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Alberta's Gambling Boom
Alberta
is Canada's gambling hotbed. Nine out of ten adult Albertans gamble on
some form of legally-sanctioned "game" and this province has
the distinction of having the widest array of gaming entertainment options
available to its citizenry of any jurisdiction in North America. Even
the kids are getting into the act as seven out of ten adolescents age
12 to 17 have gambled for money, either on a legal game or informally
with family or friends (Wynne, Smith, & Jacobs, 1996).
Further
evidence of Albertans' preoccupation with gambling is apparent when one
examines the staggering amount that is wagered in this province each year.
In the research report Gambling and the Public Interest (Smith
& Azmier, 1997), the Canada West Foundation reported that the gross
amount wagered on all forms of gambling in Alberta rose from $1.6 billion
in 1993 to $2.7 billion in 1996-a shocking increase of $1.1 billion, or
70%, in only three years! This translates into every Albertan over 18
spending $1,344 each year on gambling in 1996. This was the highest per
capita wagering total in the country (Saskatchewan was second highest
at $1,183 and British Columbia was the lowest at $589). No other industry
in Alberta or in the rest of the country - not even the banking fraternity,
long chided for its revenue generating propensity - has experienced this
phenomenal financial growth in the past few years.
This
gambling boom has translated into a windfall of revenue flowing to provincial
government coffers. In crafting the 1999-2000 budget, the Alberta government
projects that lottery revenue will total $770 million. This lottery revenue
comes from video lottery terminals (VLTs), slot machines, and ticket lotteries
only and it does not include other gambling revenues, such as licensing
fees or income to non-profit organizations derived from horse racing,
bingos, raffles, or charitable casino gambling. To place this in perspective,
the estimated $770 million in lottery revenue compares with $1.1 billion
collected annually from school property taxes, $690 million from health
care insurance premiums, $570 million from fuel taxes, $452 million from
liquor taxes, $350 million from tobacco taxes, and $346 million from crude
oil royalties. Fully 4.5% of Alberta's estimated budget of $17 billion
is expected to come from lottery revenues and this compares with 37% from
combined personal and corporate income taxes and 14% from all natural
resource revenues.
Clearly,
as well as providing entertainment for the citizenry, gambling has become
a major component in Alberta's fiscal policy. In fact in the 1999 spring
cabinet shuffle, the Alberta government created the new Ministry of Gaming
(www.gaming.gov.ab.ca) to oversee gambling operations throughout the province.
"Gaming" now has a permanent, high profile place at the cabinet
table alongside Learning, Health and Wellness, Environment, Community
Development, Children's Services and other significant portfolios.
Recent Gambling Happenings in Alberta
It
is much easier to describe what is happening on the Alberta gambling scene
than why gambling has been so enthusiastically embraced in this province.
The latter necessitates an examination of the settlement history, socio-political
climate, and economic forces at play in a diverse and bountiful environment
- all considerations far beyond the scope of this article. It is, however,
instructive to track recent gambling happenings in a province that is
so preoccupied with this form of entertainment for two main reasons: first,
as a precursor to understanding why gambling is paramount in Alberta and
second, as a harbinger of gambling trends that may spread to other Canadian
provinces.
The Great VLT War
There
are about 6,000 VLTs in over 1,200 sites across Alberta. On October 19,
1998, Albertans in 36 communities voted on whether to keep VLTs in their
villages, towns and cities or to ask the province to remove these gambling
machines from bars and lounges. In the end, most communities, including
the major cities of Edmonton and Calgary, voted to retain VLTs, although
in Edmonton the vote margin was very narrow.
This
is a watershed event in Alberta and Canada's gambling history as it represents
the first time the people have exercised a direct vote on any form of
gambling expansion. The proponents of the "yes" (VLT removal)
side engaged in a media war with the "no" (VLT retention) advocates
and the rhetoric raged for months. Those who are interested in the details
of the Great VLT War can find details in the Canada West Foundation (www.cwf.ca)
report entitled Rolling the Dice: Alberta's Experience With Direct
Democracy and Video Lottery Terminals (Azmier, 1998).
In
the final analysis, the people of Alberta have spoken. Petitions signed
in Edmonton and Calgary that forced the VLT plebiscites garnered nearly
a quarter of a million signatures, which is an extremely strong indication
that many Albertans insist on having a say in gambling decisions that
affect their communities. Based on this highly visible and successful
experience with direct democracy, it is very likely that the people will
continue to lobby the Alberta government to be more involved in the gambling
policy decision-making process.
Alberta Hotel Operators Lobby for More Gambling - Again
Several
weeks ago, the Alberta Hotel Association approached the Alberta government
with an idea for a "pilot study" that involves swapping VLTs
for coin slot machines in 40 bars and lounges. The hoteliers are proposing
giving up the VLTs in 40 establishments in return for 50 coin slots to
be placed in new "gaming rooms" to be developed in these selected
hotels. Interestingly, although the government has capped VLTs at 6,000
province-wide, there is no similar limit on the number of coin slots permitted
(these presently number about 3,000). The hotel association proposes creating
a foundation to funnel 15 per cent of the slot machine revenues into medical
research with hotel operators getting another 15 per cent and the province
getting the final 70 percent.
The
specter of hotel operators lobbying government for more gambling business
is nothing new in Alberta. In the early 1990s, the hotel lobby was a major
factor in the government's decision to conduct the VLT "pilot projects"
in Edmonton and Calgary that ultimately resulted in the wide distribution
of VLTs in bars and lounges throughout the province.
Once
again, the hotel lobby is attempting to influence the Alberta government
to expand gambling to the industry's benefit. If approved, the coin slot
"pilot project" suggested by the hotel industry will see some
2,000 coin slots rolled out in 40 new gaming rooms, replacing about 300
VLTs in the process. So far, government MLAs who have been quoted in the
media do not favour the hotel association proposal. Ironically, both the
pro- and anti-VLT spokesmen in Calgary are also quoted as being opposed.
Nevertheless, history shows that the hotel lobby in Alberta is powerful,
so I wouldn't bet the farm against lobbyists ultimately succeeding in
getting their gaming rooms- starting with coin slots at first and, perhaps,
expanding to table games in the future.
Is Internet Gambling Coming to Alberta?
Internet
gambling is already available in Alberta, as it is in other provinces.
On-line gambling is presently illegal and is typically operated from offshore
locations, such as the Caribbean islands, which are outside the jurisdiction
of Canadian governments. In our recent study Gambling and Crime in
Western Canada (Smith & Wynne 1999) Garry Smith and I conclude
that, because the present laws against Internet gambling are inadequate
and unenforceable, consumers are vulnerable to crimes such as fraud, credit
card theft, and cheating. Moreover, there is no way for provinces to stop
under-age gamblers from playing. Consequently, we speculate that legalization
of Internet gambling seems likely because prohibition is futile in the
face of advanced technology and there is tremendous potential for governments
to raise large revenues.
Coincidentally,
the day after our study was released, provincial newspapers ran a story
"Internet Gambling Could Be in the Cards" referring to the Alberta
government's plans. In the Edmonton Sun, Gaming Minister Murray Smith
was quoted as saying, "You never rule anything out categorically.
But we're not considering it at this point. We don't see it as viable
at this point" (Beazley, 1999). The story was sparked when it was
learned that the Alberta Gaming and Liquor Commission (AGLC) executive
was to get a briefing on Internet gambling operations in Canada and abroad.
The purpose of the briefing was ostensibly to bring AGLC up to speed on
which Internet gambling operators offer their product in Alberta.
This
is not the first time that the prospect of Internet gambling in Alberta
has surfaced. The Sun also reported that, in 1995, a Caribbean-based Internet
gaming company, Internet Casinos Inc., offered to make a personal pitch
to Premier Ralph Klein to set up an Internet gambling service in Alberta.
The outcome of this overture was not reported. The Liberal opposition
has made a Freedom of Information request for any studies and documents
relating to Internet gambling and the government has promised these will
be delivered in early October.
Clearly,
The prospect of Internet gambling in Alberta promises to be a political
hot potato in the near future. The government is in the unenviable position
of having to either enforce and attempt to eradicate illegal Internet
operations or sanction and regulate this form of on-line gambling. Of
course, doing nothing is also a government option as is legalizing, promoting
and regulating a made-in-Alberta Internet gambling operation. It will
be very interesting to watch how the Alberta government deals with this
difficult issue in the months ahead.
Charities Are Hooked on Gambling Revenues
A
recent Canada West Foundation study of 400 non-profit charities across
Canada (Berdahl, 1999), concluded that "gambling revenues are an
increasingly important source of funding for the non-profit sector, despite
the facts that such revenues are often unstable and present ethical conflicts
for a number of organizations." Of the 400 non-profits participating
in the study, 28% rated gambling grants as their top funding source and
50% said gaming grants were in the top three sources of their funding.
Furthermore, about 20% said they received over half of their annual revenues
from gaming grants.
Alberta
charitable organizations are especially dependent on gambling revenues.
Twenty per cent of Alberta non-profits receive more than half of their
revenues from charitable gambling as opposed to 10 per cent in Ontario
and 5 per cent in Saskatchewan. More than 8,000 charitable organizations
in Alberta currently either have a gaming licence or have conducted a
gaming activity in the past two years. The list includes agricultural
societies, service clubs, community associations, community leagues, and
various types of groups (e.g., youth, music, multicultural, sports, religious,
seniors, social action). In the current fiscal year, it is estimated that
these non-profit organizations will share in $146 million in net revenue
realized from four charitable gambling sources - bingo, $58 million; casinos,
$60 million; pull tickets, $9 million; and raffles, $19 million (Berdahl,
1999).
Depending
on gambling revenues for charitable "good works" causes an ethical
dilemma for some board members and volunteers. The Canada West study found,
however, that the prevailing sentiment among non-profits was that the
"commitment to their cause overrides their ethical concerns about
gambling" (Berdahl, 1999). In other words, most take the money and
hold their nose. The study concludes by offering 10 recommendations, with
the main focus being on reducing charitable organizations' reliance on
gambling revenues by replacing these with government grants to organizations
to meet community needs.
Gambling Megatrends
In
his pop-futurist best seller Megatrends (1982), John Naisbitt identified
"ten new directions transforming our lives." Ironically, Naisbitt
ignited a trend of his own as his seminal work spawned a parade of similar
futurist publications - Faith Popcorn's The Popcorn Report (1992)
and Clicking (1996), Naisbitt and Aburdene's Megatrends 2000
(1990), David Foot's Boom, Bust and Echo (1996) and Angus Reid's
Shakedown (1996) to name a few. Each of these authors uses different
methods to read the tea leaves in an attempt to enlighten us as to where
Western society is heading. In the original Megatrends, Naisbitt
describes "bellwether states" as those wherein "social
invention" in response to social issues and local conditions, seems
to occur time and time again. He identified five bellwether states as
the leaders and trendsetters in the United States - California, Florida,
Washington, Colorado and Connecticut - and through monitoring local media
accounts of social invention in these states, he extrapolated the first
10 "megatrends."
While
other futurists use different approaches - Foot examines demographic shifts,
Popcorn depends on interviews, and Reid relies on polling data and research
- there is merit in Naisbitt's observation that there are bellwether states
wherein socioeconomic trends are most likely to be conceived, incubated
or, at least, quickly adopted.
I
believe that Alberta is such a bellwether state when it comes to gambling
expansion, regulation and experiencing the inevitable socioeconomic fallout.
Therefore, I suggest that it is instructive to monitor the gambling happenings
in Alberta for clues about emerging "gambling trends" that may
ultimately be experienced in other provinces. At the risk of being labeled
a gambling futurist, I offer for consideration four gambling trends inferred
from these Alberta happenings:
- Gambling in Canada will continue to expand in the foreseeable future and machine-based
gambling - including VLTs, coin slots, electronic Keno and bingo, and video poker
- will grow significantly and become the most pervasive gaming format.
- This high-tech gambling future will include legalized Internet gambling where
citizens will wager on the outcome of table games, horse races, sporting events,
elections, and a myriad of yet-to-be determined gambling opportunities, all on their
personal computer and in the privacy of their home.
- The Canadian hospitality and tourism industry will be successful in lobbying
governments to allow special "gaming rooms" or "mini-casinos"
in larger hotels, convention centres, and tourist destination facilities as part
of providing a better entertainment package to attract guests.
- Canadian charitable organizations will rely heavily on gambling initiatives -
lotteries, raffles, casino nights, bingos, and grants from government-sponsored gambling
- to fund their programs and administration.
The
Alberta people have also clearly voiced that they want a say in the government's
future gambling expansion plans and other provincial governments would
be prudent to involve the public in gambling decision-making lest they,
too, suffer the wrath of the citizenry.
In
Alberta, gambling is on the edge. But the edge of what? Proponents would
argue that the province is on the leading, trendsetting edge of crafting
responsible gambling expansion plans while mitigating the harmful effects
of gambling - in other words, creating a healthy balance. In contrast,
detractors argue that Alberta is on the edge of a precipice. They see
unfettered gambling expansion as a black hole that impoverishes the vulnerable,
enriches governments and a few fat-cat operators, and generally seduces
people into valuing "luck" above sacrifice and hard work. Which
is the true Alberta gambling edge - precipice or trend-setting? It will
be interesting to watch the gambling happenings in this bellwether province
as the answer to this question emerges.
References
Azmier, J.J. (1998). Rolling the Dice: Alberta's Experience With Direct Democracy
and Video Lottery Terminals. Calgary, AB: Canada West Foundation.
Beazley, D. (1999, September 15). Internet gambling could be in the cards. The
Edmonton Sun, p.16.
Berdahl, L.Y. (1999). The Impact of Gaming upon Canadian Non-Profits: A 1999
Survey of Gaming Grant Receipts. Calgary, AB: Canada West Foundation.
Foot, D.K. & Stoffman, D. (1996). Boom, Bust and Echo: How to Profit from
the Coming Demographic Shift. Toronto: Macfarlane Walter & Ross.
Naisbitt, J. (1982). Megatrends: Ten New Directions Transforming Our Lives.
New York: Warner Books.
Naisbitt, J. & Aburdene, P. (1990). Megatrends 2000: Ten New Directions
for the 1990s. New York: Morrow.
Popcorn, F. & Marigold, L. (1996). Clicking: Seventeen Trends That Drive
Your Business-and Your Life. New York: Harper Business.
Popcorn, F. (1991). The Popcorn Report: Faith Popcorn on the Future of Your
Company, Your World, Your Life. New York: Doubleday.
Reid, A. (1996). Shakedown: How the New Economy Is Changing Our Lives.
Toronto: Doubleday Canada.
Smith, G. & Wynne, H. (1999). Gambling and Crime in Western Canada: Exploring
Myth and Reality. Calgary, AB: Canada West Foundation.
Smith, G.J. & Azmier, J. (1997). Gambling and the Public Interest.
Calgary, AB: Canada West Foundation.
Wynne, H., Smith, G. & Jacobs, D. (1996). Adolescent Gambling and Problem
Gambling in Alberta. A report prepared for the Alberta Alcohol and Drug Abuse
Commission.
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