Analysis

Online gambling: why provinces are eager to jump in

Canada's gambling landscape is being quietly refashioned, but is anyone paying attention?

Canada's gambling landscape is once again being quietly refashioned

Alberta's government, led by Premier Jim Prentice, centre, will soon be making a decision on sanctioning online gambling in the province. (Jason Franson/Canadian Press)

Walk into nearly any corner store in the country and the sight of a lottery terminal doesn't cause so much as a ripple, but that wasn't always so.

Before Parliament changed the Criminal Code in 1969, lotteries were actually illegal in Canada. Once the new rules came in, Quebec quickly threw its hat in the ring and the other provinces soon fell like dominoes.

The move to decriminalize lotteries came with little public discussion or political debate. Much like Hemingway's line about bankruptcy, the change happened gradually and then suddenly.

Skip ahead to today and Canada's gambling landscape is once again being quietly refashioned. 

The large majority of Canadians will indicate that the harms far outweigh the benefits.- Robert Williams, Alberta Gambling Research Institute

Consider Ontario, for instance, which saw only four months pass between the provincial gambling regulator issuing a request for proposals to gaming companies interested in running the province's online operations and the site going live in early January.

The same accelerated timeline now looks to be in play for Alberta. The province's gaming commission asked vendors for proposals in February and hopes to make a recommendation to the finance department in April. It's possible it will be rejected, but that seems unlikely considering the experience of other provinces, as well as Alberta's sudden financial troubles.

Online gambling is eventually expected to put $50 to $75 million annually into the government's pocket. During the energy sector's recent glory days, billions in royalty revenues afforded Alberta the luxury to pass on the lure of online gaming dollars. Not so anymore.

Falling oil prices

A straight line can seemingly be drawn between the timing of Alberta's decision to jump into online gaming and the price of oil. 

Despite such optics, Bill Robinson, the head of Alberta's Gaming and Liquor Commission, says the move to push ahead with online gaming at this particular time is unrelated to oil prices.

"It has nothing to do with [oil] actually," he says.

Gambling researcher Robert Williams, a professor at the University of Lethbridge, who delivered a report from the Alberta Gambling Research Institute to the Alberta Gaming and Liquor Commission (AGLC) in 2011 that recommended the province stay away from internet gaming, isn't so sure.

"The large majority of Canadians will indicate that the harms far outweigh the benefits and they're not in favour of further expansion," he says. "This goes against economic sense, it goes against social harm considerations, it goes against the desire of Alberta citizens, so the only rationale is increasing AGLC revenues because of the price of oil."

Although some critics say that sanctioning online gaming could actually be a net negative in the long run, the immediate draw of another $50 to $75 million in annual revenues would seem to carry more weight at a time when the province expects its budget deficit to shoot north of $5 billion.

Online gambling is expected to put millions in Alberta's coffers at a time when the province needs the money. (Stephan Savoia/Associated Press)

It does raise a question about who, exactly, is responsible for looking out for the province's best interests beyond the bottom line.

The AGLC's six-point mandate, for instance, includes a directive to"Generate revenue for the government of Alberta." Its instructions don't include any directions to consider the potential economic and social costs that may come with that revenue. Alberta's Treasury Board and Finance Department, similarly, is tasked with managing the province's fiscal health, an amount upwards of $75 million a year would surely improve.

Saskatchewan a holdout

If Alberta opts for the extra cash it won't be alone. Ontario, B.C., Manitoba, and Quebec already offer a full slate of online casino-style gambling. The Atlantic Lottery Corp., meanwhile, which oversees gaming for New Brunswick, Newfoundland and Labrador, Prince Edward Island, and Nova Scotia makes lottery tickets and sports betting available on the internet, but stops short of so-called casino offerings. Games such as online slots, roulette, blackjack and poker are more lucrative, but they're also more worrisome for problem gamblers, due to a higher addictive potential.

With Alberta on the trolley tracks towards online gaming, Saskatchewan is now the only province still choosing to stay away. According to a spokesperson for the province's gambling regulator, no discussions are underway that would change Saskatchewan's position that the risks of online gaming outweigh the benefits.

Saskatchewan currently has the right policy by not going down this path at all.- Kent Hehr, MLA, Alberta Liberal finance critic

Kent Hehr, the opposition finance critic for the Alberta Liberals, thinks his province would do well to follow Saskatchewan's lead, although he notes that gambling isn't an area that draws much attention from either him or his legislative colleagues.

"To be honest, I think Saskatchewan currently has the right policy by not going down this path at all," says Hehr, adding the extra revenue promised by online gambling will trump the considerations that caused the government to hold off in the past.

Research shows that fewer than five per cent of gamblers account for more than 30 per cent of gambling revenues.

But government's say they're the best people to keep an eye on the industry.

Ultimately, governments spend less money treating problem gambling issues than what they take in. Research on provincially sanctioned online gaming shows it increases the size of the market and the number of problem gamblers, an issue that seems to be worth some discussion before going ahead. You can't, after all, put the genie back in the bottle.

Between the cracks

In Canada, however, the business of gambling can fall between the political, legal, and regulatory cracks, which means such questions often go unasked.

Legally, gambling is governed by a mish-mash of old laws, and it's a provincial jurisdiction, which further complicates things. Aside from the odd newspaper editorial, gambling maintains a low profile which, combined with the direction of the political and financial winds, suggests Alberta's entrance into the online gaming business is a faitaccompli.

At some point later this year, Albertans, much like their friends in Ontario, will go to sleep one night only to find the next morning they can play a few hands of blackjack or an online slot machine courtesy of the province. A change, it seems, that will indeed come gradually and then suddenly.

About the Author

Paul Haavardsrud

Paul Haavardsrud writes for CBC's western business desk in Calgary. He is also a producer on CBC Radio’s national business desk where he talks about business on Radio One in the afternoons. Prior to that he worked for newspapers. On Twitter, he’s @paulhaavardsrud.

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