Social Policy in Ontario

Government-sanctioned online gambling: short-sighted and morally bankrupt

Posted on April 25, 2011 in Child & Family Debates

Source: Globe & Mail — Authors: Andre Picard

TheGlobeandMail.com – life/health/new-health/conditions/addiction/health-addiction
Published Wednesday, Apr. 20, 2011. Last updated Thursday, Apr. 21, 2011.   André Picard

“Honesty you can bet on.”

That is the large headline atop full-page ads that appeared in Quebec newspapers this week advertising Loto-Québec’s online casino.

Chalk one up for rank hypocrisy.

If there was an iota of honesty in our appraisal of state-sanctioned and facilitated online gambling, the conclusion would be this: There are few public policies that are more short-sighted, misguided and morally bankrupt.

Gambling is unhealthy – financially, socially and, sometimes, physically. Encouraging people to wager online, perhaps locked away in a dark basement with a credit card, a 40-ouncer and a pack of smokes, takes it to a whole other level.

Gambling is one of the most common and debilitating addictions. But if gambling is metaphorically cocaine, the drug of choice of the rich, then online gambling is its desperately poor cousin, crack cocaine.

All gambling is tends to be anti-social activity – a destroyer of families and relationships – and never more so than when done online. Not to mention it’s a profoundly regressive form of taxation, essentially a tax on the poor.

Yet our politicians and policy-makers blithely fall prey to the siren song of easy money.

We have lotteries galore, casinos aplenty and now “honesty you can bet on” – the privilege of squandering money by playing blackjack and Texas Hold’em online and legally.

This is what passes for vision and leadership in 2011?

The state has developed a sick addiction: Revenues from government-run gambling operations across Canada bring in close to $15-billion annually.

But provincial lottery/gaming corporations, ever-expansionist, pointed out to their political masters that $50-million Lotto Max prizes and busing seniors to casinos is not enough – not when Canadians are frittering away more than $1-billion a year online, and the government could get a piece of that action, too.

(It’s worth noting that one way in which proponents have tried to gussy up gambling is to call it gaming, putting it in the same category as pinochle and Mario Kart.)

British Columbia was the first jurisdiction in North America to embrace online “gaming” last summer. Quebec quickly followed suit, and Ontario plans to become a player in 2012. The Atlantic Lottery Corp. has some online games, but not a virtual casino. Alberta and other provinces are toying with the idea.

To date, only Nova Scotia and Newfoundland and Labrador have ruled out state-run online gambling.

Nova Scotia Premier Darrell Dexter has been the most outspoken politician on the issue. He said expansion into the murky online world is “not consistent” with the public health goal of reducing harm from gambling and policy-makers should not “put their heads in the sand” about the downsides.

But stick their heads in the sand they have.

Online gambling is a relatively new phenomenon; it’s only been around about a dozen years. At the start, sites reeked of sleazy back-alley poker dens and were plagued by corruption and fraud. But the industry has developed into one that is well-organized and security-obsessed, and it does a decent job of self-monitoring.

There is big money at stake. Annual revenues are $20-billion worldwide, and estimated to surpass $500-billion by 2015 as gambling gets easier (yes, there is an app for that!). The industry has bought itself respectability, or at least mainstream acceptance – a lot like pornography.

The United States has been the most aggressive opponent of online gambling, introducing the Unlawful Internet Gambling Enforcement Act in 2006. This was not a public health gesture but a cynical one, designed to protect the fortunes of bricks-and-mortar casinos in places like Las Vegas. Nonetheless, illegality makes some potential gamblers nervous.

Technically, Canadian law allows online gambling only through provincially regulated operators such as the Ontario Lottery and Gaming Corp. Internet gambling operators are not even allowed to advertise in this country. But who hasn’t heard of Poker Stars or Full Tilt Poker? All told, there are 2,500 or so online casinos, all a mouse-click away.

Canada has essentially taken a “we can’t do anything about it” attitude, even though one of the biggest online gambling hubs in the world is located in Kahnawake, a native reserve just outside Montreal.

Instead of cracking down, gaming corporations are jumping in, positioning themselves as “safe” and “legal” alternatives to online sites based in Gibraltar, the Dutch Antilles or Kahnawake. To skirt laws, these operations sometimes route bets through front businesses such as flower shops.

With PlayNow.com (B.C.) or espacejeux.com (Quebec) you can plunk down your credit card and bet up to $10,000 a week with the blessing of the state.

Gambling is an easy sell in our current political and economic climate. Raising taxes is unpopular, so why not grab billions from the suckers who gamble?

The problem with the state-run virtual casinos is that they make online gambling easier and more socially acceptable; they attract people who would not otherwise gamble, and they strip away barriers for those with gambling addictions. (About 40 per cent of all gambling revenues come from the addicted).

At the same time,, the government-sanctioned sites are lame; they simply can’t compete with the freewheeling private sites in terms of perks or payouts.

Want to know what the upshot will be? Take a look at Sweden and Britain – countries that went all-in early on “safe” online casinos. They now have some of the highest rates of online gambling in the world – about 12 per cent of adults, compared with less than 2 per cent in Canada.

Revenues quickly plateaued as gamblers sought greener pastures elsewhere in cyberspace. But gambling-related social problems – addiction, destruction of families, poor health – flourished.

The economic costs are staggering, enough to offset the new stream of revenue. If there is a safe bet, it is that Canada will have the same “payouts.” After all, gambling is a game where there are always more losers than winners.

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