Charitable Gaming: Is it fundraising's best bet?

Charitable gambling is really nothing new: it has existed in Alberta, in some form or another, for over 100 years. Since 1980, how-ever, when the first casino (as we now know them) was built in Alberta, charities have come more and more to rely on charitable gambling as an important fundraising activity. But whether or not charitable gambling is a “positive” trend in fundraising is an ongoing discussion—one that challenges us to take a close look at all the intricacies involved before deciding where we, ourselves, ultimately land on this issue.

What Exactly Is Charitable Gambling?

To begin, it’s important to distinguish between charitable gambling and legalized gambling. Simply put, revenue from charitable gambling goes directly to charities; revenue from legalized gambling goes to government. Alberta, like many other provinces, has adopted a charitable gambling model. For example, in 2015, Apex Casino in St. Albert hosted 180 charitable events, and the money raised from those events directly supported the Sturgeon Community Hospital Foundation, St. Albert Victim Services and the St. Albert Housing Society, just to name a few.

It’s also important to understand what a “charitable organization” is according to the Alberta Gaming and Liquor Commission (AGLC), which is responsible for issuing licenses to organizations that choose charitable gambling as a fundraiser. AGLC defines a charitable organization as one involved in the relief of poverty, the advancement of education and/or religion, or the delivering of other benefits to the community. All that said, funds raised from charitable gambling are considered “supplemental,” i.e., they can’t be a charity’s only source of funding. So, even if charities use gambling as a fundraiser, they still can’t eliminate things like bake sales, charity dinners or car washes.

So why do so many charities rely so heavily on charitable gambling? The answers are straightforward: low risk, high efficiency, high payoff and few strings attached. On one hand, a typical fundraising event may take weeks or months to organize, entail many hours of volunteer time and require a monetary investment upfront. And the payoff may or may not meet expectations. On the other hand, although charities are restricted from running a casino more than once every two years, there’s very little organizing involved. Volunteers need only provide a few hours of their time, and they receive both training and supervision at the event itself. To top it all off, many charities will make more money using this approach than any other. And there are very few strings attached in terms of how that money can be used—from poverty relief to education to programming, or from infrastructure to travel expenses to administrative costs—choice abounds.

How Big Is the Money, & Where Does It Go?

In 2015, Alberta charities raised $342 million though charitable gambling, an amount that has been steadily increasing over the past five years. And the biggest money-maker is casinos. In 2015, 3446 casino licenses were issued with proceeds of $264 million. This means that charities that undertook a casino as a form of fundraising event earned, on average, over $75,000 after expenses.

When we factor in legalized gambling, the money becomes astronomical. Legalized gambling in Canada generates $16 billion per year, with governments and charities being the biggest benefactors. In 2015, the AGLC earned a whopping $2.3 billion after expenses, of which over $1.5 billion came from legalized gambling. Where did the money go? $766 million went to the government’s General Revenue Fund, which supports areas such as health care, debt reduction, and social programs. $1.5 billion went to the Alberta Lottery Fund (ALF). In 2016, the ALF expects to provide foundations, grant programs and government ministries with over $1.5 billion, which will go to programs focussed on family violence prevention, community health services, provincial highway preservation and a host of other worthy and, in some cases, charitable causes.

What Are the Economic Benefits?

Given all this money, are there economic benefits to legalized and charitable gambling? Yes…maybe… kind of. Studies are split on whether or not gambling venues bring concrete economic benefits to communities. Some point to minor benefits, others point to benefits that are offset by negatives and still others show that such venues make no difference at all. For instance, most studies that have looked at changes in property values as a result of a new casino have found either small positive benefits or no effects.

Still, there’s no question that the industry creates jobs. But these employees represent a small fraction (about 0.4%) of the overall workforce—a percentage that has changed little despite surges to gambling revenue over the past few years. Turnover is high and wages are generally low when compared to other areas of the workforce. In fact, for these employees, wages have gone down steadily when measured against the average Alberta hourly wage—from approximately 77% in 1991 to 64% in 2009. So, yes, the gambling industry creates jobs. And, yes, there may be economic benefits. But, (and here lies the hiccup), there’s almost always a “but” when it comes to this issue, and that’s what makes it so challenging.

What About Crime?

In January 2015, RCMP Constable David Wynn and Auxiliary Constable Derek Bond were shot (Constable David Wynn was killed) at Apex Casino while investigating the report of a stolen car. For the casino, this resulted in a significant drop in business for about nine weeks. It may have also accounted for a drop in public opinion about casino safety. According to the AGLC, 73% of Albertans in 2014 believed that gambling venues were safe and responsible environments. In 2015, that dropped to 65%. So are casinos and other gambling venues safe, or aren’t they?

While there’s certainly no justification for minimizing such horrific events, it’s important to recognize that they are, in fact, very rare. A recent study out of the University of Lethbridge showed that only 0.6% of all crimes in Alberta were unambiguously related to gambling. And those crimes are largely non-violent property crimes. These low rates are reportedly due, at least in part, to the fact that such criminal activity tends to be perpetrated by only 7% of problem gamblers, and problem gamblers account for only 2% to 3% of the population. It would seem then the assumption that gambling generates large amounts of crime is only that—an assumption.

So, What’s Not to Love About Charitable & Legalized Gambling?

If most of the revenue from charitable and legalized gambling goes to charities and social programs, and if this activity accounts for only a fraction of crime, and if there are no palpably negative economic consequences, what’s not to love?

Well, first, gambling is shown to be regressive. Virtually all studies of gambling have found that people with lower incomes contribute proportionally more to gambling revenue than those with higher incomes. According to Statistics Canada, in 2009, Canadians who made $20,000 or less spent on average 10% of their earnings on gambling, while those who made over $110,000 spent an average of 2%. So Canadians who are the least able to afford gambling are also the ones who spend proportionally more on it.

It’s also estimated that problem or addicted gamblers contribute between 40% and 50% of gambling revenues. Problem gamblers can face particularly serious consequences as a result of their addiction, including bankruptcy, divorce and suicide. Further, problem gambling affects more than just the gambler. According to Alberta population surveys, about half of problem gamblers are currently married or living common-law, and about three quarters have children. So the percentage of people indirectly impacted by problem gambling is far greater than the percentage of problem gamblers. There may also be a serious inter-generational impact—children of problem gamblers are at high risk for also becoming addicted to gambling.

While about 4% of total provincial revenue comes from gambling, only 0.4% goes to the treatment and prevention of problem gambling and gambling addiction—the lowest of all provinces. The AGLC does provide a number of programs and tools to promote responsible gambling, most casinos provide resources to aid in responsible gambling and a voluntary self-exclusion program in conjunction with Alberta Health Services is available to assist problem gamblers. Unfor-tunately, many Albertans are unaware of such programs, and their effectiveness remains unclear.

A Roll of the Dice?

So, on the one hand, charitable gambling is a quick, easy and efficient way for charitable organizations to raise more money than they might otherwise and put that money toward a good cause. On the other hand, it’s worth talking about where that money comes from.

It’s a complicated issue for sure, and one with no hard and fast answers. But it’s certainly worth talking about, because it’s clear that the answer isn’t nearly as simple as a roll of the dice. t8n

Did You Know?

In 2012, St. Albert resident
Gisele Jubinville, who wrote about her life as a gambling addict in her memoir Dismissed, filed suit against the province for almost -$2 million, claiming that the public was deceived about the addictive nature of VLTs.

Did You Know?

There are approximately 70 casinos in all of Canada—24 of those are in Alberta.