Special Report: Casino

Taxing my Moral Compass

There is something inherently wrong with a government exploiting a weakness of its most vulnerable citizens for revenues.

By Sean Hurley
Published January 17, 2013

There is an issue in the debate over a downtown casino that I believe is not getting enough attention and I'm not sure why.

This week I attended a No Downtown Hamilton Casino meeting on James St. and I was left with the impression that the question of morality is one best left to church groups and their congregations.

Churches have long opposed gambling on moral grounds, due to the impacts on families and especially poor families. But the issue of casinos in Ontario carries with it a moral question that is decidedly secular.

There is something inherently wrong with a government exploiting a weakness of its most vulnerable citizens for revenues.

It can be argued that governments earn revenues from taxing tobacco, alcohol, and other vices. These are, of course, "sin taxes".

However, there is a fundamental difference: the government is not marketing cheap Ontario branded cigarettes to teens and cancer ward patients. The government is not marketing cheap grain alcohol to problem drinkers and frat parties.

The government is, however, marketing Ontario-branded gaming and casinos to gamblers.

Problem Gamblers

While the government will claim that the province runs programs to dissuade and prevent problem gamblers from visiting casinos, the fact remains that problem gamblers represent a very large proportion of gambling revenues.

A 2007 study, The Proportion of Ontario Gambling Revenue Derived from Problem Gamblers by Robert J. Williams and Robert T. Wood, both of the University of Lethbridge in Alberta, and available for free from jstor.org, found:

4.8 per cent of problem gamblers in Ontario in 2003 accounted for approximately 36 per cent of Ontario gambling revenue. This proportion varied as a function of game type, with a lower proportion for lotteries, instant win tickets, bingo, and raffles, and a higher proportion for horse racing and slot machines.

In 2011, the Ontario Lottery and Gaming Corporation (OLG) announced revenues of $6.7 billion, meaning problem gamblers likely accounted for about $2.4 billion (an amount greater than the "profit" earned by the province) of that money.

Meanwhile, according to the OLG web site, "Approximately $40 million is distributed annually by the province of Ontario to a range of services, including 49 problem gambling treatment providers and the Ontario Problem Gambling Helpline." That represents less than a paltry 2% of the dollars problem gamblers contribute to OLG revenues.

Closer to the Money

Gambling is expanding because governments are scrambling to shore up revenues as the casino market is saturated and cannibalized by competing jurisdictions.

Knowing this when it is reported that "Proximity to a casino is associated with greater participation in gambling and greater expenditure," it is reasonable to question whether that same information forms part of a deliberate strategy for moving casinos closer to the problem gamblers - or, in other words, closer to the money.

The churches and the families of problem gamblers can speak to the human costs and casualties behind these numbers. They can speak to sacrifices, lost jobs, evictions, broken families, jail terms, and suicides. And perhaps it is best to leave those details to those with direct experience.

But when tax policy has become so corrupted that governments must prey on our communities and families to top up coffers, we, as a society, must face up to a monumental moral failing that requires no piety to recognize.

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By Conrad66 (registered) | Posted January 17, 2013 at 07:34:59

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By Bla (anonymous) | Posted January 17, 2013 at 07:38:05 in reply to Comment 85250

Yeah who cares how many lives get ruined as long as you get to yank on your slot.

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By commonsense (anonymous) | Posted January 17, 2013 at 11:36:09 in reply to Comment 85251

If your so worried about ruining lives they maybe you should do something about revoking all the liquor licenses in the downtown area. Alcohol does much more damage than gambling does.

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By Conrad66 (registered) | Posted January 17, 2013 at 07:46:18

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By Conrad66 (registered) | Posted January 17, 2013 at 10:57:03

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By highwater (registered) | Posted January 17, 2013 at 10:59:45 in reply to Comment 85256

So the government should create more?

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By Pxtl (registered) - website | Posted January 17, 2013 at 12:30:16

it's also worth a stark contrast:

The government has heavy sin-taxes on cigarettes and alcohol to discourage excessive use. Drinking and smoking too much in Ontario is expensive, and beyond the profits made by the government they're deliberately expensive to discourage excessive use for your own health.

In gambling, losing that money is the bad health outcome. So the government's involvement in the price of gambling isn't really a health benefit. Expensive smoking reduces smoking. Expensive drinking reduces drinking. Expensive gambling is redundant. Heck, if gambling were cheap, there wouldn't be anything wrong with it. Cheap gambling would be like smoking without lung-cancer and heart disease.

So the government's involvement in making money off of gambling looks a lot less defensible vs smoking and drinking.

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By DowntownInHamilton (registered) | Posted January 17, 2013 at 21:15:20 in reply to Comment 85260

I'd say problem drinkers can be closely equated with problem gamblers.

Problem drinkers drink. Usually a lot. And that lands you in hot water a lot. Things like broken families can happen as a result. Things like spending way too much on alcohol can happen. You can lose your job, and thus income, based on it. You can go to prison for it (drinking and driving, public drunkenness, etc). It can drive people to steal, from the liquor store and/or muggings, etc. It can also have a large dollar figure attached if you end up requiring medical care, from say a car accident, or cirrhosis, or any other medical condition that is caused by drinking. You can make the same case out for 'problem smokers' too I suppose, although I don't know how many people who have gone bankrupt from smoking excessively.

So I'd like to see the amount problem drinkers spent vs. how much income was made by the LCBO and the beer store to compare.

Not trying to downplay problem gambling, just asking a different question.

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By Conrad66 (registered) | Posted January 17, 2013 at 12:46:52 in reply to Comment 85260

They are not trying hard enough to get pls to stop smoking and drinking and regulate all the fast food to be veg oh and cheap gambeling won`t work in this time and aged slots and card games are all fixed

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By highwater (registered) | Posted January 17, 2013 at 14:00:18 in reply to Comment 85261

How is this an argument to promote gambling addictions?

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By cdncoder (registered) | Posted January 17, 2013 at 14:44:46

It boils down to money in the end. The reason gambling gets positive marketing instead of negative marketing is the financial costs of the repercussions of the vice. Both alcohol and cigarettes incur health problems over the long haul that will require the government cover the costs in the form of expensive health care treatments. Gambling doesn't carry that particular baggage for the government. Issues like bankruptcy, lost-jobs, broken families, suicide - these have no significant dollar value to the government - they don't come with an particular health care costs that the government with need to deal with in the future. They are also issues we tend to shun or hide. Perhaps the answer is to bring the financial numbers of those issues to bare - make the government not only aware but in some way accountable.

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By Inhocmark (registered) | Posted January 17, 2013 at 16:19:18

Not that I would be for a Casino in Hamilton, but ultimately there are going to be casinos built in major centres in Ontario because there is too much money to be made by cash starved governments.

My question is: Can a city that could use the money and tourists that a casino could draw afford to be on the outside looking in when all is said and done?

It's a tough moral quandry to be sure, but if they're going to be around regardless, it might be nice if some of that money stays in Hamilton.

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By Robert D (anonymous) | Posted January 17, 2013 at 17:10:33 in reply to Comment 85267

If, as you've said, there will be a casino in major centres across ontario (which I agree is the OLG's plan) why would you assume that you would get money and tourists from a casino?

If every major city has their own, where are these tourists coming from? Why would they leave the Toronto casino or the niagara falls casino or the Brantford casino (or St. Catherine's casino?) to check out the Hamilton casino?

With casinos everywhere, would any casino become a tourist draw?

As for the money, casinos are designed to get you to empty your wallets there, at the casino. Spin-off effects are almost non-existent as studies quoted on this website have shown. So what "money" is the city getting? If you're talking about the municipal share of gambling revenue, the provincial government takes the lion's share, but the cost of that revnue will be borne primarily by citizens of Hamilton.

Why should the city let their residents gamble away a dollar so that it can get 20 cents? Wouldn't it make more sense to let those residents spend the dollar at a local business?

Because let's be honest, the money that goes to gambling (with the exception of problem gamblers) is discreiontary income that would have been spent anyways on some other form of entertainment.

When it comes to problem gamblers, they're compelled by their addiction to spend their savings, and when they end up bankrupt, guess who apys for their welfare or CPP/OAS? That's right, the municipality.

This whole thing is one big circular logic problem where the municipality will almost never be better off, particularly once the OLG has finished building casinos across the province. Even existing "sucess stories" such as Brantford, will eventually feel the pain of this new casino competition.

I also don't buy the whole "entertainment venue" argument. HECFI loses money, and they're planning theatre closings in Toronto (Princess of Wales) why would a new entertainment venue be any different than our existing ones?

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By Capitalist (anonymous) | Posted January 22, 2013 at 14:32:05 in reply to Comment 85271

Excellent response.

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By Robert D (anonymous) | Posted January 17, 2013 at 17:00:42

Casinos are normally located on the edge of a jurisdiction (i.e. Windsor, Detroit). The reason OLG located casinos here, rather than in Downtown Toronto, was that they were pursuing a classical casino strategy - locate the casino on the edge of your jurisdiction in order to attract money from foreign visitors, and minimize the impact on your own citizens in the process (no casinos close to major Ontario population centres).

Of course over time the US border cities built casinos that were just as attractive if not more attractive to US consumers (you can smoke in them I believe) and they don't have to face the hassle of crossing a border.

Revenues in Canadian casinos dropped.

But the OLG was addicted to these revenues, and so has launched their "let's build a casino everywhere" plan. They plan to build gaming facilities across the province, one per "region" to saturate the market and get every nickel and dime of gambling revenue they can witout having the casinos compete with one another directly.

There are many problems with this strategy, not the least of which is that each casino is really just drawing residents from that immediate gaming "zone" - residents further afield have their own local casino to go to. So revenue is necessarily capped and will be nowhere near what has been historically the case for isolated casinos.

In Hamilton, this additional issue of "where to put the casino" has the potential to create even greater damage (other cities face this same problem).

Ideally, the casino should be on the edge of our jurisdiction, and accessible to visitors from within our casino "zone", but not very accessible to citizens of Hamilton itself (to minimize social harm).

We should be placing it near Burlington, and/or Milton, somewhere with highway access...so we can attract money to the casino from out of towners, rather than fleecing our own citizens (same strategy ontario pursued, only on a smaller scale). Best of all, we won't be subjec to competition from an "immediate" neighbour, because gaming zones keep the facilities somewhat spread out.

Why would we not put a facility in the heart of hamilton? Well, while it's arguable (and by no means certain) that a downtown facility might make more money, that facility would be deriving most of its revenues from citizens of Hamilton, giving no real net "gain" to the local economy.

If anything, there is a net negative to a casino in downtown Hamilton because the revenue will come almost ENTIRELY from Hamiltonians, and yet the provincial portion will be distributed across the province, as the province sees fit.

A casino in the downtown is a bad deal for Hamilton.

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By Balance (anonymous) | Posted January 17, 2013 at 23:57:56

Well done Robert D! I couldn't agree more, you've provided sound facts. I truly believe that gambling, especially those venues, that are located in vulnerable areas are a detriment to society. At the end of the day, I believe that gambling causes more financial burdens on society than the revenue it generates. In this case, I'm sure the City will gross plenty of revenues from a downtown facility including jobs, however, I truly believe that we will all pay through other means.....increased crime, ruined families, medical treatment etc. It made me sick to see how the Hamilton Police Service is supportive. This will result in another reason for the HPS to increase their budget and empire build.

This isn't solely a Hamilton issue, it is Province wide. Gambling is another vice....similar to alcholism and substance abuse. The costs out weigh the benefits. I've seen families ruined. You have to remember that one person's actions (the father or mother) can affect the family's life.....financially, emotionally etc.

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By Rhet (anonymous) | Posted January 18, 2013 at 06:53:56

There have been some passionate and persuasive arguments brought to the fore in recent days. In light of the fact that the OLG is sustained by misery and disease, perhaps it is time for our community to boycott Trillium funding. Or will we fall back on the lemonade clause?

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By RenaissanceWatcher (registered) | Posted January 18, 2013 at 07:58:32

There are number of casino-related articles and opinion pieces in the Hamilton mainstream media today:

On the CBC Hamilton website:

“Passionate crowd packs Hamilton casino meeting” by Samantha Craggs: http://www.cbc.ca/hamilton/news/story/20...

And in today’s Hamilton Spectator:

“Casino crowd- pro and anti - descends on City Hall” by Dan Nolan: http://www.thespec.com/news/local/articl...

“Upping the anti at the bingo hall” by Joan Walters: http://www.thespec.com/news/local/articl...

“Mercantis want to delay HECFI deal” by Andrew Dreschel: http://www.thespec.com/opinion/columns/a...

“Hall of fame hasn’t talked about joining casino plan” by Rosie-Ann Glover: http://www.thespec.com/news/local/articl...

And a letter to the editor titled “Seminole tribe would be casino partner” by Robert Findlay: http://www.thespec.com/opinion/letters/a...

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By Vod_Kann (registered) | Posted January 18, 2013 at 09:59:31 in reply to Comment 85282

OK I'm curious

Apart from being a foreign owner, why is there an issue with the Seminole Indians?

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By RenaissanceWatcher (registered) | Posted January 19, 2013 at 14:44:39

This article titled "BIA casino survey largely ignored" by Meredith MacLeod was published in today's Hamilton Spectator: http://www.thespec.com/news/business/loc...

Comment edited by RenaissanceWatcher on 2013-01-19 15:27:49

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By RenaissanceWatcher (registered) | Posted January 20, 2013 at 20:34:36

Two articles on the casino issue in Toronto were published in the Toronto Sun today:

"Toronto casino question far from settled": http://www.torontosun.com/2013/01/19/tor...

"Casino became problem for gambling addict" by Jenny Yuan: http://www.torontosun.com/2013/01/19/cas...

Comment edited by RenaissanceWatcher on 2013-01-20 20:39:09

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By janetrymal (registered) | Posted January 21, 2013 at 08:46:42

before i became actively involved in the casino debate, i knew i didn't want it and i couldn't figure out why. i knew it had something to do with the government being involved, but couldn't put my finger on what exactly my issue with it was. this is it. when something has been proven to destroy lives, real lives- not statistical lives, or percentage of people lives - why is the government not only condoning and making money from it (smokes and booze) but actively promoting it in a place that can ill afford its social costs to people who are already vulnerable? its shameful and short sighted. i realize how melodramatic this sounds, but the blood of each problem gambler's suicide and the fallout that comes with it are on the OLG and Government of Ontario's hands.

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By Capitalist (anonymous) | Posted January 22, 2013 at 14:36:28

Great article Sean.

I am against a casino for Hamilton and I am against this government's expansion of casinos across the province for the reasons that Sean has given.

It is too bad that the government's finances are so poorly managed that they have to resort to this.

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By Le Chiffre (anonymous) | Posted January 23, 2013 at 17:37:24

Don't call it a subsidy: Horse racing financial support appears to be back on the ticket.

The Liberal renewal machine continues apace!

http://www.thespec.com/news/local/article/874324--racetrack-deal-with-woodbine-a-template-for-flamboro-downs

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By Le Chiffre (anonymous) | Posted January 23, 2013 at 21:58:19

News Release

Horse Racing in Ontario to Continue

January 23, 2013

McGuinty Government Signs Transition Funding Agreement with Woodbine Entertainment Group

Ontario is another step closer to a sustainable horse racing industry after reaching an agreement in principle to provide transition funding to the province's largest provider of horse racing.

The agreement with Woodbine Entertainment Group will ensure races continue at the Woodbine and Mohawk tracks as the industry adapts to a more sustainable model. Agreements with additional race tracks are anticipated to be reached in the coming weeks.

In order to receive transition funding, racetracks will have to meet accountability and transparency requirements. Providing a number of racetracks with transition funding is part of the government's horse racing industry transition plan, which includes:

• Continuing the Horse Improvement Program http://www.ontarioracingcommission.ca/industry_programs.aspx?id=149
• Providing animal welfare supports.
• Transferring responsibility for the Ontario Racing Commission (ORC) to the Ontario Ministry of Agriculture, Food and Rural Affairs
• Helping the horse racing industry transition to a more sustainable model is part of the McGuinty government's plan to ensure increased accountability for the use of public funds.


QUICK FACTS

Ten race tracks have reached lease agreements in principle with OLG for its slots facilities. Additional agreements with tracks are to be announced in the coming weeks.
The Ontario Racing Commission will work with race tracks to provide a revised 2013 racing calendar as agreements are finalized.

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By RenaissanceWatcher (registered) | Posted January 26, 2013 at 09:41:48

There are two casino-related articles by Jon Wells on thespec.com today:

“What’s it like when a casino comes to town?” http://www.thespec.com/news/local/articl...

“Money maker or sin spinner; are casinos worth the gamble?” http://www.thespec.com/news/local/articl...

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By Le Chiffre (anonymous) | Posted January 30, 2013 at 07:54:34

A 90-minute reel of OLG reps at last night's meeting of Sudbury City Council:

http://new.livestream.com/sudburynorthernlife/events/1841516

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By Noted (anonymous) | Posted January 31, 2013 at 16:26:42

"MGM and Cadillac Fairview would jointly develop the property and split the operations, with MGM running the entertainment, gaming, hotel and conference facilities while Cadillac Fairview would manage the retail and parking facilities, Barwise said.

MGM was looking for a Canadian partner that 'shares our working philosophy and our values, especially one that’s committed to the local community, committed to sustainable development and to service excellence,' said MGM senior vice-president Alan Feldman."

http://www.thestar.com/business/2013/01/31/cadillac_fairview_joins_mgm_in_toronto_casino_plan.html

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By RenaissanceWatcher (registered) | Posted February 02, 2013 at 08:11:32

The casino debate is featured in today’s Hamilton Spectator:

“Casino Battle Royale” where the Spectator surveyed 60 community leaders: http://www.thespec.com/news/local/articl...

“Health community leaders speak with one voice on casino issue” by Molly Hayes: http://www.thespec.com/news/local/articl...

“Answers to 10 key casino questions” by Emma Reilly: http://www.thespec.com/news/local/articl...

An editorial titled “Wynne won’t step into OLG growth debate” by Howard Elliott: http://www.thespec.com/opinion/editorial...

There is also a column titled “Other casino bidders in the bushes” by Andrew Dreschel in the print version of today’s Hamilton Spectator but not yet available online.

Comment edited by RenaissanceWatcher on 2013-02-02 08:12:23

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By RenaissanceWatcher (registered) | Posted February 02, 2013 at 12:00:24

Dreschel's column is now posted on thespec.com: http://www.thespec.com/opinion/columns/a...

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