Social & Economic Factors
Problem Gambling
"Problem gambling" is gambling behavior which causes disruptions in any major area of life: psychological, physical, social or vocational. The term "Problem Gambling" includes, but is not limited to, the condition known as "Pathological", or "Compulsive" Gambling, a progressive addiction characterized by increasing preoccupation with gambling, a need to bet more money more frequently, restlessness or irritability when attempting to stop, "chasing" losses, and loss of control manifested by continuation of the gambling behavior in spite of mounting, serious, negative consequences.
- Definition by the National Council on Problem Gambling.
Statistics from many sources tend to agree that about 5% of gamblers are "Problem Gamblers." As the definition above implies, these are people whose lives will be seriously damaged by gambling -- their lives, their marriages, their families and possibly others around them. This results in personal bankruptcy, family breakdown, divorce, job loss, depression, crime, suicide, etc.
The incidence of problem gambling among local residents would likely increase dramatically with a casino "in our own back-yard." For many problem gamblers, gambling was not a problem until a casino opened locally.
Problem gamblers are not gambling for entertainment, nor out of free choice. It is a compulsion and a seriously driven activity. They are losing more than they can afford to lose so they live with a growing desperation.
What business would be issued a business license to operate in Camrose if it were known that the goods or services provided by that business would seriously injure one out of every twenty customers?!
Suicide
Problem gambling leads all too often to suicide. This is a part of the reality of legalized gambling that tends not to come to light until it is too late. However we could learn from the experience of our American neighbours:
"For millions of Americans, gambling addiction has become a pathway to pain and misery; for some it leads to death. Gambling-related suicides have become an increasingly common phenomenon as legalized gambling has spread across America. The extent of this phenomenon remains largely unrecognized, however, due to a variety of reasons, ranging from a desire by surviving family members to protect privacy to attempts by suicide victims to make their deaths appear accidental for insurance purposes. Even so, the evidence beginning to come forth paints a grim picture of the depth of despondency which often accompanies a gambling addiction."
[The article goes on to provide statistics.]
- Ronald A. Reno, "Gambling and Suicide", Citizen Link, 1998 May 22.
Closer to home, a specific report from the Province of Quebec:
Pathological gambling has the highest attempted suicide rate of all addictions. In 1999 alone, according to the office of the coroner, there were 31 suicides in Quebec directly related to gambling. These 31 deaths are definitive only because a suicide note was left, or because the victim's family reported that gambling was the problem. How many other victims did not leave a note, and because pathological gambling is such a hidden addiction, the family was not aware of the problem? How many suicides appear to be accidental death? Some despondent gamblers do not want to burden their families with the knowledge that they had taken their own life, and yet others want their family to be able to collect benefits from life insurance policies.
- Sol Boxenbaum, CEO, Viva Consulting, Video Lottery Terminal.
Youth and children
The presence of a casino in Camrose, along with increased endorsement from many youth oriented charities, would make our community an even more "gambling-positive" atmosphere, thus even more strongly influencing youth and children:
"Retrospective studies have indicated that adult problem gamblers report the onset of their pathological behaviors to have begun quite early, often beginning between the ages of 10-19. A large scale study of adolescents in Alberta found that most problem gamblers began gambling, on average, at age 10 with similar results being found in our study of secondary school adolescents and young adults in Quebec.
"Problematic gambling among adolescents has been shown to result in increased delinquency and crime, the disruption of relationships, and negatively affects overall school performance and work activities. While these youth present themselves differently from adults, they nevertheless have similar characteristics. These adolescents have a preoccupation with gambling, sacrificing school, work, and parents and peer relationships in order to maintain this behavior."
- "Youth Problem Gambling," International Centre for Youth Gambling Problems and High-Risk Behaviors, Faculty of Education, McGill University.
The real results of present gambling expansion, of course, would not show up until a generation or two into the future when researchers document a significant increase in the rate of pathological and problem gambling and only then would it be known what we did to our children and grandchildren.
Gambling researchers say they are more fearful for the future of adolescents than adults. Children today are the first generation to grow up in a world where gambling is not seen as a vice; where, in fact, they see churches, service organizations, and governments giving their blessings to gambling as a way of raising money. It is legal, it is accepted, and children today have never known a time when it wasn't part of society. "It's a very real and serious problem and one not well known amongst youth," said Derevensky. "they don't understand the consequences."
Acceptance of gambling as a norm in the mainstream of society, young people's desire to take risks, and a belief that they're invincible coupled with a general unwillingness to take advice (common to all generations) send up red flags wherever researchers conduct their studies on youth gambling. Their concern has already been justified by results from many research studies, such as the one in Windsor and those in Quebec by noted researchers Jeffrey L. Derevensky and Rina Gupta of McGill University, and Harold Wynne, of Wynne Resources in British Columbia. According to work done by Gupta, Derevensky, and Wynne, gambling rates among youth appear to be rising, with between 4 and 18 percent of adolescents developing a serious gambling problem. 105 Another 10 to 15 percent are at risk of developing or returning to serious gambling related activities, and adolescent prevalence rates of pathological gamblers is two to four times higher than that of adults. Their work is corroborated by similar findings in Windsor.
105 Gupta, Rina, Jefffrey Derevensky, and Harold Wynne, Prevention of Youth Gambling Problems, Clinical Issues, Research Agendas and Social Policy (Montreal and Edmonton: McGill and Wynne Resources, 1998)
- V. Perrier Mandal & C. Vander Doelen, Chasing Lightning: Gambling in Canada (Toronto: United Church Publishing House, 1999) pp. 114-115.
Our society's positive attitude toward gambling, absorbed by children and youth during their formative years, makes them particularly vulnerable when they they become young adults and therefore free to gamble without restriction.
The study of 5,000 people found that seven per cent of those aged 18 to 24 had moderate to severe gambling problems.
That is almost twice the rate found in the general population.
- "Evidence gambling problems start in teen years -- study," CBC News (online), 2001 Dec 5; referring to studies done in New Brunswick by University of New Brunswick sociologist Dr. Jim Richardson for the New Brunswick Coin Machine Owners' Association, and in Ontario by the Canadian Centre on Substance Abuse and the Responsible Gambling Council of Ontario.
Exploitation more than entertainment
Although only a minority of gamblers are "pathological" or "problem" gamblers, the gambling industry depends upon this minority for the majority of its revenues:
University of Illinois economist Earl Grinols has calculated that 52 percent of casino revenues come from active problem and pathological gamblers. Grinols based his calculations on data regarding the prevalence of problem and pathological gambling in the general adult population, the amounts lost to gambling by those with gambling problems, and the distribution of gambling losses among the population.
- E.L. Grinols and J.D. Omorov,
"Development or Dreamfield Delusions?:
Assessing Casino Gambling's Cost and Benefits,"
The Journal of Law and Commerce,
(University of Pittsburgh School of Law, Fall 1996), 58-60.Henry Lesieur, president of the Institute for Problem Gambling and a recognized authority in the field of gambling addiction research, examined data from existing surveys of gambling behaviour in Canada and the United States (including Wynne resources 1994 Alberta Study for AADAC, studies from British Columbia, New York, Nova Scotia, Louisiana, etc.). The portion of revenue derived from problem gamblers in casinos was 41.4% for table games and 74.6% for machine gambling.
- Henry Lesieur, PhD,
“Costs and Treatment of Pathological Gambling,”
The Annals (556, March 1998)
American Academy of Political and Social Sciences.
Lesieur's data for machine gambling is of particular significance, because the movement is toward more and more machine gambling in relation to other forms of gambling and the casino presently proposed for Camrose would include 200 slot machines and 15 tables.
A Gambler's Story
This links to a hypothetical story, illustrating the trap that casino gambling can be and the distribution of revenue from money lost at slot machines.
Hidden economic costs
It is quite possible that the (often hidden) economic costs of legalized gambling expansion actually outweigh the (more apparent) economic benefits.
The social impact of gambling addictions is immense, as are the associated costs. In Canada, the out-of-pocket costs for taxpayers for each problem gambler is estimated from $19,2721 to $56,0002. The costs include addiction treatment, higher policing and social services costs, bankruptcies, substance abuse treatment, and higher insurance costs, to name a few.
1 Goodman, R., "Legalized Gambling is a Strategy for Economic Development," study (Amherst, MA: Center for Economic Development, 1994).
2 Tudiver, Neil, University of Manitoba, The Vancouver Sun, April 11, 1994.
- Mandal & Doelen (1999) Chasing Lightning: Gambling in Canada.
- See also: The United Church of Canada, The Gambling Economy, 1998, p.8.
Jobs
Although casinos do create some new jobs, many of those jobs are gained at the cost of jobs lost in other local businesses, due to the way a casino cannibalizes the local economy. Casino jobs also tend to be low-paying and unstable.
Local business decline
With 16 casinos in Alberta already, the provincial market is quite possibly saturated. Hence the addition of a casino in Camrose would generate little new gambling revenue from outside the Camrose region. Any new gambling revenue would be generated from within the Camrose region, from local people who gamble more frequently because of the increased convenience. And every dollar from within our region that is lost at a casino is a dollar that would likely have been spent at local businesses. Hence the net effect could be the "cannibalization" of local businesses, a phenomenon which has been observed in other localities:
"...in Atlantic City, New Jersey, 100 of the town's 250 restaurants have closed since 1978 -- the year casino operations began."
- R. Corelli, M. Nemeth, & S.D. Driedger (1994) 'Betting on Casinos,' MacLean's, 107:22:26-29."Petrowski observed that a substantial number of businesses closed following the debut of Casino de Montréal because of declining sales."
- N. Petrowski (1994) 'Le casino mal aimé,' La Presse, April 28, pp.A1-A2.- Both quoted by Lennart E. Henriksson (1996) 'Hardly a Quick Fix: Casino Gambling in Canada,' Canadian Public Policy, XXII:2:117.
Gambling proponents argue that gambling activity brings tourist dollars to a community. Tourism studies suggest that gambling can have a positive economic benefit on a region IF sufficient revenues are drawn from outside the community; otherwise gambling revenue will only be created at the expense of surrounding businesses.
- Canada West Foundation (2000 Feb) Canadian Gambling Behaviour and Attitudes," p. 25.
Much attention is given to the benefits of gambling, which tend to quite visible and measurable. However, we need to look more closely at where the money is actually coming from and how the losers are affected; this side of the story is no less significant because of its tendency to be less visible and less measurable.
But the economic boost gaming provides to local and provincial economies is deceptive, says Richard Lipsey, a professor at Simon Fraser University in B.C., who’s researched the effects of gambling in that province.
He feels gambling actually siphons money away from other legitimate businesses. If a gambler is spending his or her extra cash at the casino, local businesses, restaurants and other arts and entertainment venues in that region are losing out.
“It’s easy to point to jobs created in gambling because they are localized and visible. It’s difficult to track the jobs destroyed by the diversion of expenditures [to gambling],” Lipsey argues.
“When dollars migrate to slot machines and away from more labour-intensive activities, such as bars and restaurants, the effect upon the local economy is negative.”
Peter Muggeridge (2002 Aug) "Provinces hit gambling jackpot," Canadian Association of Retired Persons.
Organized crime
It is known that organized crime infiltrates the casino industry, but it is apparent that the Province of Alberta is lacking in both awareness and adequate preparation to deal with casino related crime:
"Money is the lifeblood of gambling and criminals use sophisticated scams to tap the cash flow inside legal casinos, Sgt. Bob McDonald [RCMP criminal intelligence expert] told a seminar sponsored by the University of Alberta and the Alberta Gaming Research Institute.
"Criminals get cooperation from registered casino staff through coercion, extortion and corruption, McDonald said. Alberta's 16 casinos are also targets for counterfeiters, money launderers, loan sharks and drug traffickers.
"Yet nobody has studied the incidence of these crimes. Casinos were legalized without research to determine how much extra crime would likely happen, he said.
"To an extend, police were caught off guard."
- 'Police caught off guard by casio crime,' Edmonton Journal, 2002 Mar 9.
Individual crime
It is also known that individual criminal activity carried out by pathological and problem gamblers increases where casinos are established. This includes theft, forgery, embezzlement, fraud, credit card scams, domestic violence, break and enters. - Canada West Foundation (Feb 2000) Canadian Gambling Behaviour and Attitudes, p.14.
"A county with casino gambling faces an 8 percent higher crime rate on average than a county without casinos, a comprehensive study on the impact of casinos on crime concludes. ... The paper estimated the cost of casino-induced crime at [US] $63 per adult in the 167 counties with casinos, or $1.3 billion in 1996. If casino gambling were expanded nationwide, the crime costs would be $12.1 billion, according to the researchers."
- Comprehensive study on impact of casinos on crime..., News from the University of Illinois at Urbana-Champaign. Referring to: Grinols, Mustard & Dilley (1999) "Casinos and Crime".
(Some studies do not find evidence of this increase, because they only study the first 2 or 3 years after the establishment of the casino. The above refers to a longer-term study which found the reported increase in crime began after the casino had been in operation for about 3 years. Why? Because that is about how long it takes for the new compulsive gamblers to lose everything and become desperate enough to turn to crime!)
Charity funding
Most charities have their foundation in some of the highest values of our society and dependence on gambling revenue compromises their integrity. Where children and youth are involved, the example that is set and the message that is given by gambling-funded charities is a mixed message.
Most of us would have some difficulty picturing Lord Baden Powell (founder of the Boy Scouts) selling casino chips; but our grandchildren might be able to picture that with no trouble at all!
We have already seen that gambling revenue is an unstable source of funding for charities. The charities have to make an appeal for support to government bureaucracies rather than a direct appeal to a constituency of genuine supporters. Hence funding levels fluctuate at the mercy of economic and political factors that have nothing to do with the charities' actual purposes.
Charitable funding from gambling may be temporary. We already see the charities' share of gambling revenues declining. Although they are understandably reluctant to admit it, the charities are being used to cultivate public acceptance of gambling. As public acceptance of gambling grows, the need for the charities' endorsement will decline.
Of the $5.4 billion in net gambling profit (after expenses) generated each year in Canada, charities will share between 15-20% of the revenue. This total includes revenue generated directly from the operation of charitable games and lottery grants available in some provinces. The remaining 80-85% of revenue is retained by the provinces to fund programs and special projects, and to pay off debts. Although exact figures are unknown, charitable gaming revenues as a portion of total revenue derived from gambling have decreased steadily over the last ten years. Across Canada, it is the provinces, rather than the charities, who have been the primary beneficiaries of gambling expansion.
- Canada West Foundation (2000 Feb) "Canadian Gambling Behaviour and Attitudes," p. 18.
Alberta may be at the saturation point for casino gambling with 16 casinos operating in the province already. (This observation has been made even by officials at the Alberta Gaming & Liquor Commission.) In this case, a new casino in Camrose would not generate more money for charities -- indeed it may well reduce the funding available for charities because of higher operating costs for more casinos.
More responsible methods of funding are possible. The government depends very heavily on the charities' implicit endorsement of gambling in order to justify continued expansion. The withdrawal of the charities' moral support for gambling would signal a demand for more fiscal responsibility from our governments. There is a social interest leadership role that could be played by the charities here.
Present opportunities
Plenty of gambling opportunities already exist:
- VLTs
- Lottery tickets
- Bingo
- Raffle tickets
- 50/50 draws
- Horse-racing
- Hospital dream tickets
- Internet casinos
No one is arguing for the complete abolition of legalized gambling, nor for unrestricted and endless expansion. Gambling is many different things and we have to decide where to draw the line.
Legal Obligation: Duty of Care
The principle of "duty of care" has been broadly applied to the sale of alcohol since the initial precedent was set under Common Law in 1973. It establishes that the providers of a good or service must effectively intervene under conditions where there is foreseeable harm either to the consumer of that good or service or to a third party. At present, a class action has been launched against Lotto Quebec endeavouring to extend a similar duty to the provision of gambling services.
"'Everyone has been waiting for a precedent-setting case,' said Wynne, head of Wynne Resources gambling consultants. 'This could precipitate a number of other cases.'
"VLT critics say playing the machines has caused some people such financial stress they lose their homes, families, jobs and sometimes take their lives.
"Wynne said it took a landmark case to make bar owners liable for traffic accidents after serving customers too much alcohol. He said the same 'duty of care' argument applies to the government as owner of Alberta's 6,000 VLTs.
"Judging by damage awards against bar owners, the government will eventually face millions of dollars in damages as a result of people becoming addicted to VLTs, he said. He's aware of individual duty-of-care awards in Ontario in the range of $6 million to $12 million."
- Edmonton Journal (02 Apr 18) Quebec VLT suit a warning to Alta. -- researcher, p. B5.
