Port Edward Island online gambling budget revealed at ast

The provincial government in Port Edward Island, Canada has (sort of) finally yielded to three years of media Freedom of Information pressure to make public details of a failed Cdn$ 950,000 initiative aimed at launching a tribal-based online gambling regulatory jurisdiction.

But it took a ruling last month by Privacy Commissioner Karen Rose to finally persuade government officials to comply with the media requests. Innovation P.E.I. had 30 days to file a judicial review of the Commissioner’s ruling, but chose instead to release the document.

The almost million-dollar scheme was organised in 2011 in the form of a loan to the Mi’kmaq Confederacy of P.E.I. by the government’s Innovation P.E.I.fund…an amount that was never recovered despite the project collapsing.

The loan funded the work of a controversially secret gaming committee that worked on the e-gaming proposal, based on a plan to create new tax and fee revenue streams for both the tribe and the provincial government.

The Guardian has publicised the government’s belated “budget proposal” here: http://www.theguardian.pe.ca/media/flying/7544/egamingLoan.pdf.

The newspaper notes that thousands of dollars were spent on legal and technical work, including $150,000 to “finalize legislation,” which was scheduled for completion by Sept. 30, 2011. Another $85,000 was spent on a communications strategy for the province and the Mi’kmaq Confederacy, which was also to be complete by Sept. 30, 2011.

Money was also spent drafting a regulatory regime to make the e-gaming plan work, including $100,000 to establish a regulatory function and $50,000 for employment contracts for a regulatory chair and supporting staff.

Work on some of the deliverables listed began long before the actual loan agreement was approved, which meant costs for this work were for reimbursements. The Mi’kmaq Confederacy of P.E.I. (MCPEI) was one such beneficiary, getting $100,000 of the loan money for “expenditures already funded.”

Don MacKenzie, executive director of MCPEI and one of the members of the secret gaming committee, said Monday the amounts outlined in the one-page disclosure were the budgeted figures and represent “a fair outline of the project work and expenditures.”

“All funds were spent on the joint provincial/Mi’kmaq governments’ project to create a regulatory framework in relation to the unregulated online gaming industry,” he told The Guardian.

Funds were paid to a private law firm, McInnes Cooper, for legal services and for work the legal company provided in co-ordinating the engagement of technical experts for such initiatives as the transaction platform, technology-based game oversight and legislative and regulatory drafting, MacKenzie said.

“McInnes Cooper’s work on the file was over a period of a few years. Creating a regulatory framework was a substantial project that involved a number of professional services being provided. While the province and MCPEI were partners in this endeavour, it was always agreed that the province would fund the development of it.

“Prior to the $950,000 being advanced, MCPEI covered $100,000 worth of professional expenses, on the condition that the sum would be reimbursed by the province, which occurred. All funds were used to pay legal/technical/professional fees associated with creating the regulatory framework.”

However, The Guardian questions expenditure items, such as why $25,000 was budgeted for “government approvals” and what happened to $75,000 budgeted to “finalize operating agreements with operators,” considering the e-gaming plan failed long before it got to the stage of final agreements.

Questions will also be raised about $135,000 budgeted to “establish the financial transaction platform,” as the only part of this aspect of the e-gaming plan that materialised was a $60,000 report completed by the U.K. firm Simplex.

The Guardian notes that it also requested copies of the legislation and contracts listed in one-pager from the province, but they were not provided.

The government emphasised that: “No government officials or employees were beneficiaries.”