Canada

Questioning a casino craze

As gambling grows, critics count the mounting social costs

DALE EISLER January 13 1997
Canada

Questioning a casino craze

As gambling grows, critics count the mounting social costs

DALE EISLER January 13 1997

Questioning a casino craze

Canada

As gambling grows, critics count the mounting social costs

DALE EISLER

It had all the trappings of a Las Vegas gala. Movie floodlights crisscrossed the night sky as more than 1,000 invited guests, many of them dressed in tuxedos or evening gowns and some arriving in limousines, turned out for the official opening of Casino Regina a year ago this month. They were on hand to christen what the Saskatchewan government had bravely proclaimed would be a jewel among the growing number of large-scale casinos in Canada. Early projections called for Casino Regina to rake in annual profits of $20 million, 50 per cent of which would flow into provincial coffers. But the results have been decidedly more modest. The province now expects its final 1996 take to be a mere $2.2 million, a disappointing showing for what many had hoped would be a much-needed source of cash to help subsidize government operations.

All the more galling for the Saskatchewan government is the fact that Casino Regina has proved to be a relentless political headache. Allegations of unfair labor practices and complaints about racial discrimination from some of its 400 employees—60 per cent of whom are native— have only added to the unease of an NDP government that was already uncomfortable with its involvement in the gambling business. “A lot of people in our government are not, in terms of ethics, supportive of the casino,” concedes Joanne Crofford, the minister responsible for casinos. “It runs against their ethical grain.” In fact, sources say the government would like to unload the casino—an option that Premier Roy Romanow and his cabinet are expected to discuss soon. “I would say it’s very, very likely they will try [to sell],” says one figure closely involved with the casino issue.

The Romanow government is far from alone as it wrestles with the ethical and financial dilemmas of legalized gambling. From Halifax to Hull, Windsor to Winnipeg, major casinos that boast all the slot machines and table games of a Las Vegas or Atlantic City have become a mecca for either serious gamblers looking for the big score, or busloads of people—many of them seniors—who see casino gambling as just another form of entertainment in the 1990s. And in an age of public sector belt tightening, casinos, and gambling in general, are also seen as a new cash cow by provincial governments of every political stripe.

First to take the plunge was Manitoba Premier Gary Filmon’s Conservative government, which opened its upscale, jacket-required Crystal Casino atop the Fort Garry Hotel in Winnipeg in 1989. Other governments quickly followed suit and today 16 large-scale casinos—either owned or contracted out by governments—operate full time in Canada. Four provinces—British Columbia, New Brunswick, Prince Edward Island and Newfoundland—remain holdouts. But faced with an embarrassing—and unprojected—budget deficit of its own, B.C. Premier Glen Clark’s NDP government is now casting a covetous eye towards the casino profits flowing to its provincial counterparts.

Casinos are the latest and most visible symbols of a pastime that brings with it some devastating social problems. In a report on gambling in Canada issued last month, the National Council of Welfare estimates as much as $27 billion is wagered annually in various forms of legalized gambling. “Needless to say, the revenues provincial and territorial governments get from the proceeds of gambling are attractive, if not downright addictive,” the report states. Addictive, as well, for the 1.2 million Canadians the council estimates are compulsive gamblers and whose predilections often exact a heavy toll on their families and home communities. Despite those social costs, says Sol Boxenbaum, Saskatchewan executive director of the Canadian Foundation on Compulsive Gambling, governments find gambling revenue too seductive to ignore. “It’s all about money,” says Boxenbaum. It’s got nothing to do with roads or health. It’s money.”

But are casinos really cash Valhallas for financially strapped governments? The answer clearly varies, depending on the population base they serve. In the case of Saskatchewan, an agreement between the Romanow government and the Federation of Saskatchewan Indians in 1994 paved the way for the development of five gambling houses, including Casino Regina. The deal was struck after the issue of casino gambling came to an explosive head between the province and Indian bands. When the White Bear Indian Band in southeast Saskatchewan defied the law and opened a casino on reserve land in 1993, an RCMP tactical squad swooped in and confiscated equipment, including 115 slot machines. The two sides subsequently agreed to share the profits from Casino Regina, as well as from four other casinos in smaller communities.

With a population of only one million, many believe the

Saskatchewan market does not justify so many gambling venues. But proponents point out that Casino Regina has attracted gamblers, exceeding the anticipated million mark for its first year in less than nine months of operation. On the downside, however, those patrons are spending less than expected, with projected average wagers of $50 per gambler turning out to be more like $23.

The same is true in Nova Scotia, where the first-year financial results from privately run casinos in Halifax and Sydney have been decidedly underwhelming. Casino management expected patrons to spend about $60 on average, but in reality they forked over an average of $20. Total revenues of $48.3 million were 50 per cent short of original projections, with casino operator ITT Sheraton on the hook for $25 million a year that it must pay to the provincial government over the next four years. “We had hoped revenues would be much higher,” says Nova Scotia Gaming Corp. president Ralph Fiske, whose task is to ensure the government gets its cut. Many, in fact, are betting that the Sydney casino will not be around much longer.

Elsewhere it is a dramatically different story, especially in Ontario and Quebec, where casinos reap big rewards for government by drawing from large populations, including many patrons from the United States. For example, Casino Windsor, on Detroit’s doorstep, has been a huge financial success, grossing $422 million in the 19951996 fiscal year. Casino Montreal has already expanded twice and has attracted 14 million gamblers since it opened its doors in 1993 at the old Expo ’67 site on lie Notre Dame in the St. Lawrence River. In Manitoba, three casinos in Winnipeg turned a $69-million profit for government in 1994-1995. And in Alberta, the government licenses 16 small-scale casinos limited to 50 slot machines each and operated as charitable fund-raisers. But even without any fullfledged casinos, the Alberta government is already a big winner, taking in $588 million in 1995-1996 from all forms of gambling, including lotteries, accounting for 3.7 per cent of its total revenue— the highest ratio of any province.

For some, the growth of a government-sanctioned casino industry is a dubious achievement. University of Toronto economist Mel Watkins describes casinos as highly regressive because they often take money from lower income people. He also questions their economic benefits. “There are no positive linkages that come from this that trains a workforce or leads to high level of skills,” says Watkins. “It’s bizarre. We’re just coming to terms with an economy based on tobacco and alcohol and now government gets into gambling.”

The dark side of the recent explosion in legalized gambling is readily apparent. In Montreal, the financial success of the glitzy casino has been tempered by claims that three recent suicides and one murder-suicide were linked to gambling losses at the casino. In one case, a 48-year-old mother threw herself in front of a train after wagering away money from a fire insurance claim on her home. In another, a man who had racked up a $100,000 debt shot himself to death. Casino proponents are quick to point out that the vast majority of gamblers do not meet such tragic ends. “Let’s not forget about the 98 per cent who play responsibly,” says Jean-Pierre Roy, a spokesman for Loto-Quebec, which operates the province’s casinos.

The actual number of people who suffer from compulsive gambling remains uncertain because, unlike alcohol or drug abuse, which have clear physical symptoms, compulsive gamblers often go undetected until they face financial ruin. In its report, the National Council on Welfare says about four per cent of people who gamble are addicted. The rates of addictions range from a high of 5.4 per cent in Alberta to a low of 2.7 per cent in Saskatchewan. However, those numbers are based on 1993 surveys and people working in the addictions field maintain that the numbers have mushroomed with the expansion of legalized gambling.

But while casinos are the most visible symbols of government’s love affair with gambling, an even more lucrative development has been the emergence of video lottery terminals. Often described as electronic slot machines, VLTs have proliferated to the point where there are now 38,000 operating in bars and licensed establishments across Canada, taking in $6.5 million a day. Easily accessible and at a cost of only 25 cents a spin, VLTs have been labelled the “crack cocaine” of gambling by those who work in the addictions field. “You can’t buy a chocolate bar for 25 cents, you can’t buy a newspaper for 25 cents, but you

can buy an addiction for the rest of your life,” says Boxenbaum, the compulsive gambling foundation director.

Governments are becoming addicted to gambling revenues

At the Old Brewery Mission in Montreal, a downtown shelter for the homeless, director Adrian Bercovici estimates that 20 per cent of his clientele suffer from gambling problems and he knows people who have lost their families and attempted suicide because of bad debts. The most destructive force, Bercovici maintains, are the VLTs. “They suck you in,” he says. Harold Wynne of Edmonton, who has done extensive research into gambling patterns in Alberta and is in the midst of a new study for the Alberta Alcohol and Drug Abuse Commission, says that social problems resulting from the growth of legalized gambling in all its forms—casinos, VLTs, lotteries, satellite horse racing—means that the practice has become more deeply embedded in the Canadian fabric. “One of the outcomes,” he says, “is more gambling and therefore a lot more problem gamblers.” Wynne adds that the situation will only worsen as adolescents—who are often introduced to gambling by playing sports lotteries and who are already part of the so-called video generation—reach legal age and begin playing VLTs.

That view is echoed by Larry Desjardins, a former Manitoba cabinet minister who chaired a recent government-appointed working group investigating the social and economic impact of gambling. Desjardins maintains that VLTs should be limited to casinos. “There is no doubt those machines are there to hook people,” he says. “Imagine encouraging the sale of cigarettes for the sake of high revenue and, if cancer results, saying, Well it’s OK, we will provide the treatment.’ ”

Already, some provincial governments are directing a portion of their revenues from gambling into education and treatment programs. But critics say that they are failing to keep pace with the emerging social problem. In Saskatchewan, where the government will take in $110 million from VLTs in the 1996-1997 fiscal year, only $1.5 million is set aside to deal with gambling addictions, Manitoba earmarks almost $1 million for the Manitoba Addictions Foundation and Alberta pays $1.2 million into addiction programs.

In response to the Desjardins report, the Manitoba government has reduced the number of VLTs in the province by 650, or 10 per cent. Facing similar concerns, the Saskatchewan government has capped the number of VLTs in the province at 3,600, and Alberta has a selfimposed limit of 6,000 machines. But while some governments are trying to curb, if not eliminate, their addiction to money flowing from VLTs, others, like Mike Harris’s Ontario government, want in on the action in a big way. Ontario is in the process of licensing up to 20,000 VLTs to be operated in charity gaming halls, racetracks, bars and hotels.

It all adds up to a new and massive industry of legalized gambling. And according to Ron Stengler, former president of Casino Regina, people who don’t like the sight of casinos better get used to it. “We’ve seen casino and gambling expansion in every jurisdiction and I can’t see why the trend won’t continue,” says Stengler. Little wonder. Judging by the way govermnents have taken to the casino business, the safest bet of all is that there will be no shortage of venues for Canadians to place their wagers in the years ahead.

SUSANNE HILLER

BRENDA BRANSWELL

DANYLO HAWALESHKA