Not a great look on the EOCF:
article link
Oilers 50/50 raffle has paid $81M to company owned by hockey group over 4 years, documents reveal
Financial statements show percentage of ticket sales available for charity has declined since raffle moved online
A significant portion of ticket proceeds from the Edmonton Oilers' 50/50 charity raffle goes to a private company owned by the Oilers Entertainment Group (OEG), according to audited financial statements obtained by the Investigative Journalism Foundation.
“Net funds from the 50/50 program are split between the winner and the Edmonton Oilers Community Foundation,” according to a frequently asked questions document from 2024 on the Oilers’ NHL page. Before the foundation disburses money to charities, expenses are deducted from the pot.
Between 2021 and 2024, the Edmonton Oilers Community Foundation (EOCF), the charity that runs the 50/50 raffles, paid more than $81 million in what it calls “licence and rights fees” to OEG’s subsidiary Win50, millions of dollars more than the amount available for charitable activities over those four years, according to the foundation’s audited financial statements.
Billionaire Daryl Katz is the founder and chair of OEG, and the Oilers say he has voting control of Win50.
The foundation says Win50 is responsible for all costs related to running the raffle, including additional prizes, television and radio commercials, promotion and advertising, the raffle technology platform and many other expenses totalling millions. However, the foundation's audited statements do not provide a breakdown of exactly how Win50 spends its money.
The Oilers’ 2024 Stanley Cup run drove 50/50 ticket sales to over $102 million, nearly double that of 2023. After the jackpots were awarded, and fees and administrative costs were subtracted, $20 million, just under 20 per cent of ticket sales, was available to go to a charitable cause.
Fees paid to Win50 for the 50/50 raffles, which the foundation reports as “licence and rights fees,” were $28 million in 2024, the biggest expense aside from prize payouts. An additional $2.7 million from ticket proceeds went to pay for credit card fees.
“I think this is shocking. I think Canadians are shocked when they hear those numbers and who the money is paid to,” said Kate Bahen, managing director of Charity Intelligence Canada, a charity watchdog.
“It's not 50/50. It's 50 per cent to the winner, 27.7 per cent to the private company, Win50, and the charity at the end of the day gets around 20 per cent.”
The “staggering” amount paid to Win50 over the last four years raises a lot of questions about how the EOCF operates, Bahen said.
Myrna Khan, executive director of the EOCF, said in an email that the increased expenses seen in the foundation’s financial statements are a direct result of the 50/50 raffle’s rapid growth from a small, in-venue operation to one also selling tickets online.
“This additional volume and complexity required a complete overhaul of the operational model, including expenses and resources needed to market and operate the 50/50 across the entire province, versus the simple model of selling tickets to fans in the arena. The result has been a steep increase in revenue from the raffle to the EOCF and, thus, to beneficiaries,” Khan said.
Charitable gaming is regulated by Alberta Gaming, Liquor and Cannabis (AGLC).
In 2020, the AGLC updated
provincial raffle policies to permit the online sale of 50/50 tickets and allow anyone in the province to play, greatly expanding sales beyond previous in-person purchase restrictions. Win50 is one of 13 approved electronic gaming suppliers registered with the province.
The EOCF has contracted Win50 to operate its 50/50 lotteries since 2011. Since 2021, the foundation has reported specific dollar amounts for transactions with Win50.
After the raffles moved online, the portion of ticket sales being paid to the company for “licence and rights fees” substantially increased, the foundation’s audited financial statements reveal. In 2020, 14.7 per cent of 50/50 ticket proceeds went to licence and rights fees, and that jumped to 21.4 per cent in 2021. In 2022, 27.7 per cent of 50/50 proceeds went to pay these fees. The fees stayed at 27.7 per cent in 2023 and 2024.
While the payouts to Win50 have increased, the percentage of ticket sales available for charitable activities has also steadily declined, from 37.6 per cent in 2017 to 19.6 per cent in 2024.
The Oilers said they do not charge a licence fee to the charity for the 50/50 raffles. The EOCF didn’t explain why they report all of Win50’s expenses to the CRA as “licence and rights fees.”
The IJF reviewed the 2024 financial statements from all seven Canadian hockey foundations. Along with the EOCF, three other foundations break out their charity lottery ticket sales and expenses.
The EOCF raised by far the most money from its raffles in 2024, with more than $102 million in ticket revenue, compared to the Winnipeg Jets’ True North Youth Foundation with $7.9 million, the MLSE (Maple Leaf Sports and Entertainment) Foundation with $4.8 million and the Montreal Canadiens Children's Foundation with $4.5 million.
After prizes and other associated costs were deducted, the MLSE Foundation had 42.2 per cent of lottery ticket proceeds available for charitable activities, the Montreal Canadiens Children's Foundation had 36.9 per cent, and the True North Youth Foundation had 34.8 per cent.
Khan said that as the 50/50 raffle has grown, more investments have been required to operate it.
“Running the largest 50/50 raffle in professional sports requires significant investment and support. Win50 reports to the EOCF board regularly and is responsible for all costs related to the 50/50. Given its role as the leader in the space, the EOCF must continue to invest in innovation and all of the other components that have made the 50/50 successful and enable the foundation to support a wide-variety of life-changing initiatives across Oil Country,” Khan said.
“Further, all licences and expenses related to the 50/50 are approved by AGLC.”
OEG’s vice-president of communications and gaming, Tim Shipton, said Win50 won’t provide a more detailed breakdown of expenses related to the raffle for competitive reasons. He wouldn’t say what Win50’s profit was, but he said “EOCF has invested many multiples more in Edmonton and Alberta than the net to Win50.”
“The market has become over-saturated with 50/50 raffles and competition is stiff. Win50 expends significant costs and resources to ensure the continued success of the EOCF 50/50, including covering the cost of multi-million-dollar expenses to third parties for line items such as prizing (vehicles, cash, experiences, etc.), television and radio commercials, marketing and promotion, digital advertising, a greatly expanded and enhanced raffle technology platform, increased staffing, customer service, compliance requirements and other costs — many of which have been front-end loaded as we moved online and into a much larger addressable market,” Shipton said.
Shipton also emphasized how much money the EOCF has raised through its 50/50 raffles.
“The fact is: we have raised over $557 million since 2001, including $318.6 million over the past four years to support kids, families, and communities across Oil Country,” he said in an email. Shipton
said the foundation was busy over the summer organizing events and supporting charities.
The Oilers' 50/50 ticket sales totalled $318.7 million between 2021 and 2024. After paying out the jackpots ($159.3 million), “licence and rights fees” ($82.8 million) and administrative costs ($9.7 million), $66.9 million went to the EOCF to be used for charity.
“Direct percentage comparisons with other foundations are misleading without considering the scale, operational complexity, market reach and success of each of these operations,” he said. The Oilers raise far more from their 50/50 raffles than any other Canadian team.
Khan said the foundation is investing in creating more of its own community programs. Funds were held in reserve to launch and grow the
Every Kid Deserves a Shot initiative, and the EOCF has also taken on responsibility and costs “for grassroots, youth ice hockey, ball hockey and other multi-sport programs, as well as for Hockey Fights Cancer, Hockey Talks and a variety of other transformative community initiatives,” Khan said.
The AGLC gives groups
up to 36 months to use charitable gaming proceeds.
Under Alberta’s
guidelines for charitable gaming events, the foundation is permitted to deduct eligible expenses from gross raffle revenue, including an electronic raffle system. Expenses, not including the jackpot amount paid to prize winners, can’t be more than 30 per cent of the total ticket value of the raffle.
AGLC spokesperson Lynden McBeth said in an email that the AGLC can’t comment on the status of a charity it regulates. “However, all charities that hold gaming events are required to file an annual report with regards to the funds earned and where they are spent.”
