Provincial auditors did, in fact, review changes to gambling commissions as part of a conflict-of-interest probe relating to former B.C. Lottery Corp. head Michael Graydon, according to newly released documents.
Mr. Graydon, who left BCLC early last year to join an affiliate of a private-sector gambling company, Paragon Gaming, has already been found to be in a conflict of interest through a government-ordered report that was released in July, 2014.
But the provincial New Democratic Party opposition continued to raise questions about Mr. Graydon's departure, including whether he had a role in pushing for new "splits" that took effect last year and whether the government review of his controversial departure from the lottery corporation had even looked at the issue.
Documents released through an access to information request say auditors did review the new commissions.
"Internal Audit & Advisory Services reviewed the changes to the table game commissions as part of the CEO conflict-of-interest review and determined that, based on the timing of the proposal and it being available to all service providers that offer table games, no preferential treatment had been given to Edgewater," says a May 12, 2015, briefing note from the audit department.
Edgewater is a casino owned by Paragon.
The timing of the changes and of Mr. Graydon's departure are also included in "advice and recommended response" prepared for government officials in relation to prospective questions about the commission changes.
"Michael Graydon's departure from BCLC was not related to the proposal to change the table game revenue splits," says a May 19, 2015 memo entitled, "Issue: BCLC Table Game Strategy."
The business case for the changes to gambling commissions had been submitted in June, 2013, and Mr. Graydon did not enter into discussions with Paragon until December of that year, the memo states.
The memo, along with other documents, was released Tuesday through a Freedom of Information request. That request focused on documents related to a 2014 government directive that changed gambling formulas, or splits, to provide a greater share of revenue to casino operators.
Under the new system, "service providers" such as Edgewater get 60 per cent of the take for low-limit blackjack and roulette tables and BCLC gets 40 per cent. Previously, that formula had been reversed, with BCLC getting the larger share. Commissions for several other games were changed as well, with the intent of attracting more players and increasing overall gambling revenues.
The changes went largely unnoticed at the time they came into effect. But in May, the NDP raised the issue in the legislature.
Mr. Graydon came under scrutiny for leaving his role with a Crown corporation to join Paragon, which is a BCLC operator with a major project in development.
BCLC announced Mr. Graydon's departure on Jan. 30, 2014. About a week later, he was named president of PV Hospitality ULC, a new company backed by Paragon Gaming, and tasked with "oversight and operations of Vancouver's new world-class urban resort."
In February, the province ordered a conflict-of-interest review. Released in July, that review found Mr. Graydon – who had been negotiating with Paragon in December and January – was in a conflict of interest but found "no evidence of Paragon Gaming or Edgewater Casino receiving preferential treatment."
The City of Vancouver issued a development permit for the hotel-casino project, which proponents describe as a $600-million urban resort, in June.