QUICK RESPONSE TO CANADIAN GAMBLING NUMBERS (Update)

11 April 2008

But no specifics in attack by academics


This week's interesting financial statistics from the Canadian Gambling Association (see previous InfoPowa report) were quickly attacked by two academics, who claimed that the money used in gambling is merely "recycled" and makes no real contribution to the economy and that a third of it comes from problem gamblers!

Unfortunately, neither Professor Robert Williams from Lethbridge University in Alberta or Professor Peter McKenna at the University of Prince Edward Island provided statistics to back up their arguments.

Earlier in the week the Canadian media quoted widely from a report issued by the Canadian Gaming Association which gave details from an independent survey it had commissioned from HLT Advisory Inc. The report credited gambling in Canada with creating thousands of jobs and contributing $15.3 billion a year to the economy.

This was dismissed the next day by the two academics in seperate statements, claiming that the "one-sided" report failed to account for the social costs of gambling addictions or the lack of new revenue generated by the industry.

The Canadian Gaming Association's report found that gambling accounted for 267 000 full-time jobs a year, and said 57 percent of gambling revenue - $8.7 billion - also supported government services and charities. The other $6.6 billion went to sustaining operations, paying salaries,purchase goods and services.

Professor Williams, who has researched problem gambling at Lethbridge said: "We know that a lot of money changes hands and there's a fair bit of employment and economic revenue from gambling, but the real question is: "Does that offset the social costs; problem gambling first and foremost?"

The report, he said, also draws "...a lot of attention to where the money goes, but they conveniently don't ask where does the money come from."

The professor said that research he had carried out indicates that "...about a third of all the money comes from problem gamblers." On the face of it this number would appear high, but the professor did not provide statistics to back up his allegation.

Professor Peter McKenna, a political studies academician at the University of Prince Edward Island, said the financial benefits are questionable at best.

"The economic benefits are fairly limited, and what's forgotten in that kind of a calculation is that there is a cost to the local economy," McKenna said. "There's no new money that comes into these areas, you're simply re-circulating the money that's there, so if the money is going into a casino, that means it's not going into the local businesses."

He added that a further cost is the increase in crime around casinos, as well as health care impacts of addiction and problem gambling.

"The cost of a single gambling addict to society is somewhere between $15 000 and $20 000 a year - some have put it up as high as $50 000," observed McKenna, who recently released a book on gambling titled "Terminal Damage. I don't think it's just a moral issue, I think it's a taxpayer issue and a societal issue."

Bill Rutsey, president of the Canadian Gaming Association, defended the report and said it was important because it represents "...the first time ever the national impacts of the industry have been calculated (and) they are quite large and impressive."

He said gambling is a widely accepted activity, despite the "...vocal minority within the population, approximately five percent, who are opposed to gaming, primarily for moral reasons." He added that part of the exercise had been to provide firm information so that the public could make its own rational judgements about the industry.

The association's research, he revealed was conducted by HLT Advisory Inc., and found that 135 000 people are directly employed in the industry, and indirect gambling-related employment such as food and entertainment services swells that total to 267 000 full-time jobs. For 2006, this translated into $11.6 billion in labour income.

"The breadth and depth of the (Canadian gambling) industry is significant," said the study’s author Robert Scarpelli, Managing Director of HLT Advisory Inc. "We've always known that employment in gaming operations was robust, but the total impact of the industry surprised us. After validating the results with the Statistics Canada’s Input-Output Model, we now, for the first time, have a picture of the industry's full impact right across the country."

The industry’s investment in current capital construction is approaching $10 billion, Scarpelli said, with the largest portion of that investment (49 percent) occurring in Ontario. ·
The study included all forms of gaming activity in Canada and covered bingo, electronic gaming devices, casinos, lotteries and horse racing.

Online Casino News courtesy of InfoPowa