21 Feburary 1998, pp. D1-D2
Governments and gambling
Long-armed bandits
Gambling used to be considered a moral and social evil. Today it's a socially acceptable pastime. The image makeover is the direct result of what may be the most expensive and most sustained government-funded advertising campaign in Canadian history.
In May, 1996, a 39-year-old Montreal man, Vo Phu Van, shot his brother-in-law to death and wounded two other people after relatives refused to give him money. A compulsive gambler who frequented the Montreal Casino, Mr. Van then took his own life. His was one of five suicides the coroner's office linked to the casino during its first 39 months of operation.
On Nov. 8, 1997, furniture refinisher Dennis Wynant locked himself in his garage, started his car and ended his life. The 56-year-old man from Winnipeg Beach, Man., left a series of suicide notes -- including one he sent to the media -- that blamed video-lottery terminals for his desperate act. "I lost in two years over $125,000 because of them," he wrote. "They cost my life -- and will destroy my family." Bank statements show that he made page upon page of debit-card withdrawals at two local hotels in which the lottery terminals were installed. Although he was apparently $40,000 in debt, he played the machines for several hours on his last day.
His 29-year-old son, Glen, says he too is a compulsive gambler. "Myself, I am addicted. I've spent thousands. I've put [VLT gambling] before rent and food."
These men and their families are casualties of the tidal wave of institutionalized gambling that has swept North America in recent years. Prior to 1969, lotteries and casinos were illegal in Canada. Until 1985, slot machines and video-lottery terminals were also outlawed. Today, Canadians spend an estimated $20-billion a year on gambling -- about five times more than we spend on tickets to spectator sports, movies, plays and concerts combined. In 1995, Manitobans handed over more money to government-run gambling ventures than they spent on food (as measured by Statistics Canada's basic grocery hamper).
And while governments regulate sales of tobacco and alcohol, arguing that the state is morally obliged to protect citizens from self-destructive behaviour, the same rules don't apply where gambling is concerned.
When historians look back at the latter part of the 20th century, they will shake their heads at the hypocrisy and short-sightedness of political leaders who, rather than pursuing sound economic policies, became hucksters for get-rich-quick schemes. They will be baffled by the millions of ordinary people who fell for the money-for-nothing promises of an industry that creates scant new wealth, that merely redistributes income from some individuals to others higgledy-piggledy.
It's true that gambling is as old as history, that it occurs in most cultures and that the majority of people who gamble don't experience ill effects. But politicians who say they're simply responding to the public's natural appetite by allowing more and more forms of gambling are deluding themselves. Research indicates that the more opportunities there are for people to gamble, the more they tend to do so.
As far back as 1976, a U.S. government report determined that, contrary to arguments that state-run betting puts illegal gambling out of business, the opposite is true. Reducing the stigma associated with gambling has resulted in a larger pool of hard-core bettors. Some of these people aren't overly concerned about the legal status of the games they play. Others deliberately turn to illegal games because the odds are better than those in government-run operations.
While gambling used to be considered a moral and social evil that undermined communities, today it's a socially acceptable pastime. This image makeover is the direct result of what may be the most expensive and most sustained government-funded advertising campaign in Canadian history.
Since the early 1970s, we have been blitzed by ads telling us not only that gambling is benign, but that it is virtually a civic duty since the money goes to good causes. The Ontario Lottery Corp., one of several provincial government-operated lottery bodies in the country, has spent $375-million over the past 22 years (an average of $17-million annually) trying to persuade us to gamble.
Indeed, in 1996, lotteries across Canada spent $43.4-million on advertising. Compare this to the $42.5-million that the federal and provincial governments combined spent on promotional campaigns urging people to do everything from voting to buying Canada Savings Bonds, or the up to $5-million a year Ontario Hydro has spent promoting energy conservation, or a $10-million federal antismoking campaign that was cancelled a few years ago because it was believed it would be ineffective. No other single issue has been promoted so relentlessly and so expensively by government. That's because the stakes are high. Provincial governments raise $4.5-billion a year, or an average of 2.7 per cent of their revenues, from gambling.
According to lottery-industry magazines such as Public Gaming, gambling revenues are a "voluntary" tax that require continuous effort to collect. Lottery officials acknowledge the need for aggressive marketing. After Connecticut slashed its lottery ad budget in the early 1990s, sales dropped. A survey found that people didn't play the lottery as often because many of them had forgotten about it.
There's "no other industry like the North American lottery industry when it comes to practical creativity in the marketing of products," declares one issue of Public Gaming. Another admits that "just about every marketing gimmick possible" has been applied to instant scratch-and-win tickets. When the Ontario Lottery Corp. launched Lotto Super 7 in 1994, its ad campaign included print, electronic and outdoor advertising, consumer promotions, direct mail and a multimarket media tour featuring a stunt biplane and wing-walker for photo opportunities.
The Ontario Lottery Corp. has run campaigns encouraging people to gamble impulsively and excessively. Marshall Pollock, managing director of the corporation during its first five years (1975-1980), says slogans such as "Go hog wild" and "Don't think for an instant" are harmful. "If you're going to advertise, you should do so in a responsible way," he says, adding that when he was in charge, the Lottery Corp. "eschewed the type of advertising that urges people to imagine what they could do with a million dollars, because it tends to lower the barriers of reason and moderation."
Says Mr. Pollock, "People ought not to be encouraged to get drunk and they ought not to be encouraged to spend more money than they should" on gambling. While politicians would be incensed if tobacco companies distributed coupons to people's homes entitling them to free samples, provincial lotteries across the country do just that. And the double standard doesn't end with different advertising rules. Liquor and tobacco are subject to far stricter regulations than is gambling.
Bars and restaurants have restrictions on how long they are permitted to remain open, yet Ontario casinos and the one in Montreal ply their trade 24 hours a day, seven days a week. Cigarette packages display ever-larger warnings indicating that tobacco is addictive, but when is the last time you were warned bluntly, in bold print, that gambling can destroy your life?
So far, government concern about compulsive gambling amounts to little more than lip-service. During a 1996 visit to Montreal's Casino, I found the usual flyer about problem gambling tucked into the bottom right of a four-row display rack -- just above floor level. Meanwhile, patrons were making frequent use of bank machines conveniently located at the ends of the rows of slot machines. During lunch at one of the casino's posh restaurants, a casino employee came in every 15 minutes to collect keno money from the couple at the table next to mine.
The entrance foyer at Casino Niagara contains an advisory that reads: "Know when to walk away." But the sign is posted on the back of a pillar, so visitors tend to see it on their way out of the facility rather than their way in. More of these warnings are scattered around the gaming floors, but they haven't been affixed above the ubiquitous bank machines (many dispensing only $50 bills), and they aren't in the line of vision of people glued to one-armed bandits that accept bills in denominations of up to $100.
While Casino Niagara maintains it believes in "moderation and sensibility," it also urges customers to sign up for a frequent-player card in which "players must maintain a minimum $25 average bet" at table games such as blackjack in order to accumulate points entitling them to "invitations to private parties and special events."
After spending decades creating a culture conducive to compulsive gambling, in the past few years the provinces have finally begun to offer services and treatment to problem gamblers. A 1996 report by the National Council of Welfare urged governments to spend "10 per cent or more of their net gambling revenues on preventing and treating gambling problems." At $1.9-million in 1995-96, Alberta funds such programs more generously than any other province in the country -- but the figure represents less than 0.5 per cent of that year's net gambling revenues.
In December, Harvard Medical School released its estimates of the prevalence of problem gambling in Canada and the United States. It says 1 per cent of adults and 6 per cent of teen-agers are compulsive gamblers, and that an additional 3 per cent of adults and 15 per cent of teen-agers are experiencing significant gambling-related problems. In other words, one in five teen-agers is in trouble.
Whether these young people will mature into adult problem gamblers remains to be seen, but it's worth noting that they are the first generation to have been endlessly advised, from the cradle onward, that gambling is a socially desirable activity. A 1993 study of 1,300 Quebec City students in Grades 4 to 6 found that 61 per cent had purchased lottery tickets. Eight per cent did so at least once a week.
Advocates of government-sanctioned gambling argue that it's necessary for the state to be involved in order to keep out corruption. But the roles of vendor and regulator are distinct. Just as we don't allow restaurants to conduct health inspections of their own premises, governments should not be promoting and profiting from an activity they are also responsible for regulating.
But money, as they say, changes everything. The steady stream of dollars raised by gambling has a habit of clouding judgments, of co-opting many of those it comes into contact with. For decades, Ontario's New Democratic Party was the province's conscience on such matters, energetically denouncing the growing use of gambling revenues to pay for essential services such as health care. After the NDP formed the government in 1990, however, the share of total lottery proceeds allocated to the day-to-day running of hospitals rose from 71 to 82 per cent, making the NDP a worse offender than the Tories or the Liberals.
It was the Ontario NDP that legalized four new types of gambling in one swoop (paving the way for large, permanent casinos that hadn't been mentioned during the election), and that began chipping away at the total amount of lottery money earmarked for social-service agencies such as Meals on Wheels and Big Sisters.
Although Lottery Corp. advertising assures Ontarians that the money goes to these sorts of good causes, this has never been true of more than 6.5 per cent of the total proceeds. Lottery revenues have soared (in its first full fiscal year, 1975-1976, the Ontario Lottery Corp. turned over $42-million in profits to the government. In 1996-97, it turned over $712-million -- a 17-fold increase in 21 years). But the social-service slice of the pie has not kept pace; it's now down to 1.7 per cent. From a high of $17-million a year in the early 1990s, politicians have cut back the good causes' allocation to $11.7-million.
In Nova Scotia, unemployed welder Wilfred Lanteigne entered a convenience store late in 1992 and used a sledgehammer to destroy three government-owned video-lottery terminals. He told a judge he had done so to prevent his wife from gambling away the grocery money. "She was putting us into the poorhouse," he said. A few months later, a Nova Scotia legislative committee invited submissions from the public on the effect VLTs and other forms of gambling were having on their communities.
Insisting that hearings were unnecessary, Conservative government members boycotted the committee. The subsequent report states that "the Speaker of the House of Assembly, although acknowledging that he did not have the jurisdiction to interfere with the work of the committee, cut off its funding at the request of the Minister of Finance. Opposition members of the committee carried out public hearings at their personal expense."
"It was wild," remembers Robert Chisholm, a committee member and now leader of the Nova Scotia NDP. "There we were, travelling around the province, holding hearings in church basements or wherever we could find free space." The report (three of whose five signatures belonged to opposition Liberal MLAs), declared: "It is known that there is significant social damage as a result of gambling in its various forms. Any extension of gambling will increase that social damage."
When the Liberals became the government shortly afterward, all was apparently forgotten. Despite the lack of public mandate, two permanent casinos have since been established in Nova Scotia. Last October, former Liberal cabinet minister Ralph Fiske resigned as head of the Nova Scotia Gaming Corp. He later told the media that his office, charged with representing the interests of Nova Scotians in negotiations with casino companies, had been ignored and stripped of its power by the government.
Indeed, as few and as weak as the safeguards provided by gaming commissions are, even these appear to pose too many obstacles for provinces blinded by the lure of gambling revenues. In December, five of British Columbia's six gaming commissioners (responsible for licencing and regulating charitable gaming) resigned, declaring that they had "become redundant within the commission itself," and that recent gambling changes had left them no "opportunity to make a significant contribution."
A few days later, it fell to the B.C. Supreme Court to frustrate plans to expand gambling in the province. After a public outcry helped defeat a proposed commercial casino on Vancouver's waterfront in 1994, the province responded by installing slot machines in smaller venues. When Vancouver City Council unanimously passed a zoning bylaw banning the devices, the B.C. Lottery Corp. took the city to court.
The Supreme Court judge heard that more gambling would strain local social services. Police indicated they are "totally opposed" to additional gambling due to concerns about increased crime. Concluding that the Lottery Corporation Act does not give the province the right to "set aside the unquestioned and long-held powers of municipal bodies," the judge ruled in the city's favour.
The Canadian public is not clamouring for ever-more opportunities to gamble. Quite the opposite. Whenever it is given an opportunity to express its view, the majority almost always rejects gambling expansion. In Ontario's municipal election last November, slight majorities voted in favour of casinos in only three communities: Brantford, Thunder Bay and Windsor. In 27 others, voters rejected additional gambling.
Rather than being a reflection of public will, this gambling trend is about governments who have begun to believe their own lottery advertising: that one gets ahead not by hard work and careful planning, but by seeking pots of gold at the end of rainbows.
As an economic strategy, gambling can never be more than a short-term fix, because it creates little genuine growth. An analysis of 55 U.S. communities with casinos found no evidence of healthier economies, and sometimes they were worse off.
Only the casinos in Windsor and Niagara Falls attract more out-of-town visitors than locals. Elsewhere, for every dollar spent on gambling, one less dollar is spent on other goods and services. (Once casinos on the U.S. side of the border are up and running, profits at these Canadian facilities are expected to nosedive.)
Gambling is also one of the most inefficient ways imaginable to raise government funds. Some of the total take is returned to gamblers in prizes, some of it is paid out to vendors in commissions, more covers the salaries of casino and lottery employees, while another chunk goes to advertising. It would be far more straightforward and cost-efficient to hike the sales or income tax slightly -- a process that would see government receive all the money raised rather than just a portion of it.
Better still, provinces could resolve to live within their means. While gambling proponents say the choice is between government-run betting and higher taxes, this too is a fallacy. In 1996, Money magazine spent six months investigating U.S. states with lotteries, comparing them to those without. Although most of the lottery states assure the public that the money is being used to fund education, the magazine found that "states that specifically target lottery dollars to pay for public schools often go on to decrease the share of general tax dollars budgeted to pay for education." In fact, states without lotteries actually spend more on education than their lottery counterparts, and taxes have risen three times as fast in states with lotteries compared to those without.
Rather than being a sign of innovation, reliance on gambling revenues suggests fiscal mismanagement. It is a mark of cowardly politicians who, wishing to avoid difficult decisions, have instead chosen to raise larger and larger portions of their budgets by promoting behaviour known to wreak havoc on some of their fellow citizens.
In the words of Alberta businessman and video-lottery critic, Jim Gray, "The problem with gambling is that it relies disproportionately on the addicts, on people who are unable to control their urge to gamble. This is a money tree," he says, "whose roots go deep in human misery." A 1997 Alberta study found that more than one-third of the province's gambling revenues comes from the 5 per cent of the population who are problem gamblers. Similarly, a 1992 report commissioned by the Wisconsin State Lottery Board determined that "nearly 75 per cent of all lottery revenue" comes from 10 per cent of the population.
Each problem gambler affects others -- relatives, friends and employers. One long-time compulsive gambler I interviewed emphasized that by the time someone suffering from this disease hits bottom they've "lost every nickel they could beg, borrow or steal. They've already taken as much as they could from their family," he says, "and they may owe an awful lot that they've borrowed from some pretty tough people." They may have ripped off friends and stolen from employers. Some compulsive gamblers become a drain on the criminal-justice and health-care systems.
Ontario's casinos attract players who leave their young children unattended in order to gamble. Other customers relieve themselves in plastic cups, or on the floor in front of the slot machines, rather than taking a break.
Almost no one believes it's possible -- or desirable -- to outlaw gambling. But a growing number of Canadians think there's more than enough of it already. They want government to regulate these activities, not promote them. They consider it unseemly for the state to be preying on the ill, to be selling false hope, to be encouraging irrational thinking.
It is for good reason that gambling has been called a tax on the foolish. We are far more likely to die in a plane crash or be struck by lightning (the odds are about one in two million) than to win a Lotto 649 jackpot (one in 14 million). Religious leaders also have a point when they condemn gambling for appealing to our greed. Yes, a few people win big. But for every Cinderella story about a laid-off nursing assistant who becomes a millionaire, there are legions of losers.
When $200 clink-clink-clinks out of the slot machine and into our lap, it isn't appearing out of thin air. It's coming from the person who warmed that stool before us, and who may have bet his rent money. That the Windsor casino is currently sucking $1-million a day out of Detroit -- a city whose weak economy hasn't got much to spare -- isn't anything for Canadians to feel proud of.
© 1998 Donna Laframboise
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