Gambling has been a part of human society for centuries. Whether one is motivated by the search for quick riches or the adrenaline rush that comes with teetering on the edge of success (or defeat) at the betting table, people enjoy the thrills associated with games of chance. While most people can enjoy gaming responsibly, there is mounting evidence and concern that the activity is impacting Canadian society in harmful ways. Ironic then that many charitable organizations rely on gambling revenue for their causes.

Though small-scale bingos, lotteries and raffles – a mainstay of small-charity fundraising strategy for years — are typically considered harmless to participants, since the opening of Canada’s first charity casino in Sault Ste. Marie, Ontario in 1999, the stakes (pardon the pun) have risen significantly. And some are suggesting it may be time to re-evaluate the tactic for the greater good.

Not your grandmother’s bingo night

According to the Ontario Lottery and Gaming Commission (OLGC) website, the charity casino program has generated $100 million annually for charities since its launch in 1999. Funds raised are redistributed through the Ontario Trillium Foundation as grants to successful, charitable applicants across the province. The Ontario government, through Trillium, says the charity casino revenue helps give grants back to charities that may have lost funding because of prior government budget cuts. Saskatchewan runs a similar charity program, only in the form of a ticket lottery where proceeds are set aside for communities and charities.

The OLGC site also mentions that in 2004 nearly $21 million was re-invested by the Ministry of Health and Long-Term Care for problem gambling research, treatment, prevention and public awareness. In addition, the OLGC says the program has helped create more than 2,700 jobs in local communities and gives the municipal governments in these areas more funds to use at their discretion to help their populations in social programming. But is it working?

While the benefits for the receiving charities are enormous, charities need to be asking themselves about the costs associated with these windfalls.

Safety concerns

According to the Canadian Safety Council (CSC) there is an inherent problem in the system. A recent press release on their website declares that “Provincial and territorial governments have become more and more reliant on revenues from their gambling operations. They advertise their casinos, lotteries and instant wins as a way to have fun and get rich quick. Ironically, they are also the regulators.” As such, the CSC questions whether the regulators can be trusted to help those who are adversely affected by gambling if it ever meant curtailing these cash cow operations. “In fact, if anybody’s become addicted to gambling, it’s probably governments,” adds Ethel Archard, spokesperson for the CSC.

Another key issue raised by the CSC is gambling-related deaths. Though the CSC does not have a position on charity gaming per se, Archard suggests that the number of suicides as a result of gambling across both for-profit and charity gambling could be in the thousands across Canada annually. The problem, she says, is that there isn’t enough data to determine these rates because they are hardly ever reported or asked after by investigators. Gambling can lead to increased marginalization of individuals, destruction of families, depression and more road-related fatalities due to fatigue from all-night gaming at 24/7 casinos.

The most recent stats from the Canadian Centre on Substance Abuse (CCSA) indicate that nearly five per cent of Canadians, close to 1,000,000 people, currently suffer through some form of gambling addiction. And with the rise of gaming on TV, the Internet and in communities research suggests this may be just the tip of the addiction iceberg.

Problem gambling on the rise

According to the 2005 Local Community Impacts of the Charity Casinos study done by Toronto-based consulting firm Robert Hann & Associates, there has been a 2.5% increase in pathological gambling in the Ontario charity casino communities, with nearly 10,000 new problem gamblers created across these communities.

While a portion of the revenue from the charity casinos is funnelled back to help these communities, via the Trillium Foundation, the study found that the major proportion of charity casino revenues are contributed by local patrons, depleting incomes, savings and potential donations to local charities from the local community. The study also determined that small charities that relied on their own gaming revenues (from bingos and the like) were being cannibalized by the new charity casinos as patrons were lured away to play in a more attractive and rewarding gaming milieu. Overall, the study results suggest that charity casinos are having a negative on their communities.

Monitoring the effects

The Public Health Gambling Project (PHGP) at the University of Toronto, headed by Dr. David A. Korn, is doing intensive research into the problem of charity gaming at the institutional level. Dr. Korn has written extensively on the subject of charity gaming and wants to explain the ethical issues involved. “It is important to clarify that gambling through the promotion of mega-lotteries is neither philanthropy nor charity,” he wrote in a letter to the Toronto Star, rebutting an article that reported on hospitals using lotteries to raise funds for their charities.

He goes on to write that, “According to the Canada Customs and Revenue Agency, charity lottery tickets are considered entertainment and not a direct donation for charitable purposes. Therefore hospitals are unable to issue a charitable tax receipt. It is more balanced to acknowledge that these hospital lotteries are a business strategy using gambling to potentially generate revenue for hospital purposes. We believe the hospital community…has a special responsibility to examine this trend carefully from a public policy perspective.” Still, others defend charity gaming as a vital revenue source.

Tenuous linkage

Over in Winnipeg, Ron Bailey, CFRE, is a consultant who has helped organize more than 30 raffles / lotteries for charities in Manitoba. He urges caution in linking problem gambling with charitable organizations.

“I am sure there are charities that choose not to participate in raffles because of the perception that they may be linked to gaming addictions, but I have not encountered this from clients or prospective clients. I think that charities who [use gaming] are raising funds to achieve their mission and that the method is voluntary, legal and not harmful,” he says. He adds that the games he associates himself with are mostly raffles and lotteries that do not offer the “instant gratification” or addictive properties associated with Video Lottery Terminals (VLTs) or casino locales. Instead, the games he has helped set up are long-term processes that often take months to reward the winner.

“I have not heard any gambling addiction official suggest that charity raffle tickets purchased one day with results several weeks later, as a [problem],” says Bailey. “This is not a concern that I have heard. Manitoba charities are generally limited to charity raffles or bingos and are not operating casinos or VLT operations. This may be different in other provinces but this is the situation here.” Still, Bailey acknowledges that charities across the country may indeed be receiving revenue from government-pooled sources which “masks the original source.”

For her part, Paulette V. Maehara, president and CEO of the Association of Fundraising Professionals (AFP), says the AFP doesn’t have a problem with charitable gaming, as long as AFP members “comply with the appropriate legal requirements” in their communities. “If the issue being explored is a ‘moral’ one, AFP has no position. [L]egal gaming with all of the proceeds going to charity is another form of fundraising,” she says.

Staying on top of the ethics

Though the revenue streams from charity gaming are undoubtedly a huge boon for charitable organizations and their clients across the country, the emerging issue of gambling addiction and its negative effects on Canadian society is one that charities should consider carefully.

Sources:

http://www.safety-council.org
http://www.gamblingresearch.org
http://corporate.olgc.ca/corp_charity.jsp
http://corporate.olgc.ca/corp_economic.jsp
http://www.casinosca.ca/CasinosCanada.htm
http://www.trilliumfoundation.org
http://www.ccsa.ca
http://www.cpa-apc.org
http://www.safety-council.org
http://www.phgp.org/about.htm (Public Health Gambling Project @ UofT)
http://www.thestar.com
http://www.cwf.ca (Gambling in Canada, June 2005 report from CCSA)
http://www.ccsa.ca/CCSA/EN/Topics/Substances_Addictions/GamblingOverview.htm

Andy Levy-Ajzenkopf is president of WordLaunch professional writing services in Toronto. He can be reached at andy@wordlaunch.com.