Time to rethink gambling addiction

Opinion

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This article was published 08/07/2022 (1163 days ago), so information in it may no longer be current.

In March, the provincial government announced a six-month pause on video lottery terminal (VLT) licensing fees.

The businesses that host and profit from VLTs in Manitoba pay a $425 annual fee per VLT to cover inspections and to ensure they are being run properly. The pause is designed to provide a boost to businesses beleaguered by the COVID-19 pandemic, and will make VLTs even more profitable in the short term.

Gambling is big business in Manitoba: our province has a startlingly high number of VLTs on a per-capita basis. It’s rare to walk into a pub in this province — especially outside Winnipeg — and not see at least a few of these blinking, blaring spectacles.

And the provincial government cashes in every time one lights up; VLT revenue is beloved by provincial governments, which are often starved of other revenues. Manitoba Liquor and Lotteries proudly announces on its website that its core mandate is to generate bucks for the provincial government and its various programs, including health care, education, social services, housing and infrastructure. The website proudly announces: “$425.1 million earned for the province in 2021/21.”

So the province is absorbing roughly $1.3 million of the normal costs of licensing for this six-month period. In response, the Canadian think tank Cardus praised the Manitoba government for voluntarily giving up some of the money it receives from VLT operation.

But this should only be the first step: according to Cardus, Manitoba’s government and other provincial governments should work to kick their addictions to gambling money by permanently ensuring VLT revenues never make their way into the government’s general revenues.

Instead, any revenues that are collected should be invested into efforts to assist Manitobans who suffer from problem gambling and into programs designed to alleviate poverty.

Cardus is on the right track, but why should the provincial government voluntarily give up its VLT revenues? It doesn’t take long, when reading about the corrosive impact of these machines on families, and indeed on our society as a whole, before one recoils at the thought of governments becoming dependent on this money.

VLTs are highly addictive. They are designed to pique and maintain players’ interest and excitement, and they press every button a potential or current problem gambler has.

The results are predictable. A 2004 study of VLT players in Alberta found a stunning 21.8 percent were classified as problem gamblers. Another study in Prince Edward Island found that someone who played VLTs in the past year was 38 times more likely to develop gambling problems than someone who has never played VLTs.

Problem gambling is simply gambling that is disruptive or damaging to one’s life. But beyond this sterile definition are the individual Manitobans whose savings have been ransacked, their prospects dimmed, and their families driven to the edge of — if not fully into — poverty because of problem gambling.

That last point is an important one. Not only does problem gambling deprive families of money, it leads to even greater problems. A 2014 study from Australia found problem gambling has far-reaching consequences for the family members of gamblers, from emotional problems to financial difficulties.

The study reported consistent evidence of an association between problem gambling and family violence. And, to cap it off, the children of problem gambling parents are at a much greater risk of developing their own gambling problems later in life than the children of parents without gambling problems.

Problem gambling is terrible for families, but has been very lucrative for governments. Throughout Canada, between 15 to 50 per cent of gambling revenues are derived from problem gamblers, despite the fact they make up only one to four per cent of the population.

But who are the users of VLTS who are likely to be making such contributions to government coffers? For the most part, they are already low-income earners with little to spare. Cardus reports that the poorest 20 per cent of Canadian households spent on average 5.7 percent of their income on gambling. This is roughly three times the percentage spent by Canada’s highest-income households.

VLT revenues must seem like manna from heaven for politicians wary of raising taxes or cutting services. In fact, these revenues come from much darker places. Gambling revenues are a hidden tax on both addiction and hopelessness, and problem gambling that afflicts innocent families and children is the most profitable of all.

Further, it is a regressive tax, imposed on low-income Canadians who are least able to pay. Is this really the money we want funding our schools?

Cardus has a better solution: keep this money away from general revenues, and instead use it to support people afflicted with problem gambling and their families, and all low-income Manitobans. Governments should see these people as worthy of help, not as potential sources of revenue.

Royce Koop is a professor of political studies at the University of Manitoba and academic director of the Centre for Social Science Research and Policy.