WINNIPEG -- We're gambling again at a record pace. Manitoba Lotteries is expected to make more money in 2005 than it ever has before -- a huge comeback for a Crown corporation that saw its bottom line eaten away two years ago because of indoor butt bans in Winnipeg and Brandon.

'LOOKING POSITIVE'

Scott Smith, the minister responsible for Lotteries, said smokers who shied away from gambling following the various puffing bans are now returning to bars and casinos.

Installing new video lottery terminals last summer and allowing the machines to operate on Sundays has also boosted the bottom line, he said.

"Things are looking positive for Manitoba Lotteries," Smith told yesterday. "People are bounding back, going to all the places they used to where the VLT machines are."

Manitoba Lotteries owns the two Winnipeg casinos and manages the province's fleet of VLTs.

The corporation's gambling profits plummeted by $30 million -- or about 10% -- in 2003, a record drop blamed on butt bans in the province's two largest cities.

Two years later it's an entirely different story.

The province estimates gambling profits will soar by 17% this year, reaching a record $271 million, according to Tuesday's provincial budget.

Tory gambling critic Ron Schuler accused the NDP government of using slick new VLTs and aggressive "target" advertising to get more Manitobans gambling.

"It shows a government that is really addicted to gambling dollars," Schuler said.

"They're really going after the younger crowd, you know, 'Go for the fun of it.' "

Smith brushed aside criticism that the government has been trying to convince more Manitobans to gamble.

"We won't apologize for a company that's doing well and went through a tough time," Smith said.

The minister noted gambling profits help fund key areas like health care and education.

Gary Desrosiers, owner of the Brunkild Bar and Grill, said his gambling revenue is up about $50 a day because of the new VLTs, which were brought in last summer.

But he said that doesn't come close to the business he's lost because of the provincewide smoking ban, which kicked in Oct. 1 of last year.

"The new VLTs are taking a lot more money from fewer people," said Desrosiers, who's leading a charge against the butt ban.

Charlie Clements, owner of Tubby's Pizza Restaurant in Winnipeg, said the new lottery machines have kept business steady at this restaurant.

The province is also estimating gambling profits will be up for the 2004-05 fiscal year, which ends March 31.