Problem gambling
Government is playing a high stakes game with Islanders' lives
Governments operate on income that, in large part, comes from taxes. It is used to carry out two of their core functions: to provide services, and to redistribute wealth in our society.
I have always subscribed to the view that people are fine paying taxes if they know two things: taxes are being collected in an equitable and ethical way, and those monies are being spent thoughtfully and productively to enhance the common good.
Recently, the P.E.I. government approved a new online casino initiative to be operated by the Atlantic Lottery Corporation (ALC). There was no debate on the decision in the house and no consultation with Islanders on how they might feel about it. In fact, government has never mentioned the project, and most Islanders heard about it first in the news, weeks after the final decision had already been made behind closed doors.
ALC is a government Crown corporation that manages gambling activities in the Atlantic region and distributes revenues from these activities to four provinces. The most recent figures available show that ALC generates about $1.2 billion annually in gambling revenue. Revenues come from the sale of ticket lotteries, video lottery terminals (VLTs) and casinos like Red Shores here on Prince Edward Island. VLTs are both the most profitable and the most addictive of these revenue streams, contributing over half of the net income to ALC.
Many have referred to gambling as a “voluntary tax”, recognizing that more money is taken in than goes out in prizes. That money, like income and sales taxes, goes straight into general government revenues.
Equitable and ethical tax policy is progressive, meaning those who are most able to pay shoulder the greatest burden. This is why we have stepped income taxes, it is how sales taxes work, and how a well-crafted carbon tax would work. However, if we look more closely at where revenues for gambling come from, it is clear that the greatest burden falls on those least able to afford it.
The new online casino is different from the VLTs that Islanders are used to playing at their local legions. The limits are way higher and government is actively encouraging Islanders to try it out with $20 starter gifts to set up an account, including placing ads on CBC Compass.
It is estimated that gambling addiction is the primary reason for nearly 400 Canadians a year dying by suicide. That translates to two Islanders every year.
Addiction is a terrible thing, and governments have formed an alarming habit of relying on the revenues it receives from gambling. P.E.I. receives about $18 million annually from gambling, $11 million of that through VLTs. The government spends about $200,000 on problem gambling services and none of the revenue is targeted to support those with lower incomes who contribute disproportionately to it.
Last week, in a meeting of the standing committee on health and social development, we heard from experts that governments should spend 30-40 per cent of gambling revenues on supports. On P.E.I., that would equal over $3 million. The P.E.I. government is underspending by 90 per cent, and yet it sees no problem with targeting Islanders with dreams of paying off debt or purchasing the home they always wanted, knowing full well that the group most susceptible to that form of advertising are those for which these things are by and large out of reach.
More needs to be spent on helping those with gambling problems. We have a crisis on Prince Edward Island in the area of mental health and addictions. So far, government has not begun to properly manage that crisis. Creating new avenues in which addictions may be worsened is both unethical and callous.
Government should treat gambling the same as other addictive things like alcohol, cannabis and tobacco. It should limit its advertising and make the provision of gambling services revenue neutral. Any and all revenues generated should be redistributed back to those who need it.
There is still time for Premier King to recognise the numerous issues with this decision and to reverse it. Government is gambling with Islander’s lives, and the cost is far too high.