Hooked on VLTs

Newfoundland’s Finance Minister, Tom Marshall, announced last month that video lottery terminals (VLTs) will be reprogrammed to work for fewer hours per day – from noon to midnight, rather than 9 am and 2:30 am as they were in the past. They also will be programmed to slow the rate of play down by 30 per cent.

The decision followed news that one small Newfoundland community of 3,000 residents, on Bell Island had pumped one million dollars into VLTs in 2004, indicating a fairly serious gambling problem.

And in the same month, a report in Saskatchewan suggested a “strong relationship” between electronic gambling machines and serious gambling problems. The report, published on behalf of the Saskatchewan Liquor and Gaming Authority (SLGA) by the Responsible Gambling Council (RGC), also said that while the general problem is clear, the specific reasons that electronic gambling machines can be such a problem are not.

The report went on to say that modifying the rate of play, as well as other modifications such as ensuring that automated bank machines are not close to the VLT terminals, can help to mitigate the effects of these machines.

Deb Higgins, the minister responsible for Saskatchewan’s gaming authority, said that some measures to help curb problem gambling would be implemented, particularly disallowing electronic funds transfers to machines, and that the province would not allow an increased number of VLTs. But she also stated that the province will not remove any of the current machines.

Both provincial experiences demonstrate the two sides to VLTs in Canada. On the one hand, provincial governments appreciate the revenue from the machines. On the other, problem gamblers that seem particularly susceptible to the draw of VLTs raise concerns for health and social costs of the games.

Follow the money
Provincial governments seem to be hooked on the income from VLTs. 8 provinces allow VLTs, with Ontario and British Columbia as the only two provinces which do not permit VTL gambling, although each does permit certain other forms of electronic gambling machines.

A 2006 research report commissioned by the Canadian Gaming Association (CGA) stated that since its inception, VLT gaming has returned almost $20 billion to provincial government programs and services across the country. In a 2006 news release the CGA seemed overwhelmingly positive about the technology and programme:

“Our study finds that VLT gaming in Canada is well-run and well-regulated by Crown agencies with a high degree of public accountability,” said the report’s author Robert Scarpelli of HLT Advisory Inc. “It offers fair games in safe, age and access-controlled environments and raises significant revenues for key government programs and initiatives. The research also confirms that VLT gaming programs in Canada have been built upon sound principles of economic development, combating illegal activities, and the generation of non-tax government income.”

Greater societal costs
But others have found there is a darker side to the machines. In Alberta, former deputy minister Ray Reshke revealed in 2004 that his trip to Nevada – sponsored by the Alberta government to investigate video lottery terminals – triggered a gambling addiction that led him to defraud the government of over $100,000.

Nova Scotia’s Game Over VLTs group launched a campaign in February of this year to eliminate the machines from the province entirely. Their website, at http://gameovervlts.com/, contains many heartbreaking stories from individuals who believe that VLTs represent an unusual experience for gamblers, one that is particularly addictive and difficult to avoid. The organization strongly believes that the province should eliminate the VLT programme.

And indeed the government itself has investigated the issue. Nova Scotia was one of the first jurisdictions in North America to take on administration and control of the video lottery market, beginning in 1991. In 1997 and 1998 the Nova Scotia Department of Health undertook a survey of VLT players. Findings included some interesting statistics. Only 5.7 per cent of adults in the province were involved in regular continuous play at VLT terminals. However, 59 per cent of these players were over 55, which suggested that seniors may have a particular interest in the machines.

75 per cent of those regular players seemed not to suffer any serious effects. However the survey suggested that at least 25 per cent of the regular players had difficulty with their gambling. And for both groups the amount spent at the machines was not insignificant: on average, regular VLT players spent $243.52 per month on the machines, or nearly 80 per cent of their entertainment budget for the month. That begins to explain where the high revenues are generated.

Now the Health Promotion and Protection government website has a section devoted to educating the consumer about VLTs and their dangers.

Even so, the question of what causes VLT addiction is still very much up in the air.

Both the Nova Scotia survey and the RGC report, as well as anecdotal reports from Bell Island, suggest that it is a combination of factors that play into problem gambling, including high unemployment rates, and substance abuse. But it seems that VLTs contribute to the problem in a particular way – they are easily accessible, available for solitary play for long hours, and the speed of their games can impact on how quickly a player can go through a fair amount of money.

Provincial governments may be able to keep the lucrative programme going, but mitigate its effects on problem gamblers by ensuring that these additional factors are controlled, much as Newfoundland has done.

The CGA 2006 study also noted that Canadian provinces currently spend a total of $75 million annually on problem and responsible gambling programs — more than any other jurisdiction in the world.

What is clear is that VLTs are not likely to go away any time soon. The question for both individuals and provincial governments will remain how to address the particular needs of problem VLT gamblers.

Resources for problem gamblers:
Nova Scotia: http://www.gov.ns.ca/hpp/gambling/directMessage/index.html
Problem Gaming: http://www.problemgambling.ca/