This gamble not worth the risk

Proponents NEVER take NO! for an answer!

City Hall
This gamble not worth the risk
Your odds of winning the lottery are better than those of a casino on the waterfront being a good bet for business

By Enzo Di Matteo

72: the percentage of torontoians who opposed casinos the last time there was a referendum on the issue back in 97.

Unknown: the percentage of Torontonians who oppose casinos today.

But you can bet your bottom dollar, and we are talking big dollars here, that our riverboat gambler of a mayor and his sidekick brother, Hopalong Cassidice (the Sopranos version of Cassidy), are working on turning public opinion in their favour.

Exhibit #1: that mysterious telephone poll last Wednesday night, linked to former Ford chief of staff and personal pollster Nick Kouvalis. It asked loaded questions of the variety designed to elicit a preordained response. As in, “If it was decided that a casino resort would be located in Toronto, which location would you prefer?” And, “If the casino resort resulted in thousands of jobs created, how would you feel about the casino now?”

Google one of the numbers whence the poll originated and it shows up on websites where folks have registered complaints about “harassing” phone calls – some of them during the last federal election. (Insert head-scratch here).

City council progressives were planning their own pre-emptive strike this week, Trinity-Spadina councillor Adam Vaughan tabling a motion to say no to a casino in Toronto until a city-wide referendum can be held on the issue. At NOW press time Wednesday, council was still debating the issue.

Technically, referendums are only supposed to take place during elections, the next one being in 2014. But the province has signalled its willingness to consider a plebiscite now. The masses will vote for circuses every time.

So we may have the province to thank for turning that gambling wet dream of some in Ford’s administration into a dangerous reality. The province doing Rob a favour – what were the chances of that?

Better than you might think when you factor in the fact that Paul Godfrey, grand poobah of conservatives and kingmaker in this town for a lot of years, happens to be head of the Ontario Lottery and Gaming Corporation (OLG), the outfit that recently announced a plan to “modernize” (code for “privatize”) gambling in good ol’ Ontari-ari-o.

Godfrey has had some experience with casino deals in his position as chair of the board of trustees for RioCan Real Estate Investment Trust.

Already, this casino business is beginning to feel like a bad Boardwalk Empire episode.

We’ve heard the horror stories before. Casinos tend to give rise to negative consequences like petty crime, prostitution, loan-sharking and suicides associated with gambling losses. The province currently spends $41 million a year from its gaming proceeds on problem gamblers. Money Laundering Typologies And Trends In Canadian Casinos, a 2009 report by the Financial Transactions and Reports Analysis Centre of Canada, identified casinos as sites of money laundering by drug traffickers, organized crime figures and suspects involved in alleged terrorist activities.

But in their own high-stakes gamble, the families-first minority provincial Libs, freaked by a credit rating downgrade and the prospect of having to go to the polls again if they don’t play nice with the opposition parties, seem willing to play along. Ontario Place is among the rumoured locations for a casino.

There’s also the half-billion-dollar-a-year online betting biz the Libs want to horn in on but want someone else with experience to handle for them. Allowing the private sector to build casinos seems to be the trade-off for access to that pot of gold.

But a casino is not the solution for what ails the province and the city economically.

The literature on the subject suggests that the odds of winning the lottery are better than those of a casino moving into a city without damaging its social and economic fabric.

There’s only one Las Vegas on the planet. For every casino success story, there are many more like Atlantic City’s, which has just opened casino number 12 although all the others have failed at their advertised goal of changing Atlantic City from a resort town to a place to raise a family.

And casinos aren’t just casinos any more. They’re hotels and resorts. They’re big. They suck the life out of the small retail, restaurants and hotels around them. And they require thousands of parking spaces, which seems like a bad starting point for any development.

We know from experience in Niagara Falls and Windsor that casinos are no panacea. Profits from gaming facilities near the border have dropped to $100 million a year in 2011 from $800 million in 2001. The jump in the value of the Canuck buck and a depressed U.S. economy have no doubt had an effect.

But it’s also important to note that today there are more competitors. A number of U.S. cities in nearby states (Chicago, Detroit, Baltimore, Boston and Buffalo and locations in Ohio among them) have casinos and are preparing to expand their gambling offerings. Competition for the gaming buck is only getting stiffer. Which illustrates what critics have been saying about the supposed economic benefits of casinos: there’s a saturation point.

Casinos do create jobs, but they don’t necessarily create wealth. They merely transfer wealth, since money spent on gambling is money already in circulation that could have been spent on other things.

The surest economic benefit from casinos is to governments, and there’s the rub. The added revenue from taxes – host municipalities are receiving a pittance compared to Queen’s Park – is arguably far outweighed by higher health, economic and social costs, which in many respects are not fully appreciated.

Personal costs related to gambling – like bankruptcies and family breakdown – aren’t usually part of the equation. But the research is clear: increased access to gambling means increased rates of problem gambling.

But the province is prepared to roll the dice, go bigger and make Toronto’s casino an entertainment destination. That’s doing the equivalent of betting the house on the off chance of hitting the jackpot at a time when logic dictates it may be time to close one of the casinos in Niagara Falls, for example.

The OLG report that gave rise to all the casino talk, Modernizing Lottery And Gaming In Ontario, makes curious references to the loss of players under 45, as if the potential exists to grow the market.

The report includes a big, fat disclaimer on page one of the sort you read in the investment documents of businesses making public stock offerings. It says that the report’s projections or “forward-looking statements… involve risks and uncertainties that could cause actual results to differ materially from those projected.”

Casinos are in the business of making money. The mathematical odds are such that they win more than they lose. That in itself tells you whom the business of gambling ultimately favours, and it ain’t the guy wagering his paycheque at the blackjack table.3