WINNIPEG – Gambling in Manitoba works out to be a 66 percent sin tax on those who roll the dice, says economist Philippe Cyrenne.
After studying the costs and benefits of gambling for the past seven months, he thinks the government should look at alternative ways to raise that money.
Cyrenne said an ethical tax policy would mean people in similar circumstances would pay similar amounts of taxes. But with gambling as a major source of public revenue, people who gamble subsidize those who don’t. Research that Cyrenne used in his study shows that often, those who gamble are those who can least afford it.
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Research shows that the instant gratification, the quick pace and the bright lights of video lottery terminals (VLTs) attract people who are predisposed toward addiction, Cyrenne said.
He is still hoping to get a regional breakdown from the lotteries corporation that would show how much different rural communities put into gambling, compared to how much they got back from the government for it.
But he’s willing to bet that rural communities spend more.
Competes with charities
“In Winnipeg, there are a lot of alternatives for the discretionary dollar, relatively speaking,” he said. “I think if you’re in a community which has very few recreational opportunities, I wouldn’t be surprised if a fair amount is going into gambling.”
Gambling also competes with businesses and charities trying to raise money. According to Cyrenne’s analysis, small businesses in the province would have been $46 million better off and charities $5 million better off without gambling last year.
Cyrenne said he thinks the government should have held public hearings to get a consensus on its gambling policy. “I don’t think it’s necessarily acceptable to say, ‘Well, we introduced it but things just sort of took off on us, and we thought it was going to be a minor change and it turned out to be a big change.’
“Because (gambling) can influence people, I think the best way is to have some debate at least about the relative merits of it.”
But given that the gambling infrastructure is already here, Cyrenne said the government has several options:
- It can accept the estimated $135 million in social costs.
- It could raise money in other ways. For example, Cyrenne calculated that a one-point increase in the retail sales tax could have raised the $77 million brought in by VLTs last year.
- It could establish a third-party watchdog organization for its monopoly, or privatize it.
- It could make payouts smaller. “Problem gamblers are people who gamble because they think they can make money,” he said. Lowering the maximum payout from a VLT to $100 from the current $1,000 could help problem gamblers.
Manitoba Lotteries Corporation spokesperson Susan Olynik said the payout rate for VLTs is between 92 and 96 percent.
This means that over a period of 10 million touches of a button, $92 of every $100 put into a VLT is returned to the player.
