There are more Alberta video lottery terminals in the province’s two biggest airports after a long-standing cap has been lifted. Alberta Gaming, Liquor and Cannabis‘ decision to raise the limit on VLTs came in response to a request from the Edmonton International Airport.
As a result, the number of VLTs permitted in Alberta increased from 6,000 to 6,098. The increase now offers debt-laden airport authorities the opportunity to benefit from an additional revenue stream.
To account for airport regulators, the AGLC created a new category of license holders called Airport Entertainment Centres last September.
Currently, only airport authorities in Edmonton and Calgary are privy to this emerging revenue stream. However, restrictions on volume (maximum 49 terminals) and location (they must be located in areas that prohibit minors) apply.
Alberta VLT revenue breakdown for Edmonton International Airport
Installed in one of its lounges last November, the Edmonton airport owns 14 VLTs.
The share of revenues is:
- 15% to the airport authority.
- 85% to the government’s general revenues to support programs and services.
Budget documents suggest the Edmonton airport estimates VLT earnings of $174,000 since opening last fall. The airport is forecasting a $1 million share of revenues for the current fiscal year.
Conversely, the provincial government predicts its share will be $4.7 million in 2023-24, despite budgeting for $817,000 last year.
The Edmonton Regional Airport Authority released a statement updating the public on present and future developments.
“With the opening of Sevens at 49, YEG (Edmonton International Airport) has welcomed back 14 VLT machines to the terminal, with the opportunity to add more in the future.”
From the second-largest city in Alberta to the largest, the Calgary Airport Authority emailed CBC News their thoughts on adding VLTs. Presently, it has no plans to offer VLTs at its terminals. It does own land on which a nearby casino is situated, but only receives a lease payment, as opposed to a share of any casino revenues.
Airport revenue diversification a lingering result of COVID-19 shutdowns
Many Canadian airports are still dealing with slow recovery times and mounting debt from COVID-19 shutdowns. Their present revenue model, which relies on passenger, aircraft and fuel fees, was no longer sustainable.
How bad did it get?
The Canadian Airports Council told CBC News that Canadian airports have accumulated over $3.2 billion in debt.
“With travellers now returning, many airports have been looking to new, diverse and innovative revenue sources to ensure Canadians have ongoing access to a competitive and efficient air sector.”
Toronto’s Pearson International Airport and the Calgary Airport Authority pined for alternative revenue streams that did not involve lottery games. The former lobbied the federal government for modernized duty-free policies and the latter is considering expanding its services to include more cargo and aircraft maintenance.
But, for the Edmonton airport authority, the answer to the low-revenue conundrum is VLTs.
Before the cap was lifted, the Edmonton airport had VLTs until the bar they were in shut down in 2016. However, the arrangement between the province and airport regarding the share of revenues remains unclear.
It has been nearly 30 years since the Lotteries Review Committee set the cap for VLTs in Alberta in 1995.
At the time, the use of VLTs garnered significant pushback and controversy, with some communities banning them.
To date, bans remain in the:
- County of Lethbridge.
- Towns of Canmore, Cardston and Sylvan Lake.
- Regional Municipality of Wood Buffalo.
- Municipal District of Opportunity No. 17.