FORT ERIE HORSEMEN'S BENEVOLENT AND PROTECTIVE ASSOCIATION
FORT ERIE ECONOMIC DEVELOPMENT CORP FORT ERIE RACE TRACK
DELTA BINGO GROUP OF COMPANIES
GOLDEN HORSESHOE SOCIAL ACTION COMMITTEE
NIAGARA PRESBYTERY, UNITED CHURCH OF CANADA
DELTA BINGO GROUP OF COMPANIES
PORT COLBORNE COMMUNITY ACTION
CONTENTS
Tuesday 13 August 1996
Alcohol, Gaming and Charity Funding Public Interest Act, 1996, Bill 75, Mr Sterling /
Loi de 1996 régissant les alcools, les jeux et le financement des organismes de bienfaisance
dans l'intérêt public, projet de loi 75, M. Sterling
Fort Erie Horsemen's Benevolent and Protective Association
Sherkston Shores
Erie Beach Hotel
Fort Erie Economic Development Corp; Fort Erie Race Track
New Port Centre
Delta Bingo Group of Companies
Joe's Place
Golden Horseshoe Social Action Committee
Niagara Presbytery, United Church of Canada
B'nai Israel Brotherhood
Flamboro Downs Holdings Ltd
Delta Bingo Group of Companies
Mr Jeff Newman
Port Colborne Community Action
STANDING COMMITTEE ON ADMINISTRATION OF JUSTICE
Chair / Président: Mr Gerry Martiniuk (Cambridge PC)
Vice-Chair / Vice-Président: Mr Ron Johnson (Brantford PC)
Mrs MarionBoyd (London Centre / -Centre ND)
Mr RobertChiarelli (Ottawa West / -Ouest L)
Mr Sean G. Conway (Renfrew North / -Nord L)
Mr EdDoyle (Wentworth East / -Est PC)
Mr Garry J. Guzzo (Ottawa-Rideau PC)
Mr HowardHampton (Rainy River ND)
*Mr TimHudak (Niagara South / -Sud PC)
Mr RonJohnson (Brantford PC)
*Mr FrankKlees (York-Mackenzie PC)
Mr Gary L. Leadston (Kitchener-Wilmot PC)
*Mr GerryMartiniuk (Cambridge PC)
Mr John L. Parker (York East / -Est PC)
Mr DavidRamsay (Timiskaming L)
Mr DavidTilson (Dufferin-Peel PC)
*In attendance /présents
Substitutions present /Membres remplaçants présents:
Mr BruceCrozier (Essex South / -Sud L) for Mr Chiarelli
Mrs BarbaraFisher (Bruce PC) for Mr Ron Johnson
Mr JimFlaherty (Durham Centre / -Centre PC) for Mr Tilson
Mr BertJohnson (Perth PC) for Mr Doyle
Mr GerardKennedy (York South / -Sud L) for Mr Conway
Mr PeterKormos (Welland-Thorold ND) for Mr Hampton
Mr BartMaves (Niagara Falls PC) for Mr Parker
Mr BillMurdoch (Grey-Owen Sound PC) for Mr Guzzo
Mr E.J. DouglasRollins (Quinte PC) for Mr Leadston
Also taking part /Autres participants et participantes:
Ms ElizabethMcGregor, special assistant, legislative/policy/MPP liaison, MCCR
Clerk / Greffière: Ms Donna Bryce
Staff / Personnel: Mr Andrew McNaught, research officer, Legislative Research Service
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The committee met at 1101 in the town hall, Fort Erie.
ALCOHOL, GAMING AND CHARITY FUNDING PUBLIC INTEREST ACT, 1996 / LOI DE 1996 RÉGISSANT LES ALCOOLS, LES JEUX ET LE FINANCEMENT DES ORGANISMES DE BIENFAISANCE DANS L'INTÉRÊT PUBLIC
Consideration of Bill 75, An Act to regulate alcohol and gaming in the public interest, to fund charities through the responsible management of video lotteries and to amend certain statutes related to liquor and gaming / Projet de loi 75, Loi réglementant les alcools et les jeux dans l'intérêt public, prévoyant le financement des organismes de bienfaisance grâce à la gestion responsable des loteries vidéo et modifiant des lois en ce qui a trait aux alcools et aux jeux.
The Chair (Mr Gerry Martiniuk): Good morning, ladies and gentlemen. The committee is pleased to be in the municipality of Fort Erie for the continuation of the administration of justice committee consideration of An Act to regulate alcohol and gaming in the public interest, to fund charities through the responsible management of video lotteries and to amend certain statutes related to liquor and gaming.
The committee welcomes Mr Hudak, member for this area.
Mr Tim Hudak (Niagara South): Thank you, Chair. It's a particular pleasure to have the committee come to Fort Erie, my home town and part of the riding of Niagara South. I'd like to say that I think this recognizes that the government is recognizing the importance of Fort Erie and the interest it has taken in charitable gaming along the border and the work of the charities in the area.
The building you're sitting in, and if you look out across the way with the Leisureplex and the YMCA, I think you're seeing the benefit from the intersection between the fact that we're on the border with Buffalo, New York -- we have a great deal of community supports and excellent charities -- and the importance of charitable gaming to Fort Erie, to Port Colborne and to the rest of the Niagara Peninsula.
I think what I expect to hear today too is that this community is particularly energized at some of the announcements made in the budget with respect to the video lottery terminals, especially at racetracks and the charity event sites. I expect to see some of that in the hearing today and I look forward to hearing what people in Fort Erie and the surrounding areas have to say.
Once again, Chair, I want to thank you for helping bring the committee here to my home town of Fort Erie.
Mr Peter Kormos (Welland-Thorold): If I may, Chair, I would like to express gratitude to Mr Hudak and Fort Erie. Of course, I'm from the neighbouring riding of Welland-Thorold, but I am certainly impressed by the facilities we're in and I know the people of Fort Erie are grateful to the last government for that government's participation in the capital funding of this complex.
The Chair: Thank you, Mr Kormos. Now, to the members of the audience, on my right is the government caucus and to my left are members of the loyal opposition and the third party. I would warn the members that the microphones are voice-activated and, I am advised by our technician, are extremely sensitive. You each have a privacy button, but even with that button, though your mike may be dead, conversations can be picked up as far as 15 feet away. So I would ask that you keep your conversations to a minimum to ensure they are not recorded for the purpose of Hansard.
FORT ERIE HORSEMEN'S BENEVOLENT AND PROTECTIVE ASSOCIATION
The Chair: We will be proceeding with presentations of 20 minutes each, including any questions, and this morning we will start with the first presenter, Fort Erie Horseman's Benevolent and Protective Association, Mr Bert Simon, director. Mr Simon, I would request that you come up to the table and take a seat. Welcome.
Mr Bert Simon: Thank you, Mr Chairman, members, ladies and gentlemen. My name is Bert Simon, and I am speaking on behalf of the horsemen who function at the Fort Erie Race Track and surrounding area.
I would just like to say that this year is the 99th anniversary of the Fort Erie Race Track. This perennial favourite among race fans is strategically located just minutes from the Peace Bridge and is known as the busiest port of entry between the United States and Canada.
For decades this track has attracted patrons from all over the Niagara Peninsula and Buffalo and, in so doing, has become a major player in the economy of the area. It is directly responsible for the employment of 4,500 people, both on track and off, and contributes greatly to the agricultural base in the peninsula.
Like any industry, horse racing is not immune to competition, and in today's changing world one must adapt. As has been demonstrated in other racing jurisdictions in North America, declining attendance and wagering is directly related to competition for the recreational dollar presented by lotteries, casinos and sports betting. We here in Ontario, especially Fort Erie, are not unique. With the introduction of a gaming casino in Niagara Falls and the recent opening of an Indian casino complex in New York state, as well as our competition from New York state's updating their offtrack betting parlours, it is imperative that Fort Erie Race Track take advantage of Premier Harris's foresight in allowing VLTs at racetracks.
Parimutuel wagering has been socially accepted for many years without serious incident. This is attributed to the tight controls and regulations put in place by federal and provincial authority as well as a secure and regulated infrastructure established by track operators and supported by horsemen's groups representing owners, trainers and employees.
This very infrastructure will adapt nicely with the regulations needed when VLTs are introduced at racetracks. It will expedite their implementation because we have provincially licensed personnel in place, security in place, adequate square footage for proper distribution of VLTs, public safety measures in place and an advertising program in place that can be modified to embrace both horse racing and VLT gaming.
Racetracks in Ontario need some stimulus to recapture their dwindling attendance base, and it has been proven in other racing jurisdictions that have implemented VLTs in casinos that their presence has increased attendance and revenue. This brings us to permanent charity casinos. Fort Erie Race Track has often opened its doors to charity bingo in the past and the community has benefited. The placement of a permanent charity casino on track would further enhance attendance and would provide the local charities with an established permanent location from which to operate.
Although the presence of VLTs and a charity casino will take away from traditional wagering on horse racing, our share of the proceeds from the two will offset this loss and will give horse racing a chance to regain its lost patron base. We have a product that is intriguing and desirable, and if we can attract people to the track, we believe horse racing will once again flourish.
In conclusion, it must be agreed that we are entering into uncharted waters, and what works elsewhere might not work here. We believe that Premier Harris recognizes this and has mandated a governmental review in five years. I trust that if it is detrimental, if any one faction is being drastically compromised by any of these new implementations, a sooner review will be conducted.
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Before I leave this chair in addressing this committee there is something that I feel I must relate to this panel. While driving to this hearing this morning from my thoroughbred farm located in the region, I had occasion to pass two pastures that used to house a couple of mares and foals. It was depressing to see these pastures empty and overgrown with weeds. This reminded me that with all the high-tech changes we are trying to implement to help the industry, I cannot lose sight of our grass-roots purpose and that it is mandatory that live racing at Fort Erie remain, and by doing so, revitalizing our thoroughbred breeding base and once again fill those empty pastures.
That is what I have to say on behalf of the horsemen at the Fort Erie Race Track.
Mr Hudak: Thank you, Mr Simon, for your presentation today. I think the town and all of Niagara Peninsula are right behind you. The racetracks need a stimulus, and the stimulus this Bill 75 will provide is probably the key to keep the track into its 100th year and keep it growing even beyond that.
From some of my own reading and my discussions with people at the track -- you've seen other jurisdictions try video lottery terminals at the racetracks or other types of games; you mentioned the charity gaming site. Hollywood Park has not had a decline in the handle. I think the handle has actually gone up as more patrons come to the track attracted by the VLTs, but they also take a shot at the horses, learn the game. West Virginia and Iowa are two other states that have seen the total purses I think quadruple.
If we implement this the right way, with the video lottery terminals at the tracks, if you make a pitch for a charity event site, do you think we'll see the same sort of thing at the Fort Erie Race Track?
Mr Simon: I believe the industry has that in common. I've had occasion to ship some horses -- I personally didn't; my daughter did -- they shipped to West Virginia and she was impressed by the fact that purses have increased considerably from a previous visit that she had made since they implemented casinos. Down there they had slot machines as well as VLTs. Yes, I believe that this would be a shot in the arm for the industry. We have to do something to stimulate our base because we're dying a slow death.
Mr Hudak: You put it quite well too, quite eloquently. You talked about the empty pastures and fields that you passed on the way here that used to be filled with colts. I think that's something we forget about. It's not just the racetrack itself but the agricultural industry that surrounds horse racing and the breeding and such.
In the other states or provinces that have tried this, has the breeding come back a degree? Can we see those fields filled again?
Mr Simon: Definitely. I've raced in Ohio, I've raced in different jurisdictions, and a lot of jurisdictions that have casinos or lotteries in place have established a new breeding program and their funding has been quite successful.
Mr Hudak: The bottom line is that Bill 75, the video lottery terminals, is good for jobs in Fort Erie and throughout Niagara.
Mr Simon: At one time I had nine brood mares and I used to supply horses to the racetrack. I did it on a personal basis; I didn't sell them commercially, but I raced here, locally, and in Toronto both. Because of the declining base I have cut back to two. As I said this morning, I noticed a situation that was not desirable. I believe that we have to come forth with something, this is the answer and hopefully VLTs will give us the necessary shot in the arm, so to say, that will get this industry back on track.
Mr Gerard Kennedy (York South): Thank you for coming today, Mr Simon. I congratulate you in terms of the 99th anniversary and the well-known contribution the track has made. Could you explain to us why there is such a problem for the track right now? What are the causes of that?
Mr Simon: I have been involved in this fight for the survival of Fort Erie for quite some time. It's a declining base. We have so much competition from other sources and there are only so many recreational dollars to go around. I believe the industry sat back on its laurels for quite some time and neglected to keep pace with the changing mode of operation. I think once you lose that base it's difficult to recapture it. I believe that with VLTs and charity casinos we can re-establish our attendance at the track. The horse racing industry has a mesmerizing attraction, and with the complement of VLTs I think we can bring this industry back to where it was.
Mr Kennedy: When you talk about competition, when you look at the government's plan in Bill 75, it allows them to put out an unlimited number of VLT machines. The body of the legislation deals with making it possible to put them into bars and restaurants on a fairly widespread basis. The government has indicated their intention to minimize that, but they're not going to regulate it themselves; they'll let other provinces set how many we will have here. All we're told is that it will be a lower level than other provinces, but it does mean thousands in bars and restaurants and it does mean, if we follow closely the experience of other provinces, an escalation in the amount of gambling but also some cannibalization of existing gambling.
When you look at that experiences in other provinces -- yours is one of the best-known tracks and so on -- are you worried about the impact overall on racetracks, not only on your own but in smaller centres, if more of that competition and cannibalization take place? Would you, if you had a choice, like to see VLTs restricted in some way and used for certain purposes rather than this very widespread rollout of them that the government plans?
Mr Simon: We have to start somewhere. There no doubt will be some cannibalization. Obviously we will receive some revenue from VLTs. I think we can stand on our own feet once we get people to the track.
Mr Kennedy: Are you worried that if people can go to bars and restaurants to play VLTs, that may keep them away from the track? Is that a concern at all?
Mr Simon: We have that problem right now. There's a grey area that exists presently.
Mr Kennedy: But if those machines are added to by legal machines -- in other words, we've found in other jurisdictions that the grey machines simply change their tapes and many of them stay in place. We can only get rid of them with enforcement. If you have a larger number of machines, more accessible, won't that be harmful to the racetrack?
Mr Simon: I don't believe so. I think it will complement the other areas and we will have a certain element of people who will frequent bars and taverns, and this is something the government is going to have to regulate. But I think we have to start, and by starting at the racetracks this will revitalize the industry. We're going to have to crawl before we walk. Gradually it's going to have to be regulated at some point in time, no doubt, but I think that's a decision the government is going to have to make down the line.
Mr Kennedy: You wouldn't see those regulations being built in at the beginning, for example, if the racetracks were one of the objectives, to make sure they have that benefit? Is it not worthwhile looking at in the beginning? I guess the government's plan is to roll it out quickly everywhere at once. There will be stages but they'll happen very quickly in terms of revenue projections and what the hospitality industry is expecting. Do you think that regulation can happen later on, after all the machines have been put in place?
Mr Simon: I believe that could be done. I think that could be implemented. Like I said, we're charting new waters here. I don't feel as though it would be detrimental to letting it ride as it is and regulate it as we proceed.
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Mr Kormos: Mr Simon, please rest assured that you're going to have slots at the racetrack. This bill is going to pass like crap through a goose, I tell you, because the government needs the cash. This government, like so many other governments across North America, has become addicted to gambling as a means of generating revenues. They made a promise of a tax break to the rich in the province. They need the proceeds from slots to keep that promise. The racetrack is going to get slots.
The sad thing is that I'm convinced that other licensed places are going to get slots as well: 20,000 slots, one for every 550 population, so in a city like Fort Erie we're talking about over 15 slot machines. If each machine only takes in $2,000 or $3,000 a week, and the figures indicate that is a conservative estimate, we're talking about millions of dollars a year being pumped out of the local economy, not being spent at the shoe store, not being spent at the supermarket, not being spent at the department store, not being spent in local small businesses but going into the hands of the government and into the hands of the people who own the slots.
You're going to get the slots. I know the race industry is in trouble, but I'm telling you there's going to be a huge price to pay. I believe this. Others disagree with me. It's like the tobacco industry spending millions in trying to convince people that tobacco is neither addictive nor dangerous to our health. Some people are going to tell you and are going to try to convince others that slots aren't addictive and that slots don't drain money out of a local economy. Go to Louisiana and you'll see the strong anti-slot movement that's been generated by their experience with it. I wish they could be contained to racetracks -- I really believe that -- I wish they could be contained to casinos and racetracks. Every corner in every neighbourhood is going to have a slot before this government's finished. Good luck to you.
The Chair: Mr Simon, thank you for coming before us today.
Mr Simon: It was a pleasure. I appreciated the opportunity to express the horsemen's position on it.
SHERKSTON SHORES
The Chair: Our next presentation is Sherkston Shores, Mr Gary Bruno, general manager. Good morning. You have 20 minutes, including questions. I ask you to proceed.
Mr Gary Bruno: Thank you, Mr Chair and members of the committee. My name is Gary Bruno. I'm the general manager of Sherkston Shores. I'd like to thank you for the opportunity to speak to Bill 75 and VLTs.
I represent Sherkston Shores, a large recreational resort complex located just west of here on the shores of Lake Erie. We support the idea of VLTs in properly controlled establishments, as well as having VLTs at the local racetrack.
I observed with great interest the televised committee hearings last week which mentioned the negative addictive effects VLTs can have, their potential effects on the sale of Nevada tickets and its subsequent effect on charities.
Certainly we feel that appropriate funding for the treatment of individuals with an addiction to gambling needs to be made available, along with research and prevention funding. This funding should come from the proceeds of VLT gaming. We note, however, that currently illegal gambling provides no funding to help the problem gambler.
Because of the transient and seasonal nature of our business -- it's a tourist resort -- we see the negative impacts of VLT gaming as being severely minimized due to the transient nature of the user: the tourist. The resort VLT user is much the same as the one-day to one-week Vegas and Atlantic City vacation gambler.
With respect to the appropriate level of charity funding, ie, compensation, to charities whose revenues may decline due to the introduction of VLTs, we suggest that the submissions made by the various charitable groups appearing before this committee be further contacted in order to deal with the specifics of redistribution of the charitable portion of VLT proceeds.
Our two main concerns are much different and are as follows:
Firstly, we feel one of the major impacts of VLT licensing on a resort property is the potential for increased tourist traffic. In our case, where approximately 40% of our customers are of US origin, this influx of foreign tourist VLT gaming dollars will go a long way to building new and improved facilities, while at the same time provide new jobs and increased tourism spending in the area.
We would plan to use all of the proceeds of VLTs to finance future capital improvements and programming on the resort. This income from VLTs I'm sure will be used for similar capital and maintenance improvements at many of the other VLT-licensed venues across the province.
I should note that we have 28 resorts in England, Scotland and Wales and we do have many different forms of gaming, mostly slots and games of chance, and we have not had any problems there due to the fact of their age restrictions and physical controls, in that the buildings are separated. I'm digressing there a bit from my prepared text.
Finally, and a major concern to ourselves, and I'm sure that of other resort operations, is the formula by which VLT machines will be licensed out, as we understand the number of VLTs allowed in a community has a proposed mathematical relationship to the population within the local municipality.
We would hope the committee and the government would look at the tourist factor when assigning VLTs. For example, if you are located in a municipality of 18,000, as is our case being a part of the city of Port Colborne, does that mean your allotment of VLTs would be strictly based on the municipal population or on the doubling of those numbers during the summer months when our vacation population at the resort may equal the number of people resident in the municipality?
There would be no drain of dollars out of the community but rather an increased amount of foreign and tourist dollars brought into the community. I would ask that this committee recommend special provisions for these recreational resort tourist destinations.
At this time I'd like to thank you for today's opportunity to speak.
The Chair: Thank you very much, Mr Bruno. We have approximately four minutes per caucus and we will start with the loyal opposition.
Mr Bruce Crozier (Essex South): Good morning, Mr Bruno. Welcome to the committee hearings. I suppose, when you talk about the attractiveness of the destination and your support for the racetracks having VLTs, it's because you feel that assists in your business. Is this correct?
Mr Bruno: That's correct.
Mr Crozier: But you didn't mention charitable casinos, the proposed 30 to 50 permanent charitable casino sites that are being proposed. How do you feel about those?
Mr Bruno: It's our opinion that with the charitable casinos, if it can bring in foreign and tourist dollars and increase dollars into the area, that the adage, what's good for your community can be good for you as a company and vice versa, applies.
Mr Crozier: I just want to clarify. You didn't specifically mention charitable casinos and you did the racetracks. I just wanted to know whether you had support for those as well. When you take the number of VLTs that are going to be placed in racetracks and permanent charitable casino sites, it leaves less video lottery terminals available for the 15,586 licensed establishments in the province; it leaves less than one per venue.
So what you're saying is, notwithstanding the discussed number of VLTs per population -- I think that was a way of defining how many there were going to be as opposed to where they're going to be located, quite frankly. What you're saying then is the government should place more emphasis on the fact that they should be located in local tourist attractions to be fair to everyone and allow every establishment an opportunity.
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Mr Bruno: I believe if they have an overall ceiling of numbers, then that may allow for some tinkering to assist tourist destinations -- the Huntsville area, Muskoka, Trent, Wasaga Beach, that area that has a disproportionate population in the summer months and is a tourist economy. Whether that be via cutting back on the number of machines in a charitable casino or the increase by an appropriate amount in the province I'd leave to the government and the committee.
Mr Crozier: I understand exactly where you're coming from. Obviously you want to support your industry. But what's going to happen? Several things may happen. Certainly there's going to be a lot of competition for these video lottery terminals, particularly if they're kept at 20,000. What I suspect is that we're going to go much beyond 20,000. I suspect there's going to be such a clamour for these from private industry, tracks and charitable casinos aside, that this is only the beginning. Then I'm not so sure beyond that what's going to happen to charities in this province. We've talked a lot about break-open ticket sales. Local charities are part of our concern with the widespread proliferation of VLTs.
I can understand where you're coming from. You're interested in your industry. But I suggest there's going to be a lot of competition, a lot of pressure, and there are going to be a lot more VLTs in this province than you or I ever dreamed of. How that will then position you as a destination nobody knows. As the previous presenter said, we're in uncharted waters.
Mr Bruno: If I could just comment, Mr Crozier, one of the things I'm concerned about with that line of thinking, though, is that we don't limit the number of licensed liquor establishments, and yet really the onus is on the operator to run a good, clean operation. From that aspect, we haven't placed the same controls, as has been mentioned, on alcohol or tobacco, yet really it becomes the fact that good operators should keep that under control and bad operators should be so punished.
Mr Kormos: Thank you, Mr Bruno. Look, I wish you were right about the location of every slot, that they were new locations where you're taking money from tourists who come there armed, if you will, with a loaded wallet, knowing that they're going to get -- that's part of what the tourist industry is all about: getting as much money as you can as quickly as possible out of a tourist. There's nothing inappropriate about it. When you or I travel somewhere else, they're lined up to take our money as well. But the reality is that most of these slots are not going to be in operations like yours which have a large out-of-community itinerant population.
People have been lining up in front of this committee. The hotel-motel association has had presenters and they've been scripted, giving their presentations in town and city after city and throughout the course of the hearings in Toronto. There are big bucks here, billions of dollars, literally billions.
You're right. We already have over 15,000 liquor-licensed establishments in the province. We only have 33 liquor inspectors in all of the province of Ontario. The Ontario Liquor Boards Employees' Union told us that yesterday: 33 liquor inspectors for over 15,000 licensed establishments. We're telling stories out of school, but a licensed establishment could expect a regular inspection once every six years, based on the capacity of our liquor licence board to police, in terms of person-power, those establishments.
There have been warnings about how slots and the huge amount of money they generate attract organized crime. Indeed, the Minister of Consumer and Commercial Relations delivered a letter -- Mr Flaherty, his parliamentary assistant, brought a letter to the committee yesterday saying that a request for proposal had not been issued for the purchase of these 20,000 slots. That letter contradicts what a senior official in his ministry said two weeks ago when that senior official in a newspaper interview confirmed that the request for proposal had been out. I haven't been able to confirm yet information that a Baton Rouge, Louisiana, company is already gearing up for the production of these slots for the province of Ontario.
The first day when the minister was here we asked him whether there were any Canadian suppliers of the slot equipment, and he said, "I think there might be one in Quebec." I took him at his word. He's the minister. I presumed the government had been doing all this intense planning. But -- what was it? The next day, gentlemen? -- we find out that there's one right in the city of Toronto that has been working with the ministry lobbying.
This is the most ill-prepared proposition that any government -- and let's face, I've witnessed a few of them now in my career. I've gone full circle. I've seen them all. It's as ill-prepared a proposition as has ever been seen.
You're the little guy in the total scheme of things. Sherkston Shores, notwithstanding its reputation and notwithstanding its ability to attract clientele who are not local people, is I suspect at the end of the ladder, at the end of the list, because you've got the jockey club, the racetrack industry, the hotel-motel association. You've got the big guns lined up, and they want their piece of the action.
I'm concerned about our communities. I think you know that, you've interpreted it. I suspect at the end of the day you're going to get slots, and I wish you well with them. By God, I hope that the research showing the high level of addictiveness, their impact especially on younger gamblers, I hope that research is proven to be wrong.
The Chair: The government caucus, we have four minutes. Mr Flaherty and Mr Maves.
Mr Jim Flaherty (Durham Centre): Good morning, sir. I appreciate your being here this morning. I understand your resort is one of Ontario's leading family campground resorts and is quite a benefit to this community in terms of jobs and attracting tourist dollars. That's great.
I have to correct one thing of course. Mr Kormos -- and I spend a lot of time doing that at these hearings, but this is our first day here so it's the first opportunity. The inspectors of the Ontario Liquor Control Board inspect about 7,000 premises a year on a spot-check basis, and they should be credited for the work they do --
Mr Kormos: How many inspectors are there, Jim? Thirty-three.
Mr Flaherty: -- to keep our licensed premises decently run in the province of Ontario. I think people should know that so they're not misled; about 7,000 spot checks a year.
Mr Kormos: How many inspectors are there?
Mr Flaherty: Our friend over here, Mr Kormos, and his friends beside him talk about Bill 75. I don't know if they're against it or for it. It's hard to tell.
Mr Kormos: You don't know where we are on it?
Mr Flaherty: It's our bill and we support it. Mr Kormos started off in Toronto last week saying, "It's addictive, it's terrible, and we've got to be against it." Then the Addiction Research Foundation expert witness, after Mr Kormos talked about the crack cocaine of gambling, said, "That's an improper term to use."
Mr Kormos: What did they say in Thunder Bay and Kenora? They called them the crack cocaine of gambling, Jim.
Mr Flaherty: Then he said people can get into all kinds of trouble at all kinds of gambling, but the probability of addiction doesn't necessarily increase with the video terminals. That's what he said. Despite that fact, now we hear this morning from Mr Kormos --
Mr Kormos: You guys are so deep in the back pockets of the gambling industry, you're --
Mr Hudak: Chair, please. People are here to hear the discussion.
The Chair: Mr Kormos, no one interrupted you. I don't know why you want to interrupt Mr Flaherty.
Mr Kormos: I was a little more factual, Chair, and I wasn't being a mouthpiece --
Mr Flaherty: He's using up our time, Chair.
The Chair: No, I'll be deducting it from his time if he's going to act that way.
Mr Kormos: -- and tell the truth about what ARF says --
The Chair: Mr Kormos, if you want to be fair, I would suggest you not interrupt and no one will be interrupting you. Mr Flaherty.
Mr Flaherty: Mr Kormos started off being against the bill, and I guess the NDP is, because it's addictive. Then they found out it's not really, it's the same as other forms of gambling. Now I gather from what he's saying it's okay in racetracks but it's not okay in licensed premises. I guess that's what he's saying.
Our Liberal friends, as we travel around the province, say different things. We had Mr Ramsay, the member for Timiskaming, in favour of break-open and Nevada tickets. So I guess he's not opposed to gambling. We have Mr Kennedy, who I guess is opposed to the bill; we're not sure because he told the mayor of Kenora that he supported her and she had a very balanced presentation, and she supported us on Bill 75. That was in Kenora of course; we're in Fort Erie today, so we'll see what we hear today. We're not sure where the Liberals stand and that's because they don't know where they stand on the bill. But we know where we stand on the bill and we're in favour of it.
Mr Kormos: How much are they paying you, Jim? What's in it for you?
Mr Flaherty: The reason we're in favour of it is that we are a government that faces real problems in our society and realities in our society. The majority of the people in the province of Ontario view video lotteries and other forms of modest gambling as forms of entertainment and of having fun, and we accept that decision by the people in that regard.
What we do say, because of the importance of gambling in the province, and gaming, is that government should take a very controlled, cautious, phased approach to the introduction of video lotteries, which is indeed what Bill 75 provides.
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First of all, it's a phased-in introduction of video lotteries in the province. Secondly, we can learn from the other eight provinces and the experience they have had, and we fully intend to learn from those provinces. We're not afraid to learn from some of the mistakes that have been made there and some of the things that have been done right.
We're introducing very heavy fines, $50,000 and $250,000 fines, whether it's an individual or a corporation who would have anyone under the age of 19 not playing a video lottery machine but in the area where the video lottery machines are before they even get to play the machine. We're dedicating 2% of the gross revenues, which will be a lot of money. For the first time in Ontario, a government is dedicating a substantial amount of money to help with respect to the question of addiction, something the previous governments have not done when they introduced casinos in the province.
The other point that needs to be raised is that the province of Ontario, with 20,000 video lotteries, will have the fewest number of video lottery machines of any province in Canada on a per capita basis.
I thank you for your comments, sir, particularly about implementation and how we can go about that. There will be further consultation concerning the implementation stage of video lotteries. We know how important it is for the hospitality and tourism industries in the province --
The Chair: Excuse me. Thank you, Mr Flaherty. Even with an additional 30 seconds for the interruptions, your time is up.
Mr Bruno, I'd really like to thank you for attending today and for your excellent presentation, and I apologize to Mr Maves. We'll get you next time.
ERIE BEACH HOTEL
The Chair: Our next presenter is the Erie Beach Hotel, Mr Tony Schneider. Good morning and welcome, sir.
Mr Tony Schneider: Mr Chairman, members of the committee, my name is Tony Schneider. I'm the owner-operator of the Erie Beach Hotel located in Port Dover. I'm accompanied today by Jack Lloyd, who is the owner-operator of the American Tavern in the neighbouring town of Jarvis. I also have notes from two other licensed establishments, Capt'n Billy's in Port Dover and the Norfolk Tavern, which is in the act of a sale right now. The new owners-to-be have asked me to express their concerns, which all fall in place with the concerns I'm about to present to you.
First of all, I'd like to congratulate the government for its commitment to introduce video lottery terminals. I think in our province they're needed very much by our business. It is interesting to note some of the misinformation being put forth by some to discredit the government on this issue and as a means to promote their own interest. The Amusement Association of Ontario has sent out a self-serving letter that did not communicate the true facts in an attempt to discredit video lottery terminals in favour of their own member products. There's a little handout to back this up.
Ontario's hospital industry is one of the province's larger and important industries. Unfortunately, the recession has hit very hard, with sales down 20% and no real turnaround in sight. In the year 1991, our family-owned and -operated business generated sales in excess of $4 million. In 1994, we generated sales barely over $3 million. As you can see, we were one of the areas that suffered more than a 20% decrease in sales. In 1991, our payroll was in excess of $1.3 million. It wasn't much over $1 million in 1994. Once again, those percentages are somewhat staggering.
In the spring of 1996, our family celebrated our 50th anniversary in the hospitality industry. For the last couple of years we weren't sure we were going to be able to attain this mark, and our feelings of having a 60th or a 75th anniversary celebration are definitely somewhat insecure.
I'm here today to ask you to not only support the commitment made by the Minister of Finance on May 8, but also ask the government to commence implementation as soon as possible for our industry. I'm also here today to put before you substantial facts and information on VLTs.
First of all, VLTs are already here. I understand the OPP estimates there are 15,000 to 20,000 illegal machines in our province. According to some experts, they're siphoning off $400 million that should be going to the government to fund programs. Illegal machines are costing me and operators like me substantial sales. They're threatening my operation and the jobs of my employees. Ontario has been and continues to be flooded with illegal grey machines. They're allegedly installed for recreational play. Police are aware of the magnitude of illegal play but say they lack the means to make any serious inroads in controlling their use. I pride myself on what I've been able to accomplish as a business person. However, it is patently unfair to expect me to be able to compete against illegal machines. I can't. Video gaming is the new, favoured form of recreational gaming. Independent research reveals that people play on average one or two times a week and spend an average of $10 and that it's a planned and budgeted event that is viewed as part of relaxing and socializing.
At this point I also have an excerpt from Brandon University's study, which is in your handout. Studies conducted by Brandon University in Manitoba indicate that video lottery players see video gaming as part of an evening's entertainment. It's planned as part of going out and hence is a part of their budget planning process.
We would also like to commend the government on its forethought to dedicating funds towards the development of programs for those with gambling problems. There already are in the marketplace today many forms of gaming. It should be noted that VLTs are, according to research, not any more addictive than any other forms available, be they horse racing, bingos, casinos etc. Data indicate there is a small component of the population susceptible to compulsive gambling. Compulsive gambling, like compulsive drinking, is not a cumulative problem which grows with the introduction of new brands and types. Gamblers transfer their attention from one form of gaming to another. For example, horse racing revenues have declined substantially from the days when they were the only legal game in town.
Tibor Barsony, the executive director of the Canadian Foundation on Compulsive Gambling, has said, "Prohibition is not the answer; education and treatment is." Dr Durand Jacobs, vice-president of the US National Council on Problem Gambling, said when here in Canada: "The majority of the population has no problem with gambling. For most folks, gambling is just fun and games -- but for a small minority who have a problem, it can be devastating and we have to develop programs to help them."
It is interesting to note that research shows less than 2% of the population exhibits the potential to become problem compulsive gamblers. This compares to 6% for alcohol, you should note. However, we all recognize that for some, no matter what the product, a problem can develop. We commend the government in recognizing this fact and moving forward on it.
Despite what you have heard or have been led to believe, the introduction of VLTs in other provinces has proven to be a job creator and a major stimulator to our industry. Only in Nova Scotia, where originally they were allowed in corner stores, was there a problem. Now that they are in restricted locations as per Bill 75, we are not aware of any problems, contrary to what some may want you to believe.
I should also point out that VLTs and the casinos of Nova Scotia are coexisting quite well. A study conducted by Professor Marfels of Dalhousie has concluded no negative impacts. These are two different audiences: one destination, the other drop-in. Based on the experience in those other provinces, VLTs will create thousands of jobs in Ontario's hospitality industry, as well as providing a new source of funds for the industry and the government.
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In Manitoba, the introduction of VLTs has resulted in the creation of almost one full-time and one part-time job per business location. As you just heard, a member mentioned 15,000 locations. That totals a lot of jobs. Overlay these numbers in Ontario and you're looking at well over 10,000 jobs.
Prior to the introduction of VLTs in Manitoba, the Manitoba Hotel Association reported that its members were going bankrupt at the rate of about 14 per year. With the introduction of VLTs, that number has dropped to two per year, a drop of over 85%. A recent survey conducted by the association revealed that 65% of its members credited VLTs as playing a crucial role in averting financial disaster.
Another positive spinoff to the local economy is as it relates to the purchase of capital improvements. Construction projects and the purchase of goods and services relative to the operation of VLTs resulted in a boost to the local economy. Each operator spent an average of about $20,000 to install the machines. That figure translates into well over $100 million in capital expenditures all across the province.
In terms of an implementation schedule, we urge you to recommend to the government to move into the hospitality industry online as soon as possible. The minister, in the budget on May 8, said VLTs were being introduced to help stimulate the hospitality industry. This measure is clearly intended to help the industry, but any undue delay could exacerbate the shift in business that will accrue to those who will receive VLTs in the earlier implementation schedule. This will make an already serious economic situation here, and northern Ontario included if applicable, even more urgent. It will also delay the fight against the illegal grey machine market, including bringing the $400 million plus of non-tax revenues into the government accounts.
VLTs are important to our industry for a number of reasons. Obviously they provide an important new source of revenue to the business. The proposed 10% commission fee is low in comparison to other jurisdictions, which average 16% to 30%, but one that we can live with; 10% of something is better than 100% of nothing, and that's what we're making right now from that type of machine. Because VLTs are viewed by the public as a desirable form of entertainment, they increase the traffic flow; they bring in customers. Customers eat and drink, which creates more economic activity. A byproduct of this new activity is our agricultural sector, as our industry is one of the largest purchasers of Ontario farm products as well as off-farm employment.
VLTs will help save our industry. This is the clear and loud voice of myself and my peers all across the province. The facts support that belief. I and my peers are already licensed and as such are proven, responsible professionals, trained and thoroughly familiar with all that results from the operations of activities for adults, including liability. A healthy hospitality sector through the VLTs means a healthier local economy. A strong and vibrant business reinvests in its business, hires more people, purchases more goods and services, sponsors local charitable and sporting events and pays taxes.
Before closing, I would like to note that, as previously mentioned, VLTs are already in the province. In my case, we had to have a family and staff meeting to decide whether or not to seek illegal machines in order to remain competitive with other locations that offer this form of entertainment. We did not go that route.
I also feel we have had a loss in our American clientele, because of the absence of US dollars in our cash registers. I have a feeling that with the proliferation of gaming available in many states, the cross-border traffic is down.
In September 1994, a business trip took me to Manitoba, specifically a small town similar to Port Dover with tourism and commercial fishing. It was there I had my first experience with VLTs in licensed establishments. As this viewing sparked a curiosity, I went to several locations in the town of Gimli and in the city of Winnipeg, and at no time or in any location did I view anything which could be construed as compulsive gambling.
I would like to take this opportunity to thank you for allowing me your time to make my presentation, not only for myself, but for my business associates.
The Chair: Thank you, Mr Schneider. You are accompanied by Mr Jack Lloyd of the American Tavern. Would you like to make any comments, Mr Lloyd?
Mr Jack Lloyd: Tony's presentation was about everything that I'd like to see. I've been an owner-operator for 26 years and I think if the VLTs came into effect I'd be quite qualified to get one and maintain and run my establishment the way I have in the past 26 years. For the Jarvis Lions Club I sell Nevada break-open tickets and I find that the money generated from the profits from those break-open tickets goes to Rainbow Lake, Camp Trillium in Waterford and will then be used to put a cottage on that lake for children terminally ill with cancer. I don't find that break-open tickets are any problems. It's not addictive, it's a fun thing, and I don't see any problems with VLTs at the same time. It's family-oriented and goes with burst-open tickets. I think the government can see its way through and develop a licensed industry and have these VLTs. I went through 26 years of ups and downs and would like this licensed. Thank you.
Mr Kormos: Mr Schneider, Erie Beach Hotel undoubtedly has the best perch platter anywhere in this province, no two ways about it. I'll drive down there quick as a boo on Sunday afternoon to eat perch, but I have absolutely no interest, and I hope that most of your customers don't, in using your premises to play slots.
I appreciate that you quoted that Brandon University research, the Gfellner research. The Ontario Hotel and Motel Association provided that to all its members. What they didn't provide, though, were the observations that Gfellner made on page 18 of that same study. Notwithstanding that there may be among the general population a 2%, maybe even 3% level of gambling addictiveness among slot players, Gfellner's research at Brandon, Manitoba, indicated that 9.3% of slot players were pathological, addictive gamblers. Gfellner also spoke of the fact that increased accessibility to gambling leads to an increased amount of gambling that will take place and a higher risk of addiction along with the incidence of petty crime.
Mike Harris, back in 1993, said --
The Chair: Thank you, Mr Kormos. Your time is up. If we can move on.
Mr Hudak: Thank you, gentlemen, for your presentation. I appreciate the Gfellner study. You're right on; you have an excerpt directly from it. It's good science. Mr Kormos is quoting a little selectively from the document. It doesn't say 7% or 8% is high. It makes good headlines but it makes lousy science.
Mr Kormos: Some of us have read it, Tim.
Mr Hudak: Let me anticipate the Liberals' question as well. They're going to ask you, "Hypothetically, if you could be the only site in Ontario to have video lottery terminals, would you like to be the only site?"
Mr Schneider: No, I would not.
Mr Hudak: Most people said they would and another competitor said they would because everybody would like it. The difficulty is that the government has to decide: How do we help with the hospitality to create jobs, how do we help with the racetracks to create jobs and how do we help out charities, charity event sites and putting aside VLT revenue for charities? We're trying to create a win-win-win situation, so we put them in at tracks and we put them at liquor-licensed establishments and we put them at charity events sites. Can the government create a win-win-win situation so it's job for your business, jobs for the track and good news for charities for a change?
Mr Schneider: I think they can. I'd like us to reach the point where I have access to machines as well as people in the business who already have machines. I've really, seriously thought about breaking the law. We discussed it and we decided not to.
Mr Kennedy: There's a clear understanding that the hospitality industry has taken a large hit in the last years. I don't think you're saying it's just because of the grey market in video machines, but you see an opportunity here for another form of revenue. Is that correct?
Mr Schneider: Correct.
Mr Kennedy: In other provinces, governments provide 25% of their revenue to restaurant and hospitality owners and that's what makes them viable there. There's only 10%. This government, let's make no bones about it, is being simply greedy in how it's planning to put this forward. This bill is misnamed, and I believe your industry has been misinformed. Most of this money is going to the government that can't add, because it has to deal with the tax cut it has given to people. Over 80% of the money is going to go back to them, 10% for charity and 10% for the restaurant owner.
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That 10% to charity -- the gentleman spoke about break-open tickets. A lot of your members do a good service for charity by having break-open tickets. In other provinces they've been reduced by 50%, and to replace that there's a 10% reduction. There's a problem in terms of the community.
Police forces in this province, in Metropolitan Toronto, say that VLTs are a nightmare. In some communities -- probably not your own, I'll say -- they become excuses for loitering, they become excuses for the drug trade and so on.
Given those kinds of things and given this simple fact that right now -- because they've already promised machines to racetracks and charity gaming halls -- there'll be one machine at 10% revenue for every two licensed establishments, we need to understand how that will make a significant contribution to the economic support that your establishment deserves in terms of recognition from the government and from anyone else who can help in that regard. How will one machine for every two establishments make that kind of difference?
The Chair: Thank you very much, Mr Kennedy. The time allotted for this presentation has expired. Mr Schneider and Mr Lloyd, I'd like to thank you on behalf of the committee for attending this morning.
FORT ERIE ECONOMIC DEVELOPMENT CORP FORT ERIE RACE TRACK
The Chair: Our next presenter is the Fort Erie Economic Development Corp, Mr John Palumbo, general manager; and the Fort Erie Race Track, Mr Mike Robitaille, general manager. Welcome, gentlemen.
Mr John Palumbo: Thank you, Mr Chair. I am the general manager of the Fort Erie Economic Development Corp. We're charged with maintaining and enhancing the economics and job stability in the town of Fort Erie and have taken the lead with regard to gaming issues specifically in Fort Erie over the last three years, so we've been involved with all aspects of gaming.
I had invited all our stakeholders to attend with me today. Some have chosen to take their own spot, which you'll have later on through the day. Mr Robitaille, the general manager of the Fort Erie Race Track, has decided to stay with me on this issue. As far as sharing my time, he's going to speak for a couple of minutes, after which I'll close up with my comments.
Mr Mike Robitaille: I'm the general manager of the Fort Erie Race Track and I'm representing the OJC. I just want to point out a few reasons why the OJC believes the Fort Erie Race Track is best suited to handle this controlled gaming environment and the importance of it. It's extremely important, and I'll get to that in a minute.
Let me just point out a few things. The infrastructure of the property certainly is in place and it's tightly secured. That's very important when you're talking about gaming. Our employees are screened, licensed and under strict regulatory control. Security is another very important item. That's in place. It's been in place for many years. It's a safe place to walk around. You can walk around the Fort Erie Race Track with $10,000 cash in your pocket and you don't have to worry about getting hit over the head. No one has as long as I've been there.
The Fort Erie Race Track can offer over 200 acres of well-positioned property directly between all of western New York, the eastern United States and Casino Niagara. What a beautiful position to be in. Could you ask to be in a better position? Casino Niagara will probably end up being, per square foot, as busy as any casino in North America, and we're 20 minutes away from it.
The property at Fort Erie is considered by most people to be the most beautiful and well-maintained racetrack in North America, including enormous parking facilities. We can park as many people as you want at the Fort Erie Race Track. This is a showplace, a place that people have been proud of for years, and this is an opportunity for us to make it extra special.
When Bert Simon was up here a little earlier he brought up a very good point, the point I'm mostly concerned about because I have to look at the figures and numbers of this racetrack every day. I'll go back three years to when I first started working for the Fort Erie Race Track. The general manager then was David Gorman, and halfway through the season he was going, "Where did 200 people go?" The next year he said, "Where did 300 people go?" Now I'm telling you I want to know where 400 people went, because that's what we're down consistently every day at this racetrack, and so are the numbers.
I don't know if we can compete, I really don't. If we don't have this, I don't think we can compete and it scares the living daylights out of me. I have a vested interest. I just happen to love this job. I don't want to lose it and I don't want that place to go in the wrong direction.
The history is very thick. There are too many people involved. We're dealing with 4,500 people here, give or take 100, who count on the Fort Erie Race Track for a living. You tell me how we can compete. Even with the help the government was nice enough to give us or is about to give us, how long does that last? With Casino Niagara 20 minutes away, what's going to happen? What's going to happen to us if gambling comes into the state of New York? It scares me an awful lot.
The OJC's concerned about the cannibalization of it, but in that group some people are more concerned than ever. I'm one of those people. I need it. We need it.
This town is flourishing right now. My God, I walked around this place this morning and I was so proud, and I don't even live in Fort Erie. This is magnificent. Buffalo hasn't got anything like this. They're dreaming about having something like this some day. We could turn this into something that everybody would be very proud of.
The infrastructure is in. We're set to go. We know how the game is played. We understand the mentality of people who like gaming, and they want to gamble. We want to aggressively go after this window of opportunity, because if we get left behind, folks, I don't know what's going to happen. I don't even know if I'll be working here in three years.
Mr Palumbo: When you come to Fort Erie you'll get passion when you talk about gaming, because of the approximately 27,000 community and 11,700 workforce, 5,500 are somehow directly or indirectly employed in gaming. That comes from the 4,500 which you heard Mr Robitaille say, from the racetrack and from 1,000 other jobs in charitable gaming in Fort Erie. We've got a 100-year history of gaming, we've got a successful charitable gaming industry here and we are gamers.
The stakeholders in the economic development corporation in the community were aggressively pursuing a commercial casino. We felt we were the correct location. The Ontario Casino Corp did its studies here. Our market is huge. It has the potential to duplicate Windsor's success. Fortune had it that it went to our neighbours up the road, and we wish them the best of luck, but the scenario is that we're into maintenance of an industry that employs over half the people in this community.
From that position, after we heard the news -- we were a little taken aback by the news of the announcement of the commercial casino in Niagara Falls -- we didn't sit pat. We took all the stakeholders and got them together, including the Ontario Jockey Club, bingo halls and charity casino operators, we pulled them together with service clubs and said: "What do we do? We can't cry about the announcement; we have to be progressive." We put together a case and proposals in order to give us tools to be competitive. What the government has done -- the previous one and this one -- it put government-run competition 20 minutes up the road from our $180-million gaming industry in Fort Erie today, so we have to be competitive.
Mr Hudak, our MPP, has been very supportive. He arranged for us to meet with Mr Sterling. At that meeting we presented many options and potentials for us to compete with the increase of gaming that's available and specifically so that we can compete and work together with Casino Niagara. We talked with Domenic Alfieri and his group; we even have further visions that include Gateway and a product that will enhance all of Niagara, at the same time maintaining the gaming industry here in Fort Erie.
It doesn't take much to see the effect on this community. If you look around, you can see the positive effect of gaming in a community like this. A Coopers and Lybrand study indicated that we had a 1.1-million market within 15 minutes; 90% of that is US. We have a casino going up 20 minutes down the road.
Mr Sterling and this government and our local MPP have given us some of the tools. Many tools we asked for I won't mention, they're not relative to today, but the things we asked for were VLTs at racetracks and permanent charity casinos. We asked for stabilizing the permanent charity casinos so that they would be in one location. This is what our stakeholders have told us they needed to be competitive. We asked for some enhancements to the bingo industry, which is huge in this community; in fact, I would say that we're probably the bingo capital of Canada -- $15 million in wins; $15 million to the charities and 1,000 jobs in this community that we are determined to maintain.
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So they've given us the VLTs for the racetracks and we're excited about that because of the potential. The racetrack -- Delaware Park gives you a fine example. They went from 2,000 people a day to 10,000 people a day, a huge impact economic-wise to this community, but I hope to give you even more of an impact.
The Peace Bridge is considering twinning. The increase in traffic on that Peace Bridge will create the revenues which will increase trade, create jobs and increase taxes for this government. Fort Erie is the ideal location by nature for gaming. VLTs is in order for us to maintain what we already have, and somewhat enhance it. The Peace Bridge is the only logical entry point into Canada for tourists, on the majority side.
As far as charity gaming sites, it only makes sense that they are anchored down and that they're given the VLTs in order to compete with the gaming industry that's around us.
Just another point, too: We've worked very, very closely with my friends in Buffalo and western New York. In fact, even on the gaming issue we've worked closely with them for the last three years. There's no advantage to one person taking all the advantage, so we've worked with their hotels, visitors convention bureaus and their tourist industry to maximize the effect of gaming here in Fort Erie, gaming throughout all the areas, including bingos, charity casinos and the racetrack.
We support the VLTs in order to help us become competitive, to maintain the industry that we have. We thank you, Tim, for your efforts, and your government in helping us become competitive because, as Mr Robitaille says, the last four years we've been hanging over the falls with our racetrack. It could be closed; it was going to be devastating, in fact, to this community. We now have the potential to revive and get ourselves back on track.
Thank you, Mr Chair, those are my comments.
The Chair: Thank you very much, gentlemen. We have two minutes per caucus and we start with the government caucus.
Mr Bart Maves (Niagara Falls): I'll go quickly to some questions. Mr Kormos made comment earlier about milk money and shoe money and so on and so forth. Not to belittle those who do have gambling addictions, but the gentleman from Sherkston Shores had mentioned that the resort VLT user, for instance, is much like the person who goes to Vegas and Atlantic City. With the vast majority of gamblers, do they spend their milk money in Vegas, or do they usually have an entertainment dollar, a component? Do they gamble the milk money at the track, or do the vast majority of gamblers usually have an entertainment dollar set aside for this purpose?
Mr Palumbo: My understanding is that it's around $85, and that's what entertainment money is used for. The market is divided up into 20% recreational gamers, 80% gamers that go occasionally over the course of the year and spend roughly $100, which is the cost of a good NHL hockey game.
Mr Maves: I can't talk about the perch, Mr Robitaille, but I will say you're one of the finest defencemen the Buffalo Sabres organization has ever had.
Mr Robitaille: I played for all that big money too, I might add, 20 years ago.
Mr Maves: Do you believe that at the track you would be able to identify minors and exclude them from the areas with VLT machines?
Mr Robitaille: I'd be very concerned about that, because I don't think they have any business being in there, and besides that, that's the law. We do have security in place to take care of that when we have to deal with it right now with the kids who are not allowed to gamble in there. It's something we deal with every day, on an ongoing basis.
Mr Maves: Do you think the bill's heavy fines and perhaps revocation of licences -- are they appropriate penalties?
Mr Robitaille: I'm sorry?
Mr Maves: The revocation of licences and the very heavy fines if minors are caught on the premises using these machines, do you think those are appropriate?
Mr Robitaille: If not a little stronger. I think it's very important. Whether we have it or not, that's fine. They can put our feet to the coals. I think they should, and be on it real close in the first while and be really aware of what's happening on a day-to-day basis, sometimes hour to hour maybe, for the first two or three months. You bet. I would expect our feet would be put right to the fire and I'd be disappointed if they weren't. I can pretty well guarantee you that I'll make sure the people who are responsible, our security, their feet will be very close to the coals, because we're not going to jeopardize a wonderful opportunity like this, something we were trying so hard to get. We're not going to see it go out the window because of stupidity or just a lack of interest.
Mr Crozier: Mr Palumbo, Mr Robitaille, if John Ferguson were still at Windsor Raceway, you guys would be close to having all this wrapped up.
Mr Robitaille: I don't even want to hear you bring up his name. I'm still afraid of him. He was that tough. I have nightmares thinking about it.
Mr Crozier: Mr Robitaille, would you support the second step of this proposed introduction of VLTs to all the licensed establishments in the province of Ontario?
Mr Hudak: That's my question, Bruce.
Mr Robitaille: I have a hard time with that question, but let me try to answer it for you. I would expect the government, the people who are in control, to watch it very, very carefully. They might use us for the lightning rod or whatever to really get a feel for where this is going, and if they watch us carefully, almost on a day-to-day basis, for a good amount of time, I think they'll learn an awful lot whether it should continue on to phase 2 or not. Maybe it shouldn't. At that point, if it can't make it into phase 2, I don't know what steps they would take at that point, but use us for an example if they like, and see how it works out.
Mr Crozier: That's the most interesting lack of support answer I've received.
Mr Robitaille: I'm trying to be honest.
Mr Crozier: Sure, and I appreciate that, because you're representing the jockey club and the horse racing industry.
What's the handle been like at Fort Erie over the past two years? I don't mean anything in real dollars, but has it been declining?
Mr Robitaille: I'll give you in real dollars. Last year we were averaging -- that nice little track over there was responsible for $1.1 million cash bet every day on that product. This year we're well below that. I think we'll be around the $800,000 mark. OTB, of course, picks up a lot of that from the restaurants and so on around Toronto, but our figures are definitely down. Our attendance is down a little under 400.
Mr Crozier: Which would you rather have, the live betting handle or VLT revenue?
Mr Robitaille: My mandate is to make horse racing successful and keep that racetrack open, because we're responsible for a lot of people, or at least we feel that way. What we have right now on hand is a racetrack.
Mr Crozier: What I'm getting at is, are you concerned about the cannibalization that VLTs will create on your live handle?
Mr Robitaille: Yes, it's a concern. Once again, I guess we're going to have to watch it, and watch it carefully.
Mr Kormos: Thank you, gentlemen. I understand your wants; I understand that. There's a whole lot of money to be made in this. It's trite to suggest that.
I also understand -- you see, Mr Flaherty mentioned that Dr Room from the Addiction Research Foundation declined to identify slots as more addictive than other forms of gambling. I understand that too, because if I were in a senior position in an organization that receives all of its funding from the provincial government -- and a government now, today's headlines, shutting down three more hospitals in Toronto -- I'd be careful what I said too. I understand why Dr Room said that. You should know that his colleagues at the Addiction Research Foundation in Thunder Bay refer to slots as the crack cocaine of gambling, as being highly addictive. The Addiction Research Foundation of Kenora -- correct me if I'm wrong, gentlemen -- referred to slots as being identified as the crack cocaine of gambling.
Let me tell you what it means to a community like where I live, Welland. With its population, with a ratio of one slot for every 550 people, we're talking about 87 slot machines. Let's assume that each slot took in $2,000 a week, that's $290 a day. That's $174,000 a week; that's $9.048 million a year that ain't being spent at Sue's bookstore, that isn't being spent at Kouros's garage, that isn't being spent in Commisso's or in Pupo's Super Market, that isn't being spent on fund-raising activities for local charities.
In a community like Welland, like so many, like all Ontario communities, hardworking, honest people -- to have $9 million sucked out of that community with a highly addictive form of gambling is a recipe for economic disaster. We don't have a racetrack in Welland. We don't have thousands of non-Wellanders a day coming to the community, as Fort Erie does, to play at the track. We've got hardworking folks -- well, some wish they were working but they're part of that 10%-plus unemployment that the province is suffering -- who were promised by this government 725,000 jobs. And what do they get? -- 20,000 slot machines.
You've got to understand why there's concern out there about the slots. I understand your position. I understand you want to make money; that's your business, and if this government is going to let you make it -- and again, the government isn't getting into the slot machine business out of its concern for the racetrack industry or out of its concern --
The Chair: Thank you, Mr Kormos. The time for this presentation has elapsed.
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Mr Palumbo: Mr Chair, just one comment. I'd like to point out to Mr Kormos I am not making money. There's a differential here. This is the OJC. I represent a non-profit organization which is putting forward Fort Erie's position on gaming. So I'm not making any money, Mr Kormos.
Mr Kormos: Somebody's got to be making a whole lot of money --
The Chair: Sir, to me profit isn't a bad word either. Thank you very much for your presentation.
Mr Crozier: The neutrality of the Chair is showing.
Interjection: It's about time.
NEW PORT CENTRE
The Chair: The New Port Centre. The Port Colborne General Hospital, Ms Heather Scott, director. Welcome ma'am. Someone is accompanying you? Perhaps you could identify yourself for the purpose of Hansard.
Mr Jim Hanna: My name is Jim Hanna. I'm the program coordinator at the New Port addiction treatment centre. I'm just going to read from my brief and then if you have any comments or questions, feel free.
The New Port Centre is a treatment provider in the area of substance abuse or addiction problems in the Niagara community. Our interest in gambling stems from a consideration of the potential risks to health, mental health and social stability that may accrue as more forms of gambling are legalized. In substance abuse epidemiological research literature a correlation is noted between availability of substances, disposable income and subsequent substance use. We suspect that this correlation would hold with other risk-taking behaviours such as gambling as well.
Our concerns with this situation are in two areas. We are concerned about the potential impact this may have on a system of care that is presently being restructured. We are also interested in safeguarding the means by which the resources set aside for prevention and treatment reach those in need in the community.
My first point: Problem or pathological gambling behaviours closely resemble those associated with substance abuse. Both present as difficulties experienced by some individuals in controlling impulses in the face of situations that, for them, are high-risk environments. Substance abuse and gambling behaviours share many common characteristics, symptoms and consequences. In addition, substance abuse and other problematic behaviours such as gambling coexist in many individuals who currently avail themselves of our services.
We suggest the inclusion of treatment of gambling problems within the service umbrella of the existing addiction treatment system. As an extant care provider, we have an established infrastructure, trained staff and considerable expertise in the areas of training, treatment, research and prevention of addictive behaviours, including gambling. The increase in the demand for social services would be most easily integrated within the system of care currently available in our community.
The last 15 years or so have seen a shift towards acceptance by government and the general public of gambling as a recreational outlet, revenue generator, and creator of employment from increased tourism and other things. The subtle shift in vernacular from the term "gambling," which connotes potential for problems, to "gaming," which spins towards fun and recreation, is an example of this increased acceptance. Social situations, however, function as systems in which changes in one aspect of the social fabric reverberate throughout the community.
Extreme positions in predicting the potential for social effects, that there will be a dramatic increase in social problems as a result of relaxed controls over gambling or the denial that any problems will accrue, are either alarmist or naïve. It is safe to conjecture, however, that there will be some fallout from relaxed controls over gambling behaviour. Expectancies as to the extent or severity remain at present with those willing to posit their best guess or share their crystal-ball-gazing with us.
Clearly the fallout from relaxed controls will have some direct impact on the demand for service in our community. It is ironic that addiction treatment services are undergoing a rationalization process that might place limitations on the amount of service available directly in our community concomitant with the legislation likely to increase the demand.
Historically, privately funded initiatives and philanthropies have failed to adequately address the demands placed on communities as the result of rapid social change. We are informed and supportive of the government's initiatives in developing rational and cost-effective systems of care. Our hope is that, as social problems begin to surface after an interval of a few months to a few years, resources will be available to meet the demand.
We're not present to make an argument for or against legalized gambling. Our experience has suggested that focusing on the activity or substance itself is not particularly useful or effective in addressing the problem and in practice often creates a polarization. Although the gaming industry and health professionals have a different focus and interest in gambling, they need not be enemies. Attacks on the gambling business similar to those directed at the tobacco and the distilled beverage industries creates two antagonistic camps with differing agendas. Clearly it is time to work together in searching out solutions for the problems society will face. It is this type of participation that we are seeking from government and the gaming industry.
Having emphasized the need to work together, we would like to commend the government's decision to provide 2% of the VLT revenue towards prevention, research and treatment of gambling problems. This responsible and logical decision is an example of direct partnering of parties with a potential stake in the outcomes, both positive and negative, of the endeavour. Unlike the early days of caveat emptor policies in distribution of tobacco and distilled beverages, we are today keenly aware of the social impact that may accrue from the promotion of activities such as gambling. These behaviours are at once fun, exciting, pleasurable, risky and carry an inherent potential for excess and abuse.
The debate about whether gambling should be banned is a moral issue that will continue to be debated long after the casinos and VLTs are established as social artefacts. We believe that parties with vested interests need to direct some energy away from the moral debate and towards a commitment to finding solutions.
The members of our community, our neighbours and relatives, will constitute the fallout from the social change and create the demand for service. While we applaud the decision for creation of a fiscally responsible means of addressing social problems, our concern is that these resources be safeguarded in legislation and procedure that will ensure as much benefit as possible reaches the front lines. Historically, there are examples of how these forms of taxation and partnerships have worked and failed. We encourage the legislators to consider creating a means by which benefits are protected and can be used to prevent as many individuals and families as possible from becoming unfortunate statistics.
Mr Kennedy: Thank you for your presentation. It's good to know that there's been this kind of advance consideration of what VLTs can do. But I see you've been very careful in your language in terms of what you have to say about guessing in advance. Have you talked to some of your colleagues in other provinces about their experience with VLTs?
Mr Hanna: Personally, no.
Mr Kennedy: Are you aware that British Columbia, for example, using evidence from treatment professionals in Alberta, declined to take on VLTs? Are you aware of that?
Mr Hanna: I'm not aware.
Mr Kennedy: Are you also aware that after the experience in Nova Scotia, having them in stores as well as licensed restaurants and bars, they withdrew two thirds of the machines there?
Mr Hanna: Right.
Mr Kennedy: Are you aware that Alberta has capped the number of machines in that province and are you also aware that 10% of the machines have been withdrawn in Manitoba?
Mr Hanna: I'm not aware of the numbers.
Mr Kennedy: Just two weeks ago, as a result of a study on gambling there. In all of these there are horrendous stories, and obviously they're easily dramatized, but there are stories about some of the impacts. I should mention too that 42 states won't put them in bars and restaurants as well. You say the Gfellner study says -- everybody talks about some correlation between the availability of gambling and its increased incidence.
Mr Hanna: In the substance abuse literature; I don't know if that work has been done directly with gambling, although it likely may have been. I am quite familiar with this literature from substance abuse which finds that correlation and supports it in a number of studies.
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Mr Kennedy: What we want to rely on you for as professionals is knowing what we can expect, because we're having to prognosticate. The government has set very ambitious revenue projections for these machines. Rather than choosing to introduce them just in racetracks or casinos, we have enabling legislation here that will put them in bars and restaurants all across the province. We have had dozens of members of the hospitality industry say that it will be enough of them to make a difference. At the current number there's only one for every two establishments, so we've got to believe that a proliferation of those will follow.
What can we say about problem gambling? What can you say in anticipation of what it means for your program in terms of what will happen? Before that, I just wondered if you're aware of this quote from an addictions professional that the government side quotes often. It says:
"There is no provision in the bill concerning a comprehensive strategy of research, public awareness and treatment to deal with problem gambling, as promised in the press package at the time. Instead there is only a provision that video lottery proceeds may be paid out as the government of the day may direct."
I'm wondering, are we able to say that we will have more problem gambling as a result of the increased number of VLTs? Are you able to at least consider that a significant probability? What can you say about that, given your understanding of the literature that does exist about different addictions?
Mr Hanna: I think logically you could support that. I'm an empiricist myself, so without actually seeing some sort of study of it, I don't know. But certainly it has an intuitive appeal.
Mr Kennedy: Do you think it's incumbent on the government to have a strategy of research, public awareness and treatment ahead of time, before it introduces the VLTs on such a widespread, publicly available basis? We heard a gentleman earlier thinking that the regulations can catch up. Do you think there is a need to have this prepared ahead of time?
Mr Hanna: I think our point in item 3 addressed that. It's our belief that something should be in place as the legislation is being developed.
Mr Kennedy: Wanting to just make clear, while you're not injecting yourself into the moral debate, you're also not saying that this shouldn't take place, that we shouldn't look at what the impacts of these are in terms of the community and decide whether we want to draw lines in terms of these behaviours.
Ms Heather Scott: That's the point, though, that we have a lot of things right now that we could engage in. We do engage in extensive moral discussions. Where has that got us? We still have alcohol, drugs, tobacco etc here. Had we understood the impact of drugs, alcohol etc and had put in place some safeguards, we might be in a better position today.
You now have this opportunity. We are keenly aware that there will be an impact. Jim is saying: "How much? We're not sure." The laws of nature dictate that availability will increase consumption; we know that. Let's at least try to provide some legislation that will provide the research, training and treatment ahead of time. If we do it afterwards, then I don't believe it's a true partnership.
Mr Kormos: Mr Hanna, Ms Scott, I can appreciate that you may not want to get involved in the moral debate, but one would think that you as treatment providers would want to be involved in the public health debate.
Mr Hanna: That's why we're here.
Mr Kormos: It's not an accident that it's not blackjack tables that the government is proposing legalizing in racetracks, or craps tables. It's no accident that it's slots. We've witnessed over the course of a number of years the sophisticated development of that equipment so that it qualifies for the label of the crack cocaine of gambling.
Gfellner indicates that in Manitoba, as compared to the overall level of pathological gambling, 9.3% of slot players are pathological gamblers. The real kicker is what Frisch tells us, Dr Frisch from the University of Windsor. In his study of adolescents he discovered that 17% -- and it's approximately 50-50: half of them are confirmed pathological gamblers, the other half are at high risk. You mate that to the research by Dr Mark Griffiths, University of Exeter in Britain, and you find that slot machines -- they call them fruit machines there; you know, the three cherries -- have their biggest appeal and their greatest addictiveness for young people. If you read some of the other research that indicates that you have a generation that is culturalized, conditioned with video games etc to respond to the slot machine, I think we have a serious public health risk here. Forget that 2% of Canadians are pathological gamblers; we've got the prospect of a generation of young people becoming addicted in epidemic proportions.
I appreciate that here you are like Dr Room from the Addiction Research Foundation who is loath to criticize slots, like Tibor Barsony, a so-called anti-gambling expert who campaigned against the proliferation of gambling but now finds himself concurring that prohibition isn't the solution but that 2% of gross revenues, that $33 million a year that's going to constitute 2% of gross revenues at current estimates, is the way to approach it, because that will go to programs for treatment and research.
That may pay for research and treatment for addicted gamblers. Who's going to pay for the children whose lives are destroyed because of an addicted parent? Who's going to pay for the families that have broken down? Who's going to pay for the greater incidence of spousal abuse which you know flows from pathological and addictive behaviour, whether it's drugs, whether it's booze, whether it's gambling?
You make reference to the tobacco industry and the spirits industry. Those bastards spends millions, billions of dollars a year, notwithstanding the hard data, convincing young kids that it's still cool and chic and trendy and okay to drink, and that it's still cool and chic and trendy and okay to smoke. Just like the Ontario Lottery Corp distributes their glossy pamphlets encouraging people to buy lottery tickets -- they do, two for one -- the slot gambling industry is going to have as its purpose and its focus encouraging people to play more and more.
I'm sorry. Some members of this committee have tried to somehow create the addict as the other, but I say to you, and perhaps this is the question, that anyone in this room is as capable of becoming an addict to booze, to drugs or to gambling. Some may have higher propensities. I say to you that none of us is immune. This is not a moral issue; it's a public health issue.
Mr Hudak: I'd like to welcome the New Port Centre to the hearings. I met with you about a month ago. We had a very interesting and productive discussion, and to no surprise to me, this is probably the most professional and objective report I've seen on this topic.
It's interesting to say too that when confronted with this sort of report, you get a five-minute lecture in exchange. You're the professionals, so I'm going to ask your opinion on it instead of giving you a lecture. I'm not a professional. Mr Kormos is not a professional. You're the professionals in this area.
Mr Kormos: Try reading the research and maybe you'll learn a little about it.
Mr Hudak: You make some interesting points too. You say that the dramatic increase that's alleged in social problems is either alarmist, political or naïve; that focusing on the activity or the substance itself is not particularly useful or effective in addressing the problem and in practice often creates polarization, another good point; and direct the energy away from the moral debate and focus on the issue.
I appreciate your salute to the government for providing 2% of the VLT revenue towards prevention, research and treatment.
If I may really quickly, the Fort Erie Times -- Mike Wales is here from the Times; Mike Robinson was here earlier -- puts very succinctly about how the hyperbole gets us away from the issue. They say, "We find it interesting that Mr Kormos's NDP buddies, who introduced slot machines, blackjack, baccarat, money wheels and roulette to our province, object to VLTs."
Mr Kormos: Wait a minute. Who voted against the casino legislation?
Mr Hudak: "If they are indeed the crack cocaine of gambling, then what are the slot machines? Would they be called the powdered cocaine of gambling? Would roulette be the heroin of gambling, blackjack the speed, baccarat the hashish?" and we work our way to Pro Line and Lottery 6/49.
Mr Kormos: Unlike Mike Harris, I've been consistent in my position.
Mr Hudak: The fact is that there is a lot of gambling in Ontario. Gambling addicts are something we should be serious about, whatever poison they choose. It doesn't matter if it's VLTs, if it's slots, if it's roulette. Do I understand correctly your presentation, that the thing is to treat the addict and be responsible for this? Does that follow? Could you sum that up for me?
Mr Crozier: Ask them if they'd like VLTs, Tim.
Mr Hudak: Is the way to go about funding addiction setting aside the 2% to treat the addict, no matter what game they choose, instead of focusing on prohibition?
Ms Scott: That's correct. Our point is that there will be some fallout. Let's not put it behind. Let's bring it forward. Let's deal with it together instead of creating two different camps. Accept it.
The argument can be either way. I was just saying that the moral issue is not a productive way of addressing what is very real for us, what we see every day. We want to protect that in the future as well, so yes, we are interested in the public health issue. We're also realists. Gambling is going to go on whether you legislate it or not. That's a fact. Drugs and alcohol are going to go on whether they're legislated or not. It's up to us to be neutral about it and to do the very best we can to help our individuals at risk and our communities as well. That is our stand on it.
The Chair: I'm sorry, Mr Flaherty, the time is up. I thank you very much for your presentation here today.
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DELTA BINGO GROUP OF COMPANIES
The Chair: If we may proceed to our last presentation before lunch, Delta Bingo, Ms Darlene Bergsma. Welcome. I'd ask you to proceed. The clerk will distribute your written brief.
Ms Darlene Bergsma: Good afternoon. My name is Darlene Bergsma, and I'm here as the chief compliance officer for the Delta Bingo Group of Companies. I'd like to take some time to express our opposition on the new amalgamation of the gaming commission and the liquor control board with respect to the proposed VLTs and compliance issues.
We have recently been asked by the Gaming Control Commission to undertake a series of steps to ensure that our businesses and the staff employed meet all the requirements of the terms and conditions set out by the province. Our costs? We've had to provide accountants to perform full audits, hire a compliance officer to be responsible to educate and train all of our registered staff for all of our locations and have legal counsel on board to help prepare all the necessary documents for the compliance reference book that would be distributed to all of our registered staff in all of our locations. All of these things that were asked of us were at our cost, and we have successfully accomplished most of these issues.
When we were asked to perform these tasks, we were promised a contact person within the gaming commission who was well versed in all the rules and would be available at any time to directly deal with us on issues of concern that we may have. This would allow us to fulfil all the issues required by the terms and conditions. At this time, we were informed that our contact person would be Ms Jasmina Milanovich. We had been working closely with Lynne Bertolini and her legal counsel, Don Bourgeois.
We had sent out a series of questions to Jasmina Milanovich and Lynne Bertolini. These questions are the material that you have received. I hope at some time you will have the opportunity to review these questions. I believe it may help give some insight to the ongoing issues that we deal with on a daily basis.
The first letter, dated May 28, 1996, to Jasmina Milanovich, was an introductory letter with approximately eight questions and an attempt to let her know who we were and where we hope to go in the future. The second series of questions were sent to Lynne Bertolini for a response. We had arranged a full-day seminar for training purposes, with qualified speakers, which both Lynne Bertolini and Don Bourgeois agreed to attend. A couple of days prior to this seminar, we were informed that they would not attend because they were busy with the new amalgamation of this office. These are the types of things that happen all the time in the industry.
To the first letter, sent in May to Jasmina, I received some responses by telephone two months later. Jasmina also attempted to answer the list of questions for Lynne Bertolini. At the end of our conversation, she politely informed me that she was going on another assignment the next day and that in the future I would have to attempt to reach her staff or perhaps go through the RGSO if we required any further assistance. Absolutely no disrespect is intended for any staff member of the gaming commission, they all seem to have huge workloads, but this creates major problems when attempting to reach someone for answers. If you call the office on different days with the same question, you'll receive different answers. Now comes along a new office with extra functions.
How do you propose that we are to keep on top of all of the issues required by the new alcohol and gaming act? Under the current system, it takes weeks and possibly months to receive a response by telephone. I have no idea how long it will take to receive a response in writing; I've never received one. It becomes increasingly difficult to deal with all the compliance issues. On top of these difficulties, each municipality interprets the terms and conditions differently and adds on additional bylaws to those terms and conditions. When attempting to deal with compliance issues in all the cities, the municipalities are so very different you feel like you're banging your head against a brick wall.
This is a competitive industry. We need to have guidance, we need to have consistency for all and we need to have a fair and level playing field for all. We definitely need to have contact people who can respond quickly and accurately. All of these things are a must if we are expected to continue to meet the required terms and conditions set out by the new Alcohol and Gaming Commission.
In closing, please remember that all of these locations are licensed entities and have been since the enactment of the Gaming Control Act, and the charities running in these facilities generated over $25 million for charity in the 1995 calendar year.
If the VLTs are something that you must license, it would only seem fair and reasonable that the bingo industry, with its established clientele, be considered at the top of your list and not an afterthought. Thank you for your time and attention.
The Chair: Thank you very much. We have approximately three minutes each. Mr Kormos.
Mr Kormos: I will decline. I was dealing with Ms Scott and I didn't have a chance to read this submission.
Mr Flaherty: Thank you for your presentation this morning. I want to comment about the municipalities and the role of municipalities in a moment. I haven't had a chance to read all of this. I read as much as I could while I was listening to you at the same time.
To the extent that these answers from the Gaming Control Commission are not complete or satisfactory, I will certainly undertake to you, as the parliamentary assistant to that ministry, that I will get answers for you that are complete and satisfactory.
With respect to the role of municipalities -- and I see that some of the questions here relate to that -- and differing interpretations of bingo rules by different municipalities, we're dealing with Bill 75 here, but I don't -- that's no answer, and you want some sort of answer, I'm sure.
Video lotteries will not be subject to opting out by municipalities or to rule setting by municipalities. They are lotteries, and lotteries are run by the province of Ontario and will continue to be run by the province of Ontario. So in so far as we're dealing with video lotteries, they will not be subject to municipal rules or municipal dealings in that regard.
As you know, the legislation also creates charity gaming halls which are designed to get some control over these roving Monte Carlo nights, which under the previous governments of the members opposite here started off as one night and then grew to three nights, and have proven virtually impossible to regulate properly because they're moving around all the time. We want to get control over that too as a provincial government. We're facing up to these problems; we're not avoiding these problems.
If we have persisting problems in the bingo area -- and you have certainly pointed out a few of them -- as I say, you have my undertaking to give you adequate answers.
Are there any other items you wanted to raise concerning the bingos?
Ms Bergsma: We just want to make sure that they are aware of the problems that are currently with the regulated business now, and bigger doesn't necessarily mean that it's going to be better. If you put all of these things together and you attempt to regulate them, we're already having difficulties keeping things reasonably regulated to the point where if you have a problem you need to have somebody that's going to be able to help you. They're all licensed entities, and if the VLTs are not at least part of the thought for bingo, then they're definitely going to rip the hearts out of the charities that are running a bingo.
Mr Flaherty: There certainly would be nothing stopping any bingo hall from applying for a charity gaming hall, as a permanent charity gaming hall. As you probably know, under the legislation the concept is that there'll be permanent charity gaming halls which we can regulate at permanent locations around the province of Ontario. There will be further consultations about where they should go or where they shouldn't be, how large they should be, and which charity should participate and how you define a charity, those sorts of things. There will certainly be further consultations, and the government's undertaken to do that.
I should mention that the Gaming Control Commission has a history of hiring more regulatory employees as gaming activities in the province have increased, and they will be increasing pursuant to Bill 75. Right now, as some of the opposition members have mentioned, we have 33 liquor inspectors, but in the gaming side, by the end of the month, there will be 66 inspectors. So we'll have over 100 inspectors in the new Alcohol and Gaming Commission, which again is important because of our government's commitment to control cautious introduction of video lotteries into the province.
Ms Bergsma: So with the extra inspectors you're telling me that there's going to be the availability for extra help in this industry to get the answers and to get the help that you need?
Mr Flaherty: There should be, and if you don't get the right answers you call me and tell me and I'll get you the answers.
Ms Bergsma: And are the bingo halls on the top of the list? I haven't heard anybody mention bingo halls. The charities that currently run in bingo halls are generating, just in the Niagara region, $25 million for charity. If you end up completely forgetting about them, it's going to destroy those charities.
Mr Flaherty: Just the opposite. To the extent that we're talking about charities, Bill 75 will result in the charities -- not operators, charities --
Ms Bergsma: That's what we're talking about.
Mr Flaherty: -- receiving up to $180 million more than they receive today; from Monte Carlo nights the income alone 10 times more under Bill 75 than they are currently receiving --
The Chair: Thank you, Mr Flaherty. We most move on to the opposition caucus.
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Mr Kennedy: I want to correct some of the member opposite's math to you because I think it's a bit confusing, but before that I'd like to hear from you about how many dollars now the provincial government gets from the take from the bingo halls in Fort Erie.
Ms Bergsma: If you're talking licence revenues just in the Niagara region, you're talking in excess of $2 million in licensing revenue. So if something happens to the bingo industry with all of those charities and the license revenue, if they end up completely losing, all of that money that the municipalities are getting is gone as well.
Mr Kennedy: The provincial government gets?
Ms Bergsma: They get a percentage. They get the whole amount that each individual hall has to pay. Each individual hall, depending on the amount of events that they have and whether they sell Nevada tickets or what not, they have to pay over $12,000 annually to the provincial government in licensing fees, not including the licence fees that are charged to the actual registered staff that works in the building. That goes directly to the province as well.
Mr Kennedy: But the vast majority, you've given us some indication and we heard earlier from the economic development office something like $50 million in Fort Erie is given out in prizes. Is that correct?
Ms Bergsma: In prizes, yes.
Mr Kennedy: Then some $15 million to charities?
Ms Bergsma: That's just up in this area, I would assume.
Mr Kennedy: I'm wondering if this is fully understood, that the payouts for the VLTs are much lower. They are higher per machine, but they end up being much lower so more money gets taken out of the community, probably about 50% of the money gets taken out and the return to the charity operator in the budget is 10%. Only 10% is going to the charity and then another 10% to the establishment from the VLT.
I'm just wondering what you think about what is happening here in terms of the government taking over community gambling for its own revenue, because that's essentially what you have when the government takes most of the revenue for itself where it currently doesn't.
Ms Bergsma: We are concerned because we already have the clientele. Those are the types of people who perhaps will play VLTs. So if you come in and you lose 25% off the top, if it costs something like an 80% bottom line, that ends up being lost to the actual charities themselves because the prize board still doesn't change and we're just bringing in less dollars and less money is getting to the bottom line. So if you take thousands of charities that run across the province in bingo halls and you take their heart right out because we have the same clientele in the bingo hall -- we have the demographics for it. It's already established there. You go in and you take all of those out of there and it just completely will destroy those thousands and thousands of charities that have been operating for years and years and years, plus now you're looking at the loss of revenue to the municipalities and the province.
Mr Kennedy: Were you consulted by the province ahead of time?
Ms Bergsma: No, we were not.
Mr Kennedy: Based on what you've described to us today, do you have confidence that the government is ready to handle this vast expansion in terms of putting them in every bar and restaurant and 15 other locations?
Ms Bergsma: On a compliance issue, I do not. I'm sorry.
Mr Kennedy: In terms of the impact on charities, do you feel that your beneficiary charities are going to be able to withstand the challenge that will come? We're making gambling officially legal. They'll have to apply to the government, to the Ontario Lottery Corp to get the money they used to get in terms of bingos because elsewhere in the country when they've brought in VLTs, bingos have been cannibalized in terms of revenue.
Ms Bergsma: Absolutely. In St Catharines alone we had a new hall open up and that's hurting enough of the organizations, never mind to have VLTs in bars and here, there and everywhere. There's just no way in the world that they'll survive, and if they don't survive -- they have the revenue. Again when I think about the licence revenue for each municipality, that has allowed the municipality to obliterate most of their grant lists and do all kinds of extra stuff with that money. So if the charities aren't there, how many more charities are going to be knocking on the government doors for help now?
Mr Kennedy: I wonder what you think of the title of this bill. It's called An Act to regulate alcohol and gaming in the public interest, to fund charities.... Do you see that in this bill?
Ms Bergsma: I'm sorry, I don't.
The Chair: Ms Bergsma, thank you very much for your presentation here this morning. We are going to be adjourning until 2:20 this afternoon and you can leave your documentation here. The room will be locked, according to the clerk.
The committee recessed from 1255 to 1420.
JOE'S PLACE
The Chair: Our first witness this afternoon is Mr Joe Ruicci. Welcome, sir.
Mr Joe Ruicci: Thank you very much. I appreciate the opportunity. My name is Joe Ruicci. I live in the city of Port Colborne where I presently own and operate a nightclub known as Joe's Place. I've been in the business there for the last three and a half years. Prior to opening my club, I worked for many years in management positions for a variety of companies in industry; 25 years in industry, always working for someone else.
When I turned 40, in 1991, I had been employed at Union Carbide for four years and received a layoff notice along with many other management staff. The layoffs were the effect of reductions of management staff due to restructuring of the company in an effort to cut costs. I was too young, and financially unprepared, to retire. I was tired of working for others in a factory. These were the two factors which prompted me to look at opening a small business.
The reasons for opening a nightclub in particular were numerous and at this point of little importance. The fact remains that I did decide and did open a small business, a nightclub. Through the course of the next few years I encountered many barriers that made doing business a difficult task. If you will bear with me, I will mention those that I feel are hurting our industry most.
Financing is next to possible to get. The food and beverage industry has a high rate of failure, making investment almost non-existent for new entrepreneurs.
The high cost of liability insurance, due to the fact that owners and servers are held highly accountable for other people's actions.
The high provincial sin taxes on alcohol and the introduction of the GST cut right into the owners' profits.
Bar owners, unlike other retailers, are not allowed to purchase at wholesale prices and no savings can be achieved through bulk purchases. We buy at the same price as the average consumer, making our product too costly for the average person once we factor in our overhead.
Unlike all other retailers, we are not allowed to advertise our prices, although our American competitor can advertise in our newspapers and radio stations without worry.
The high cost of labour due to continual increases in minimum wage and payroll deduction taxes.
Governments that continue to try and legislate the industry with stupid and archaic laws, as we have recently witnessed in Toronto with the new anti-smoking law.
Restrictive hours, not being able to do business when the customer most wants our product. Although we have seen some good movement in the relaxation of hours, it really does not go far enough.
The carefree way that special-occasion permits are handed out on a regular basis that creates situations where non-profit organizations are competing with taxpaying business people. The non-profit groups can afford to keep their prices low.
Laws which do little to put illegal, unlicensed booze cans out of business.
The sad state of the economy in the last few years with the high incidence of employment has reduced the amount of entertainment dollars available.
There are many, many more items on this list. So what's a bar owner to do? He does have a lot of options open to him, including -- and I don't think you'll agree with these, but the options are there -- sell illegal liquor; don't report all the sales; sell drugs; support prostitution; hire only very casual workers, under the table; sell after hours; sell to minors; illegal gambling; do business by all the rules and possibly go bankrupt; legal gambling.
When a person has invested all of his or her hard-earned money and he and his spouse worked to the bone to scratch out a meagre living, and the prospect is at hand that they may lose everything, sometimes all those options become viable. It doesn't matter at that point that these are mostly illegal activities. People do desperate things in desperate times. We see it more and more every day.
Personally, I prefer to do business by the rules. That's the way I was brought up. Should I be the one who succeeds or fails? More and more we see the honest guy lose it all while illegal operations go on raking in tax-free dollars, and do so seemingly immune to prosecution.
I have a small room in my club which is licensed for 23 people. This is a side room to the main room. I would love to be able to put 12 games of chance in this room for my patrons. I believe that creating this situation in my club would be financially beneficial to the club's overall fiscal health. Of course, that is if you the legislators don't fall into the same frame of mind as the governments of the past, which beat up on the food and beverage industry; that is, to use us as tax collectors and not allow us to participate in the reaping of the financial rewards that will be recognized.
Here are a few suggestions of what I think the government could possibly do.
Do not make the price of licensing so high that only the more prosperous establishments can afford to have them.
Share the wealth equitably with owners so they can afford to put the machines in upscale environments and afford to put in proper controls to prevent minors and other people with addictive personalities from participating in this particular situation.
Do not complicate the owners' lives more with complex filings and bizarre regulations. Keep it simple.
Don't cut out the middleman, the vending machine operator; otherwise you may find that some will become your prime competitor.
Don't make things so restrictive that it invites the breaking of laws to earn a dollar.
Make appropriate changes in the Liquor Licence Act which will allow us to do business in a more realistic manner while accommodating the introduction of gaming machines into our environment.
The government should work towards forming a partnership with the food and beverage industry rather than the adversarial role of master and tax collector that it now plays.
If these items are addressed, or at least if it becomes a win-win situation for all, then all I can say is, let's get on with it, let's do it. If your course, though, is one of restrictive policies and greed, then I say scrap the whole idea. Don't create another bureaucratic nightmare that we will all live to regret.
Thank you very much for your patience and indulgence. I'm open to any questions, if you have any for me.
The Chair: Thank you, Mr Ruicci. Mr Kormos, three minutes.
Mr Kormos: I want to tell you people, and I'm sure other folks from this area will confirm this, Joe's Place is not some crummy sawdust joint. He's taken a location in Port Colborne, and I've been in there several times. We're talking about a small business person here. I recall when a family in Port Colborne had a sad tragedy, Joe's Place was there with a fund-raiser raising money for that family. He's brought live entertainment, which is a rarity in his business nowadays. Some of you might remember the Imperial Room at the Royal York. That's dark now, because the nature of the industry doesn't permit that type of entertainment. But Joe's Place has brought international blues and jazz performers, quality performers, to Port Colborne, attracting a whole lot of American clientele because of the quality of the music.
Mr Ruicci, I've got to tell you, you know what my position is on the slots. I think they carry with them far more social dangers. It's my view; it's not shared by the government. It's my view that the government is using you and others like you as patsies because it's them that need the money. You just happen to be there and if they can bring you on side saying, "We'll give you a little piece of the action," that will bring you on side.
You've addressed some far more fundamental issues, and I don't disagree with any of the propositions you've made. That applies to every government and, quite frankly, any level of government, because the stumbling blocks are across the board. I think you've brought insights, though, that transcend the issue of slots because there are far more concrete things that have to be done to make people like you capable of succeeding than merely the introduction of slots. I've got to tell you, you haven't persuaded me to support the slot proposition, but I think the things you've said here have been relevant about the role of small business people.
Mr Ruicci: I'm not here to convince you one way or the other about anything.
Mr Kormos: I'll keep patronizing your place, and you can count on the patronage of myself and the friends and the other people who've referred to Joe's Place, and I urge others to as well. I'm not going to support you in your bid for slots, Joe. Sorry.
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Mr Flaherty: It's a pleasure to meet you. I hope to get a chance to see your restaurant-nightclub at some point.
We are trying to be pragmatic on the government side of this -- cautious, careful -- in the implementation of video lotteries. We are not about to tell the majority of people in Ontario, like the neo-prohibitionists across the way here, how to live and what kind of fun they may or may not have. If the majority of people view some moderate form of gaming as enjoyable entertainment, then let them enjoy it. We know from the studies in Ontario that the average VLT player plays once or twice a week for 30 minutes at a time and spends about $10 each time and, maybe more important, sticks to a predetermined gaming and entertainment budget. That's pretty moderate and modest behaviour, I think, and we need not attempt to reinstate Prohibition with respect to gambling.
One of the points you raised about being pragmatic was fewer regulations for licensed premises. We do have a red tape commission which our government started. It's very active, it's very busy. Frank Sheehan, the MPP for Lincoln riding, is at the head of the commission, and any comments you have concerning how we could streamline the regulatory process, send them to any one of us here or you could send them to me or we'll pass them along to Frank Sheehan and make sure they're given attention.
Mr Hudak: Joe, good to see you again. I'm glad you could make it to the committee. Like Mr Kormos, I just want to salute the establishment you've put together in Port Colborne. It's some of the best blues music around, and I'm proud to be a patron of that establishment.
I'm glad too that you took the time to bring up some of the issues we've discussed in my office with respect to the government regulation of your business. Like Mr Flaherty said, we've moved on a few issues under red tape, or through Mr Flaherty and the minister's office we can make sure that our establishments are as competitive as they are, especially in border areas.
I have one quick question. Do you anticipate that the type of customer you're going to have at your establishment who may play a video lottery terminal is going to be somebody like a high-stakes gambler who's going to chain himself to the machine, or do you think somebody who comes in there to hear the music might throw a couple of bucks into the machine?
Mr Ruicci: Basically, you are going to get some fanatics. You always do, even if it's a pinball machine. People get addicted to them, let's face it. Video games throughout time have shown they have a tendency to draw people in. And you always have addictive personalities, people who drink too much, smoke too much, eat too much. It's just the nature of North America, I believe.
But in my particular situation, I believe what we're going to see is not that it's going to replace what my club does now; it's just going to be another attraction. It's like Niagara Falls. It has the falls, and if it has nothing else to draw them, they can look at the falls for 20 minutes and then they're going to move on to somewhere else. I believe it's just going to be an accent, an added attraction.
But here's the situation, and I've got to stress this. If you stick them in every corner store, you're going to have a problem because you won't have regulation. I believe you don't want minors participating; I don't want minors participating. I don't want people who are blowing away their welfare cheque.
It's the same situation with alcohol. The problem is this: With the alcohol situation, the bar owner right now can't make a buck. So if the only customer walking in that door sometimes is a 17-year-old kid who looks like he's 19 and it's an opportunity to pay his rent, he's going to jump at it. That's because you're regulating the hell out of us and you're not allowing us to make a profit.
The same situation comes up here. If we're allowed to make a buck off it so we can decorate the rooms appropriately, don't have to put them in a corner in the basement, and we can afford to put the staffing in there to regulate the people, the minors and those people, then you're not going to have a problem. You'll have a problem if you insist on taking all the money. It's great that the government will prosper from this and it'll all come back to us, hopefully, but don't use us to be tax collectors. That's the way I feel now; I feel abused as it is. Don't tempt me, don't bait me with opportunities to make more money and then just tighten the screws. Some of the rumours --
The Chair: We have to move on, sir.
Mr Kormos: I'm not sure we did Joe any favours by telling everybody that Tim Hudak and I are patrons of his place. We don't go there that often.
Mr Ruicci: We don't discriminate at all.
The Chair: Mr Kennedy, you have the floor.
Mr Kennedy: I'd like to give you a chance to finish what you were saying, about what you think is happening with the government, the rumours you hear.
Mr Ruicci: Here are the rumours. We deal with game machine operators, and they're concerned. There may be some game machine people here. They're concerned that first of all you're going to cut them right out of the picture, so you're going to knock out a whole segment. The word on the street is that you're going to put a $6,000 bond on every machine. I want to put a dozen machines in my establishment. Where the heck am I going to get $60,000? If you go to a bank, they don't want to lend us any money because we're high-risk. We can't do that.
So what you're going to do is open the doors to the larger establishments, the big corporations, to be able to fill their rooms with machines and the little guy is going to be left out in the cold. I'll tell you, right now you're dealing with operators who are dealing illegally. If you cut them out and the little guy isn't allowed to participate, you're going to have the same situation you have now. You're going to have illegal machines in the small establishments doing the black market thing, and nothing's going to change except that some rich people will continue to get richer.
Mr Kennedy: What do you think about the 10% the government's going to give on the machine? It's 25% in Nova Scotia, New Brunswick, Manitoba. Is 10% going to be viable for what you're talking about?
Mr Ruicci: From my understanding, even in Vegas they work on a 20% situation. They realize that between the payoffs and their overhead, they'd like to see a 20% return. At a 10% return, would you invest your money for a 10% return? I sure as heck wouldn't.
Mr Kennedy: I understand. But that is in the budget, that is what the Treasurer has said: "The host site will receive 10% of total terminal revenues." That's what it says. Also, this government has given us to believe that they're only going to allow one machine for every two establishments. They're talking about 20,000 as a maximum they're going to put in. They've committed 5,000 to 10,000 to charity gaming halls, another 4,000 to 6,000 to racetracks. That leaves less than one for every two licensed establishments. How will that be of benefit to the hospitality industry?
Mr Ruicci: Having one machine in there and only getting 10% off of it, it's not worth it.
Mr Kennedy: Or if every fifth place gets five, then what happens to you if the guy down the street qualifies? How will this benefit the hospitality industry if some have them and some don't? That's the other way to play that number.
Mr Ruicci: Not everybody in the hospitality industry except with certain environments is going to want it. An upscale restaurant is not going to want game machines disrupting their particular environment, but a nightclub situation does want it. You have to give them a little more than just one machine, otherwise what's the sense? It's ludicrous.
Mr Kennedy: I'm not in favour, unfortunately for your purposes here today, of seeing these in licensed establishments because I don't think this government is telling us the truth. The government will not admit that it has planned many more machines. I think the hospitality industry has been successful in talking to this government. Really, it doesn't make sense. Why would you get so few machines, so little return? What the people in the hospitality industry have been telling me, unfortunately not from the dais but in the hallways, is that this is a foot in the door.
I think we've got to look at this really seriously in terms of the people who are out there and not part of where this may be of some economic benefit. I count at least eight other things you'd like to have done to make your business more viable. I don't know where you'd rank VLTs on that. You didn't mention off-sales either.
Mr Ruicci: As I said, VLTs for me are just another attraction. It gives me another opportunity to give something more to the people to draw them to my club. I'm not planning on making a living off it.
The Chair: Thank you very much, Mr Ruicci. I'd like to compliment you. We've had a number of bars and hospitality people come before us. They all say, "We're in trouble." You're the first one to give us an analysis of why there are some problems in that industry. I compliment you on your presentation.
Mr Ruicci: Thank you very much and I would like to make my services available to any other commissions, if you're looking at reviewing the whole hospitality situation.
Mr Frank Klees (York-Mackenzie): We'll have the next hearing in your bar.
Mr Ruicci: Feel free to call me.
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GOLDEN HORSESHOE SOCIAL ACTION COMMITTEE
The Chair: Our next presenter is the Golden Horseshoe Social Action Committee, Linda Rogers, a member of the steering committee. Welcome, Ms Rogers.
Mrs Linda Rogers: I want to thank you for the opportunity to speak today on Bill 75, particularly with regard to that bill's provision for the introduction of video lottery terminals into Ontario.
The Golden Horseshoe Social Action Committee is an umbrella group made up of representatives of over 40 community, church and labour groups. I want to stress the variety of our membership to make it clear that we are not a special-interest group. Our only common goal is to work together to preserve the social safety net, the very important social fabric that working people have built up over the decades in Ontario.
I want to congratulate the government and the committee for taking the initiative in holding public consultations on this very important issue, which has significant implications for our political institutions, our families and our communities. But I also want to caution the government that we expect and indeed demand that these consultations be meaningful. So far, we have seen nothing to encourage us that this government is really prepared to change one jot or one tittle in response to feedback that may be obtained through these consultations.
Throughout news releases and statements on the introduction of video lottery terminals, the language implies that the government is going to proceed with the introduction of the video lottery terminals whatever the public says. In fact, back on June 13, Minister Norm Sterling was announcing to the press, "A gambler will have his first opportunity to donate to charities through the VLTs some time in October." This is hardly the language one expects before committee hearings are complete. I want respectfully to inform the committee that I and many of your other presenters will not take kindly to having their time wasted in a charade.
I further urge the government to carefully listen to the presenters and make meaningful amendments to Bill 75, because there is a perception that the government has become so increasingly dependent on gambling revenue that they are in a conflict-of-interest situation, that they cannot prescribe what is best for Ontario when they stand to make a profit. Failing to listen to those with sober second thoughts will further contribute to the general public cynicism.
Previously this government has excused its haste and its lack of consultation in pushing through items like the omnibus bill by saying that the provincial election gave them a mandate for swift, radical reform. I must admit that there is some merit to that argument, albeit the Common Sense Revolution has proved to be a very elastic document when it comes to matters like health user fees, among other things.
However, nowhere in the government's election platform was there any mention of an expansion of gambling in this province. In fact, the public was led to expect just the opposite from this government. Mike Harris, in objecting to the former NDP government's introduction of a casino, promised that the Tories would hold a province-wide referendum. Well, we haven't had that referendum but have two new casino announcements -- one, much to my regret, in my home town of Niagara Falls. I can tell you from knocking on doors in the election that people who voted against that casino very much voted for the Tories because they saw it as their main hope in keeping the casino out of town. And now the government plans also to introduce video lottery terminals to give more opportunities to desperate, misguided and sometimes mentally ill individuals to throw away their money.
Why? The excuse most favoured by the government has been that it needs to stem the spread of illegal gambling machines. The Ottawa Citizen in its May 9, 1996, editorial "didn't find this logic particularly compelling," and neither do we. This logic could be used to legalize murder to stem the increase in numbers of contract killers. The remedy to illegal gambling is enforcement, not legalization. Will we ever completely eradicate it through these means? Not likely, but neither will we wipe out violent crime through enforcement, and that doesn't cause us to give up enforcement.
What is patently clear is that this government needs money, and this is quite a reversal. Eric Dowd quotes Mike Harris as having said when discussing expanded gambling: "I don't think the government needs more money. I don't want all this money pouring in. Part of the problem is that the Ontario government has too much money, wants too much money, borrows too much money and spends too much money." He also quotes Mike Harris as saying, "We are not convinced that this is the way we want to raise money."
The way governments usually raise money is through taxes. We in the Golden Horseshoe Social Action Committee wonder why the government is giving a 30% tax break that will benefit the richest citizens when it is so broke that it has to turn around and pick the pockets of the foolish, the desperate and the mentally ill.
The government has also turned down other legitimate sources of revenue such as the proceeds from photo-radar, which had the pro-social effect of reducing speeding, much in contrast to the deleterious effect of gambling.
The members of our committee are also concerned that the contribution of corporate taxes to the overall tax load in Canada has been decreasing for decades as the load gets shifted more and more on to individuals. We would like to see some action taken to get the corporate high rollers to pay their fair share before introducing one-armed bandits to extract loonies from our communities.
Taxation and representation is a bargain between people and their governments which is as old as democracy. Together we have always hammered out how much we pay and what we want to fund collectively. The increasing dependence of government on gambling revenues erodes that relationship and is just another way of fooling people into the belief that they can get something for nothing.
We in the Golden Horseshoe Social Action Committee deplore any increase in government dependency on gambling revenues, but we would also like to make it clear that we see a qualitative difference in the introduction of VLTs into gambling establishments such as racetracks and casinos and the introduction of VLTs into bars and restaurants. In the former situation, individuals have travelled to that location having taken the decision to gamble. In the latter situation, the individual is subject to impulse, peer pressure and the influence of alcohol. After introducing VLTs into bars and restaurants in Alberta, that province's lottery review committee found that 87% of Albertans felt that the machines were too accessible.
In this society, we have learned that it is dangerous to drink and drive. I submit that it is just as dangerous to the welfare of individuals and families to drink and gamble. There is no merit in encouraging these two vices to feed off each other.
The Addiction Research Foundation has found that these machines are particularly attractive to women and adolescents because they require no prior gambling knowledge. They are frequently the entry point for problem gamblers into the gambling world. The government has assured the public that these machines will not be available to adolescents. We find this difficult to believe. Very recently, cigarette machines were removed from bars and restaurants because it was deemed impossible to supervise them to ensure that youngsters were not buying cigarettes. We doubt the ability to supervise 20,000 VLTs any more successfully.
The Addiction Research Foundation has also noted that VLTs are particularly attractive to depressed individuals. This means that those who are already depressed by circumstances such as unemployment and poverty will be most tempted to play the machines. The machines are also highly attractive to those who suffer from hyperactivity or attention deficit disorder, which are major factors in an individual's inability to succeed in school and work. Thus individuals who are already handicapped are most at risk of developing an additional handicap: problem gambling.
The government has touted the fact that Bill 75 calls for VLTs to be set up in bars and restaurants in a separate area where only those aged 19 and over are admitted. I'm sure the government means well with this provision, but recent events point to a possible social problem down the road with these separate areas. Many of us were appalled recently to read about children abandoned in parked cars in the parking lot of the Casino Rama on its opening day, and a sweltering hot day it was too.
The implication for VLTs seems obvious. What is going to happen to the children while mom and dad go into the VLT room to gamble? Are we going to see seven- and eight-year-old kids propped on barstools with a Coke and some fries, exposed to what could be a very adult environment, even a dangerous environment?
We believe that the hospitality industry in Ontario is misguided in its support for VLTs. Restaurant and bar owners in other jurisdictions have given the machines mixed reviews. While the machines may bring more customers to bars with VLTs, they are putting their money into the machines, not into food and beer, according to Quebec City bar owner Benoît Mercure, quoted Saturday, August 10, in the Toronto Star. Ian Pickles, a Sylvan Lake, Alberta, bar owner, is quoted in the Alberta Report, December 18, as saying he "got to hate watching people throw their money away." The same publication mentions that another Alberta bar owner, Ted Tsenekos, erected a sign outside his bar reading, "Hooray, No VLTs Here."
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The most pressing economic problem in the province is unemployment, and unlike casinos, VLTs do nothing to create jobs. In fact, if they lead to less money spent on entertainment locally and more money being sucked into Queen's Park, they well could lead to layoffs in the hospitality industry.
This government likes to pride itself on an Ontario that is open for business. In a recent column entitled "Harris is Making Us the Alabama of the North," Toronto Star economics editor, David Crane, cited the reasons that top knowledge-based business gives for locating in a jurisdiction. They all relate to quality of life: good schools, good health care, cultural facilities. Increasing the divisions between rich and poor in this province and degrading the quality of life through increased gambling and attendant crime problems run contrary to any strategy to attract sunrise industry to Ontario. As Crane suggests, we should be aspiring to be the Silicon Valley of the north rather than remaking ourselves to be a low-pay, low-environmental standards, low-rent, and with video gambling, I submit, no-class copy of the worst of US models.
In concluding, the Golden Horseshoe Social Action Committee sees no good reason for the introduction of video gambling terminals. As Darryl Upfold, director of St Mary's Hospital counselling service in Kitchener-Waterloo, said, as quoted in the Kitchener-Waterloo Record on June 3, "The more opportunities to gamble, the more people will develop a problem." The 2% of the proceeds that the Ontario government has earmarked for gambling addiction problems is a mere sop thrown at a problem that we need not create in this province. The government has indicated it believes that about 5% of gamblers develop problems with VLTs, but Brandon University Professor Barbara Gfellner found in her study of 507 gamblers that 9.3% developed problems with the machines and suggests that figure could be much higher because she didn't allow for people fudging; they don't really like to tell the truth about their gambling.
The British Columbia government has listened to its citizens and heeded the problems with VLTs in other provinces. Nova Scotia and Alberta have pulled back on the number of machines, particularly in bars and restaurants where they cause the most trouble. We ask the government to listen to citizens' concerns and follow the example of the British Columbia government in absolutely turning down this socially costly source of revenue. Failing that, we ask that VLTs be restricted to racetracks and gambling halls.
Mr Klees: Thank you very much for your presentation. Could I just ask a question regarding your committee: How many members does your committee have?
Mrs Rogers: The steering committee or the committee in total?
Mr Klees: I'm talking about the committee that is referred to in this presentation.
Mrs Rogers: The entire committee has 200 to 300 members.
Mr Klees: Are the views you are putting forward totally endorsed by your committee?
Mrs Rogers: They're endorsed by the steering committee, which is about 15 representatives who form the executive.
Mr Klees: Fifteen of the 200?
Mrs Rogers: Yes, representing the group.
Mr Klees: The comments you made that you didn't support the introduction of a casino, are all 15 in agreement with you?
Mrs Rogers: The committee is divided between those who totally oppose any expansion in gambling and those who would like to see VLTs limited to racetracks and charity casinos.
Mr Klees: So even among the 15 there's some difference of opinion.
Mrs Rogers: Yes. Everybody is united that they do not want to see this in bars and restaurants, but beyond that point there is some division of opinion.
Mr Crozier: I appreciate your presentation. I as well as you hope the government listens to what you have to say. In the area where you say the excuse most favoured by the government is the need to stem the spread of illegal gambling machines, I want to share with you something. A study done by Goodman in 1994 suggests: "Organized crime remains an active provider of gambling products in its own market niche. Expanding legalization increases the number of people who gamble and provides organized crime with access to a larger consumer pool." That's in a study by Rose, 1986.
In the words of a former Chicago mobster out of this research that was done: "There always existed one solid constant. Any new form or expansion of legal gambling always increased our client base. The stooges who approved Las Vegas nights, offtrack betting, lotteries etc became our unwitting front men and partners. The publicity gave people a perception of gambling as healthy entertainment."
Mrs Rogers: In preparing this presentation I asked many people what they thought of the issue. One of those people was my family doctor, who said that every time there's a new form of gambling or the pot is raised at the bingo hall or whatever, he sees it in his practice in terms of increased family violence, stress problems, whatever.
Mr Kormos: Thank you, Ms Rogers, for a submission that has your sources annotated the whole nine yards and is I believe extremely good. But look, here we are; the fact is that the government members form a majority of this committee and it's a done deal. Like you said, Normie Sterling's been telling people not to worry -- what a remarkable comment to make -- that a gambler will have the opportunity to donate to charities and to government come October. By God, that's like telling a mugger that he was the mere beneficiary of a donation.
The person you've got to talk to, please, is Jim Flaherty over there. He's the parliamentary assistant. He makes his 78 grand a year plus another eight, nine, 10, 11 grand on top of that. He's the person with the most power here. He's the person with the right connection to the minister. He's the person who has more influence than any other member of this committee.
MPPs just gave themselves a raise several months ago under the guise of eliminating their pension. They gave themselves a net raise of several thousand dollars a year. You've got a government now that's addicted to gambling, like so many other governments across North America. Somebody said earlier today we shouldn't become preoccupied with the morality of it. Well, maybe we ought to become a little more occupied with the morality of increasing poverty, beating up on the poor, beating up on women and their children so that the rich can get a tax break. Maybe we ought to become a little more preoccupied with morality.
Mrs Rogers: My mother was the kind of person who never liked to say anything bad about anybody, not even a Tory. She always used to say that you could count on the Progressive Conservatives to look after family values, to look after the family. I'm sure that many people in Ontario are very disappointed, in that view of the Tory party, with this kind of anti-family legislation.
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NIAGARA PRESBYTERY, UNITED CHURCH OF CANADA
The Chair: We move on to our next presentation, the Niagara Presbytery of the United Church of Canada missions committee, Mr Robert Hoover, member. The clerk will take your written submission, Mr Hoover.
Mr Robert Hoover: I was under more than one deadline, Mr Chairman, and some of the copy will need some revision. I'll give you the corrections as we go along.
I'd like to introduce my colleague, the Reverend Ron Wallace who, if he is willing, will help me to field some of the questions that may come and add another element of his own.
The brief before you will address these aspects of the issue of video lottery terminals and similar electronic gaming devices to be positioned at certain locations and establishments other than casinos in Ontario. The argument covers these topics: the quantum leap in commercial gambling that marks the introduction of electronic gaming machines; that this is not a response to popular demand; that we have to distinguish between entertainment and fun on the one side and problem gambling of an obsessive or addictive type on the other hand; and a look at the costs, both human and economic, in the best way we can.
First the quantum leap. It is submitted respectfully that gambling by electronic machines is a quantum leap in commercial gambling because (1) they introduce continuous-action gambling to the lottery and related gaming processes; (2) they encourage the transition from recreational gambling to problem gambling; (3) they are intrinsically and, I dare say, insidiously effective in raising revenues by victimizing the poor and the desperate.
First, the introduction of electronic gambling machines was a quantum leap in lifting problem gambling to new heights of social and public cost, according to Professor Robert Goodman in the work that was cited a few moments ago by one of the members. Unlike the old way of buying lottery tickets where one goes to a store, buys one's tickets and waits a few days to find whether or not one is a loser, machine betting makes gambling continuous and rapid. Machine betting -- slot machines, keno, VLTs and so forth -- enables constant, quick-action games with a predetermined rate of payback to keep players interested. As and when alcoholic beverages are made available, legally or otherwise, the setting rapidly becomes conducive to playing machine games hour after hour.
Next, the quantum leap into electronic machine gambling permits the practice of teaser inducements. Frequent payouts at low rates of payout to investment are conducive to continuous, uncritical gambling. Frequent wins encourage further gambling but payoffs themselves may not be enough to keep the player's net worth from declining. All the essential elements of problem gambling are then brought together here: first, a game of pure chance requiring no skill whatsoever on the part of the participant; second, teaser inducements; and third, the unending rapidity of action.
For these and similar reasons, Tom Cummings, director of the Massachusetts Center for Compulsive Gambling, has identified VLTs and similar mindless gaming machines to be "the most pernicious, vicious, silent, subtle, deadly form of gambling." Likewise Tibor Barsony, the chief executive officer of the Canadian Foundation on Compulsive Gambling, has observed that legalized gambling terminals in restaurants, bars and like places would fuel a huge increase in compulsive gambling and "would be a big mistake," doing "more damage to young people than any other form of gambling."
Moreover, the Ontario Provincial Police find that terminal machines tend to be highly addictive. According to Staff Sergeant Larry Moodie: "The people that we see playing" terminal games "do not simply walk in and play for a couple of dollars. They play from the time they get in there until they run out of money."
Finally, VLTs and related devices are designed to despoil the poor and lower-income people. The low bets accepted, five cents to a loonie, for example, are not so much designed to be democratic and benignly permissive as to bring in the little that the needy have in their pockets, which is significant in the aggregate, as the poor in this province become more numerous, to the government's general fund and the corporate gaming till.
Thus electronic gaming machines are a quantum leap in commercial gaming. They introduce continuous action to the lottery process, they encourage the transition from recreational gambling to problem gambling and they are insidious raisers of revenue by victimizing the poor and the desperate. This is a mean time indeed when governments themselves become addicted corporately to compulsive gambling in order to build up their revenues.
Second, the quantum leap to convenience-located video gambling is not a response to popular demand. In 1992, a Gallup poll inferred that slot machines in public places, video poker and so forth, which enjoy an important role in recent government and industry promotion efforts, are not a response to popular demand in the United States. Indeed, this innovative step in commercial gaming was approved by only 38% of the sampled voting population nationwide. The VLT initiative, rather than being rooted in widespread public demand, is geared to the focused pressures of the gaming industry and, as well, from politicians anxious for a quick fix to the problems of unemployment and the reduction of taxes, debt and deficits. Moreover, in 1995, against a backdrop of public concern over crime and corruption in the state of Louisiana, a poll by the Baton Rouge Advocate showed that two thirds of the sampled voter population were more likely to back political candidates committed to eliminate video poker gambling than they were to support office seekers who would allow the continuation of VLT-type devices at convenience locations.
Goodman warns that it is crucial to understand that these developments towards ubiquitizing gambling throughout a political jurisdiction are "not because of a popular movement...but because of aggressive lobbying by the gambling industry, and the promotional efforts of politicians who have not been able to find more productive alternatives for economic development."
This pattern of political-industrial behaviour, then, appears to have crossed the border into Canada, as one reflects on what the reasons are for Ontario's reneging on the promise to hold referenda before expanding the scope of legalized gambling in this province. I should like to interject that this does not represent any kind of ingratitude for the opportunity to be here today to use this democratic forum of a hearing.
Going on, the Netherlands' experience with VLTs suggests that after the approval of electronic gambling devices at convenience outlets, thus making gambling ubiquitous, the public may elect solons who are committed to reversing the situation. Holland's Jellinkek Addiction Centre, which treats gambling and other addictions, had 400 visitors in 1986, the year electronic gambling machines in local business places were approved. A short six years later, the number of gamblers visiting the centre for treatment advanced from 400 to 6,000. Also, during the same six years of legalized electronic gambling in neighbourhood locations, the number of problem gamblers in the general population rose from under 1,000 to about 150,000. In fact, machine gambling became so pervasive by 1994 that the traditionally liberal Dutch government removed all of the 64,000 gaming machines operating in local places of business.
In short, the quantum leap to ubiquitously located electronic slot machines, VLTs and so forth, has not been by the majority request of the general public, but rather has been despite the majority's opposition in many places where the said leap has been undertaken. Rather, thirst for income on the part of governments, and the gaming industry as well, seems often to be the underlying motivation.
Third, is it obsession or addiction, or is it entertainment? What is the VLT? This section will contrast gambling as entertainment or play with problem gambling, both obsessive and compulsive. It will contend that problem gamblings are not play. Finally, it will argue that video slots and VLTs are characterized by problem gambling behaviour and are therefore neither entertainment nor leisured play.
Gambling as true play or entertainment is economically superfluous. It is never imposed, by necessity or otherwise, whether physical, moral or psychological. Moreover, gambling as play is always performed at leisure; that is, it can be started or ended at the will of the player. Entertainment gambling also is distinct from everyday life in that it can be started or ended at the will of the player and it is up to the player to choose how long it will continue.
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Without play or entertainment, everyday existence is overcome with the meaninglessness of life, or what's called anomie, in its modern context. It is in play that people are able to be free. Most importantly, gambling, to be true play or entertainment, must be liberating play. It does not impair the gambler's ability to function in the domain of work or to carry out personal responsibilities. It is voluntary behaviour.
We look to the forms of problem gambling here.
Obsessive gambling is not play or entertainment. Obsessive gambling, the soft side of problem gambling, "is an escape from societal or personal pressures into the order of the gambling-generated subculture." This subculture "transcends the realm of leisure and intrudes upon the `ordinary' (everyday) world. Obsessive gambling is a self-annihilating behaviour that eventually conforms so closely to the games' formal structures that the interactional nature of conventional (play-oriented) gambling is transformed," to the effect that conventional, or play-oriented, gambling motivations "are replaced by motivations which are generated by the game itself."
Moreover, "the obsessive gambler escapes pressures that bear...upon everyone, but in contrast to real entertainment gambling's temporary escape...the obsessive gambler's escape is more or less permanent. Thus, the problems that prompt obsessive behaviour, which are in some objective sense `real,' are made worse by gambling instead of being resolved."
Therefore, obsessive gambling is problem gambling of the neurotic type. As a neurosis, it is not functioning as genuine play or entertainment in any wholesome or healthy interpretation of the word.
Neither is compulsive gambling play or entertainment. "Compulsive gambling is a manifestation of personality disorder. (It is) not, in its final stage, interactional at all. In contrast to obsessive gambling, it is world-annihilating, wholly solipsistic and self-centred, and actively destructive of personality, which ceases to gamble with any other purpose than the stimulus-response gratifications of the activity itself....
"Compulsive gambling is infantile and completely uncontrolled.... The compulsive gambler derives no benefit from gambling, rather the reverse: certain financial loss and probable ruin, the sacrifice of personal relationships, responsibilities, work, and ultimately the self."
No way can this dreary syndrome of pathological psychotic suffering be interpreted as fun or play or entertainment. Compulsive gambling is the deeper form of problem gambling, not a neurosis but a psychosis, comprising both a personal and societal problem of major dimensions.
Suicide is a principal problem for compulsive gamblers. Professor Henry Lesieur, Illinois State University, sociology, says that suicide is frequently viewed by the compulsive gambler as "the perfect way to stop a losing streak," or even the only solution. Lesieur adds that 15% to 20% of compulsive gamblers going to Gamblers Anonymous, GamAnon or other similar agencies for aid have actually made some sort of suicide attempt. This of course takes no account of the compulsive gamblers who fail to turn themselves over to helping agencies.
How do VLTs fit into all this? VLTs, video slots and convenience-located gambling machines tend to induce problem gambling, obsessive and compulsive. Hence, they cannot be classed as genuine entertainment or play. John Gray reports that "experts on gambling addiction say that the number of problem gamblers is increasing dramatically and most of the difficulties come from people hooked on the new slot machines." This is supported by previous testimony in this brief.
No doubt other briefs in this hearing will report more in detail about the threat to the present generation of adolescents of becoming problem gamblers and potential suicides posed by VLTs and like machine gaming devices. That will be left to these other contributors to develop. This brief will not get into the relevant dangers of licensed and unlicensed outlets, the question of whether or not the VLTs are the so-called crack house of gambling addiction and so forth.
Now let's look at the costs and benefits of what I'm going to refer to as McGambling.
The Chair: Mr Hoover?
Mr Hoover: Am I over time?
The Chair: No, you've got three minutes to go. I want to make sure you get the important stuff in.
Mr Hoover: The costs and benefits of McGambling: The province of Ontario expects to receive $450 million from the installation of 20,000 VLTs. Two per cent of this amount, or $9 million, will be used for healing and prevention of compulsive gambling behaviours. Prevention will presumably be showered on obsessives. Thus, the $9 million will be used for problem gambling therapies and treatment of different sorts.
It has been contended in evidence previously taken by your committee that about 2% of all people exposed to video gambling tend to become addicted. Professor Goodman reports that it cost about US$13,000 in 1993 for society to meet the costs generated annually by a problem gambler, and I've given how he has arrived at that view, if you'll follow that through. Allowing for an average of 2% inflation and an exchange rate of 1.30, this suggests a figure of about $18,000 Canadian in 1996. Putting these data together in a meaningful, logical way indicates some important things about VLTs.
Some $450 million was reported as the estimated gross receipts from 20,000 VLT terminals, and 2% of that is $9 million for therapeutic services to problem gamblers. There are 134,500 persons exposed to VLTs in the regional municipality of Niagara, assuming a total adult population of 269,000 and that at least half of them will see these things and be attracted to them one way or another. Under-aged persons are not included in this. That 2% gives 2,690 regional Niagara adults who are likely to become problem gamblers. That 2,690 times the $18,000 in 1996 gives a $48 million-plus estimated cost of problem gamblers generated by VLT-type gaming. Compare then the $9 million proposed by the Ontario budget for services to problem gamblers with the estimated cost of $48 million to meet the needs of Niagara alone, never mind the rest of the province.
Of course, the token amount for services to problem gamblers generated by McGambling bears no relation to the need, nor is there likely to be any increase in the therapeutic services fund. After paying the operational costs of the VLT corporations and meeting substantial commitments to certain charities, the Honourable Norman Sterling says the entire balance is needed to pay off the provincial debt, reduce taxes and cut back provincial deficits.
In summary, McGambling through VLTs marks a quantum breakthrough in commercial gambling. Second, the quantum breakthrough in McGambling is not a response to a public clamour but to revenue-thirsty politicians and profit-avid corporations. Third, this type of gambling tends to be either obsessive or compulsive and is therefore not a form either of leisure activity, play or genuine entertainment. Fourth, the budgeted amount of money for VLT-induced problem gambling is by any reasoned calculation minuscule and trivial.
In conclusion, your committee is strongly advised and urged to re-examine the issue of VLTs for Ontario. Our committee suggests that if this public commitment is made, the people of Ontario and their government will repent that action in their leisure.
The Chair: The time has elapsed. I thank you very much, Mr Hoover, for the work that has gone into this presentation.
Our next presentation will be Christian Action Against Poverty, Tam Jones, president. If there's no one here representing that organization, we'll attempt to proceed down the list.
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B'NAI ISRAEL BROTHERHOOD
The Chair: B'nai Israel Brotherhood, Mr Harold Nash, chair. Welcome, Mr Nash.
Mr Harold Nash: Does that give me 40 minutes?
The Chair: No, unfortunately, it really doesn't but we do have some discretion in that regard.
Mr Nash: Thank you, Mr Chairman, members of the committee. I did not prepare anything printed for you, which may mean that you'll have to listen carefully to what I have to say if you're going to have any questions. Now, I'm not sure if that's an advantage or a disadvantage, but here I go.
My name is Harold Nash. I'm representing the B'nai Israel Brotherhood, a religious charity operating a charitable bingo in the Delta Bingo hall in St Catharines. It is my understanding that I may be the only bingo charity appearing before you today. I am therefore speaking not only on behalf of my charity, but also for the 200 charities operating in four bingo halls run by the Delta Bingo Group of Companies. These halls are in Fort Erie, Niagara Falls and St Catharines, being four of the 14 halls presently licensed in the Niagara Peninsula.
By the way, you don't have to worry about me using up 40 minutes; I'm not even going to use 20. In fact, I'm going to restrict my remarks only to the proposed allocation of VLTs.
First, let me make a comment on the initials, "VLT" -- video lottery terminals, slot machines. This may be the only time I will be in agreement with Mr Kormos, because in fact they are slot machines. It's too bad that we have to --
Mr Kormos: It's a beginning, sir. It's a beginning.
Interjection: It's a good beginning.
Mr Hudak: Don't hold your breath.
The Chair: It won't get you anywhere, anyway.
Mr Nash: I'm talking to the wrong side. I understand that, Mr Chairman.
In any case, it's too bad that we have to seek politically correct acronyms or devices to mask what they really are. As it was described to me recently, if it looks like a duck, smells like a duck, walks like a duck, sounds like a duck, it surely must be a duck. A VLT by any other name is still a slot machine.
I don't want to make any comment on the correctness of the device or its potential effect on our communities, but rather I want to speak from the point of view that in fact these devices are going to come, and make my case for their usage in the bingo industry.
Speaking for the bingo charities in Niagara, all of whom are having problems maintaining their old level of fund-raising, I would like to make the case for including bingo halls in your plans for the placement of these machines.
Let me first describe the problem being experienced in St Catharines regarding reducing bingo charity revenues. In December 1995 our local municipality and the licensing provincial ministry allowed the opening of a new bingo hall in St Catharines. This decision was taken in the face of predictions that existing charities would face hardships in maintaining their level of fund-raising from bingo to carry on their charitable work. Six months later these predictions have proven true. Bingo receipts are down appreciably, attributable in part to increased competition and to other factors such as the state of our local economy and cutbacks in social assistance by local and provincial authorities. I know that comment isn't one usually expressed, but the fact remains: Any gambling opportunity, from provincial lotteries to full-fledged gambling casinos, tends to attract to a degree those who should be the last to participate.
I recognize that the new hall in St Catharines has provided another 50 worthwhile charities the opportunity to raise funds outside of the city's grant list, and I know the city is happy about that. But adding these extra events means the pie is sliced thinner, resulting in the fact that each charity, particularly the old bingo charities, must be prepared to do with less. No one can accurately predict what will happen when the Niagara Falls casino opens this fall. Certainly the Windsor experience indicates that bingo will take a hit, at least in the short term, another thing placing pressure on bingo revenues.
Now the provincial ministry plans to put slot machines in racetracks, bars and permanent-site charitable casinos, putting even further pressure on the bingo industry. No mention is made of including bingo halls in this allocation, which certainly begs the question: why not?
The stated objective of this whole procedure is to increase revenues for "charitable organizations". The proposed regulations only vaguely refer to how charitable funds raised by the slots will be distributed.
Let me briefly examine how each one of the location types proposed appears to me.
Racetracks: A good place, but who will get the charitable receipts? The Horsemen's Benevolent Society? The last time I looked, that was a profit-oriented organization for its own benefit.
Bars: Not such a good place. And who will get that money? I've heard a few comments as I've been listening to some of the presentations made before you, and I guess probably the Ontario Lottery Corp, God forbid, will get those funds so that it can provide political benefit to the government.
Permanent-site charitable casinos: That one makes sense, because there is always a licensed charitable group attached to that event, with a clear distribution path to follow.
May I respectfully submit that the best location for slot machines is bingo halls, one that will surely meet your clearly stated objective to increase revenues for charitable organizations. The halls are licensed and strongly and effectively provincially controlled.
The charities are in place, correctly municipally licensed and involved in the operation of the game. Their need is clearly evident as they struggle to meet their charitable objectives, and the distribution path has been established using the Super Jackpot game and the hall-run Nevada break-open tickets as the guide.
Bingo faces an uncertain future, particularly in the peninsula. Excluding bingo halls from the allocation of slot machines may do irreparable harm to the industry and reduce the effectiveness of the many charitable organizations it has supported for many years.
I urge you, on behalf of the 200 charities I represent, to include bingo halls in this allocation, allowing us to continue our charitable endeavours in each of our communities. We all know we can no longer ask any level of government to financially help in this work. Please give us the opportunity to help ourselves.
The Chair: We have three minutes per caucus.
Mr Crozier: Good afternoon, Mr Nash. Welcome. You've given some interesting thoughts and made a few assumptions, not the least of which is to ask the question: Why not bingo halls? Well, I suggest, sir, that why not bingo halls is because perhaps your lobby hasn't been great enough. In other words, those who have it, those who have the biggest and best-organized organization often benefit the most from this kind of endeavour. So when I say your lobby, perhaps had the charitable bingos been actively pursuing the government like those in the racetrack industry and those in the licensed establishments, the hotel-motel-restaurant associations, you may have been more successful, but that's only speculation.
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I want to ask you about cannibalization, in other words, how and where the gambling money is spent. In your bingo halls, do you have break-open ticket sales as well?
Mr Nash: Yes, we do.
Mr Crozier: I would like to ask if you have a concern that through the use of VLTs those revenues may not be reduced.
Mr Nash: I would say that if slot machines are not allowed in bingo halls on an equal basis to those other places that are being determined, there will be a lot of pressure on the revenue generated in that particular bingo hall. Let me suggest to you that it may well be that the distribution of how bingo dollars or gambling dollars are spent may change a little in the halls from that of break-open tickets to the slot machines -- that's possible -- but let me suggest that each of the charities that is involved in the operation of that particular game at that particular time slot is anxious to maximize its opportunity to raise charitable dollars.
By the way, may I make a comment, Mr Crozier, that I'm really disturbed by your comment about the fact that our lobby isn't stronger. This is a charitable group of people who have no lobby. All they are is small, little local organizations attempting to raise funds to provide the charitable work that they do in their community. There is no such thing as a lobby.
Mr Crozier: And I --
Mr Nash: Let me continue, if I may, sir. The fact is that if the stated objective is to provide maximum funds to charitable organizations, do that. Don't provide the funds to bars and don't provide the funds to the Ontario Lottery Corp, which takes more gambling dollars out of our economy than any other single organization that I can think of.
Mr Crozier: But, sir, I'm on your side.
Mr Nash: I know you are.
Mr Crozier: Give me a break. I'm really saying I'm disturbed too that because someone doesn't have a well-organized, well-financed lobby --
Mr Nash: Then you make that point strongly when the debate occurs in a few weeks.
Mr Crozier: I have tried to, but I share your frustration.
The Chair: Thank you, Mr Crozier.
Mr Kormos: Obviously, Mr Nash, there have been a number of concerns raised, and you've heard I think a runthrough of them today, but one of them has been from charitable organizations and the impact of slots on charitable fund-raising. The two biggest sources, as we've been told so far, of charitable fund-raising are bingos and break-open tickets, Nevada tickets.
Again, the numbers are very difficult to get a grasp on, to get a handle on. The government says there will be $180 million available to charities, which they say will be 10% of the slot action. My speedy calculation shows that to require that there be $1.8 billion invested in the slots to generate 10%, $180 million. That means approximately $90,000 a year per slot machine, just shy of two grand a week. The break-open ticket industry tells us that they generate sales of $1.3 billion a year in break-open tickets. I don't think we were told if they're uniformly priced, but any experience I've had, they were 50 cents. I don't know if they vary in price.
We've heard also from a number of people about the difficulty that charitable organizations have had doing fund-raising, simply because there seem to be less dollars out there to appeal to. We had government officials in the past, the Ministry of Consumer and Commercial Relations, telling break-open-funded charities that they have to limit the number of licences for break-opens -- same argument for bingos -- because they don't want to exhaust the gambling dollar out there. But now they're saying that they're looking for $1.8 billion in gambling dollars to feed their slots. Somebody has got to lose. I hear what you're saying. You're saying as long as it goes to charities at the end of the day, it's all six of one and half a dozen of another.
Mr Nash: More importantly, though, as long as there is a clear path ahead of the time as to how it's going to be distributed. That's in place right now in bingo halls, because there is a licensed charity involved in every event that gets a share of whatever revenue is produced. I don't see how that's going to happen if you're going to put them in wherever.
Mr Kormos: I think you're going to see a number of amendments coming, even from those of us in the Legislature who don't support the proposition of slots -- and I'm one of those people -- recognizing that the government's got a majority. At the end of the day, the real motive here on the part of the government isn't to help charities; it isn't to help the bar and tavern industry; it's to raise funds, God bless. But we need clear-cut guidelines as to what amount will be dedicated to charities and how that will be determined on a charity-per-charity basis. Because you've got some charities that are province-wide based in Toronto; you have others that are regional that, if they have a strong base of support, can work their behinds off and manage to cultivate more support financially than a charity with less body support, less human support.
Mr Flaherty: When we hear Mr Kormos, as a neo-prohibitionist, looking down his nose at the people of the province of Ontario who consider gaming as a form of entertainment, the vast majority of the people in this province, he can look down on them if he wishes; his was the political party that put more than 2,500 slot machines and video lottery terminals in Windsor, Ontario.
Mr Kormos: Did you support it or didn't you?
Mr Flaherty: Now he sits --
Mr Kormos: I know where I stood. Did you support it or not?
Mr Flaherty: I warn you also about these people over here, these Liberal people. I gather the position du jour is that they are against VLTs, because that's what he intimated to you. But they put out a press release today, these two, the putative leader, Kennedy, and Crozier: "Liberal MPPs Bruce Crozier and Gerard Kennedy today joined a number of local groups at a public hearing in warning against allowing video lottery terminals in bars and restaurants," not anywhere else. They're in favour of them everywhere else, just like the NDP put 2,500 of them in Windsor, Ontario.
Mr Crozier: Have you got a problem with that?
Mr Flaherty: Isn't it interesting how they vary their position now from even morning till afternoon. They don't even have a firm position --
Mr Crozier: My position hasn't changed in a week. I'll put my position, my word, up against yours any time, Mr Flaherty.
Mr Flaherty: As you may know, in Windsor, Ontario, where a major new form of gambling was introduced by our friends in the NDP, who brought in more than 2,500 machines and of course all of the tables, over 100 gaming tables, generally speaking, bingo gaming has come back because of using a different clientele and different loyalties among them. That is the statistical information we have from Windsor. So I wouldn't be too pessimistic.
The other thing of course I'd mention to you is that there would be no impediment to current bingo halls applying to be designated as permanent charity gaming halls under Bill 75, which is the legislation with which we're dealing -- there's no impediment to that -- just as others are free to apply. I assume that if you're serious about what you said, your group would be one of the groups that would apply.
Mr Hudak: I'll be really quick. Thank you, Mr Nash, for your presentation. Fort Erie is in my riding. Fort Erie's bingo industry is very pronounced. I appreciate your comments on behalf of the bingo industry and the charities that benefit from it. I believe we have you on the record in favour of putting VLTs in the bingo parlours. I'll defend it to the end at the track, because who does it go to? We've got 4,500 people, a lot of whom don't have job skills that are transferable. They depend on the horse racing industry to support themselves and their families, their children. I'll defend that to the end. The charity event sites are going to increase revenues to charities 10 times from the Monte Carlos, is the estimate. But also I appreciate your comments on behalf of bingos and we'll take them into consideration.
The Chair: Mr Nash, I thank you for your presentation and also for enlivening the conversation around this table.
Mr Nash: Even if I couldn't hear what was going on, Mr Chairman.
Mr Kormos: Mr Chair, why is Mr Flaherty prepared to compromise his integrity and lie in the pursuit of this goal? I find that really remarkable.
The Chair: Mr Kormos, I've asked you in the past to act parliamentarily. I rarely object around here, but you are not acting parliamentarily by using that particular language. Mr Kormos, we have rules of the game. If you choose not to follow them, that's up to you. But I don't think it's fair and that's not the way I would act.
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Mr Hudak: Chair, could I ask for all-party consent on an issue? I received a message from an individual who runs Paradise Casino, the Monte Carlos. He tried to get on the speaking list today. Unfortunately, he called too late and was on a waiting list. I understand we did miss a 20-minute appointment, which I think pushes everything forward 20 minutes. Would people be interested in allowing him -- he has an interesting perspective on the way the Monte Carlos currently function and the way they could function at our charity event sites -- to present?
The Chair: The only way it would be possible is if there was unanimous consent of this committee to permit someone else to enter a spot that was granted to someone who did not appear. Is there any objection?
Mr Kormos: At $78,000-plus a year, we should be prepared to work a full day.
The Chair: If there's no objection, we will hear from him immediately after we hear from these gentlemen.
FLAMBORO DOWNS HOLDINGS LTD
The Chair: Flamboro Downs is our next presenter.
Mr Charles Juravinski: First, on behalf of Flamboro Downs and the horse racing industry in the province of Ontario, we thank you for the opportunity of appearing before you.
At this point in time, you would have heard from a cross-section of the horse racing industry, specifically horse persons, horse-related organizations, racetrack operators and the Ontario Horse Racing Industry Association, which we know as OHRIA.
Rather than repeating the many salient points made in the various presentations, we wish to -- I want to drive home -- heartily endorse the report tabled by Racetracks of Canada Inc and presented by Roland Roberts, the executive vice-president, and the presentation by the Ontario Horse Racing Industry Association presented by our chair, Robert Hall, and the executive VP, Jane Holmes.
I would like to now become parochial and hopefully enlighten this committee as to what Flamboro Downs is and the current services provided, not only to the racing patron but to the entire horse racing fraternity, certainly in Ontario, throughout Canada and parts of the United States, and this must continue.
Our operation is literally home for some participants, as we operate five days per week, 52 weeks per year.
We provide stabling facilities full-time for 690 horses and have 44 roomettes to accommodate horse caretakers. I might add it costs them the grand sum of $25 per month per roomette.
Security is maintained 24 hours per day, seven days per week, and we strive for first-class facilities for the use of the harness horse industry.
Simulcasting of our live racing product is conducted every live racing day. We complement our race schedule by receiving other tracks' product, and are literally operating day and night, seven days per week, on track and also into our teletheatre network.
Sixty full-time employees and 232 race day employees complement our service to our patrons.
We are told time and again that Flamboro Downs is one of the finest class tracks in North America, and our resolve is not to simply maintain this status quo but to enhance our premises. Hopefully, the clerk furnished you with a business card which has a picture of Flamboro Downs on the cover.
To this end, the government of Ontario, through Bill 75, has provided us with an opportunity to fulfil our vision. We applaud them and respectfully request this total committee's support so that we may achieve our ultimate vision.
We visualize Flamboro Downs becoming a destination place, with better-than-first-class facilities, not only to accommodate VLTs but to provide bingo facilities -- we've noted that application was made some time ago -- and a charity gaming hall -- and we are on record with the government to this end -- to clearly enhance our main thrust, which is live horse racing, and continue contributing and growing our agricultural and rural base as we have in the past.
Our facilities are strategically located in the town of Flamborough, and within a 30-minute drive there is a population potential approaching three million persons. We can park 5,000 cars on our premises. We have 250 acres of cut grass surrounding our buildings, parking lots and two half-mile racetracks. We operate these facilities without any inconvenience to our neighbours of which we are aware.
Getting back to our vision, we are surrounded by approximately 1,500 acres of farm and conservation area and can visualize Flamboro Downs supporting added commercial living facilities, an adult-children's entertainment complex, a golf course and, for that matter, any other recreation facility which will help support, I reiterate, our main thrust, which is live horse racing. Additionally, we are directly across the highway from the Christie conservation area, which is one of the finest public areas in the province.
We have proven over the past 25 years that we are a people-oriented operation. Our business record is totally unblemished and we are proud of the corporate image we have achieved.
We wish to continue on this line of endeavour, maintaining our private corporate identity, hopefully creating profits for all our governmental partners and any other parties -- and the charities should like this -- that make a living from and are dependent on Flamboro Downs.
I just wish to digress for a moment. Flamboro Downs' main thrust as far as charities are concerned is in our dining room. We have over the past 20 years had every imaginable charity funded at Flamboro Downs through a special deal as far as dining facilities are concerned, race sponsorships are concerned, balloon-busting with prizes is concerned. This is a real going concern for the charities in our area.
For instance, is this committee aware that we touch the direct lives of 1,200 persons daily who earn their living in the horse racing industry? It would be unconscionable to turn down this base and jeopardize their future. By that we mean that we must be put into additional gaming to have everything viable and survive.
Mr Chairman, we urge you and this total committee to recommend to the government the following:
Racetracks and the government form an alliance and develop a sound business plan equitable to all parties, and permit VLTs to be installed at racetracks in the first instance.
Designate clearly racetracks to be included as charity gaming halls.
Consider racetracks to be owner-operators of these establishments without any third-party participation or ownership.
Review the performance after a reasonable period of time.
Permit the racetracks to evolve into first-class sports, gaming, entertainment and recreational facilities.
We are up for the challenge. We have proven records and capabilities and are ready, willing and able. We believe it would be a win-win environment for everyone.
Thank you for listening. I am prepared to answer any questions, but first, if you flip the page to the "Points to Ponder," we will leave those points to ponder for you, but I would appreciate if you went to the second-to-last line where we have written in, "Better meet the demands and requirements of the public." Of course we're going to blame this on the typist. We missed adding in there and we would appreciate if you noted under, "Better meet the demands and requirements of the public," "in a socially responsible setting." The last bullet, where it says, "A place of `conscious choice to go to,'" please add under that "for entertainment under responsible management."
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As a matter of fact, with your indulgence, I like it so much that I think I would like to read the "Points to Ponder."
We ask the questions: Who can? Who has? Who can grow the agriculture base and the rural communities better than racetracks in a gaming environment? Who can ensure the future viability of the horse racing industry? Who has a proven record as it relates to integrity and security and accountability in a controlled structure? Who has the infrastructures throughout the province? Who can achieve the best possible returns to the government? Who can better meet the demands and requirements of the public in a socially responsible setting? Who has a place of "conscious choice to go to" for entertainment under responsible management? Obviously, the answer is extended-meet racetracks.
Incidentally, this is Mr Richard Jacob, our general manager, who worked on this brief with me and does a very fine job for Flamboro Downs.
The Acting Chair (Mr Tim Hudak): Thank you, Mr Juravinski. Mr Jacob, did you have any additional comments or should I open the floor to questions from the members?
Mr Richard Jacob: No, I think we're prepared to answer questions, so you can open the floor.
The Acting Chair: Very good, thank you. We have about two and a half minutes per caucus, beginning with the NDP.
Mr Kormos: Mr Juravinski, you are certainly one of the more dramatic characters in the horse race business in Ontario, and I say that in a very positive way. Unlike the OJC, for instance, you've never whined and threatened to shut your track down. You've been through better times and worse times in the business but you've maintained your commitment to that track in Flamboro and not engaged in some of the game playing some of the other players in your industry have a history of.
I appreciate you may not have been here earlier when we had some small business people here saying: "By God, we're licensed. We're licensed to sell alcohol." The government's eliminating the LLBO and creating this new quasi-arm's length agency to supervise both gambling and alcohol. There's some logic to your proposition. Those of us who are opposed to slots I think acknowledge at least a racetrack is more akin to a casino in that you go there for gaming purposes, not an in-your-face slot machine. You go to a dining room to eat and if there's a slot machine there, it's trying to seduce you into playing it.
So I think there's some logic to your argument, but what do you say to the tavern owner -- they got hard times, too. I don't dispute that. They want a piece of the action. Everybody wants a piece of the action. By the time this is over, there's going to be 40,000 slots, and then at some point nobody's going to be making any money because it becomes non-sustainable. Do you appreciate the sense of unfairness from other industries that say, "But we need help too"?
Mr Juravinski: Yes. I think our attitude on the parochial aspect is basically that once the system has sorted itself out, perhaps there's going to be room for everyone. At this point in time, we don't know. If the government's mandate is to be fulfilled, it would seem to us that you can't put them on every corner, for openers.
I think, with all due respect, Mr Kormos, that the government's current terms of reference are on the money because they do appear as if they're open for future study. Like in any other business, things will get sorted out as we go on and if it's in the cards that others should have them, by all means. On the other hand, it's entirely conceivable that if they're not successful, say, in the racetrack element, then it might be racetracks that don't want them at that point in time. I think we have to try it, though.
Mr E.J. Douglas Rollins (Quinte): Thanks for your presentation, Mr Juravinski, and congratulations on running a first-class establishment at Flamboro, because it is that.
Mr Juravinski: Thank you for the kind words.
Mr Rollins: I know you mentioned that you housed approximately 690 horses on grounds. Do you have a large number of drawn-ins that come in to race there regularly too?
Mr Juravinski: Yes. Better than 50% of our entries on a per diem basis come from offtrack, principally from farms around the area -- principally, and I stress that. I'm pleased to brag that 25 years ago we talked to our town fathers and went to the Ontario Municipal Board and said that Flamboro Downs would become the horse Kentucky in the province of Ontario, and by God, we've achieved it. All you have to do is fly over top of Flamboro and you will see the farms.
Mr Rollins: So really those numbers of people that you employ in the horse industry could be doubled when you stop to think of all those other people who are working on those farms getting those horses ready for the track and looking after their training and everything else, other than what you people have working there on race day?
Mr Juravinski: They are quadrupled, in fact. To prove this point, the Ministry of Agriculture, going back not three years ago, did a total study and tabled a paper. There are literally 4,500 people who are touched by Flamboro Downs by virtue of a race day. That is fact and it's written and it's in the Ministry of Agriculture's files now.
Mr Rollins: Thanks for doing your part in keeping Ontario working.
Mr Juravinski: Thank you for the kind words.
Mr Kennedy: Thank you also for your presentation. I wonder if you could comment on what some other racetracks have told us, that they're concerned about the cannibalization of their revenue. Have you experienced that in terms of the expansion of gambling in the province that has taken place so far? Has it affected your handle? Also, this legislation is mainly about putting these devices into licensed restaurants and bars. I'm wondering how you think that may affect the positive impact that you've told us about for them in your establishment?
Mr Juravinski: Mr Kennedy, I can succinctly answer that question because prior to lotteries, if you will, or the Ontario Casino Corp, and principally lotteries, our operation on far fewer racing days used to do $62 million of live ontrack handle. By the time the lotteries, the bingos and I might say the charity bingos, the charity casinos got through with us, we were cannibalized by 50% and went to a handle of approximately $32 million per year. We were frankly decimated under that scheme.
The thing that has resurrected us currently is simulcasting, because we have gone to the people with our simulcasting and though we have further cannibalized our product on track and our attendance base on track -- and I'll give you an example. We have gone from $32 million per year to $120 million per year. So we have recovered in getting the product to the public. Now, obviously, we are no different than others. We fear the cannibalization. We have to protect against it and be on a level playing field and have these VLTs and become charity gaming casinos or you will colour us gone. I don't mean, as Mr Kormos alludes, that we're going to close the track. We will not be able to make it financially.
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Mr Kennedy: What would happen if you aren't the charity gaming hall? There's a lot of charity gaming activity that is potentially affected. Those groups will want to see their interests transferred, perhaps into the new form of gaming. Do you see yourselves as beneficiary or operator of the charity gaming hall if you have it in your facility? What happens if you don't get it but somebody else in your local community has 200 slot machines and 50 gaming tables, which are the parameters for that activity?
Mr Juravinski: It will further cannibalize us, there is no question about it. We see ourselves, because of our structure to begin with, and I'm talking about being a highly regulated operation, we believe that racetracks are the natural place for the charity gaming halls because of the structure. We believe, by virtue of the additional people who should gravitate to these charity halls -- and as I pointed out earlier, we can work in hand with the charities by virtue of being the kind of place we are, with dining room facilities, entertainment facilities, horse racing facilities, to serve all factions of that part of the industry who are so concerned.
The Acting Chair: Thank you, Mr Kennedy. I'm sorry, the time has expired. Gentlemen, on behalf of the standing committee on administration of justice, thank you very much for your presentation today. Have a safe trip back, and best wishes on the rest of the season.
Mr Juravinski: Thank you, and thank you for a job well done to date. We appreciate it.
The Acting Chair: Next on our list before the committee, originally scheduled for 4:20, so they may not be here yet, is Capt'n Billy's, a Mr Wade Grant as the manager. Anyone from Capt'n Billy's here? Then I will move to the next group on the list, Port Colborne Community Action, Mary Ellen DuPon.
DELTA BINGO GROUP OF COMPANIES
The Acting Chair: I see that Uncle Sam's Bingo is here now. John Cameron is here. Is Duncan going to join us?
Mr John Cameron: No, he couldn't make it today.
The Acting Chair: Okay, do you feel like going ahead with your presentation early? Please join us, John. Welcome to the committee. You have 20 minutes for your remarks. You may choose to use some time to allow the members to ask you questions at the end of your remarks.
Mr Cameron: Good afternoon. My name is John Cameron. I am here representing the Delta Bingo Group of Companies. We are a family-owned and -operated business that has been in the bingo industry for 35 years. Here in Fort Erie, we own Uncle Sam's and Delta Bingo, which are two out of the four halls in the town of Fort Erie. In the Niagara region, we have four out of the 14 halls.
Within the halls in the Niagara region, we represent 200 charities, which include 120 charities from our two halls in Fort Erie alone. The 14 halls in the Niagara region collectively for 1995 made $20 million in charitable profits, paid $2 million in city licensing fees, paid $1 million in provincial licensing fees to Toronto and paid an undeterminable amount of PST and GST. Our two halls in Fort Erie alone made $9.5 million in charitable proceeds, paid $1 million to the city in licensing fees and paid $300,000 in provincial licensing fees to Toronto.
The bingo hall and card manufacturing portion of the gaming industry in the Niagara region alone has about 1,500 direct employees working in the operation and manufacturing of bingo cards and equipment as well as the day-to-day operations of bingo. These numbers do not include the huge number of people who volunteer and/or work for charitable organizations.
The announcement of the video lottery terminals, or the VLTs, we initially thought was going to be a spectacular event for the charitable interests and to all the stakeholders involved with the bingo industry. However, you can imagine our dismay at learning how the VLTs are planned to be released and can appreciate that we are more than a little concerned. Not only did the racetracks receive $50 million off in taxes in their wagering, but they will also receive the VLTs in the first wave. The roving charity gaming halls are going to receive specialty status to control the profitability problems by making them permanent site casinos and giving them VLTs as well.
We also believe that the amalgamation of the Ministry of Consumer and Commercial Relations and the LLBO is a great indication that the VLTs will be going into the hospitality industry as quickly as possible. Having VLTs in every corner bar will also deplete our customer base. We don't resent these industries being given a chance to grow, but we know that we must be included in the first wave of the VLTs and not be ignored. After all, are bingo halls not also licensed charity gaming halls?
Not only does the bingo industry deserve this, but it is already set up to meet the eligibility requirements of the newly formed Alcohol and Gaming Commission. The inner structure of the bingo industry is that we are already licensed entities by the Gaming Control Commission, and we pay $12,000 a hall a year for this licence. All of our key employees are licensed by the Gaming Control Commission, and not only our halls but our key employees as well have had background investigations conducted by the Gaming Control Commission. Even more so, the Delta Bingo Group of Companies is undertaking a voluntary compliance audit for the Gaming Control Commission in which our registered employees comply with and enforce all gaming rules and regulations. This makes for an excellent, controlled environment for no under-age gambling, as we are regulated not to allow people who are under age to enter our establishment or play bingo.
The Ontario Alcohol and Gaming Commission is allowing VLTs in the permanent charitable casinos but not in the bingo halls, thus making an unlevel playing field in which they are expropriating our customers. Horse bettors are blackjack and poker players, they are not VLT or slot machine players. In essence, they will displace the bingo customers and their spending, who will go to the other gambling establishments to get to where the VLTs are, to the detriment of the charitable gaming sector.
When we don't receive the same and fair opportunities as the others will receive, it will be a dark day in the bingo industry. This is not only unethical but unreasonable. That the Ontario Alcohol and Gaming Commission makes the rules and the laws for their casinos and for their VLTs and also for our bingo industry and then decides to put VLTs in all parts of gaming except for bingo is immoral. If the charities experience a 25% loss of their customer base, this would result in more than an 80% loss to the drop, to our and to our charities' profits, based on the calculations used in determining profit for bingos.
We feel that using the bingo halls in Ontario for the first wave of the VLTs, in conjunction with the racetracks, is the logical choice. There are over 300 bingo halls in Ontario, compared to the eight or so racetracks. Our bingo halls in the town of Fort Erie, for example, are open 16 hours a day, 365 days a year. We suggest that bingo is the very tool that is needed to have a proactive approach in introducing VLTs to the marketplace in a safe and controlled environment.
In closing, we know that bingo must be included in the first wave of the VLTs, and we expect the same consideration as the other stakeholders in the gaming industry. Remember the old expression that there is no sense cutting off your nose to spite your face? We believe strongly that bingo is the face of the gaming industry in Ontario.
Thank you for your time and consideration in regard to this important matter. I am done, and I will answer any questions if you have any.
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The Acting Chair: Thank you, Mr Cameron, for your presentation. That leaves us about four minutes per caucus for questions, beginning with the government side.
Mr Klees: Thank you for your presentation. As a committee we have a difficult time sometimes weighing all the factors. We've heard from representatives of the bingo industry, if I can put it that way; we've heard from the racetracks; we've heard from really all corners. One of the tensions we have here is that everyone's saying, "Let me into the game." Then of course we have the other side of this discussion that says, "Don't do it at all."
What we have a difficult time doing as a committee sometimes is separating and weighing where people are coming from in their presentations and trying to determine whether the presentations are from a parochial position. Obviously, if you're in business and your profits depend on it, then you will be parochial, and that's fair. We understand that you have to make a profit. You're employing a lot of people, so you have to guard your own industry. Sometimes presentations here are made from a partisan standpoint and we have to be able to determine where the partisan issues are so that at the end of the day we can make the right decision for the people of Ontario. We're entrusted with that responsibility.
You argue that you should be considered in the first wave. I want to make it very clear that one of the reasons that the government is proposing to stage the introduction of VLTs is because we want to have an opportunity to monitor very carefully what the impact is of the VLTs in our communities. We want to be able to then take a look at the second stage. When we make that decision, there are members on this committee who are very concerned that that next stage of introduction of VLTs, if it takes place, only takes place if this government is assured that it's the right thing to do, that there are not negative impacts in the community, that there are not negative social effects, and for whatever negative social effects perhaps in place that we see evolving, that we've got mitigating protections in place for those people being affected.
You make a very important point, and that is that while there are perhaps eight racetracks, there are over 300 bingo halls. I just want to give you that information, that if bingo halls are not included in that first wave, it has nothing to do with this government's attitude towards bingo halls. It has everything to do with the fact that when we do introduce, it will be done in a secure way, in a planned way, that we're not going helter-skelter across the province. I'm not sure that message is getting across. I wanted to give you an opportunity and those in your industry an opportunity to understand what the rationale is behind the staging of the introduction of these VLTs.
The Acting Chair: Mr Maves, you have about 30 seconds.
Mr Maves: I'll just make it a quick statement then, the fear that the bingos will be in trouble with the introduction of VLTs. I believe in Windsor the bingos initially experienced a loss but within a year were back to within 5% and in fact some were making even more. I just wanted to pass on some information to help mitigate some fears.
The Acting Chair: Now we move to the official opposition.
Mr Crozier: Good afternoon, Mr Cameron. We have four minutes to discuss your presentation, so I just want to steal about 30 seconds from that. The parliamentary assistant made comment about a press release that was issued today and made some comment about my comments. I just wanted to tell him that, yes, when I said this form of gambling is particularly addictive, especially for the young and the less-well-off, we have surveys that tell us that. I have said that the Tories are pushing full steam ahead to put slot machines in neighbourhood bars and restaurants without proper consultation with communities affected, because I strongly believe that the community should have the option to do that, and I'll have more to say on that through the next days of the hearing. I certainly, although this is a personal view, have come to the conclusion that the group most addicted to gambling today is the provincial government, and I said that in our opening statement at the beginning of these hearings. As I said when the PA was making comment about those, I'll stand behind everything I say.
At this stage, certainly, I, as a result of the hearings, am supportive of the VLTs, if -- and I always say if -- if we have to have them, in racetracks and charitable gaming sites.
Now we get to the question of bingo halls. It's been raised by several other bingo operators that you feel shortchanged, and well you might, because we don't know what's fair. Mr Klees made some comments about how the government feels about it. The point is that in all of this, when the government announced this and named racetracks, permanent charitable gaming sites and licensed establishments, it left bingo halls out. Notwithstanding what was just said, and I listened very carefully to it, I don't know whether we got a commitment that bingo halls will be included; that may be something we'll have to determine later. Did you take any comfort from that?
Mr Klees: I'm prepared to provide clarification, Mr Crozier, if you give me your time.
Mr Crozier: Sure. I said we'll --
The Acting Chair: You have a minute of your time left. Do you want to give it to Mr Klees?
Mr Crozier: No, I'd like to hear this gentleman's comments, but if at some time he'd like to clarify it, that's fine. Did you feel any comfort in the comments about placing them in bingo halls?
Mr Cameron: No, not really, because I haven't ever heard anybody say yes, they would be going in. I can understand his position that they're trying to work them in to suit everybody in Ontario, but bingo halls are a huge industry and we should not be just left out of that loop. No one's ever said, yes, they're going to go into bingo halls for certain at some time.
Mr Crozier: Maybe Mr Klees in our final seconds would clarify that.
Mr Klees: What I said previously stands, of course, in that we want to stage the introduction. Certainly bingo halls are eligible to apply to become one of the sites for a charitable gaming hall. We urge you to make that application. In terms of the general proliferation, no, that certainly is not the government's intention at this point in time, but as I say, you have the opportunity to make your application to become one of the sites for a permanent charity gaming hall, and we urge you to do so.
Mr Kormos: Lots of luck, Mr Cameron. That warm fuzzy feeling that Mr Klees is trying to impart was neither authorized nor approved by the Premier's office.
Tell us about your business. You talk about 14 halls and the number of profits generated for charities. When you talk about paying out $20 million in profits --
Mr Bill Murdoch (Grey-Owen Sound): Peter knows all about the Premier's office.
Mr Kormos: What do I know about the Premier's office? I know that this Premier's office is as corrupt as any Premier's office has ever been and as much controlled by the spin doctors and the pollsters and the big money boys as any other right-wing government has ever been. That's what I know.
Interjections.
The Acting Chair: Members of the committee, please let's maintain the decorum we've had through the afternoon session.
Mr Kormos: Chair, you've got to try to keep order here.
The Acting Chair: Mr Kormos, go ahead.
Mr Kormos: When you talk about paying out $20 million to charities, how does that break down? What's the breakdown in terms of the salaries you pay to your staff and the profits the company makes?
Mr Cameron: The $20 million I talked about is the profit the charities in the Niagara region made; bottom-line, that's what they made, and they go spend it however they feel they should. It has nothing to do with my end or how I make it. The charities basically make a dollar and a half, I make a dollar. If they don't make any money, I certainly don't make any money, and if they lose money, I lose half.
Mr Kormos: The $20 million you say was paid out, I presume that's per annum?
Mr Cameron: That was for the year, yes.
Mr Kormos: And you say that's the charities' piece of the action.
Mr Cameron: Yes.
Mr Kormos: So what's the company's end of the action?
Mr Cameron: It would be somewhere around $10 to $12 million. They pay their employees. That's a guess. I can say in my halls how they work, but I can't say how, in the 14 in the Niagara region, it really works.
Mr Kormos: I get the impression that to date, without cannibalization, which is inevitable, the industry has served charities and been a reasonably profitable one.
Mr Cameron: Yes. Bingo has been running for a long time without asking for any handouts from anybody, without getting any grants. As a matter of fact, the people who run the bingos are the people who have been getting their grants taken away from them and are still able to come up with the money to pay for the things that need to be done. They're not asking for handouts from anybody.
Mr Kormos: So the ratio -- did I get you right? -- is that for every buck and a half the charity gets, the operator gets a buck?
Mr Cameron: Yes, and they have to pay for everything out of that, the cards, the wages --
Mr Kormos: I understand. What types of wages are paid in the bingo business?
Mr Cameron: It's salary for the people who run the hall, who work in the concession, the managers who hand out the cards, the callers.
Mr Kormos: What type of wages are they?
Mr Cameron: The lowest is about $8 an hour, and the highest as much as $12 to $14 an hour.
Mr Kormos: In the 14 parlours you've got, how many full-time help?
Mr Cameron: No, we have four in the Niagara region. There's 14 halls in the Niagara Region; we have four.
Mr Kormos: Oh, you have four of the 14. So of your four halls, how many full-time jobs are there?
Mr Cameron: There would be 120.
Mr Kormos: That's 120 full 40-hour, 36-hour, 37-hour week?
Mr Cameron: Yes.
The Acting Chair: Thank you, Mr Cameron, for coming before the committee today, and pass on our regards to Duncan. I'm sorry he couldn't make it, but you did a good job. Thanks for your time.
I'll call down the list again to see if these people have arrived yet: Capt'n Billy's, Wade Grant; Port Colborne Community Action, Mary Ellen DuPon; Swannee's Restaurant, John MacDonald.
This committee will recess for five minutes until the next group arrives.
The committee recessed from 1623 to 1634.
The Chair: I call the meeting to order. We still do not have any presenters present and therefore I am readjourning this meeting till 4:55. At that time we will reconvene and proceed with the last two presenters.
The committee recessed from 1635 to 1640.
JEFF NEWMAN
The Chair: Ladies and gentlemen of the committee, we'll reconvene at this time. The time is 4:40. I understand that Mr Jeff Newman, instead of a no-show, is here to make a presentation to us. I welcome you, Mr Newman, and request that you proceed. We have 20 minutes.
Mr Jeff Newman: My name is Jeff Newman. I'd like to thank you for the opportunity of speaking on Bill 75. I'm presently a consultant for Paradise Casino. I'm also on several boards for local non-profit groups in the town of Fort Erie. We do the charity three-day roving casinos throughout Fort Erie.
Seventeen months ago, the Gaming Control Commission implemented a new game of chance called hold 'em poker, which we feel saved the charity casino industry. When contacted about Bill 75, our charities and myself welcomed it with open arms. We feel the funds that would be raised will help us continue with our programs throughout the town of Fort Erie. We feel the VLTs will be tightly regulated and it would help put us on a level playing field with the government-run casino in the city of Niagara Falls.
Many jobs will be saved because of this bill, but I have one concern, and that is that the timing of the VLTs is crucial when they are brought into play. We feel that when the VLTs are brought into the racetracks throughout Ontario, if they're brought in prior to the opening of the 50 permanent charity casino locations throughout Ontario, this will definitely hurt our industries. Many customers ask us on a daily basis, "When are the VLTs coming?" Our customers will definitely be VLT players, and all we're asking for is to be put on a level playing field.
As far as the bill itself is concerned, for a quick recap, we are definitely in favour of it. We feel that the funds raised will help many charities throughout Fort Erie, as well as throughout Ontario, sustain their programs. Many of these programs are not government funded and the only source of revenue they have is through fund-raising. Again, the only thing we ask is that when the 50 charity casinos are to be opened, we request that that be the time the racetracks throughout the province of Ontario -- that they be issued at the same time. That is our only concern about the VLTs.
I thank you for the opportunity of speaking to you, and I'll take any questions.
The Chair: Thank you, Mr Newman. We have approximately three minutes a caucus.
Mr Crozier: Good afternoon, Mr Newman. Your request is very clear. One of the things we've suggested to the government in this whole issue is that we have to go slowly enough that it's done right. The government has also said this, that they want to implement it in such a fashion that they won't make some of the mistakes that have been made in other jurisdictions, albeit that the government is in such dire need of cash that they can't delay too long. On the one hand, time is of the essence, and on the other hand, they say they want to do it right.
The problem you present to them, by asking -- I just want to get your idea of the timing of it. If they do the racetrack introduction and the permanent charitable casino site introduction at the same time, there has to be a lot of work done to lead up to that. In other words, they have to decide how many and where the charitable casinos are going to be. There has to be application made via the permanent charitable casinos. They have to treat everybody fairly and go through all those applications. We've got 300 bingo halls possibly that have been told to apply for these 30 to 50 charitable gaming sites. Goodness knows, I hope, since you've had a roving one, that you have a fair chance of getting one of the permanent ones, but you've got this competition from 300 possible bingo halls. Racetracks have said that they'd like to have charitable bingo halls there.
So all of this has to be done, and that's all going to take time. I'm not so sure that the racetracks will be as patient or will be patient at all. What's the time frame you'd like to see this in?
Mr Newman: The time frame I'm looking at, in a nutshell, is that they all be opened at the same time, whatever length of time it takes for the processing, for screening the operators for the full-time charity casinos. As we're all quite aware, the industry itself has gotten so cutthroat, in terms of the charity casinos, that some people are doing things that are against the rules, and until they're actually caught red-handed, it's making it tough for a lot of people. By implementing the permanent sites, that's going to eliminate all the shenanigans going on out there, so in turn, our charities are going to get their fair share.
As far as timing is concerned, we would like to see it being done at the same time. In other words, if a charity casino is located in Toronto, Fort Erie, anywhere else, we would like to see that the VLTs are implemented at the same time as the racetracks, as well as the permanent sites.
If one is open prior, we feel our industry will suffer greatly. In other words, if racetracks are the first phase and they're the only ones that get them, and then for us to try to survive on a three-day roving charity casino, we feel our industry will be hurt. If they're implemented at the same time, with the level playing field that will give us, we feel we will be able to compete and survive and our charities will be able to fund-raise.
As far as the actual timing of when they're going to implement, if they're going to implement these VLTs throughout the province of Ontario, the time frame to me really is irrelevant.
Mr Crozier: How many roving charitable casinos are there at this time?
Mr Newman: How many different operators throughout the province?
Mr Crozier: Yes, operators.
Mr Newman: I haven't the foggiest idea. The company I represent operates in three different towns throughout Ontario, and we run on a daily basis. We run every single day in Fort Erie, we run every day in Hamilton and we run every day in Toronto.
Mr Crozier: Can the parliamentary assistant tell me? I'm looking for a figure. How many operators are there at present out there?
Mr Flaherty: I can probably find that. I know it's very difficult to regulate -- that's one of the problems -- because there are so many of them in so many places.
Mr Crozier: But do we know?
Mr Flaherty: I'll see if I can find out for you the number of roving casinos.
Ms Elizabeth McGregor: I know there are 9,000 days of roving casinos. I'll have to check on the actual number.
Mr Crozier: I'd just appreciate some time -- I just hadn't thought to ask the question before about how many operators there are like yours.
Mr Newman: I'm speculating somewhere between 40 and 50 operators throughout Ontario. A lot of them have gone -- in three words or less -- bankrupt prior to the implementation of the hold 'em poker game. That was about 17 months ago. Since then, that has definitely saved the industry.
What has happened with a lot of different places, even in Toronto, with just the blackjack itself, they've basically been blackjacked to death; they want more variety of games. And with some of the overheads a lot of people in the charities have to pay for, with the competition out there -- I know one place we left in Toronto, prior to the hold 'em poker we were paying $2,500 rent for three days; that same location now is $10,000. That's hurting the charities. With this on a permanent site structure, if they implement it similar to the bingo halls, I think that's going to give everybody a fair shake.
Mr Crozier: Is hold 'em poker like canasta, Mr Chairman?
The Chair: I was going to ask him. Why don't you ask him? I'll give you an extra 30 seconds.
Mr Crozier: I don't know what hold 'em poker is. What's that?
Mr Newman: Hold 'em poker is a game of chance where the house takes a percentage out of every pot. Eleven players are allowed to sit down at a table at any given time. It's a form of seven-card stud, but the house takes a percentage out of every pot.
Mr Kormos: It's called a rake.
Mr Crozier: The house gets a rake, right?
Mr Newman: Exactly. They get a rake.
Mr Crozier: Now I understand.
Mr Kormos: If you try that in your basement, you get busted.
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Do you really think there's going to be a charity casino in Niagara region?
Mr Newman: I'm hoping there is, for the simple reason -- and congratulations to the city of Niagara Falls for being chosen. But I really feel deep down in my heart that Fort Erie was definitely one of the front runners, as we have a 100-year history of gaming in the town; for example, the racetrack. I feel that we were one of the front runners and unfortunately we were not one of the ones that was selected on the border, so I figure, since we were one of the front runners for the government casino, we should have the opportunity of having a permanent charity casino.
Mr Kormos: I agree, Fort Erie was a front runner. I became increasingly impressed with the types of arguments that they were presenting. Tim Hudak tried as best he could but the Premier stiffed him. He gave it to Bart Maves.
Mr Klees: You know what that's all about.
Mr Kormos: Two rookie MPPs and you got to make a choice, and there you go. Bart got the casino, Tim got --
Mr Crozier: The shaft.
Mr Kormos: -- the shaft. That's the gold mine rules.
Because the casino operator in Niagara Falls is going to be investing a whole whack of money and that is going to be probably a far more lucrative, I'm confident of this, casino location than Windsor ever could dream of because of the natural tourist traffic through there. After investing that kind of money -- because what we've heard all day and all week and all last week is that nobody wants to share. Do you really think that the casino operator in Niagara Falls, with a multimillion-dollar -- I don't know how many millions of dollars they're going to spend -- is going to put up for one minute with a competitor 20 minutes down the road?
Mr Newman: I don't think the people themselves have really got too much to say in the matter. I really feel that the people themselves, a lot of people in the Niagara region who have been employed by numerous operators, are not going to be employed by this group. So in turn, you're going to hurt a lot of jobs. Also, if I'm not mistaken, the moneys are going to the government coffers, if I'm correct, where none of it is going to the local non-profit groups. There are a lot of groups in this area that rely on that funding and I'm sure, at least I'm hoping, the government will recognize that fact and give one or two, if not three, somewhere throughout the Niagara region because we need the jobs and the non-profit groups definitely need the funds.
Mr Kormos: Hope springs eternal.
Mr Hudak: Perhaps Mr Kormos could help me with some lessons on how to get closer to a Premier in Ontario.
Mr Kormos: Now, listen, I was able to make choices about whether or not I wanted to be in the back pocket of a Premier. You're just along for the ride. You have no idea what you're doing there, you're just happier there.
Mr Hudak: Mr Newman, we had some interesting meetings after the casino was announced in the falls and you know I supported the casino for Fort Erie. We didn't get it, but rest assured, we're going to fight for one charity event site for Fort Erie and that's why I support this legislation.
Let's talk about that for a second. Let's talk about the charity event site in terms of how it works right now with these roving Monte Carlos. In your opinion, are the charities currently getting their fair share of the money throughout Ontario from the roving Monte Carlos, or would we better off with a permanent site, do you think?
Mr Newman: I think the bottom line is definitely you should have a permanent site. I'll give you a real quick -- for the small town of Fort Erie, with running 10 events a month, just on rentals alone we are paying in excess of $15,000. Based on our split with our charities, that's 60%; 60% of that revenue could be given to the local non-profit groups. The advertising -- a lot of the players are not aware of where you are. We'll float. One day you're here, one day you're there. I think the permanent site should be done.
Mr Hudak: Especially considering, if I understand correctly, you have a large number of American customers who may have some trouble finding out where the charity event site might be on a given night. But you make it a permanent site, you advertise, you set up the decor nicely, and you're saying that it will be of substantial benefit to the charities in Fort Erie and the area.
Mr Newman: I agree wholeheartedly. Seven or eight years ago, who would ever think the town of Fort Erie could sustain four bingo halls. By putting them in permanent sites and the people are fully aware of where they are, they're normally quite busy, and thank God for the industry itself and thank God for the revenues it's raised for the non-profit groups.
Mr Hudak: One more thing to bring up, and I don't mean to offend the business, but we've heard this. I certainly don't agree with this and Mr Flaherty calls this the neo-prohibitionist viewpoint. There are some people who come before the committee and some -- not Mr Crozier but other members of the opposition -- who look down their noses at what you do, who say that you're taking advantage of the poor and the desperate in society and that we shouldn't have any kind of dealing with types of individuals who work in your establishments. So are these charity event sites, these Monte Carlos, filled with these kind of individuals or are they average working people trying to raise their families, save up money for school? What do you think about that, Jeff?
Mr Newman: I've had this discussion before with people in the past and I've said to them all, "Please, one time, before you make a decision, come to our casinos and find out who the clients actually are." Such a cross-section. The majority of my customers here in Fort Erie are definitely from the States. We have lawyers, we have doctors, we have prison guards, we have police officers, insurance agents. These are the people who basically can afford to come anyway.
Mr Hudak: In terms of the people who work with Paradise Casino and other establishments like it, if we followed what the opposition wants us to do and some other groups and banned this type of gambling in Ontario, what would happen to those people and their families, people who work every day in your establishments?
Mr Newman: With our company itself, for Fort Erie alone, we have 75 people who are employed on a full-time basis and approximately 25 to 50 on a part-time basis. There's such a cross-section of people. These are single mothers who are working, who have taken some sort of training, whom we've hired. These are grandparents. We have a gentleman who has spina bifida, where, let's face it, he probably would not get a job anywhere else. We have given him the opportunity. It turns out he's one of the best dealers we actually have. These people here, if this was ever shut down, would be going to the welfare office.
Mr Hudak: Anybody else I could pass my time on to, any other member of our committee, or else I'll ask another question. If nobody else on our side, maybe I could ask again about your customers in the future.
There are different types of customers that go to different events. Are you going to be competing with the break-opens, with the bingos, or with the 15 million visitors coming to Niagara, staying overnight with Casino Niagara, with the American customers, I think 1.1 million people within a few hours' drive? Do you think it's an issue of what the opposition would say is cannibalization or do you think this is an opportunity to grow the business so that the track and the charity event sites can benefit?
Mr Newman: I think it's an opportunity where everybody, if marketed properly, could capitalize on other people coming in. I don't want to get into bingo versus the charity casino versus break-open tickets, but a classic example, one of the locations in Fort Erie where we do have a charity casino is upstairs of a bingo hall. Talking with the owner of that, neither of us is being affected by it. I personally feel that bingo players are bingo players and the charity casino -- the majority of the industry now is hold 'em poker players. That's their own breed. That's a totally different ball game. Break-open tickets, we don't have them in the charity casinos, so I couldn't really give you a stand on that.
Mr Hudak: In terms of the revenues from the charities, what's your view on this? What do you think your friends in the charities would advise? Do you want to see a central fund set up in Toronto where you would apply for a grant to get that money or do you think the money that's raised in the Fort Erie area should go back into Fort Erie area charities?
Mr Newman: Being a member of several groups, I would obviously like to see it stay in Fort Erie, depending on how it's done. If it's like how we do it right now, where a charity is allowed to do fund-raising for a three-day event and they're only allowed to do that twice a month, if it's similar to, I would say, a bingo, where this day is your time spot and that's your fund-raising and whatever splits the government has worked out or will work out, that's fine. If it's something along the lines of VLTs -- I don't know whether they could be monitored on a daily basis, maybe a monthly basis -- then what I would suggest is it would be divided among the groups that actually ran it for that month, something like a super bingo. If I'm correct, it's to divide it up monthly among them on a time for each group that ran it. As far as centralizing it to Toronto, I might have a bit of a problem with that. I'd rather see it stay locally.
The Chair: Mr Newman, thank you for your presentation here today.
PORT COLBORNE COMMUNITY ACTION
The Chair: The Port Colborne Community Action, Mary Ellen DuPon. Welcome, Ms DuPon, and my apologies for taking you out of order and making you wait 20 minutes. There's been some confusion here today.
Mr Crozier: All on the government side.
The Chair: My apologies to you. I'm pleased you're here, if you could proceed.
Ms Mary Ellen DuPon: Thank you. I appreciate the opportunity of being able to present today. I am Mary Ellen DuPon, a member of Port Colborne Community Action. Port Colborne Community Action is a group of citizens from the Port Colborne area who have concern for the wellbeing of our community. As members of the public, we are here today to express our concerns with video lottery terminals and the establishment of VLTs in our community. Quite frankly, we do not wish to see VLTs become a commonplace part of our society. We do not support the widespread use of video lottery terminals across the province of Ontario.
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Patrons of casinos and racetracks can attend those specific locations to gamble. If VLTs are to be located anywhere, then perhaps racetracks or casinos would seem to be a more logical site. A member of the community who chooses to attend a racetrack or a casino at least knows that he or she is at a location where there is gambling. If I attend a restaurant or another licensed establishment, I'm not necessarily choosing a location where gambling takes place. When we have our families with us, many of us do not wish to expose our children to gambling and VLTs.
I personally do not wish to make gambling seem like an everyday happening. This exposure on a local basis to this persuasive form of gambling seems only to legitimize gambling to make it an accepted form of recreation. From my own personal experience with charity casinos, as a board member of an organization that hosted a charity casino, I saw at first hand the effects of gambling. It made a lasting impression on me. Gambling is in no way a fun thing to do. Those people attending the charity casino did not seem to be having fun; in fact few of the patrons walked away as winners.
As a member of a non-profit agency, the group that was involved with the charity casino at that time agreed that we would never again be involved in gambling. We feel there are other ways to raise money to fund-raise in our community. We feel that the addition of video lottery terminals only ensures that most players lose money and the only way we can say it is they seem to ensure this. As a community action group, we have great concerns about that and we don't wish to see that happening in our community.
That's basically my presentation. I've watched the committee hearings on TV and I haven't often seen a lot of community groups or ordinary people making presentations, and that's why I felt compelled to come here today as a representative of my group.
The Chair: I'm pleased you did. We have five minutes per caucus and we'll start off with Mr Kormos.
Mr Kormos: Ms DuPon, one of the concerns that has been expressed is the sort of message that this gives to people in general, and that is that you don't work to achieve a goal; you pursue your goal and your dream proverbially with a roll of the dice, literally with the flick of the wrist and the flop of a loonie into a slot -- the illusion of winning when in fact we know that there are no winners, there are only losers in the gaming industry, other than the people who own the gaming industry. Do you have concerns about that type of message, that type of image?
Ms DuPon: That's probably one of the main concerns we would have, that basically you're sort of buying into a dream when you put your coin into that machine. That's certainly not the image we want to see in our community. We want to see people being able to work, to have jobs, and that's the way they would buy into their dream.
Mr Kormos: I know.
Ms DuPon: We just have this idea that if you see the VLTs all over the place, it becomes a legitimate way of trying to make money, and we know you don't make money, you lose.
Mr Kormos: Knowing that the government has a majority of members, that ever since -- where's Bill Murdoch? Ever since he got his wrist slapped over being outspoken about the government's ability to fund education, and another colleague -- ever since those two got taken into the woodshed, short of my good friend Chris Stockwell, we haven't seen government members prepared to speak up and stand up to the government.
Mr Rollins: You weren't in the woodshed.
The Chair: He was in the woodshed.
Mr Kormos: Noting that, we know that the legislation is going to pass. I'm not going to vote for it. I doubt if the other opposition members are going to vote for it either; I doubt very much. But we are going to be proposing amendments to try to make the best of a bad thing.
What about signs in visible lettering on each and every slot machine telling people that your chances of losing are far greater than of winning and that the longer you play the more likely you are to lose? Would that be some modest way -- because I'm afraid of these machines -- would that meet your approval in view of the fact that we're going to have live with these slots one way or another?
Ms DuPon: It would be better to project a negative image than a positive image, and the fact that you're saying that if the machine had the sign, the message that said you have more opportunity to lose, then that would do that.
Mr Kormos: What about a sign that clearly indicated that out of every dollar you spend on this machine X number of dollars is going to the owner of the machine, X number of cents is going to the government of Ontario etc? Would you advocate similarly a breakdown of letting people know where each and every penny that they're feeding that machine is going to go?
Ms DuPon: I think that would be a benefit as well. You should know where your dollars are going.
Mr Kormos: In you organization I trust you deal with the concept of healthy communities among other things?
Ms DuPon: Yes.
Mr Kormos: Earlier today we heard from Heather Scott and her colleague from the New Port treatment program, who didn't want to get involved in the debate of pro- or anti-slot because they saw that as a moral issue. I'm sure it is a moral issue. Do you also see it as a public health issue in the context of healthy communities?
Ms DuPon: I certainly think it would be part of a healthy community image. I don't know where anyone can say that gambling is healthy for the community. It only creates losers; very few winners.
Mr Kormos: Another phenomenon is that wide-open gambling jurisdictions -- with 20,000 slots I don't know how you couldn't call Ontario a wide-open gambling jurisdiction -- especially with slots, organized crime is attracted like flies to cowflops. Do you have concerns about the fact that this government's basically going to be sending out an invitation to the mob, to organized crime, in communities where they've got these slots spread helter-skelter?
Ms DuPon: I think the history of gambling has shown there's always been an involvement of organized crime, and if we have widespread usage, I just don't know how you can build controls in the system that will prevent that.
Mr Kormos: Now it's the government members. They're going to try to persuade that this is a good thing, that it's good for you too and that you should enjoy coughing up loonie after loonie to finance a government that's increasingly morally bankrupt and needs to pick your pockets.
Mr Rollins: Paying off your debts, Peter.
Mr Murdoch: Who put us in debt, Peter? What government put us in debt?
Mr Rollins: Who opened casinos?
Mr Kormos: With these yahoos howling and squealing -- it's remarkable how when I get close to a nerve they just shriek out in pain.
Mr Murdoch: It's when you don't happen to tell the truth; that's what happens.
Mr Kormos: Go ahead, watch this.
The Chair: Thank you, Mr Kormos. We'll move on to Mr Flaherty and Mr Klees.
Mr Flaherty: Chair, if I may, because of the outlandish statements of Mr Kormos, I have to yield a moment or two to Mr Murdoch.
Mr Murdoch: I understood that somebody mentioned that when we got in trouble we wouldn't be speaking out. First of all, I never get in any trouble for speaking out against the government, and if I don't like something I'll be doing it again too. I want to make that quite clear to Mr Kormos.
Mr Kormos: Oh Billy, God bless you. You're my kind of man. They need more of you over there.
Mr Rollins: Another fellow who spoke out too was me, and I didn't get in any trouble either. I didn't see you in the woodshed, Peter.
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Mr Flaherty: I listened carefully to your presentation, and I would like to ask you about what it is you're really opposed to. First of all, we have video lottery machines in the province of Ontario. Right now, we have somewhere between 15,000 and 25,000 so-called grey machines operating in the province. You mentioned the involvement of organized crime in gambling, and that's always been a concern of every jurisdiction that's addressed it, but you can guess who's getting the revenue now from those 15,000 to 25,000 machines. It's not the government of Ontario and it's not the charities of Ontario. It's not any worthwhile cause and it's not going to treat gambling addiction. The evidence we've had before this committee is that money is leaving the province. That's a grave concern to the government of Ontario.
Do you know what break-out tickets are?
Ms DuPon: Yes.
Mr Flaherty: You see them all over the place, corner stores, everywhere -- a form of gaming?
Ms DuPon: Yes.
Mr Flaherty: Are you against those?
Ms DuPon: I have grave concerns about the break-open tickets as well, personally speaking.
Mr Flaherty: These lottery tickets that are sold all over the place?
Ms DuPon: I personally rarely buy lottery tickets.
Mr Flaherty: So you don't like those either? Sport Select tickets?
Ms DuPon: I have no knowledge of them.
Mr Flaherty: They sell them in the stores too and people bet on sports events by picking things. What about casinos?
Ms DuPon: I have concerns with gambling.
Mr Flaherty: Racetracks, where people bet?
Ms DuPon: I would say personally that perhaps at a racetrack there's more opportunity, that you don't necessarily have to go there to gamble.
Mr Flaherty: Most people do, though, don't they?
Ms DuPon: I have no idea; I imagine a lot of them do.
Mr Flaherty: I understand your concern with gaming. I think all of the members of this committee of any political party have similar concerns because we care about the welfare of our neighbours, speaking generally. I must suggest to you, though, that the majority of the people of Ontario, the vast majority, tend to behave responsibly and that, similarly, a majority of the people in Ontario consider the kind of gaming that I've just gone through with you, racetracks right through these break-out tickets and picking winners of hockey games and so on, to be a form of entertainment or fun. You and I or some members of the committee may not share that enjoyment from buying break-open tickets. I've never bought one but I've seen people use them, and it doesn't really excite me in any way.
What I'm getting at is, what is the role of government in this situation? Our government's view is that our role is to make sure that gambling is strictly regulated in the province; that gaming such as video lotteries, which is already here, is turned to the profit of the people of Ontario and the charities of the people of Ontario rather than to illegal sources; and that it be brought in in a phased and staged way with very serious penalties for those who would disobey the law.
If one accepts that this form of gaming is acceptable to the majority of the people in the province as a form of entertainment, then do you agree with the controlled, phased-in, cautious approach that the government is taking?
Ms DuPon: I'd have to answer that on two levels. I don't necessarily believe that two wrongs make a right, and even though there are illegal machines in the province already, by the government legitimizing newer machines, whatever, it just makes it more commonplace.
Mr Flaherty: What about alcohol? Should we ban alcohol in Ontario? It hurts a lot of people; 1% to 2% of the population gets addicted to it, like gambling. Should we ban it?
Ms DuPon: That's a long-standing problem that can't be cured within a day or two, or a year or two, or a century or two.
Mr Flaherty: So is gaming. Human nature doesn't change, does it?
Ms DuPon: No, it doesn't, but I don't think you should make it as accessible as possible.
Mr Flaherty: Then should we only sell alcohol on Tuesday mornings from 8 till 10 and only in Toronto?
Ms DuPon: If we could just sell alcohol in the LCBO stores, we'd be quite happy with that. I don't think we should privatize those.
Mr Flaherty: What you're advocating is the prohibitionist view, which, with the greatest respect, simply has not worked anywhere it's been tried in the western world. We had more people die of alcoholism during Prohibition than since Prohibition, because what happens when you drive an activity underground is that the suffering of the vulnerable increases rather than decreases. It's an interesting phenomenon. Thank you for coming today.
Mr Crozier: Good afternoon. I don't know whether I should apologize for how patronizing we can get sometimes, but sometimes we can. I'd like to ask the parliamentary assistant if you could provide the statistical data that shows that more people died during Prohibition due to alcohol than since. I'd like some research. Do you have any research data?
Mr Flaherty: I'd like to see your research in support of your allegation in this press release. Let me see your research that supports the misrepresentations in here.
Mr Crozier: I'll provide you with my written background for that.
Mr Flaherty: I'll look forward to seeing it. Let us know what your position is on the bill, will you, what it is each day, before we start each day.
Mr Crozier: My position on the bill is that I support the location of VLTs in racetracks.
Interjections.
The Chair: Mr Crozier has the floor.
Mr Crozier: I do not support it in bars or restaurants that are licensed. It's very clear.
Mr Flaherty: What's Mr Kennedy's position today, the absent Mr Kennedy? Is he out campaigning again for the leadership?
Interjections.
Mr Crozier: Chair, could I have your help?
The Chair: Yes, you can, Mr Crozier. It is late in the day, but Mr Crozier does have the floor. He has listened attentively without interrupting anyone for most of today, and he deserves the same consideration from this committee.
Mr Crozier: What I'm asking, Chair, is something that's quite normal on these committees. The parliamentary assistant represents the minister, the parliamentary assistant has made a statement, and I merely would like him to provide me with the research data that support his statement or withdraw his statement, one or the other.
Back to your statement: By and large, I understand, appreciate and sympathize with your position. Earlier on, it was mentioned about the illegal gambling and gangsters. I read this into the record before, but you may not have been here. The government will say that to rid ourselves of these illegal gambling machines we're going to make it legal. But Goodman, in a research paper in 1994 entitled Legalized Gambling Strategy for Economic Development, said, "Organized crime remains an active provider of gambling products in its own market niche." Rose, in a paper, Gambling and the Law, said expanding legalization increases the number of people who gamble and provides organized crime with access to a larger consumer pool. He went on to say:
"In the words of a former Chicago mobster: `There always existed one solid constant. Any new form or expansion of legal gambling always increased our client base. The stooges who approved Las Vegas nights, offtrack betting, lotteries etc became our unwitting front men and partners. The publicity gave people a perception of gambling as healthy entertainment.'"
Those are two research papers that made that statement. I want to inform you of my opinion on this. Earlier you said that people don't want to take their children to an area where they're exposed to gambling. In those licensed establishments that opt into the VLT game, you won't be able to take anyone in there under the age of 19.
Mr Flaherty: That's not accurate; that's not what the bill says.
Mr Crozier: Excuse me, sir; I haven't finished yet. I said that those that opt in, and some of those are family restaurants, if they want to have the gaming as part of their restaurant area where you can play a game at your table or your bar or whatever, depending on where they define that area and what pressure they feel from competition, may not be family restaurants any more. I emphasize "may not be"; it's a choice they'll make. They may have it in an separate area, but if those games are in the area where liquor or food is served, they won't be able to entertain or have anyone under the age of 19. It's my understanding only those who work there perhaps as busboys or buspersons will be able to.
Your concerns are valid. I, like you, wish some things weren't the way they are, but I appreciate the fact that you came forward to express how you feel about it. I don't think your position needs to be belittled at all. I congratulate you for feeling the way you do.
The Chair: Thank you, Ms DuPon, for attending today.
Mr Kormos: If I may, the Chair has ruled these types of queries or inquiries in order before. As you know -- this is a follow-up to the comments Mr Crozier made -- Mr Flaherty is the parliamentary assistant to the Minister of Consumer and Commercial Relations. The Minister of Consumer and Commercial Relations and that ministry are responsible for the supervision of the LCBO and the LLBO as we know it now, responsible for the distribution of alcohol and spirits and the regulation of their sale within the province of Ontario. The parliamentary assistant said today that more people died from alcoholism during the period of Prohibition than died in a regime where there was no Prohibition. For a parliamentary assistant to a minister responsible for the sale and distribution and alcohol, and who has the responsibility to do so in a way which protects vulnerable people from the ravaging impacts of alcohol, it is a most alarming thing.
Mr Crozier attempted to persist in asking Mr Flaherty to please provide a source for that observation. It certainly couldn't have been a personal or anecdotal experience, because Mr Flaherty simply isn't old enough. I too would be interested in that. If that's the case, so be it, but for the parliamentary assistant to the minister responsible for the sale and distribution and regulation of alcohol in this province to make that sort of statement off the cuff I think is a very serious thing. It reflects seriously upon the government. Certainly I think people like Mothers Against Drunk Driving, People to Reduce Impaired Driving Everywhere, a whole bunch of concerned advocates on behalf of victims of drunk drivers are going to be very interested in what he had to say. People who work in addiction research, Alcoholics Anonymous and other things will be interested in that information.
I am formally requesting, and I believe I join Mr Crozier -- Mr Crozier initiated the request -- that Mr Flaherty, as parliamentary assistant, provide his source or some authority for that very bold and interesting statement. He may well be right, in which case he should be pleased to provide the authority or the source. I'm interested. I think that's a legitimate query to make of Mr Flaherty, a legitimate request of two representatives.
The Chair: Thank you, Mr Kormos. You've made the request to Mr Flaherty.
Do you wish to say anything at this time, Mr Flaherty?
Mr Flaherty: I have a point of information on something that came up earlier.
The Chair: Do you want to provide that today or some other day?
Mr Flaherty: Now, if I may.
The Chair: Please proceed.
Mr Crozier: Just a point of order first: What is the point of information?
Mr Flaherty: You asked a question about Monte Carlo events and the number of operators.
Mr Crozier: I thought it had to do with the procedural matter.
Mr Flaherty: No. The information is that there are 103 companies registered as gaming service buyers, that is, charity casino operators, of which 52 run Monte Carlo events. Mr Murdoch: Pretty good service, eh?
Mr Crozier: Yes.
The Chair: For the purpose of the record, the clerk has ascertained that the 5:20 appointment would be highly unlikely to be here on time from their office, so we will be adjourning at this time to 9 am in Toronto, the Macdonald Block, room M2-17.
The committee adjourned at 1723.