Controversial Renovation Expenditure at Casino New Brunswick
There has been discussion regarding the controversial renovation expenditure at Casino New Brunswick. The casino refuted the claims that renovations were done with funds that should have been set aside for the provincial government. While many were quick to accuse the casino of incorrectly using funds, Casino New Brunswick and the provincial government have explained where the money that was used for the renovations came from, and why there were no problems with using it for a casino upgrade.
The casino used a government-operated capital reserve fund in order to add new slot machines in order to keep the gaming experience fresh and exciting for gamblers, as well as upgrading the buffet area.
Casino New Brunswick's Capital Reserve Fund
The controversy arose when it was seen that the provincial government received revenues that had dropped by $500,000 since the previous year, while at the same time, there was an amount of approximately $2.6 million spent to upgrade the Moncton Casino that is operated by Sonco Gaming of Halifax.
The funds that paid for the renovations come from a special fund that has been set up by the provincial government. The casino has to put three percent of its revenues into the fund each year. The capital reserve fund is kept for capital improvements to the casino. All the funds used from this account need to be approved before use.
Leah Fitzgerald, a provincial government spokesperson, explained: "Part of the gaming revenue from the casino's operations go to a capital reserve fund. Casino New Brunswick is reimbursed for approved capital improvements from this fund."
The casino's general manager, Craig DeMarta, said that the improvements were necessary in order to ensure that customers do not get bored with the same games. He further noted that those who eat at the buffet usually spend a minimum amount of $40 on gambling while they are at the casino. He further explained that funds, such as the capital reserve fund, may be operated by the government, but that the money is still the casino's money.
How the Profits are Divided
The contract between Sonco and the provincial government clearly state how the profits should be divided. The government gets half the profits, while the other half are divided as 47% for Sonco, and 3% to the capital reserve fund. In reality, the 3% is still Sonco's, however, it is more like an insurance policy to ensure that the casino can maintain high standards, rather than available profits.
