VLTs offer new revenue stream to struggling Alberta airports

Alberta Gaming, Liquor and Cannabis (AGLC)has lifted a long-standing cap on the number of VLTs permitted in the province from6,000 to 6,098to allow debt-ridden airport authorities the opportunity to benefit from the additional revenue stream.

The change happened last fallin response to a request from the Edmonton International Airport.

The AGLC announced it had created a new category of licence holderscalled Airport Entertainment Centres last September.

For now, only Edmonton and Calgary airport authorities are allowed to access this revenue stream.Each can have up to 49 VLTs(video lottery terminals) located post security in areas where minors are prohibited, such as bars and lounges.

To date, the Edmonton airport has 14. It installed them last November in one of its lounges.

The share of revenues is 15 per cent to the airport authority 85 per cent to the government's general revenues to support programs and services.

According to the budget documents, the Edmonton airport expects to collect $174,000 since opening last fall and projects $1 millionfor its share of revenues this fiscal year.

The provincial government estimates its share will be $4.7 million in 2023-24, and it budgeted for $817,000 last year.

CBC News reached out to the Edmonton Regional Airports Authority but it declined to do an interview. Instead, it issued a statement.

"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," the statement reads in part.

The Calgary Airport Authority also declined to do an interview, but in an email said it has no plans to introduce VLTs at its terminals. There is a casino located nearby on land owned by the authority, but the airport does not benefit from any of the revenues generated. Itcollects only a lease payment.

Diversifying revenues

Many Canadian airports are still struggling to recover from the devastation of COVID-19 shutdowns, the slow recovery and mounting debt.

They operate as not-for-profits, relying on passenger, aircraft and fuel fees to generate most of their revenues.

The Canadian Airports Council told CBC News in an email that Canadian airports have taken on over $3.2 billionin debt.

"With travellers now returning, many airports have been looking to new, diverseand innovative revenue sources to ensure Canadians have ongoing access to a competitive and efficient air sector."

Toronto's Pearson International Airport recently asked the federal government to modernize its duty free policies to allow international travellers to purchase items upon arrival. They are also asking for the government to consider allowing duty free stores to sell items to domestic passengers without the duty free tax advantages.

The Calgary Airport Authority's new CEO says he's considering expanding services to include more cargo and aircraft maintenance as the Calgary airport begins itsnext phase of growth.

Now the Edmonton airport authority believes VLTs may be a way to raise additional revenues.

But this isn't the first time the Edmonton airport has had VLTs. A spokesperson says it hadVLTs up until 2016, before the bar they were in shut down. But it's not clear what the agreement was between the province and airport for those revenues. AGLC says it's looking into this and wasn't able to respond by the time this story was published.

The cap for VLTs in Alberta was set in 1995 based on recommendations by the Lotteries Review Committee.

At the time, there was a lot of pushback and controversy surrounding the use of VLTs, with some communities banning them.

Bans are still in effect in the County of Lethbridge, the towns of Canmore, Cardston andSylvan Lake, the Regional Municipality of Wood Buffalo and the Municipal Districtof Opportunity No. 17.