needs of Alberta’s soaring post-war population. The scale of prizes increased to include automobiles and it wasn’t uncommon for crowds of 5,000 to participate in special bingo events in Edmonton and Calgary.
The First Transformation of Bingo
By the 1970s transformation of bingo occurred as bingo moved into commercial halls, the frequency of events increased and revenues became substantial, but the proceeds still benefited charitable and religious groups. It was at this point serious government regulation of bingo began to evolve and legal jurisdiction for bingo was transferred from the federal government to the province.
Beginning in 1982 the Alberta Gaming Commission (AGC), a predecessor government agency of today’s Alberta Gaming and Liquor Commission (AGLC), created both the bingo association business model and the casino business model with each having different facility licenses to operate their games. This initiative began the formation of what is referred to as the Alberta government’s unique charitable gaming model whereby eligible charitable and religious groups directly participate in the proceeds of bingo, casinos, raffles and pull-tickets.
While bingo facility licenses were eligible only to non-profit bingo associations operated by charity volunteers, casino facility licenses were eligible to non-profit associations and individual private operators. (The AGC’s intent to apply different treatment has been long forgotten but the consequences eventually became clearly apparent.)
Decline of the Bingo Industry Due to Competitive Imbalance in Gaming
Among the components of the Alberta government’s charitable gaming model, bingo had been the major contributor of net proceeds to charity until the AGLC’s Fiscal 1998/99, generating almost $60 million that year. Bingo lost this position when casinos surpassed bingo the following fiscal year and the gap between generation of net proceeds to charity from casinos and bingo has continued to widen since then. Net proceeds to charity depend on total gross revenue and the introduction of slot machines in Alberta casinos in Fiscal 1996/97 have generated substantial gross revenue and now casinos account for the greatest source of net proceeds to charity, more than table games in casinos, and certainly more than raffles and bingo. Bingo has dropped to third place.
Due to the competitive imbalance within the Alberta gaming industry, bingo has been in a steady decline as measured by total gross revenue and attendance at bingo events since Fiscal 1998/99. Bingo’s contribution to charities in net proceeds has declined from almost $60 million in Fiscal 1998/99 to less than an estimated $25 million in Fiscal 2007/08, a drop of $35 million or 58%. The decline has been precipitous due to increasing competition from new, expanded and, by comparison, luxurious Alberta casinos that contain a wide range of amenities and a generous number of slot machines.
As competition in the gaming industry substantially increased, another factor of bingo’s failure can be attributed to its business model, which has undergone little change since the early 1990s and is far beyond its organizational lifecycle. The lack of a new business model has resulted in a huge disparity in the distribution of charitable gaming funds within the province that seriously disadvantages bingo and its charities.
Genesis of Bingo Alberta
An AGLC Board evaluation conducted in the spring of 2006 highlighted the Board’s desire to engage with bingo stakeholders, and to more effectively acquire and utilize strategic information about the stakeholder environment due to bingo’s steady decline. An extensive consultation with bingo industry stakeholders led by the AGLC Board’s Stakeholder and Governance Committee chaired by Lynn Faulder, which also included Guy Mathieu and George Russill, was facilitated by Sierra Systems Consultants of Edmonton, Alberta and commenced in late 2006 and ended in mid-2007.
In the first report produced by Sierra, Bingo Industry Stakeholder Consultation -- Report of Findings, February 22, 2007, it is recorded: “The Board (AGLC) is now well informed about the issues and challenges the bingo industry in Alberta is facing. This broader perspective will help the Board challenge traditional thinking and long held beliefs in order to develop some practical and innovative policies to assist the bingo industry in Alberta.” (Bingo Alberta is challenging traditional thinking and long held beliefs for the benefit of the industry and bingo charities.) The Report of Findings also revealed the need for the bingo industry to develop a long-term renewal strategy, the strategy intended to improve the way the bingo industry operates with the single goal of increasing the return to Alberta charities (money) while continuing to maintain integrity in the game.
Sierra’s second report, Bingo Industry Strategy For Change, June 1, 2007, recommended the incorporation of Bingo Alberta as a not-for-profit limited company with a defined role, a new governance model and a number of objectives including speaking as one voice for the bingo industry in order to optimize communication between the AGLC, as a centralized consulting group for the bingo industry.
Bingo Alberta is the by-product of this extensive consultation process with the AGLC, stakeholders of the Alberta bingo industry, and the elected interim working group. The observations, analyses, conclusions and recommendations concluded in the consultation process and recorded in the Sierra Systems two reports catalyzed the creation of Bingo Alberta and formed it as the entity it is today.
Bingo Alberta did not become an actual entity until November 2007 when legal documents were registered and a Founding Board was formed to fulfill certain obligations on its part to the AGLC and the bingo industry.
The Founding Board of Bingo Alberta comprised the five volunteer bingo association representatives, who were previously elected to the interim working group by their peers, the official representatives of the bingo associations. These five elected volunteers together represented many decades of experience in most if not all aspects of the game of bingo, and especially in the governance and the business of bingo. They knowingly assumed some heavy responsibilities on behalf of the bingo industry.
A new Board was installed at Bingo Alberta’s Annual General Meeting in Edmonton on Saturday, October 25, 2008.
Bingo Alberta was incorporated as a limited company under Part 9 provisions of the Companies Act of Alberta R.S.A. 2000, c. C-21, as amended from time to time, and filed with the Registrar of Corporations, Province of Alberta, on November 13, 2007. Part 9 provisions apply to companies with objects other than the acquisition of gain, thus prohibiting the payment of any dividend to the Shareholders of the Company. Part 9 companies are treated the same as charitable associations with regard to federal and provincial taxes. Bingo Alberta’s incorporation permits the Company all the privileges conferred and is subject to the obligations imposed on limited companies, with the exception that none of the provisions require the Company to use the word “limited” as a part of its name, thus Bingo Alberta’s name is not followed by the designations of Company, Co., Limited, Ltd., Incorporated, Inc. etc. Bingo Alberta is not an agent of the Alberta government or AGLC for any purpose.
Bingo Alberta replaced the former Federation of Alberta Bingo Associations as the new representative and leader of the industry, but with a different role and expanded responsibilities.
The Objects of Bingo Alberta are contained in its Memorandum of Association filed with the Registrar of Corporations, Province of Alberta, also on November 13, 2007, as were the Company’s Articles of Association, which contain what would normally be considered the by-laws of an association.