The Crack Cocaine of Gambling

One day soon after I moved to Dartmouth, Nova Scotia, I decided to walk downtown to find a bar to watch the Super Bowl. The football game was, frankly, an excuse to begin the navigation of the social geography of my new home: what better way to meet new people and learn the lay of the land than to hoist some beers with locals watching a game?

The old warehouses, strip joints and brothels on the Dartmouth waterfront were torn down in the 1980s and replaced with government buildings whose soulless architecture underscores their lack of purpose in the evenings, after the bureaucrats drive back to the suburbs. The urban renewalists had evidently decided that lifeless municipal buildings were preferable to the bustling squalour they replaced, but Dartmouth is now neither a shining, respectable city on a hill nor a hedonistic Pottersville; rather, the only nighttime life downtown is found in a series of pathetic little gin and beer joints dotting Portland Street, sad leftovers whose more profitable days are far in the past.

It was into one of these bars I walked that January evening, hoping to catch the game and some conversation. Alas, there was no one sitting at the bar or any of the tables around the room, and the TV was tuned to a sitcom. The bartender popped the lid off a Keith’s, slid it in my general direction and shrugged when I asked if I could watch the game. Only then did I notice the “VLT room,” a glass-wall enclosure that doubled as smoking pit and gambling den. There were perhaps ten people sitting on stools before about 15 video lottery terminals. The machines made a low murmur, but otherwise the room was utterly silent, the patrons saying not a word to each other. I watched the entire football game; the only interpersonal interactions over three hours among the dozen people in the place occurred when the bartender, perhaps feeling sorry for me, occasionally looked up from a book to engage in small talk, and when one of the gamblers ordered a drink in the third quarter and took it back to his machine. Otherwise, the machines were the dominant social force.

My inaugural visit to a Dartmouth watering hole was hardly a unique experience. As Peter McKenna demonstrates in Terminal Damage: The Politics of VLTs in Atlantic Canada, VLTs are the defining force in the lives of thousands of Maritimers, leading to bankruptcies, divorce and suicide. Thousands more are directly affected, as VLT addicts turn to crime to support their habits.

The numbers can be alarming. Citing a range of academic studies, McKenna claims that about 20 percent of people who play VLTs become addicted, and of problem gamblers (the vast majority of whom are addicted to VLTs and not to other forms of gambling), 39 percent sell things or borrow money to continue gambling, and 20 percent “regularly think about taking their own lives.”

More compelling are the dozens of problem gamblers profiled in Terminal Damage. There is Bernie Walsh, a Halifax resident, who, in six years, lost $50,000, “his job, his house, his family, and his sense of self-worth and dignity” before finally getting a grip on his problem. Donald Swinimer, a Sackville man, broke his habit by taking an axe to five VLTs in the bar where he had lost his thousands. Eric Bishop, of Saint John, was not so lucky; after gambling away his last penny and trying, but failing, to address his addiction with professional help, he committed suicide. Susan Piercey, of Corner Brook, stole from her grandmother in the course of losing $100,000 to VLTs, then took her own life by overdosing on pills.

McKenna, a political scientist at the University of Prince Edward Island, is particularly adept at examining the political dynamics of the VLT issue: how did VLTs come to dominate the landscape of Atlantic Canada, and who benefits from the continued use of these machines? McKenna shows that through the 1970s and 1980s the provincial governments pushed to take control of lotteries away from the federal government, and to “covertly” amend the Criminal Code to redefine computer and video games as permitted forms of lotteries. “This change,” he notes, “in effect, gave the provinces more legislative and jurisdictional control over gaming activities like VLTs, thereby effectively decriminalizing what was a criminal act under the previous slot machine provisions.” In separate chapters devoted to each of the Atlantic provinces, McKenna gives a thorough review of the players in the VLT issue, the political parties’ stances, and how the industry and debates about the industry have evolved over time. This exhaustive historical and political analysis stands on its own, and Terminal Damage is an invaluable resource on that count alone.

The bottom line is that VLTs bring a lot of money into provincial coffers, and governments have become addicted to this income, which constitutes about 2 percent of overall provincial revenues. Between 1991 and 2005, Nova Scotia brought in about $1.3 billion through VLTs. New Brunswick had $57.7 million in VLT revenue for the 1997–98 fiscal year. Newfoundland and Labrador cashed in on $87 million in 2004–05. And in 2004–05 tiny PEI earned $11 million. Across Canada, there are 36,000 VLTs in 8,500 locations, or one machine for every 293 people. For every $100 spent in a machine, the governments receive $30.

The addicted players, McKenna shows, are considered expendable, an annoyance at best, by the provincial governments and the Atlantic Lottery Corporation. The “responsible gaming” programs are, simply, a cynical joke, underfunded (less than 1 percent of VLT profits goes to addiction services) and ineffective in any case. He writes:

VLT apologists suggest that simply banning the machines or significantly reducing their numbers would result in lost revenue that would have to be made up through increased taxes elsewhere, or that lottery and VLT monies “dedicated” to specific social programs would be lost. On the latter count, McKenna shows conclusively that funding for social programs is rarely, if ever, actually increased by lottery profits; rather, that dedicated funding stream simply frees up other tax revenues to be used elsewhere.

The former argument—that a lotteryless government would have to increase income or other taxes—ignores the very large social and government costs that VLTs bring with them. McKenna approvingly cites researcher Brian Hutchinson, who puts the annual cost of each problem gambler at between $13,200 and $20,000, which represents the price of “petty crime, loss of work-days, losses to local economies, incarceration, personal bankruptcy, counselling and treatment, and general healthcare expenditures.” Given that, according to a Canada West Foundation study, some “83,000 people are at risk or have gambling problems in Atlantic Canada,” writes McKenna, “one is talking about a fallout from problem gambling ranging from $1.1 billion to $1.7 billion in this region” annually.

Related to these social costs are the costs to businesses, as money dropped into VLTs is money not dropped in retail establishments. McKenna makes passing reference to this issue, but does not fully develop it, perhaps because there have been no thorough studies examining the cause and effect. But an example might be Portland Street’s counterpart in downtown Halifax, Barrington Street, which stretches north from the cruise ship piers. Barrington Street was at one time the central shopping district in Halifax, but of late has become something of a ghost town, notable for its boarded-up storefronts and street people. There are of course many contributing factors to Barrington Street’s decline, including the success of the nearby upscale Spring Garden Road district and the natural periodicity of all retail centres, but the most recent decline started roughly when the casino opened a short distance up Barrington. Perhaps the thousands of tourists debarking from the cruise ships are passing up the retail district in favour of a direct trip to the casino.

Bar owners, however, state just the opposite: VLTs are keeping them in business. The hospitality business points at the impacts of the recent smoking ban, the decline in tourism generally and the ever-decreasing profit margins in a struggling business climate, and says many establishments would simply go out of business without VLT revenue. That argument can be persuasive, and is no doubt true in specific cases, but I have yet to find a comprehensive study of the entire VLT economy. VLT margins are slim compared to food and drink margins, and my very unscientific survey of VLT rooms shows that drink and food consumption among regular players is minimal, almost non-existent. And, arguably, if there were not VLT machines, those regular players would be spending at least some of their money in other retail establishments, and the multiplier effect of employees spending increased wages would tumble through the larger economy, including to bars and restaurants. But it is anyone’s guess as to whether bars could survive without VLTs: a ban has not been tried in Atlantic Canada.

There is also a libertarian argument for the continued legality of VLTs that is likewise hard to ignore: why should the recreational player who games occasionally and responsibly be prohibited from playing because someone else has a problem? I have sympathy for this argument, as I usually stand politically against absolute prohibitions. But like most reasonable people, I think, I accept some forms of regulated legalities; alcohol is not banned completely, but minors are prohibited from drinking, and the alcohol itself must pass regulatory muster. McKenna too hints at an apprehension against total prohibition of gambling, pointing out that VLTs are so far along the gambling spectrum—he approvingly quotes actor John Dunsworth, who calls VLTs “crack cocaine.” Although McKenna does not make such a connection, we could perhaps compare the VLT–crack cocaine analogy to, say, poker and marijuana, the drug in this case being a relatively minor issue even at its most problematic. And poker is, of course, a game of skill, where players learn from experience; VLTs, on the other hand, involve no skills whatsoever, and are merely a game of complete chance constituting a “tax on the poor (or, more critically, on the foolish).”

Terminal Damage will remain the foundational bible for all future study of VLTs in Canada, and especially in Atlantic Canada. It covers a broader range than should be asked of any such book, and can therefore be forgiven its dry academic style. (This is no page turner, which is too bad, given the importance of the issue.) Still, even given McKenna’s exhaustive research, I had hoped that he would get into how VLTs affect the culture within bars.

After my rather unpleasant experience on Portland Street that January night, I discovered another bar a couple of blocks away, across the street from the Dartmouth ferry terminal. This place eschews VLTs completely, and appears to be doing well financially. Moreover, a robust and talkative community forms around the bar itself, as locals socialize with each other. Another bar I frequent, in Halifax, has a couple of VLTs stuck in an obscure corner, but the regular players are in no way part of the lively bar community. A bartender tells me he “hates” the machines because of the damage it does to the players, but can’t talk the owner into removing them. Tellingly, he says that in past years the players had to get change for the machines from a coin changer at the far end of the bar; “they’d have to pass me to get change, and I could at least talk to them for a while, get their minds on other things, even if just for a minute.” But when new VLTs were introduced, the machines came with bill acceptors, so the players can play for hours on end without interruption. “Now I never see them, never talk to them,” says the bartender. “I don’t know who they are.” And that, I think, is yet another cost of VLT addiction.