Presentation to Council by Hilary Reid

This comprehensive presentation was made to Vancouver City Council by gaming expert Hilary Reid on the first day of public hearings on the proposed Edgewater Casino expansion.

Brief Regarding Edgewater Casino and Gambling Expansion Proposal
Submitted to Vancouver City Council Public Hearing
March 7th, 2011
by Hilary Reid

Mayor and Council, thank you for seeking public input on the Edgewater Casino expansion.

 

A former Provincial Opposition leader had this to say about gambling:
“I want to build an economy based on winners, not losers, and gambling is always based on losers. The only way government makes money on gambling is because you lose it.” (as quoted in The Vancouver Sun, Oct. 8th, 2009).
The speaker went on to become the Liberal Premier of BC. His name is Gordon Campbell.

I address you as a long time Vancouver citizen, as a post secondary educator, and as someone who has done a lot of research on the effects of gambling expansion in North America.

Mayor Robertson, in a recent Vancouver Sun article on the 2010 Olympics, you stated that “We will pursue our goals to be the world’s greenest city, the safest city, and the most liveable city….a city of compassion, where we strive to make sure none are left behind.” (Vancouver Sun, Feb. 12, 2011).

These are worthy goals, but will call for some hard choices. One of these choices is before you now. You will not be able to both approve this huge casino, and achieve these stated goals.

Let me explain why.

Speaking to the Board of Trade, Paragon President Scott Menke said, “a large casino will attract more visitors to the area and create economic benefits for surrounding businesses” ( Vancouver Sun , Feb. 11, 2011).
In fact, research has consistently shown that the presence of a destination casino drains spending away from other cultural, sports, and tourism events, as well as from locally owned businesses (www.senatoreldridge.com/issues/expanded-gambling-casinos).

2.

Proponents argue that this casino will be an international tourist draw.
UBC’s Commerce Professor Tsur Somerville, on the other hand, says that this expanded casino will not make much difference to tourism numbers because “casinos are inconsistent with how Vancouver is perceived as a tourist destination…people come here for the beautiful environment and the beautiful city…not to stay inside a dark, windowless gambling institution” (BC Business Magazine, Oct. 7, 2010).

Peter Collins, a Manchester Professor of Public Policy and an international expert on gaming, feels that despite the international clientele goals, 90% of the expanded Edgewater Casino revenues in Vancouver will still come from local people within a 45 minute drive. (BC Business Magazine, Oct. 7, 2010).
Promises that social problems created by this casino will leave the country with tourists may therefore be empty.

And what of these social problems?

In the Feb. 11th Vancouver Sun, Menke assures us that “the type of visitors we attract will be bleeding out into the community.”
I would agree with him here.

In his book Betting the House, Brian Hutchinson explains that the costs of gambling are always and without exception higher than the returns.

Paragon explains that the expanded casino will create a large net gain of jobs.
In fact, a Maclean’s article, “The Curse of Casinos” (May 11, 1998), tells us that while government and casino promoters say casinos bring jobs, tourism, and urban renewal, “economists, police, psychologists, social workers and citizen groups tell a different story. Casinos destroy at least one job for every one they create, they cause bankruptcies that bleed communities dry, they breed crime and they corrode families…” (p. 44).
“Casinos cost taxpayers as much as three dollars for every dollar the government reaps in revenues.” Why? Because they often “…lead to a loss of jobs from the surrounding region (because gamblers take disposable income to the casino), to increased crime, and to more social welfare costs….Businesses near a casino can anticipate increased absenteeism, declining productivity and theft” ( Maclean’s, p. 46).

3.

And what of the horrific cost in terms of plain human misery? We know that gambling addiction leaves in its wake a trail of suffering, including physical and mental illness, job loss, bankruptcy, separation and divorce, domestic abuse, child neglect and abandonment, theft, fraud, assault, embezzlement, and sometimes murder. Did you know that 20% of addicted gamblers attempt suicide, and so do 11 to 15% of their spouses? (“Economic Impacts of Legalized Gambling Activities”, John Kindt, Drake Law Review, Vol. 43, No.1, 1994, p. 85.) Can you imagine what this trail of destruction feels like for their families?

Paragon wishes to triple the number of slot machines in its expanded casino.
Slots represent one of the most addictive forms of gambling, for these reasons:
the continuous form of play;
the immediacy of results;
the ability to increase play;
the faulty perception that skill is involved;
the mesmerizing effect;
the perception that losses are small.

Were you aware that with the recent introduction of slot machines to BC, the percentage of residents with a severe gambling problem almost doubled between 2002 and 2007, according to a 2008 Ministry of Public Safety study? (www.bcbusinessonline.ca/2010/10/07/ ).
What do these figures mean? In 2010, BC’s Gaming Policy Branch calculated the number of addicted gamblers in the province at almost 160,000; of these, 31,000 were severely addicted (ctvbc.ca, June 7, 2010).
Paragon’s proposal to triple the number of slot machines to 1,500 would be like pouring gas on the fire of addiction problems in Vancouver.

How does this fit with your vision of a compassionate city?

Gambling addiction is of particular concern for our youth.
Did you know that gambling is probably the fastest growing teenage addiction? Dr. Howard Shaffer, Director of the Harvard Medical School Center for Addiction
Studies, said in 1992, “We will face in the next decade or so more problems with youth gambling than we’ll face with drug use….” In 2009, 8 to10% of BC youth were at risk for pathological gambling (Vancouver Sun, Dec. 9, 2009). Because

4.

addiction rates rise with ease and proximity of access to gambling venues, the sanctioning of this mega casino by attaching it to BC Place, an entertainment venue popular with youth, seems to me to be one of the worst possible choices we could make. The fact that this location is only a 10 minute walk from the downtown east side, where addiction and other social problems are already rampant, makes it even less suitable.
How much more constructive it would be to develop a cultural and fitness precinct which would contribute to Vancouver’s overall well being and liveability!

The Paragon President also assured the Vancouver Board of Trade that the new Casino would not draw crime to the area, calling it “safer than shopping malls”
(Vancouver Sun, Feb. 11, 2011).
Actually, there is ample research to show that destination casinos spawn crime. According to the Richmond RCMP, replacing Bridgeport Casino with the much larger River Rock Complex in 2004 “led to a quadrupling of casino-related crime and allowed new organized crime groups to gain a foothold in the city” (Vancouver Sun, Oct. 25, 2007). These crimes included at least five gambling related kidnappings, as well as money laundering, fraud, threats, assaults, hold-ups, and recently, murder.
Casinos are also the third largest venue for money laundering in Canada, according to a report by FINTRAC, the federal agency which monitors cases of suspected money laundering and terrorist financing.
FINTRAC found that 20% of the laundering transactions in Canadian casinos involved organized crime, from street and outlaw motorcycle gangs to transnational organized crime groups. In their report, they mention five of these cases “were suspected to be related to terrorist activity financing and/or threats to the security of Canada.” (“Money Laundering Typologies, Methods and Techniques Observed in FINTRAC Cases Disclosed in 2008-2009”, Government of Canada Publications, Nov. 2009).
Currently, BC is not well equipped to address this problem. In fact, in 2010, BC Lotteries Corporation was fined $670,000 by FINTRAC for 1,000 violations of the Federal Proceeds of Crime and Terrorist Financing Act, prompting then Solicitor General Mike de Jong to say he was concerned about the potential for organized crime to misuse BC casinos ( Vancouver Sun, 2010).

5.

Casinos are not only a magnet for existing criminals, but create a whole new class of criminals with no prior legal record, desperate to finance their gambling habit through theft, assault, fraud, extortions, etc. (Courier, Jan 5, 2000). In a one week period in Richmond, for example, two separate casino winners were followed to their homes, then robbed at gunpoint (Vancouver Sun, Jan 15, 2004).

So much for your vision of a safe city.

Probably the biggest incentive for Council to approve the new casino is anticipated financial gain. But is even this expectation correct?
Paragon is offering Vancouver $11 to $14 million a year as the city’s cut for agreeing to allow the casino expansion. This sounds pretty good, until such a sum is put into perspective.

Back in 1999, Vancouver social planning department analyst Mario Lee estimated that Vancouver had more than 22,000 problem gamblers. He calculated the financial drain from the gambling industry on Vancouver alone (from lost productivity, theft, cost of policing, prosecution, incarceration, and increased social services) to be $104 million a year (Vancouver Sun, Feb. 6, 1999). These figures are 12 years old, so would be much higher now.
$11 to $14 million would therefore barely make a dent in the current cost of remediating social and economic problems caused by gambling in Vancouver.
An additional economic disincentive for the city is that Vancouver taxpayers would be on the hook for most of these costs, while the lion’s share of gambling proceeds would flow to the Province and Las Vegas.
A more disturbing economic consideration is the regressive nature of using gambling proceeds to fund government services at all.
Poorer people gamble a larger proportion of their income than do the wealthy. (Vancouver Sun, Dec. 17, 1996). Worse, a hugely disproportionate amount of casino revenue (one quarter to one half of total earnings from gambling) comes from the five percent of the population “at risk from problem gambling” (Maclean’s, May 11, 1998).

In other words, the poor and addicted are subsidizing at a huge rate government services for the rest of us.

This becomes even more shocking when we understand that for the first time, the Provincial Budget estimates that gambling revenue in 2011 will exceed corporate tax revenue ($1.1 billion vs. $847 million).
(www.bcbusinessonline.ca/2010/10/07/).

6.

Where would you prefer your funding to come from: legitimate business taxes, or money from destitute gambling addicts?

Is this the source of money you wish to increasingly rely on for civic spending in a city where no one gets left behind?

Lastly, what about this carrot of job creation?

If you work for Edgewater, you already have a job. Six hundred jobs, in fact.
Meanwhile, many of the estimated 22,000 gambling addicts in this city are at risk of losing, or have already lost their jobs due to problems caused by their addiction.

Construction jobs and property taxes will come from whatever is built, so this casino has no advantage over other options in these two areas.

Beyond that, what sorts of future jobs do we wish to create?
The Canadian Auto Workers Union, representing destination Casino Windsor’s employees, noted in a 1999 health and safety study that stress caused by noise, second-hand smoke, overcrowding, abusive patrons, and hearing loss were the biggest health problems for casino workers .
More disturbing, “the great untold story of casino workers across Canada is their fear of biological hazards from body fluid and bacteria….Many gamblers put in such long hours at their slot machines that they wear adult diapers…or don’t. There are disgusting stories of gamblers urinating into plastic coin cups, or throwing up or even bleeding at their machines, leaving the clean-up to porters.” (Editorial, Elm Street Magazine, March 1999).

Are these the kinds of jobs we want to replace our locally owned and operated businesses with?

Is this the vision we have for our beautiful city of Vancouver?

Mayor Robertson and Council, as our elected officials, you are responsible for this fresh faced, natural young beauty who is Vancouver. Do you really wish to dress her up like a harlot, all glamour and cheap glitz, but destroy her soul?
Can you really, in good conscience, prostitute our city for the amusement of the wealthy and to fund Las Vegas gambling companies, while causing untold suffering to vulnerable local residents?
Vancouver is already famous for her stunning natural setting and recreational opportunities. She does not need the gaudy bauble of a Las Vegas styled casino, nor its dark underbelly.

7.

In closing, consider this excerpt from a letter to the Vancouver Sun:

“After struggling with gambling for many years, my dad has been crushed by a mountain of debt and is on the brink of divorce. How does one gauge the ‘cost’ of lives ruined and a family broken by gambling addiction? I [would] like to see them put a price tag on that.”

Mayor and Council, I have admired you for your attempts to think in a green and sustainable manner, and for your wish to create “a safe city, a liveable city, a city of compassion, where none are left behind.”

I therefore ask you to do the right thing, and vote no to any proposal that includes expansion of gambling in Vancouver.

Those who would otherwise be left behind, and all of us who love this city, will thank you for your foresight and your legacy.

Hilary Reid,
Vancouver, B.C.

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