Gamblers misled about payout rates

Gamblers misled about VLT payout rates, Liberals charge
Spokeswoman blames accounting differences
By Karen Kleiss, edmontonjournal.com

EDMONTON - The provincial government is duping gamblers into spending more money by telling them the house takes eight per cent of their money, when the reality is the take is typically 30 per cent, the Alberta Liberals say.

Edmonton Gold Bar MLA Hugh MacDonald said if gamblers knew the real price tag, they would be less likely to plug millions of dollars into video lottery terminals and slot machines each year in hopes of a big payout.

The government wants “to hide from Albertans the true amount they are taking ... from VLTs and slot machines,” MacDonald alleged. “The government saw this as a means of revenue, they saw it as easy money, regardless of who it hurt.”

Last year, the provincial government took in more than $1.4 billion in gambling revenue, the vast majority from slot machines and VLTs.

MacDonald pointed to brochures distributed in gaming locations that suggest the payout at VLTs is 92 per cent, which leads gamblers to believe they will get back $92 for every $100 they spend. The reality is they get about $70 back, MacDonald says.

Alberta Liquor and Gaming Commission spokeswoman Jody Korchinski confirmed MacDonald’s figures are accurate, but said they result from different accounting practices, not an intention to hide information from Albertans.

Each machine is programmed to “pay out” 92 per cent, so technically a gambler who puts $100 into a VLT will get $92 back. But the reality, ­Korchinski said, is that gamblers play the same dollar over and over again, which leads to a much lower “cash out.” The difference between the two terms — pay out and cash out — is critical, she said.

For example, say you play $100, and you get the predicted $92 cash out. That’s round one, and you get 92 per cent of your original amount, which is consistent with the computer’s payout programming and the province’s pledge.

You continue playing, but you start Round 2 with the money left over from round one: $92. When you cash out, you will get 92 per cent of that $92, which is $85. Play again, and you start Round 3 with the $85 you’ve got left. When you cash out, you will get 92 per cent of that $85, or $78.

Korchinski said in the end, most gamblers walk away with $70 for every $100 they put in.

Finance Minister Ron Liepert, who oversees the AGLC, told the legislature that Alberta’s auditor general instructed the AGLC to change the accounting practices to reflect the 92-per-cent pay out, not the 30-per-cent cash out, as it had previously done.

“About 12 years ago, the auditor general made some recommendations on accounting practices, the AGLC is applying those accounting conventions, there is nothing hidden,” Liepert said. “There is no shady form of mathematics, there is no cooking the books, as this member alleges.”

Recovered gambling addict Gisele Jubinville said the government is hiding the real price tag from gamblers, who have a right to know what they’re really spending at VLTs and slot machines.

“Sure, this reflects their 92-per-cent payout rate, but it actually hides from the players the actual profit percentage they’re making, and in turn the actual cost of playing these machines,” Jubinville said.

“I think that’s horrible. I, and my fellow Albertans, can’t make an informed choice.”