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It has been just over a dozen years since gambling exploded in popularity as an entertainment and tax source for Canadians and their provincial governments. The rapid progression from agricultural fairs and basement bingos to a high profile and nearly $13 billion a year industry has created a moving and controversial public policy issue.
The availability of so many gambling opportunities is also unparalleled in Canadian history. There are now 87,000 gambling machines (slot machines and video lottery terminals), 33,000 lottery ticket centres, 60 permanent casinos, 250 race tracks and teletheatres, and 25,000 licenses to run various bingo, temporary casinos, raffles, pull tickets and other activities (Figure 1). The role of these gambling implements in filling provincial coffers, funding good deeds, and providing employment is well-entrenched.
Yet, the societal costs of raising revenues from gambling remain largely unknown. Gambling's human impacts on family stress, financial well-being, lost work productivity, and addiction—impacts that have resulted in suicide, crime, divorce, job loss, and lower overall health—are only just starting to be measured and tracked. Further, the costs of job losses, decreased quality of life, health care expenses and increased judicial costs are even less well known, and will likely remain so as the rate of gambling expansion out-paces the capacity of researchers to provide answers to these complicated questions.
While the revenue growth trend of the last three years suggests a modest levelling off of gambling revenues, these data are reflective of a period of several moratoriums on expansion and re-tooling of approaches brought on by the very high profile and public concerns of the period 1998-2002. The current untapped potential market for the next generation of gambling products (e.g., home-based Internet gambling, interactive television and video game gambling, and cell phone gambling) is large and arguably troublesome. Gambling's recent slow rate of growth appears restricted by regulatory controls rather than by an exhaustion of consumer preference or the ageing of the industry. The emergence of poker as a significant ratings winner for television networks underlines the suggestion that gambling as a product is nowhere near its market boundaries.
The yet unexplored and emerging opportunities suggest that future gambling markets will be increasingly difficult to control as more and more money leaks out to illegal and offshore activity. Trapping the "leakage" of gambling money to illegal and external sources has historically been an effective justification for introducing more gambling (including lotteries, casinos, video lotteries) and will no doubt also make compelling future arguments for expansion.
The well-established commercial effectiveness of the Internet represents the obvious next evolution of gambling. Indeed, wildly varying estimates suggest that Canadian Internet addresses make up anywhere from 5-15% of a multi-billion dollar worldwide online gambling activity in spite of the questionable legitimacy of offshore gambling providers. International on-line gambling providers understand the potential of Canadian markets as they currently actively promote and advertise their products in Canada.
While the profit from these activities heads off-shore, the economic impacts are primarily negative. Offshore Internet gambling takes money out of the Canadian economy while trapping the negative social costs here. These will be difficult issues to deal with in the coming years and will exert tremendous pressure to justify expanding gambling once again.
It is against the backdrop of these emerging trends that we present Gambling in Canada 2005: Statistics and Context. This document represents our third significant effort to introduce some much-needed clarity and understanding to the issues of the growth of gambling. Using statistics for the 2003-04 fiscal year and historical trend analysis, the main gambling policy issues are given a numerical context.
Author: Senior Policy Analyst Jason Azmier
Author(s): Jason Azmier
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