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Tuesday 21 May 2013

Michael Bryant calls the casino industry’s bluff (Michael Bryant)

Big ideas, beautifully written by a brilliant mind.  Wouldn't it be something if we could harness genius in a way that didn't let it consume those touched by it's fire?

Michael Bryant calls the casino industry’s bluff

“A casino is a factory of broken dreams — a scam for “recreational” gamblers, a shell game for taxpayers, and a rat trap for addicts”
by Michael Bryant on Tuesday, May 21, 2013 2:29pm
Casinos are best avoided for guys like me. Something was always too foreboding about them, like a mainstream, even highbrow way to ruin.
I always knew not to hang out in places with anything bright, shiny, ringing with promise, sirens of that next new experience even better than good bourbon with good company. Eventually, for the untreated addict, that self-protective fear erodes, and they stumble past lines once drawn in the sand, their brains starved for dopamine, their serotonin increasingly useless, their sanity long gone. More, more, more.
Casinos are just part of that lust for more: a little forbidden, a lot of booze, the allure of elusive jackpots, the escape imagined therein.

One fine spring, years ago, my then-wife Susan and I decided to turn the tables on Atlantic City. We’d stay at the Borgata Hotel Casino & Spa, but we wouldn’t gamble there. Oh no. We’d enjoy the discounted hotel rates, restaurants led by famous chefs, the elegant spa and the beaches on the Jersey Shore.
It was the worst holiday ever. When she complained about a minor injury, incurred on the premises, security guards showed up and waiver forms were pulled out; they seemed to fear litigation from this former Supreme Court of Canada law clerk and her Harvard lawyer husband. They eventually explained: People at their hotel hurled themselves down stairs to trigger lawsuits that might offset their gambling losses. There was a reason why you couldn’t open your windows in a casino hotel. Suddenly we felt like we were in a very strange place.
There was no way to go anywhere in that hotel without passing through the casino. On the way to and from our rental car, on the way to a restaurant, there was just no way to avoid those ringing bells and neon winks. The games, the slots, the pretty girl with a complimentary bourbon and soda, just like I liked it back then. (I stopped drinking in 2006, as I set out in Maclean’s for the first time last year, in an excerpt from my memoir, 28 Seconds.) Yes, I was indignant about these places, and yes, I wouldn’t let them fool me, but a few pulls on the slot machine couldn’t hurt, and I wouldn’t spend more than the $20 in my wallet and I wouldn’t go to that ATM that seemed to follow me, to get more cash, more chips, more tokens.
This was the biggest and fanciest casino in Atlantic City, making it one of the fanciest in the world, and still, in the morning, through my hangover’s veil, I could glimpse its fake, suburban feel.
A casino is a factory of broken dreams. It’s a scam for “recreational” gamblers, a shell game for taxpayers, and a rat trap for addicts. Walk this factory floor on a weekday afternoon; it will be, as Toronto Councillor Denzil Minnan-Wong said of the Woodbine slots, “the saddest thing you’ll ever see.”
They design casinos like a 3D movie but not everyone gets to wear the glasses—only the dealers, the managers, all the shills, and once in a blue moon, a winner.
So maybe you’re cool, flush, and the allure of getting to wear those 3D glasses is enough for you. Except that by the time you finish reading this, you’ll feel like you’ve been pick-pocketed by your government, and they’ve been pick-pocketed by the casino industry, which means, well, we’re all just a mark.
The so-called debate over a Toronto mega-casino is taking place in a parallel universe, as if a casino in the Greater Toronto Area might not happen. A casino is going ahead, regardless. The only blank to be filled in is the area code. Is the mega-casino complex going to be here or there in downtown Toronto, or in Markham or Vaughan?
Not Toronto, as of last week, when Mayor Rob Ford pronounced “dead” his dream of a waterfront casino, and the Ontario finance minister fired the chair of Ontario Lottery and Gaming (OLG), the self-described “largest gaming organization in North America.” But that just moves the new mega-casino a little north of Lake Ontario. The Ontario government shifted leadership and direction at OLG last week, by firing its leader, Paul Godfrey. But they are still budgeting for a 12 per cent increase in gambling revenue.
The deal is done. The casinos are coming. In fact, in less than a half century, Canada has gone from a jurisdiction that criminalized casinos and lotteries to one where provincial government treasuries see gambling dollars as their best bet for easy money. For the Ontario Treasury, gambling dollars now exceed boozing dollars by over a quarter of a billion.
When was this casino deal done? In July 2010, Finance Minister Dwight Duncan announced the Ontario government’s direction to OLG: “modernize”—i.e., privatize and double the money. Less than two years later, the casino plans for the GTA was announced. (My tenure in the Dalton McGuinty government predated the internal cabinet debate and external announcement.)
The brutal logic of the OLG privatization and expansion is that Ontarians are now counting on those dollars, rendering happy projects for which there will be a cornucopia of fingerprints.
Casinos incubate addictions, like old bread in a damp basement. One disbarred, ex-con of a friend gambled it all away, his life in ruins. I know too many guys who go there to die a little, guys and gals who took this roller coaster from frequenter of government liquor store and government slots or casino, buried under an avalanche of government advertising to drink and gamble more, to government-funded emergency room, detox centre, treatment centre, provincial jail, family court, welfare cheque and, tragically, right back into that Crown corporation to gamble and drink, or miraculously, into recovery and escape from that insanity. These poor suckers sunk themselves and then some saved themselves, but they were all more harmed than helped by this phony baloney about entertainment, casino jobs, tourism, and easy money for public goods.
Part of the con is the brilliant foundational work done by those in the casino industry who have gamed the debate to be about fuzzy social costs versus cold, hard economic benefits. Calling proceeds from a gambling enterprise “economic benefits” or “net profits” is being economical with the truth.
We have no idea how harmful casinos are, in terms of social costs, by way of suicides, poverty, addictions and the harm wrought. Nor do we have any idea about economic benefits, other than how much gets collected by provincial governments. More than $13 billion across Canada in 2010 was collected from gamblers, and all that can be projected because the games are fixed so as to produce billions in losses to gamblers hoping to strike it rich.
You don’t believe me? Read the fine print and weep. It’s called the “house advantage.” As Ontario Lottery and Gaming makes very clear in their companion website (, “With the possible exception of professional blackjack players and some poker players … over time, every casino game played results in a loss or expenditure for the player … While any single bet can result in a win at any time, loss is inevitable in all casino games over time. No system of betting can overcome the house advantage.”
Think about that. You go to a casino to win, to have fun. OLG wants you there for another reason. They know you’re hoping to win, but they know you’re going to lose. They take those losses—those guaranteed losses, guaranteed by the house advantage that “no system of betting can overcome”—and OLG calls those gambling losses “net profit” in all their public statements.
OLG’s “net profit” is a fine piece of Orwellian gibberish. These dollars are obtained from the guaranteed losses incurred by the gamblers and lotto ticket buyers. So gambling “profit” is not like profit wherein a customer buys a movie ticket and the theatre owner earns a profit. There is no risk of loss to OLG; there are legally guaranteed losses by casino-goers. There is no “profit” for taxpayers in the distribution of (mostly) taxpayers’ gambling losses to the provincial treasury. Ontario Lottery and Gaming is just a tax collector with a light show and an advertising budget.
This is more crudely put by the “Mob’s accountant” and casino pioneer Meyer Lansky: “There’s no such thing as a lucky gambler. There are just the winners and losers. The winners are those who control the game … all the rest are suckers.”
Why are they suckers? Because Lansky is correct: gamblers lose their money to casinos because casinos control the games. The advertisements promoting casinos, and the bells and whistles on the casino floor, all tell you that this is fun and you might strike it rich. But these casinos are just taking your money, and that’s a dirty trick. This isn’t “net profit” for Ontarians. It’s easy money, dirty money, money for nothin’, as the song goes. The same goes for all the lotto money in Canada, and those shameless “Welcome to Cloud 6/49″ commercials running in Ontario.
Who are the suckers? Up to 50 per cent of pathological gamblers are alcoholics or drug addicts, making casinos a rat trap for drunks and junkies. I know it was for me, though I never had enough cash to do much damage to my wallet. Plus, I retained enough fear and sanity to keep me the hell away from those places for most of my life.
Nor are the suckers high rollers. In the U.S., less than 10 per cent of the healthy casino-goers make more than $100,000 a year. Most make less than $50,000, whether substance-abusing recreational gamblers or non-abusers. Let me repeat that: most casino-goers make less than $50,000 per year. So the suckers are more likely to be the working class, the underemployed and the unemployed. These are the people from whom OLG extracts the billions in net profit. This is how OLG can project billions of revenue for the Ontario budget, annually verified by the provincial auditor.
But that shell game, that legalized scam, is usually lumped into additional, so-called economic benefits to come from “modernized” entertainment gaming complexes, as bragged about by OLG on its website: “thousands of spinoff jobs in construction and infrastructure.” Unlike the billions of gambling losses guaranteed by the “house advantage,” the promise of jobs, tourism dollars and “spinoffs” are all speculative.
The former chair of OLG speculated about the economic benefits of a casino thusly: “This project will create 6,000 construction jobs … Once completed, the project will directly employ over 12,000 people in well-paying jobs and … spur further creation of other indirect [benefits] and induce employment … It could generate up to $400 million in additional tourism revenue,” and “could propel Toronto into …. the Top 10 in overall convention business in the world.”
Maybe. But the private consortium that wins the bidding war for the GTA casino project will do so by keeping their costs down, to maximize profit, in exchange for the risk they will take in building, operating and maintaining the casino. So while the outgoing chairman wanted those job numbers up, the private consortium wants to keep costs down, which means less jobs and/or lower wages, to avoid less dividends and a lower share price.
A 2007 study in the American Journal of Economics and Sociology concluded that “the casino industry does not have an impact on economic growth at the state level.” So all the pro-casino boosterism about economic development is either bogus or questionable. It is far from clear that casinos boost an economy, even leaving aside the social costs, and also leaving aside the pressure that casinos put on other entertainment industries.
Even the gaming revenues themselves are not necessarily a net benefit to Ontario’s economy. “There are two simple questions: Where does the money come from, and where does the money go?” says William Thomson, a professor of public administration at the University of Nevada in Las Vegas, in a 2007 Wall Street Journal article. “If the customers live in the local area, there’s no way you can have economic development.” In other words, every Ontario resident walking into a casino is financing this phony profit from his or her actual losses.
Perhaps saddest of all is how so much will go into such a small, small idea. In the life of a government, there are only so many hours in the day; the time and resources are limited. When I look at all the hullabaloo around this gambling enterprise, I wonder what might have been. All this political energy and planning and public relations and all that lobbying; the campaigns, the fancy websites, the phony consultations, the maps, the requests for proposals and all the lawyering and accounting and consulting; the political commentary, hand-wringing, bureaucracy reports and committee meetings and council debates; the financing and construction and hospitality job applications. All of this, for a casino.
But there is a better way, and now it’s time for me to stop kvetching and start offering something useful. Casinos are coming no matter what, no matter the government in power. So what to do? I say use the casinos, the slots, and bingo as social and medical science laboratories. Study who is going in and out of the buildings, everything about the gamblers, in every way imaginable. Let’s stop guessing about the social costs of casinos, and find out, using the leverage that comes with a state-sponsored project. Call the bluff of privatization and require casino operators to collect information about the gamblers and their behaviour.
As for the gamblers’ civil rights, this is the additional price they pay for access to a casino. If these places are really the bastions of “entertainment, innovation and fun games” that OLG says they are, then what’s the harm? It’s like showing ID at the LCBO. Or presenting your Scene card at Cineplex movie theatres. Instead of corporations collecting consumer information relevant only to their bottom line, they can collect information, available only to government authorities, to allow for research that is obviously in the public interest.
Ask any social science or medical researcher how they gather information for research purposes. They do it all the time. All those studies that make you veer from trans fats and toward kale; that make you slather on sunscreen; that led to the denormalization of tobacco usage, chasing smokers outdoors. Invite the University Health Network and the Centre for Addiction and Mental Health and all the universities in Ontario to submit proposals about how it can be done. There is already a measure of this happening right now. Just expand it and be ambitious.
Next, either ban all advertising for gaming, or split the advertising down the middle. For every “Cloud 6/49″ or pro-gambling ad, a contrary ad must be run, back-to-back. Or simply require that the advertising budget for provincial gaming corporations be matched by advertising run by a coalition of anti-gamers.
Next, let’s determine where the gambling “net profit” will be directed, unlike other forms of provincial government revenue. The anecdotal information on where the OLG dollars goes is just that. The truth is that the bulk of OLG revenue goes into Ontario’s consolidated revenue fund—the big budget pot.
Without that revenue, there would be a shortfall that exceeds the annual budget of many government ministries. But it’s still only two per cent of the annual spending for Ontario, so OLG “net profit” is primarily absorbed into a variety of spending priorities. Yes, there are the happy announcements referred to previously, but there is no direct accounting between dollars taken in from the gambler and dollars spent on the taxpayer. Fix that. Let’s determine where the dollars are to be directed, and then account for that.
Where ought the $2 billion be directed? Open source that question. Invite applications, not unlike the requests for proposals that will be issued for casino construction.
This has never been done before, on this scale, and that just invites innovation. The government can set forth broad priorities for the proposals, ranging from revenue generation to health care and education. Maybe add alternatives, like poverty reduction, transportation, energy, infrastructure, or even the settlement of all Aboriginal land claims. I would advocate for a government to really make this a signature piece. For Conservatives, they’d be less likely to call for proposals to increase welfare rates. For New Democrats and Liberals, they’d be less likely to focus on revenue generation, because it’s not exactly a retail political winner.
An example of a big, new innovative idea? Imagine that we could diagnose children for learning disabilities, cognitive conditions, and mental illness, by a blood test, or an affordable and accessible brain scan, right in their local public school. Then imagine that there was technology that assisted those students to address any cognitive or behavioural function that harms more than helps them to learn. Now let’s see the cost of having the appropriate tests in the health care system, the justice system, and other government services, that would allow any Canadian to have that same diagnosis: a blood test or brain scan that didn’t involve a waiting list and limited access. And that diagnosis could determine whether the person has the brain of an addict, a bipolar, or borderline personality. It could test for anxiety and depression as easily as we currently test for diabetes or AIDS or cholesterol levels. (Such tests exist, but are neither accessible nor affordable on a mass scale, let alone outside the doors of the health care system.)
Then imagine how the various sectors of health, education, and justice might transform correctional facilities into giant treatment centres. These people need treatment to go from addicted, mentally ill, at-risk convicts to recovering highly productive and low-risk citizens.
Now, commercialize that technology, that education curriculum, that correctional system program and that health care delivery model and you’re looking at a net profit on your investment of $2 billion. And when I say net profit, nobody blushes with anything but pride at the public achievement.
I bet that Ontario could do that for $2 billion per year, and then even develop a project that would allow state-sponsored gambling to be obsolete and unnecessary because that giant casino-turned-research project confirmed our worst fears, and outrage ensues because the actual social costs, the horror stories, indeed outweigh the overestimated economic benefits, and we forge a better way to raise $2 billion a year that could truly be called “net profit,” and then some.
But wait: governments can’t do that. They don’t do that. Consumer-directed taxation is bad public policy, we’re often told. The problem is that some seniors won’t pay an education tax if there is no one in their lives going to school any more. Nor would a twentysomething pay a tax directed at geriatric research.
However, governments pretend that gambling revenue is not a tax, but net profit. Even then, directing the profits from, say, Ontario hydroelectricity gains to particular programs is bad public policy. The difference is that the $128 billion that comes into government is nothing like the dirty money of OLG—an exceptional revenue generator, which deserves exceptional treatment. Plus, we’re talking about two per cent of provincial government revenue. Think of it as an experiment.
Besides, that’s exactly how lotteries were used in the first place, in Canada, and much of the world. Copying Munich’s 1972 GlücksSpirale (i.e., lottery, though literally “happy spiral”), the Olympic Lottery Canada was created in 1974 to finance the ’76 Olympics, then was continued as Loto-Canada to address the large debt left thereafter. A Criminal Code amendment was needed to legalize that lottery, the original idea being that lotteries were exceptional, and could finance special projects.
Eventually, of course, all provincial governments and territories became addicted to gaming revenue, so much so that since 1980 they make an annualized payment to the federal government to keep the feds out of lotteries. Loto-Canada was eating into provincial lottery revenue, so the provinces and territories bought themselves an oligopoly. Nevertheless, the original purpose of legalized gaming in Ontario, and the rest of Canada, was to finance the kind of special megaproject I’m proposing herein.
Moreover, OLG already directs a fraction of its revenue to a specific source: First Nations. In 2008, I negotiated an agreement with Ontario First Nations, on behalf of the government, to avoid the kind of rampant casino proliferation that dominates Native American economies in California, and several other states. The deal was that Ontario First Nations would partner with OLG, not compete with OLG, and they would abandon litigation claiming Aboriginal rights to gaming development (as exists in the U.S.), in exchange for a share of OLG revenue.
So OLG is already built to channel its revenue directly to particular Ontario sources, and it is subject to the kind of accountability the public deserves. Now, take that model, and use the dollars to fund this new open-sourced Ontario megaproject. A project for the ages, one that tries to eclipse in its public benefit and societal ambition, the shabby piece of public policy that is OLG “modernization.”
Now, that would be something. It would be something that neither embraces gaming’s inexorable expansion, nor denies the conventional wisdom that “gambling is inevitable,” as concluded by the U.S. Commission on the Review of the National Policy Toward Gambling in 1976. Or, as Mayor Rob Ford puts it, of a Toronto casino: “I don’t know how you can say no.”
Michael Bryant is a former Ontario Attorney-General, Minister of Economic Development, and Minister of Aboriginal Affairs, and was a Toronto MPP (1999-2009). A Harvard-trained lawyer, Bryant currently teaches at the University of Toronto, and is an aboriginal affairs consultant at Ishkonigan. He is the author of 28 Seconds: A True Story of Addiction, Tragedy and Hope (Penguin, 2012).

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