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Tuesday, 24 April 2012

Is Governmental Gambling Addiction Unethical?

How much governmental revenue from gambling comes from addicts?
BC Gambling ad

In a free society, we might argue that people should be entitled to do what they like: cliff diving, rock climbing without ropes, eating at McDonalds, whatever. It’s our life, after all, we can spend or dispose of it in almost any way we wish.

But in the case of gambling in Canada (and in many other jurisdictions), governments are the primary beneficiaries of gambling revenue. Increasingly, governments are dependent on these revenues and are understandably reluctant to give them up.

It looks like a win-win situation: People line up to give their money away, and the government stands willing to take it for use in public services. Gambling is that most honourable of donations: a voluntary tax.

This sounds fine, and the majority of citizens – including me – have, on occasion, plunked down a dollar or two to purchase a lottery ticket or press a button on a slot machine. If everyone takes some time to donate money this way, the government may be able to avoid a deficit.

The problem is that most of us are not sufficiently dedicated. We lose interest in slot machines within minutes, and grow bored of buying lottery tickets.

And yet, these are enormous sources of revenue for our governments. In British Columbia, for example, gaming revenues (it always sounds more friendly to drop the ‘bl’ to turn gambling into gaming) earned $1.1 billion above expenses in fiscal 2010-11. In the 2009/10 annual report they calculate that revenues after all costs amount to about $435 per capita. This was counted as a “target not achieved,” as the goal of this crown corporation was to have citizens lose slightly more money that year to gambling.

In an interesting use of language, BC Lottery Corp’s annual reports refer to net revenues as the “Net Win”, despite the fact that gambling operations only profit via customer losses.

But the funds go to worthwhile services, don’t they?

At one point, money from gaming in BC was supposed to go to community organizations, cultural groups, and so on. But most of the revenue, 62.9%, now goes into the province’s general budget. Only 12.3% goes to community organizations, and another 13.4% to healthcare services and research.

Still, the province’s general revenues go to provincial programs, and perhaps it’s better to have a voluntary tax than one that is imposed. But where is the money coming from?

It’s hard to say. But a variety of studies in various jurisdictions suggest that a substantial amount of the money comes from people with gambling problems.

  • A report entitled “The Demographic Sources of Ontario Gambling Revenue” indicated that 60% of the income from machines and 35% of the total income was from problem gamblers.
  • The Nova Scotia Video Lottery Players’ Survey suggested that 53% of machine revenues were from problem gamblers.  
  • An Australian report estimated that between 42 and 75% of machine losses were incurred by moderate and high risk problem gamblers.

These reports and others are available from

We all know that some of the purchasers of alcohol (and so payers of alcohol-related taxes) are alcoholics. So what’s the difference between that and casino revenues?

One difference is that most adults drink at least occasionally, and most government revenues from alcohol sales come from users who are not addicted to the substance.

A more important difference is that the government does not itself promote alcohol consumption. There aren’t huge government ad campaigns suggesting that drinking is a great idea, or offering you incentives to start drinking.

In the case of gambling, however, the BC Lottery Corporation spends millions to promote gaming to the public. The actual figures are never provided in their annual reports, though the Corporation is quite candid about its goals. The top goal in the 2009-10 annual report is to “Build public trust and support for BCLC gaming.” As elaborated in the previous year’s report, “Without the public’s support BCLC’s business and revenue objectives could be placed at risk.”

Incentives are offered, such as go-go dancers on specific nights (presumably for the young male crowd) and (currently) a $100 bonus for signing up to gamble on the corporation’s online website. It’s difficult to imagine the BC Liquor Distribution Branch offering $100 worth of alcohol to nondrinkers to help get them started.

So what should be done? Should we make gambling a private enterprise, in which the profits go to the corporate sector? Should we outlaw it altogether?

Personally, I’m not a great fan of the government-as-parent deciding what citizens can do. But I also question the government’s role as both industry regulator and prime beneficiary of profits – this seems like a conflict of interest. Governments take in more taxes with every new chronic gambler they create. And having seen the results of their “successes” in my office, I’ll confess to experiencing some distaste for the industry.

Luckily, the decision about such things is not up to me. If it were, I would impose a sharp limit on the amount of gambling promotion that can be done, just as we do with cigarette marketing. And I would limit the expansion of casinos. I’d also like the government crown corp to stop making an increase in gambling a business objective. Given that the corp is effectively a branch of government, this makes it government policy to create as many gamblers as possible.

And please, let's stop patting ourselves on the back by talking about gambling profits going to treatment programs. Instead, let's actually publish the percentage of those revenues that are used on antigambling initiatives.

Even better: Let's publish a ratio. The amount of money spent promoting gambling, relative to the amount of money spent treating or preventing it. Then we'll get a sense of where the priorities really lie.

1 comment:

  1. Terrific post. I admire your courage (which of course is just knowledge.)