Welcome to Lotteries Yukon - History of Lotteries in Yukon

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History of Lotteries in Yukon

The sale of Lottery tickets began in the Yukon in 1974 with the signing of an agreement between the Commissioner of Yukon and Western Canada Lottery Foundation, and the establishment in Yukon of the Lotteries Ordinance.
From 1974 to 1976 the Government distributed tickets from the Territorial secretary’s office with revenues generated from sales going to office expenses for an administrator, and to the non-profit clubs that sold tickets.

It became evident to the Executive Committee that increased revenues would result if Lotteries were administered by an independent agency.

In 1976, Yukon Sports Federation was contracted to assume the administration of the distribution of tickets. All non-profit recreation groups had equal opportunity to sell the tickets. The Commissioner received 12½% of gross proceeds and the balance remained with the Sport Federation. Profits generated were used for office expenses of the Sport Federation, with the balance of the monies devoted to the benefit of sport in Yukon.

An internal audit of the Western Canada Lottery – Yukon Administration was conducted in 1978, and resulted in the recommendation that YTG designate an authority to be recognized as the official agent of government.

In May of 1979 the Yukon Lottery Commission was established as the official agent of government by Order in Council. At this time, the Executive Committee considered transferring lottery revenues to Y.R.A.C. for distribution under recreation grants regulations. This possibility was not enacted as it fell short of the intended role and function of the lottery commission. The intent of the regulations was to establish a lottery commission that would function at “arms length” from government – transfer of funds to Y.R.A.C. was seen as increasing government control.

It was speculated that "rolling in" of lottery funds with Y.R.A.C. would imminently result in reduced total funds available for recreation in Yukon, and also increase dependency on lottery revenues to balance the budget. The wisdom of using lottery revenues to provide or maintain a government service was questioned. The report concluded that lottery revenues offered Y.R.A.C. flexibility to encourage the development of recreation in Yukon, and that to remove access of applicants to lottery funds would reduce that flexibility.

Subsequently, a comprehensive review of recreation in Yukon was initiated which resulted in the Kyllo Report and in turn, the Report of the Green Paper Committee on Recreation completed in September 1983.

With the establishment of Yukon Lottery Commission and the lottery regulations, mandate was defined:

Ticket distribution and management
A Commission that met twice yearly to distribute surplus monies and set policies All policy decisions relating to the two mandates were the regulated responsibility of the Commission.
The distribution and day-to-day management of lottery tickets was put out to open bid. Rampart Developments was selected by the Yukon Lottery Commission for a three-year contract.
The responsibility for administration of the Yukon Lottery Commission funding decisions was designated to the Recreation office of Government.
Financial statements providing revenues and expenses for distribution were prepared by the financial chairperson of the commission, based on information provided by the contract distributor.
In 1983 when the distribution contract came up again for bid, the contract was awarded jointly to Yukon Arts Council and Yukon Sport Federation. Ticket sales remained exclusively with non-profit organizations until 1986, when a TIVM machine was installed in the Qwanlin Mall and 6/49 and Lotto West were introduced in the Yukon. The management of the lottery terminal was contracted to the Yukon Arts Council and Yukon Sports Federation with the established non-profit organizations who sold lottery tickets receiving a pro-rated share of the profits.
This method of distributing tickets continued until the summer of 1987 when the Yukon Lottery Commission assumed direct management of lottery ticket distribution.

In 1986, Western Canada Lottery Corporation undertook a research and cost study on TIVM (Ticket Issuing Machines – lottery terminals) expansion in Yukon. W.C.L.C. committed additional machines for Yukon contingent upon adherence to the accepted retailer application procedures for the entire network. At the same time, the Yukon Lottery Commission, in consultation with the Minister of the day, undertook a review of its mandate and administrative procedures, known as the MacKay Report. Upon completion of the review, the decision of the Government of Yukon and Yukon Lottery Commission was to transfer the administration of the commission and assume direct responsibility for both mandates under the Lotteries Act.

Key factors for change identified in the MacKay report were:

»	Revenues from the sale of lottery tickets had increased from $219,465.00 in 1982, to $1,157,236.00 in 1986. Administrative demands had changed and the commission did not have the practical knowledge required to adapt to the rapid changes, nor to make effective policy decisions to keep up to the changes.
»	Staff of the recreation department was spending more and more of their time in lotteries related administration; therefore the business of providing the service required of the department was compromised.
»	The increasing workload and time commitment demanded of the volunteer Commission both in their mandate to manage the lottery operation and to allocate profits was without an office or staff to provide assistance.
»	Due to the number of players involved and the absence of a central office, indistinct and confused lines of communication were inherent. There were at least three sets of accounting records, thereby decreasing control.
»	The increase in sales volume throughout the W.C.L.C. jurisdiction had resulted in the development of a computerized distribution system that eliminated much of the labour intensive administration of the past. In order to utilize the system, Yukon had to comply with ticket pricing and commission rates established by W.C.L.C. and which up until this time had not been implemented in Yukon. Retailer agreements/licensing was required by agreement with W.C.L.C. defining the responsibilities of each party.
»	With the increased demands to administer the distribution function of lotteries, Yukon Sports Federation and Yukon Arts Council were expending considerable time and other resources, which it was felt could instead be spent on these organization’s primary objectives. Funding to other non-profit groups did not have the workload attached and were not subject to the same consideration and conditions.
»	The use of non-profit groups as retailers was seen as essentially an indirect discretionary funding. There were inefficiencies with volunteers as retailers and inconsistencies in sales methods and lottery knowledge. Inequities existed for the non-profit retailers in regards to prime selling locations and distribution of pro-rated profit sharing.
»	The expansion of the on-line network required licensed retailers.

The Yukon Lottery Commission established an office in April 1987 and staff was hired, exempt from the Public Service Act. The rationale for setting up the office of Lotteries and obtaining an exemption from the Public Service Ordinance for hiring of staff was to enable the Yukon Lottery Commission to operate as independently as possible from Government, with staff reporting directly to the Commission. The Yukon Lottery Commission in fact decided that it wanted the freedom to make decisions and set policy independent of government as the mandate defined, and to maintain the flexibility required to operate the business aspect of the mandate. The efficiency of the operation depended upon accurate, up-to-date information on every aspect of the lottery mandate.

The network of retailers was re-established with licensed retailers and the expansion of the on-line network began with the addition of machines in Whitehorse and rural communities. Non-profit groups who had sold tickets were provided with options for transitional funding and the distributor was provided with two years of transitional funding based on an agreed formula.

A comprehensive review of lottery revenue distribution resulted in agreement to provide funding through the application process to non-profit groups and societies to enhance the recreation projects of volunteers. The commission approved funding to government to provide additional funds for distribution through the Y.R.A.C. granting process for ongoing programs of territorially relevant groups.

In 1987, the Yukon Lottery Commission entered negotiations with Western Canada Lottery Corporation to finalize an agreement defining roles and responsibilities of both parties. An agreement, defining the Yukon Lottery Commission as the official agent of Government of Yukon and Territorial Marketing Organization of Western Canada Lottery Corporation was finalized in February of 1989. Three party retailer agreements were finalized with all retailers in 1989 upon acceptance of the W.C.L.C./Y.L.C. two party agreement in 1989.

Through the ongoing process of review, the Yukon Lottery Commission, in consultation with communities, Y.R.A.C. and the Minister responsible, agreed in 1991 to distribute by percentage of revenue available for distribution, 48% to supplement Government funding to eligible Y.R.A.C. groups and 52% for distribution through approved programs by the Y.L.C. This agreement was in effect for three years and has subsequently been renewed for three year periods – currently expiring March 31, 2006.

Ticket distribution, retail support and revenue distribution functions, administrative support for the Yukon Lottery Commission are administered from the Lotteries Yukon office. The day-to-day operation is administered by staff, who in 1993 became recognized Public Service Employees, and therefore may be authorized signatories for processing of payments.

Monthly financial statements are generated, reconciled to the YTG trust account where revenues are held. An annual audit, prepared by an independent auditor hired by the Yukon Lottery Commission, ensures that approved accounting procedures are practiced. An annual budget is presented and approved, which requires planning and policy to ensure the best possible distribution of funds based on current recreational needs. Records of all aspects of distribution are accessible for members to ensure informed and timely decisions regarding distribution. Ongoing gathering of information regarding both the distribution of tickets and disbursement of revenues allows statistical information to be compiled for analysis of effectiveness of systems.

The establishment of the Lotteries Yukon offices and administration procedures created inconsistencies within the Financial Administration Act, as defined by the Internal Audit report prepared by Government Internal Audit Branch in 1988. The Yukon Lottery Commission prepared recommendations based on the results of the Internal Audit and these recommendations were forwarded to the Deputy Minister for follow up. A cabinet submission was approved in 1993 which was intended to ensure compliance with the Financial Administration Act while ensuring an ‘arm’s length relationship’ with government. Changes were put on hold pending review of the Recreation Act and the establishment of an Arts Act.

In 2000, the Yukon Lottery Commission undertook a full management review that resulted in recommendtion for full corporate status.

Administrative procedures that require Government of Yukon participation and assistance in areas of finance, human resources, policy, communication, and information technology are achieved through 'shared services' of Department of Community Services, with the General Manager participating as a member of Senior Management reporting to the Deputy Minister.

The Yukon Lottery Commission has continued to set goals and policy consistent with intended role and recommendations of several reviews and government internal audits.

Last Updated 07-Sep-2007