by Laurie Dickson 

Until the mid-1950's, gambling in Canada was looked on as a social vice. Although several forms of illegal gambling existed, religious, civic and military leaders endorsed a prohibition on gambling, believing that it shook the foundations of society. Dr. Rutherford, the Commissioner appointed by the Dominion Government to investigate racetrack gambling, concluded, “Gambling is the determination of the ownership of property by appeal to chance…to determine the ownership of property by chance is anarchistic and antisocial” (Godfrey, 1920). Gambling opposed the virtue of human reason, reward-for-services-provided and order. In a climate of public tolerance for gambling, largely because it was seen as a victimless crime (Mandel & Dolen, 1999), society’s leaders quoted the lines, “Enthrone chance above reason, and the reason will retaliate on the gambler. The gambler is not so much a criminal, as a fool” (Silcox, 1939).

Canada has now decriminalized gambling because its perceived economic benefits — reviving economically depressed communities through job creation and increased tourism and the new tax revenues funding valued social programs — are thought to outweigh its prohibition (Campbell & Smith, 1998). How did this change in thinking come about?

Over the last 100 years, Canadian society has undergone a number of significant legal events that wiped clean gambling’s tarnished image. The Criminal Code, enacted in 1892, permitted limited forms of gambling. An amendment in 1910 permitted pari mutuel betting on horse races. Temporary games of chance, such as bingo, were also legalized if played at agricultural fairs and special events, and if the profits were to be used for charitable or religious purposes. The greatest significance of the 1910 amendment was that organizations were introduced to large money sources.

In the 1950's, casinos opened across the border in the United States and an increasing number of Canadians visited US casinos for entertainment. After 1963 all provinces were familiar with legalized low-stakes charity bingo, commonly held in church basements and offered by other social organizations such as the Lion Clubs and Canadian Legion groups. From 1960 to 1969, a review of gambling by the Joint Committee of the House of Commons resulted in the enactment of section 190 of the Criminal Code. Section 190 had a pivotal impact on gambling with the following changes:

The first government lottery by the federal government was held in 1970 to fund the 1976 Montreal Olympics, followed by the first charitable casino in Edmonton in 1969. Manitoba opened the first provincially operated casino, claiming health care as its motivation (Mandel & Doelen, 1999). Casinos in Quebec and Ontario came next, with the Crystal Casino (1993) and Casino Windsor (1994). As gambling expanded, financial returns grew and conflicts between provinces and between federal and provincial jurisdictions arose. As a result, several large regional lottery corporations, including Lotto Canada, were established to manage large lottery events, decreasing legal disputes and competition for lottery sales. In 1985, Bill C-81 was passed, marking the federal government’s withdrawal from all gambling activity. In exchange, the provinces would pay the federal government $18 million a year through the Interprovincial Lottery Corporation. Giving provincial governments sole jurisdiction over gambling created conflicts with First Nations groups who believe they have the right to establish gambling operations on their reserves. Many differences remain and Canada still has no national policy on First Nations gambling, unlike the Indian Gaming Regulatory Act in the US.

Gambling as an activity with socially beneficial purposes has emerged with distinct features, as outlined by Campbell & Smith (1998), that include provincial (rather than private) ownership of gambling operations (making governments the primary financial beneficiaries), winnings not being taxed as they are in the US and sports betting that is significantly less restrictive in Canada than in the US. Last, the US government has commissioned a study of the social and economic impacts of gambling, a task the Canadian government has not yet undertaken.

Gambling started a new phase in 1985, when electronic gambling formats such as VLT's (video lottery terminals) and Internet gaming were legalized. New Brunswick was the first province to provide VLT's in 1990, and by 1993, VLT's could be found in every province except Ontario and British Columbia. VLT's abound in provinces that have legalized their use and are an enormous source of cash flow for governments (Mandal & Doelen, 1999). Internet gambling is also on the rise and games of little or no skill that can be played with credit — from horse racing, lotteries, bingo and sports betting to online casinos offering slot machines — are readily available. Internet gambling allows Internet operators access to personal bank accounts to deposit winnings and deduct losses electronically. Speed, accessibility, privacy and convenience have brought gambling into the homes of many Canadians.

Two main outcomes have resulted from this new phase. First, government revenues have escalated (Campbell & Smith, 1998). Second, an increasing number of addictions are appearing. In Alberta, the number of severe gambling addicts rose more than 40% between 1993 and 1997. During that same time, the number of VLT's across the province rose from 1,767 to 5,099 (Mandal & Doelen, 1999), an increase of 288%. Mandal and Doelen conclude that the link between the number of machines used and the number of addicts and revenues collected is unquestionable. Addictions are appearing across all ethnic backgrounds, socio-economic groups, ages and genders. A western study shows that Alberta adolescents are significantly more likely to be classified as people affected by problem gambling (Wynne, Smith & Jacobs, 1996 cited in Smith & Azmier, 1997).

The provinces and territories have trailed behind gambling’s expansion rate and are still evolving their regulatory structures. Provincial report cards based on regulatory procedures were assigned in a report published by the Canadian West Foundation (Azmier & Smith, 1998). Alberta and Nova Scotia scored the highest (b) while Ontario and Newfoundland scored the lowest grades, d+ and d, mainly for failing to consult the public and failing to provide research and financial data. The task of regulation has grown due to technological advancements made in gambling. While the US has taken the path of prohibition on Internet gambling, believing it can’t be regulated, Canada’s response is summed up by Toronto Liberal MP Dennis Mills who notes that Canada should recognize Internet gambling won’t be stopped and that we “should make it safe for the individual player” (Mandal & Doelen, 1999).

Critics have noted that the principal issue involving gambling today is the assumption that the social good (measured economically) outweighs the social damage, ironically the very reason gambling was legalized. It is alarming that the benefits of gambling can be calculated by the revenue it generates, whereas the social costs are neither immediately noticeable nor possible to measure accurately. As social scientists seek answers, only time will tell what impact gambling is having on Canadian society.

References

Campbell, C. & Smith, G. (1998). Canadian gambling: Trends and public policy issues. The Annals of the American Academy of Political and Social Sciences, 556, 22-35.

Godfry, J.M. (1920) Argument of Mr. John M. Godfry on an investigation conducted by Dr. Rutherford the Commissioner appointed by the Dominion Government to investigate racing and racetrack gambling. Toronto: Social Service Council of Canada.

Mandal, V.P. & Doelen, C.V. (1999). Chasing Lightning: Gambling in Canada. Toronto: United Church Publishing House.

Martin, J.C (1998). Martin’s Annual Criminal Code. Toronto: Canada Law Book Co.

Silcox, C.E. (1939). The Ethics of Gambling. Toronto: Christian Social Council of Canada.

Smith, G. & Azmier, J. (1997). Gambling and the Public Interest? Calgary: Canada West Foundation. Smith, G. & Azmier, J. (1998). The State of Gambling in Canada: An Interprovincial Roadmap of Gambling and its Impact, electronic version. Calgary: Canada West Foundation.