ALL GOVERNMENTS ARE NOT EQUAL
Paper presented at the
11th International Conference on Gambling and Risk-Taking
A Critique
Written by Sol Boxenbaum and Brenda Thomas
MGM Grand Hotel and Casino
Las Vegas, Nevada
June 16, 2000
© Viva Consulting
2000
Since the preparation of this paper for the 11th International Conference on Gambling and Risk-Taking, Las Vegas, (June 16, 2000), Viva Consulting has discovered that two significant changes have occurred.
The first change is that, having promised $10 million or 2% of the annual revenue from slot machines (whichever is greater), the Government of Ontario announced (June 2000) that they have already increased their budget allocation for the prevention and treatment of problem gambling this year to seventeen ($17) million dollars.
The second significant change is that the coroner of Quebec recently released new figures showing thirty-one suicides in 1999 directly related to gambling problems. These figures represent only those suicides where a note was left referring to gambling or where the family of the victim confirmed that there was a gambling problem.
The coroner’s office reports that there were 1600 suicides in the province of Quebec in 1999. Given the statistics on the percentage of the population afflicted with gambling problems (approximately 5%), it is reasonable to infer that there were probably more gambling-related suicides than the number quoted.
Introduction
Historical Background
Fast Forward: The 1998/1999 Fiscal Year
Gambling in Quebec Today
The Proceeds of Gambling
Quebec’s Adolescents
A Question of Lunch? Or Lottery?
I would like to preface this presentation by stating Viva Consulting’s objectives, and our position on gambling. Viva Consulting neither opposes nor endorses social gambling. Our organization has chosen to assume a responsibility towards ensuring that the necessary systems are in place to provide care for those adversely affected by problem or compulsive gambling. Our primary focus is to work pro-actively to minimize the risks associated with expanded gambling. We offer our services to governments and the gaming industry in an attempt to develop harm-reduction strategies. We also provide seminars to the private sector on the signs of problem gambling in the workplace, as well as offering seminars to at-risk groups including, but not limited to, adolescents, and seniors.
WHEN GOVERNMENTS RUN GAMBLING:
ALL GOVERNMENTS ARE NOT EQUAL
Unlike tobacco and alcohol, where it is content with taxing the consumer and the industry, the government decided to be the "owner" where gambling is concerned. All forms of gambling (which for decades had been illegal according to the Criminal Code of Canada) were suddenly given a new name, "Gaming", and were magically legitimized. Now gambling was taken out of the Criminal Code of Canada and the regulating of gambling activities was to be left up to the discretion of the individual provinces.
Since that time, most of the provinces have recognized that as a result of this deregulation there are serious problems being created among a certain percentage of the population. These responsible governments have taken steps to prevent the problems, and to provide the necessary health services for those already adversely affected by problem gambling. Other provinces, however, do little more than pretend to care and do what appears to be good, essentially in an effort to improve their public image. In Quebec, massive advertising campaigns especially target our young (as the government grooms its clientele for the new millennium) and our senior citizens who (for a variety of reasons) are also extremely vulnerable.
As I stated earlier, both in my role as founder and past Executive Director of Canadian Foundation on Compulsive Gambling (Sask.) and in my present position as CEO of Viva Consulting, I do not oppose social gambling. I do, however, feel that as the owners of the industry, the provincial government has a responsibility to educate people about the potential dangers of gambling, as well as having in place the necessary programs to provide treatment to those who have already become pathological gamblers.
HISTORICAL BACKGROUND
In Canada many years ago, even buying a ticket on the Irish Sweepstakes was illegal. A breach was finally opened in 1967. The Liberal federal government introduced a special law (the Omnibus Bill) intended to bring up-to-date a number of obsolete laws. The Minister of Justice at that time, Mr. Pierre-Elliot Trudeau, sponsored the bill. On September 12, 1967, Mr. Trudeau stated that his government had decided to insert in the Omnibus Bill an amendment to Article 179 concerning lotteries.
Even while the Omnibus Bill was still being trimmed and adjusted in Ottawa, Jean Drapeau, the mayor of Montreal, trying to recoup some of the dollars that had been spent building the World’s Fair and Montreal’s subway system, announced the creation of a program of "voluntary tax". For every $2.00 donation you would be eligible to participate in a draw, with a grand prize of $100 000. According to Mayor Drapeau, this "tax" was not a lottery, for two reasons. First, the prizes were given out in the form of silver bars, not money, and secondly, the "competitors" (chosen in a preliminary drawing) would have to reply correctly to four questions about Montreal during a second draw. That competition would determine the value of the prize that the winner would carry off. The replies to the questions were previously written on the back of the ticket and as a result this "testing" caused no undue problems. The inaugural draw was held on May 27, 1968.
There were many debates from Ottawa to Quebec City on the legality of this initiative. The Minister of Justice alleged that this was a lottery, pure and simple. On the contrary, Montreal’s mayor considered that (due to the way in which winners were chosen) the draw did not contravene the federal law. While all concerned awaited the verdict, the monthly draws nevertheless went off without a hitch. Players from all over Canada, the United States, Europe, and Asia readily "volunteered" to give their money to Montreal.
On September 14, 1968, the Quebec Appeal Court gave its decision: it declared Mayor Drapeau’s "voluntary tax" illegal. However, the municipal authorities of Montreal did not give up the struggle. The Council announced in November that the City would appeal this decision to the Supreme Court of Canada.
Interestingly enough, as the debate over legalities continued, sales in the "Mayor’s Lottery" dropped significantly, as many people did not want to participate in anything illegal. Despite periodic offers of new prizes, the revenue continued to drop month by month, and by the nineteenth and final draw, was only a little over $800 000. This furthers my belief that most people tend to avoid activities that are considered illegal. Then an amendment was made to the Canadian Criminal Code (Dec. 23, 1969), allowing a provincial government to legally operate lottery systems. Suddenly, those same people who had chosen not to participate in gambling returned, because NOW the government was endorsing the activity.
FAST FORWARD TO THE 1998/1999 FISCAL YEAR
Loto-Quebec reports net earnings of one point two ($ 1.2) billion dollars, which is 10.2 % more than in the previous year (1997/1998). In contrast to the earlier drop-off in lottery sales while the legality of a lottery was in question, in the past year Quebec’s lottery sector had its best year since Loto-Quebec was founded. They registered almost one point six six nine ($ 1.669) billion in sales, accounting for 53.3% of the total gambling revenue.
In $ Millions
GAMBLING IN QUEBEC TODAY
Since the advent of the legal lottery in Canada, the gambling choices in Quebec at present include the following, among others: Lotto 6/49 and Quebec 49 (twice weekly), the Super 7 (weekly), the Extra (played as an additional option on any of the on-line games), and two daily games, Banco and the Quotidienne. The latter is a game in which a person picks a three or four digit number. At one time this was known as "the numbers", an illegal game that gave people in impoverished lifestyles a chance at a dream, as "runners" did their route through the ghettos picking up bets of a dime or a quarter, usually only a half step ahead of the police.
Now the Quebec government has made that same "numbers" game both glamorous and legal. The only difference is that the payoff is smaller than when organized crime controlled the game!
In addition to these on-line games, Loto-Quebec also markets myriad scratch tickets. Crossword and Bingo are the two perennials that are available all year round, but there are many other scratch tickets that vary from month to month. What they do have in common is the same deceptive advertising in terms of chance of winning. When questioned about the obscene odds paid out on scratch tickets, spokespersons for Loto-Quebec respond that people play these games "to pass time, not to win money".
The least expensive of all the many lottery tickets in Quebec is the fifty-cent Mini-Lotto ticket. Drawn once a week since 1970, it now has a maximum jackpot of $ 50 000. However, since its payout rate is based on sales of 900 000 tickets and the average weekly sales are 600 000 tickets, the payout actually becomes 44 % of the week’s revenue. Today Mini-Loto represents only 1% of lottery sales.
Loto-Quebec also operates two lotteries where one can wager $2.00 or more on the outcome of professional sports, including baseball, hockey, basketball, football, and soccer. However, it is necessary to pick a minimum of three games correctly (3-team parley) in order to win. Betting on the first game involves predicting the outcome of three to six games, while the second game requires the bettor to predict whether the combined score of the two teams is over or under a given number. If the bettor picks three games correctly, he collects a grand total of ten dollars.
Loto-Quebec calls this odds of five to one. Basic math tells me it’s actually odds of four to one.
Nevertheless, these games have mass appeal, especially to teen-age males, because the cost is minimal and adolescent males tend to think they are extremely knowledgeable in sports.
My conclusion is that lottery and scratch tickets offer perhaps the worst odds of any form of gambling. Yet because of the polished marketing by Loto-Quebec, the ready accessibility of these tickets, and their affordable pricing, it is frequently the most desperate and impoverished members of society who buy these tickets. It is true that in Quebec, the aggressive salesmanship that accompanies these tickets is so intense that one cannot make a purchase of anything from gasoline to diapers to a loaf of bread to a newspaper without being encouraged to buy a lottery or scratch ticket.
In addition to all these games, Loto-Quebec also operates three casinos, 15 314 video lottery terminals in a total of 4 175 sites, a chain of high-tech off-track betting parlours, and a network of 168 Bingo halls.
THE PROCEEDS OF GAMBLING
The government of Quebec is Loto-Quebec’s sole shareholder. In the 1998-1999 fiscal year, Loto-Quebec’s net revenue was one point two ($1.2) billion dollars. One point one six two ($1.162) billion dollars went directly into a general revenues fund. This was in addition to the one hundred and thirty eight point seven ($ 138.7) million dollars that the government collected in sales tax and tax on capital. This translates to an income of more than three and a half ($3.5) million dollars per day, every day of the year, coming into Quebec’s government coffers as a result of gambling.
This three and a half million dollars per day is money that is not being spent in the general marketplace. Unemployment cheques and welfare cheques are being rapidly recycled by Quebec’s lottery tickets and video lottery terminals. There are presently 11 571 Loto-Quebec retailers selling lottery tickets and more than 15 000 VLTs. It is also alarming to note that the lower the average income of any neighbourhood, the more lottery outlets and VLTs there are.
Despite the fact that because of gambling more than three and a half ($ 3.5) million dollars came out of the economy and into general revenue every day last year, many of Quebec’s schools and sometimes entire wards of Quebec’s hospitals are closing. Teachers, nurses, doctors, lab technicians, and other public servants are either on strike, threatening to go on strike, or leaving the province altogether.
Quebec residents who have waited endlessly for heart surgery are dying every week. At Montreal’s biggest hospitals, the waiting time in emergency wards is twelve hours or more as one overextended doctor alone on duty attempts to deal with the crowds of emergency patients. In January one Montreal area hospital received a donation of a unit of radiology equipment valued at over a million dollars which still stands idle, because budget cuts prevent them from hiring a technician.
A recent report from the Health Center of McGill University revealed that cancer patients are being treated with medication that is known to be inadequate. More effective medication is now available, but budget cuts have made it impossible for Quebec hospitals to purchase and administer these new medications. However, those people who are financially capable can purchase these drugs, creating a two-tiered health system.
With revenues from gambling alone contributing more than three and a half million dollars on average per day, I find it ludicrous that any hospital need have a four million dollar budget deficit and be curtailed from providing necessary treatment.
QUEBEC’S ADOLESCENTS
One of the biggest problems in Quebec, as in most other jurisdictions, is the growing number of adolescents who are experiencing gambling problems. They are developing problems at three to four times the rate of adults, according to a study by Jeffery Derevensky and Rina Gupta of McGill University (1998). This appears to be consistent with other research across Canada and the United States.
In December, 1999, Viva Consulting was invited by the National Assembly of Quebec to participate at a commission to discuss amending the law governing the sale of lottery tickets to minors. Along with experts like Drs. Derevensky, Gupta and Ladouceur, we were able to convince the government to amend the law on lotteries to prohibit the sale of tickets to minors.
We stated at the hearing that in order to test the law Viva Consulting could, and would, send minors (with parental consent) to attempt to purchase lottery tickets. Ninety days after the law came into effect, an experiment was carried out, under our direction, to test vendors in relation to the amended law. We engaged the services of two Montreal area high school students (one male, one female), both sixteen years of age, neither of whom appeared older than their age.
While a reporter from the local English newspaper, Montreal Gazette, looked on from a close distance, the students attempted to buy tickets without being challenged for identification.
The vendors were selected in a manner that would not discriminate, more than one in each category of retailers. We visited Loto-Quebec booths in shopping malls and retailers in supermarkets, pharmacies, service stations, bakeries, and convenience stores (both franchised and family owned).
The two students were able to purchase a variety of lottery tickets from twenty-five of the locations. They were asked for proof of age by only six of the thirty-one vendors. This translates to less than twenty per cent of the retailers who obeyed the law, a full three months after it had come into effect.
Our initial intent was to notify the police and ask that they charge offenders through the judicial system, according to the new law. Bill 84 provides for fines of $300 to $2 000 for a first offence, but the purpose of our experiment was to draw attention to this law, not to cause financial hardship to the retailers. Therefore, we decided to first give Loto-Quebec Security the opportunity to deal with these matters internally.
A list of the offending retailers was provided to Loto-Quebec and each establishment was first visited by an inspector and then sent an official warning letter. Vendors found in default of the law for a second time would lose their permit for one month. Third time offenders would lose their permit permanently.
Viva Consulting was assured that in conjunction with our action, Loto-Quebec inspectors will begin to monitor vendors closely commencing at the start of the next school year and will prosecute offenders accordingly. This was our goal when we initiated this project: that the sale of lottery tickets to minors becomes the exception, rather than the rule. Loto-Quebec did provide us with the original documentation delivered to all their retailers in January, clearly outlining the changes to the law. We are satisfied with the steps that Loto-Quebec had taken at that time, but it was obvious that the large majority of those retailers had chosen to ignore the law. Perhaps this was due, in part, to the fact that a similar law had existed in Quebec for more than two years regarding the sale of tobacco products to minors, but had never been enforced.
A QUESTION OF LUNCH OR LOTTERY?
As I have previously explained, on February 1, 2000 the government of Quebec enacted a law prohibiting the sale of lottery tickets to minors. However, just twenty-seven days later, on February 28, 2000, Loto-Quebec launched a new animated game on CD-ROM which has obvious appeal to children. It is a game which takes twenty minutes to play and offers the possibility of winning up to $25 000.00 in prizes. It is actually an interactive electronic scratch ticket. According to Loto-Quebec spokespersons the new law prohibiting the sale to minors would be enforced, yet the 16-year-old boy who took part in our experiment was able to purchase the CD on his first attempt. Loto-Quebec further states that there is a password option to enable parents to render the disk inoperable on the family computer. That is true, but this raises two issues: a) many parents are not aware what their children are doing on computers, and b) many parents do not realize that gambling is dangerous to the welfare of their children. I feel that some parents and grandparents will actually purchase these games for their children, and will include them as birthday gifts. As a computer game, the price is extremely affordable. The initial package, which contains the CD-ROM disc and three tickets, costs $12.00. After that you must buy a ticket each time, in order to play the game.
With additional cards selling for $4.00, I feel that some children likely will be skipping lunch and buying "a piece of the dream". The biggest travesty here is that, unlike the computer games our young have grown up with, it is impossible to ever become more skilled at this game. It is a game of chance. The odds of winning with this CD-ROM are the same as on the typical scratch ticket, and we heard earlier how obscene those odds are! A subsidiary of Loto-Quebec, Ingenio, owns the world patent and will be licensing this game and others like it internationally.
We do not fault Loto-Quebec for their efforts. They are doing their job. In targeting the youth market, they are not alone. The tobacco companies are doing it, and the breweries and distilleries are doing it as well. The mandate the government has given to Loto-Quebec is to market gambling and to make as much profit as possible. They do that job well. However, we truly feel that an animated CD-ROM such as this cannot possibly be intended to interest adults, who can readily access real gambling via the Internet.
One might wonder why in one segment of this paper we praised Loto-Quebec for their efforts in curbing under-age gambling, and in the next berated them for targeting the youth market. The reason is that while one department of Loto-Quebec has the mandate to operate the lotteries and casinos at a profit, another department has the mandate to deal with pathological gambling. The latter function tends to be similar to the people who have to follow the circus parade to clean up.
We believe the fault lies with the Quebec government for not having realized the need to have a minister in the cabinet responsible for gambling. As well, Quebec needs to have a neutral outside organization to oversee the actions of Loto-Quebec, examine the consequences of gambling on society, and report to the government. Unlike most other provinces, in Quebec the agency responsible for all forms of gambling, Loto-Quebec, answers only to the Minister of Finance. In fact, it is only since Viva Consulting’s address to the National Assembly in December that the Minister of Health has been included in the hierarchy.
Another issue Viva Consulting raised while addressing the vice-premier of Quebec in the National Assembly was the absence of free treatment for gamblers in distress. There is a free, 24-hour Problem Gambling Help Line which refers callers to resources; however, most of these services are counsellors in private practice who charge a minimum of thirty dollars per hour. As we pointed out, most compulsive gamblers who could afford to pay thirty dollars an hour for counselling would not likely be phoning for help. They would still be gambling.
We compared our treatment situation in Quebec with that of Ontario, Manitoba, Saskatchewan, Alberta, and British Columbia, where problem gambling treatment is provided free through their provincial health care systems. All of those provinces have been divided into health districts, each of which has at least one counsellor who has received sixty hours of training in gambling addiction. All of those provinces have free outpatient treatment.
Not too surprisingly, because his sole source of information on the subject of gambling is Loto-Quebec, the vice-premier of the province was not aware that, unlike other provinces, such services were not available free in Quebec.
Subsequent to Viva Consulting’s appearance at the hearing in December, in the last provincial budget the Quebec government pledged forty-four ($44) million dollars over the next six years for problem gambling prevention and treatment (March 14, 2000). However, even that is not as generous as it may seem. The problem is that the funding is comprised of three ($3) million dollars for this fiscal year, three ($3) million dollars for the next fiscal year, and eight ($8) million dollars for the 2001-2002 fiscal year. The remaining thirty ($30) million dollars is to be spread over the final three years wherein the present government may or may not be in power. Moreover, more than two months have elapsed since that budget was passed and we still have not heard when, how, or to whom this money will be distributed.
By comparison, Ontario’s budget for problem gambling prevention and treatment is a minimum of ten ($10) million dollars or 2% of slot machine revenue, whichever is greater (preliminary estimates are that it could be as much as twenty million dollars per year). Manitoba and Saskatchewan, whose combined populations do not equal the population of the City of Montreal, contribute one point five ($1.5) million each. Alberta provides over three and a half ($3.5) million, and in British Columbia (where there are only charity casinos, and no VLTs) the government contributes two ($2) million per year. Quebec’s population is greater than that of the four western provinces combined, yet the government has designated only three ($3) million dollars for each of the next two years.
THE DEADLY ADDICTION
Prevention and treatment of problem gambling must become a government priority. In Quebec, the ease with which one can find a video lottery terminal within minutes of the home or workplace is creating a major crisis. Gamblers Anonymous groups are growing rapidly in number and attendance is largely comprised of VLT players.
No other form of gambling hits as swiftly and as hard as this one. People seem to bottom out both emotionally and financially in record time. Those who had never in their life even entertained the thought of committing a criminal act are suddenly stealing money to support their gambling habit. Of course, in the mind of a compulsive gambler caught up in the spiral of chasing their losses, they are only "borrowing" the money. They have every intention of replacing all they have borrowed as soon as they win. Unfortunately, for many, that win never comes and the result is loss of job, loss of family, loss of business and the ultimate loss: the loss of life. It is well documented that compulsive gamblers have the highest rate of attempted suicide of all addictions.
On November 25, 1999, the Montreal Gazette stated that, according to the office of the coroner, there were fifteen gambling-related suicides reported in Quebec so far that year. These are the ones officially counted and registered, only because in each case a suicide note had been written specifically referring to gambling. They were all men, aged twenty-six to seventy-one, and most had problems with VLTs. The coroner counted six suicides in 1998 and eight in 1997 directly attributed to problem gambling. We have no idea how many other suicides each year are actually as a result of gambling. Rumours even circulate about suicides in the Casino washrooms and parking lots, but the security staff at the Casino continue to deny the veracity of these rumours.
The news recently reported that a thirty-year-old man who had voluntarily banned himself from Montreal Casino subsequently became addicted to VLTs. After ultimately being put out of his home by his common-law wife, devastated by his addiction and deeply depressed, he returned on December third of last year to kill her child and critically injure her. A thirty-nine-year-old Casino gambler whose family finally refused to give him any more money shot and killed his brother-in-law and critically wounded his uncle and his mother-in-law, before turning the gun on himself and committing suicide.
These stories are sad, but they are not even the tip of the problem gambling iceberg.
How many stories of victims are not reported?
Sadder still is the fact that, due to lack of government-funded public education and awareness programs, it is unlikely that the first time a person plays these machines he or she has any knowledge what a deadly insidious addiction the VLTs can become!
In the province of Quebec, our VLTs can be played for as little as five cents at a time.
As one of its many promotions, Loto-Quebec advertises, "Imagine the Freedom !"
Just imagine
For a couple of dollars, you can buy an addiction that will last you a lifetime!
In conclusion, I would like to remind you that P.T. Barnum once said, "There’s a sucker born every minute". Nevertheless, in order to preserve the generation that is rapidly becoming part of adult society, and to prevent the cycle of compulsive gambling from continuing on in to the following generations, I have but one request to make of our provincial leaders:
"Please, let’s allow the young people of Quebec the freedom to be children...
before the government starts to exploit them !"
