Five casino myths dispelled

Reality check: Five casino myths dispelled
Why Oxford’s mega-casino plans for the downtown core will be no boon for the city
By Enzo Di Matteo

Is the fix in for a waterfront casino? Hard to quarrel with that theory given the way that Oxford Properties proposal came seemingly out of the blue last Friday (October 12).

I say out of the blue because, it’s not clear Oxford’s plan amounts to a formal proposal at all. By that I mean, an official plan on paper that’s on someone’s desk in the planning department at City Hall. Still waiting to hear back from Oxford on that.

But there was the mayor already counting the $100 million the “plan” is supposed to bring to city coffers. At least, that’s the figure that’s been floated in discussions he says he’s had with Oxford folks. Curious that.

Oxford is indeed registered as a lobbyist at City Hall on matters related to properties its assembled on Front, the proposed site of its $3 billion-dollar “world-scale project.” Four lobbyists were on that file for Oxford last time I checked. But the city’s records don’t show any meeting with the mayor on the subject of said properties. Those must be taking place behind the scenes, as per the mayor’s preferred mode of communication on this slippery file.

There I go entertaining conspiracy theories again.

Oxford took pains to soft sell the casino part of its project, pointing out that a casino would make up less than 10 per cent of the entire development. But don’t be fooled by the verbal gymnastics. For Oxford, the casino is everything, “a necessary and essential catalyst for the entire development,” the company says in its release. Read: it’s an all or nothing proposition folks.

I imagine it was pure coincidence, too, that Oxford’s announcement came barely 24 hours after the Canadian Gaming Association launched its own PR offensive on the casino front.

It was with much fanfare that the official organ of gambling industry in the country summoned the city’s media to the Sheraton to launch something called torontocasinofacts.ca, to “cut through the rhetoric,” says CGA president Bill Rutsey.

Reps from local unions, the CAW and UNITE Here were present to help make the case that the claims of casino opponents are lies and a casino would be a jobs boon to the city. Ka-ching. But would it really?

We have the experiences of other cities to go on, but seems the folly that gambling is not a viable economic development strategy can’t be repeated often enough.

Our city fathers think we’re different. That a “destination resort” with swanky shops and maybe a full-time circus to attract tourists, would preempt the kind of life-sucking effects we’ve seen in other cities. And that by building something bigger and grander, we’ll inoculate ourselves from the harmful effects of gambling.

Time to dispel a few myths.

Myth number #1: A casino is the cure-all for all that ails the city economically.

The way casino advocates and the mayor’s allies have been talking up casinos, you’d think they’re a license to print cash. Maybe for casino operators.

Reality check: the gambling pie is shrinking, not growing. Casinos are losing money. Which is why the Ontario Lottery and Gaming Corporation embarked on its so-called “modernization” (read privatization) plans in the first place.

There’s a huge misconception out there that somehow the city will be cashing in on casino profits. Sorry folks. We won’t be getting a cut of the house winnings, delivered by Brinks at some cash box at City Hall at the end of every night.

Any revenue the city stands to gain from a casino operation will come from property taxes and whatever business spinoffs may flow from the development. And the extent of those spinoffs depend greatly on whether the operation sources goods and services locally or from outside jurisdictions. The latter has tended to be the case in other cities.

Which is to say that the economic benefits from spinoffs have tended to be outweighed by the negative effects of casino developments on established neighbourhoods.

On its Casino Facts website, the Canadian Gaming Association’s own literature makes mention of “growing pains” associated with businesses in and around casino mega developments. They’re not just growing pains, though. They’re economic killers. Think big box.

Myth #2: Casinos are good for tourism.

News alert. Tourism in Toronto has been on the upswing seeing increases in each of the last 12 quarters. Those who come here come for our arts and culture, not to gamble.

A brand new casino resort might bring in some curious out-of-towners to start. But once the novelty wears off, we’ll start tallying up the social costs of gambling faster than the tourist bucks. It happened in Windsor. It happened in Niagara. Thanks to a stronger Canadian buck, which provided a disincentive for Americans to venture north. And competition from casinos that have sprung up on the U.S. side of the border.

But that’s old news. There’s clearer evidence in the fact American cities that have based their economic development strategy on casino development are also starting to see the light.

Atlantic City and St. Louis, two cities that have gambled big on casinos, and lost, have hired noted Toronto architect and designer Ken Greenberg to draw up rescue plans.

Myth #3: Gambling problems are confined to a small percentage of the population.

Worldwide rates of problem gambling are relatively low, anywhere between .5 and 1.5 per cent of the population, that much is true. But Canada’s problem gambling rate is about twice the global rate, and as high as four times, or six per cent of the population, in some provinces.

But the stats gloss over the real issue – the fact that problem gamblers account for up to 40 per cent of all gambling revenue.* It’s not the couple on a night out gaming is attracting. It’s not the high rollers that are the big spenders either. They account for about 10 per cent of gaming revenue. It’s the poor sods who think they’re one big win away from cloud nine that are pumping cash into casino coffers. Not to mention seniors blowing their social security on slots.

Gaming advocates point to facial recognition technology used at casinos and programs for problem gamblers as proof they’re not preying on vulnerable addicts.

But the so-called “self-exclusion” programs, are voluntary. In fact, the Ontario Lottery and Gaming Corporation offers incentive programs, like limo pickup at your front door, to keep problem gamblers hooked.

Myth #4: A casino destination in Toronto would create thousands of well-paying jobs.

The Canadian Gaming Association claims that the average annual salary in the gaming industry is over $50,000 a year, higher if you include gratuities.

Maybe for the folks dealing at the black jack table, but most of the jobs at a casino, some 8,000 of the 12,000 being promised here, will be in the hospitality sector, the wait staff serving your meals and drinks and housekeeping staff cleaning your hotel room.

Those folks aren’t earning anywhere near $50 K a year. They make between $13 and $17 an hour which adds up to a gross salary (before taxes) of just over $35K a year.

The working conditions aren’t exactly the greatest either. Which may more fully explain the CAW’s and UNITE Here’s presence at last week’s presser. Both already represent workers in the gaming industry.

Myth #5: The availability of casino gambling does not cause increases in crime.

The Canadian Gaming Association trotted out quotes from Chief Bill Blair and Ford’s buddy Ron Taverner to suggest there isn’t a noticeable increase in crime associated with gambling. Examples used to make that point: gambling at the Ex during the two weeks the CNE is open and Woodbine racetrack, where there are slots.

But using those two for comparative purposes is horribly misleading. When it comes to casinos, we’re not just talking nickel and dime petty crime associated with problem gamblers or free booze that flows at such operations.

Casino resorts are magnets for big crime like fraud, the money laundering activities of drug dealers. And, according to the Financial Transactions and Reports Analysis Centre of Canada, terrorist organizations. And it seems to be a growing problem.

FINTRAC identified 112 cases involving questionable transactions at casinos in 2008-2009, more than double the 43 cases the year before.

According to FINTRAC, approximately 20 per cent of those involved organized crime (street gangs to outlaw motorcycle clubs), and were associated with drug crimes. Five cases involved the suspected financing of terrorist activities.

Still think a casino is a good idea?

• The Demographic Sources of Ontario Gaming Revenue | 2004

Oct 15, 2012

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