Gambling and the local economy part 2


MoneySeventy three dollars. It’s not a large amount if you’re middle class, certainly not if you’re Conrad Black. But for others it can be significant. If you’re on minimum wage, it’s a full day’s wage, before taxes. If you’re a senior on a fixed income, it’s a week’s groceries.

It’s also the average amount a typical gambler spends at one time in a gaming facility in Ontario, according to the answers I got from my questions sent months ago to the OLG. The clerk gave me their answers last night, only after the discussion about extending the OLG deadline.

Seventy three dollars. It will get spent in 1.75 hours; the average length of a visit to a casino. That’s about $41 an hour.

When multiplied by 12.8, it totals $934.40. Twelve-point-eight is the average number of times a typical gambler visits a gaming facility in a year. The average gambler will spend almost $1,000 every year in a gaming facility.

Again, it’s not a stunning amount. If you have some discretionary income, it’s equivalent to a mid-level laptop computer, an iPad maxed out with all the accessories, a good, flat-screen TV, a good custom-made ukulele, a case of premium scotch or tequila. An air flight to Mexico or Cuba. Or for others, it’s a month’s rent. Three months’ car payments. Groceries for a family for two months, maybe longer. 

Problem gamblingConsider the potential problem gamblers here in Collingwood. I estimated them to be about 700 people in my last blog post on gambling, based on the percentages OLG provides.

Multiply 700 by $934.40 and you get more than $654,000.

Assuming these 700 people attend a local gaming facility (a windowless warehouse with up to 300 slot machines – the OLG gets prickly if you refer to them as “slot barns”), and spend the same amount as average gamblers, Collingwood’s problem gamblers could spend $654,080 a year in a gaming facility. But of course, they will probably spend more, because they’re problem gamblers. I’ll come back to that.

And what about those others who are  not problem gamblers yet, but are “at risk” from becoming problem gamblers? That’s about 1,200 more local people. If they are also “average” gamblers, they will spend about $1.2 million annually in the facility.

Add these two groups together – the smallest percentage of gamblers but the most problematic - and they will collectively spend almost $2 million a year in a local gaming facility. That’s money not going into the local economy.

Well, okay, five percent of it will come back to us: the town will get about $93,000 from our problem gamblers. For every ‘average” person who attends a potential gaming facility, the town will get $49. Win or lose, we tax you for playing.

Let’s say our problem gamblers spend the same amount per hour ($41), but stay three hours per visit, instead of the average 1.75. That means they could spend about $125 per visit, or $1,600 a year – about $1.12 million a year for those 700 people. And then there are those “potential problem gamblers…” If they spend 3 hours per stay, we get more than $3.1 million spent by 2,000 Collingwood residents.

You can endlessly speculate on these figures, guessing how much people will spend versus how much intervention a gaming facility will use to keep them out. There’s no concrete number we can use, no absolute figures. Just realize that the potential exists for local residents to spend a lot of money gambling.

Personally, I would rather see that money spent at local stores, eating at local restaurants, buying food, furniture, books, musical instruments, cameras, clothing, pet supplies… but with the OLG launching online gambling n 2013, the money may be spent outside local businesses even without a slot warehouse in town.

You can use these numbers to work out a few possible numbers about attendance. If, as the OLG suggests, the town might get $1 to $2 million a year, a gaming facility would need to bring in between $19 and $38 million a year for us to get our rake-off.*

To get $19 million, at the average $934 a year, you need more than 20,000 people gambling there every year. You need more than 40,000 to get $38 million. To get the unsupported-by-OLG-but-often-quoted-locally figure of $3 million per year to the town, you need to have 60,000 “average” gamblers annually.

That’s a lot of wear and tear on our infrastructure. Twenty thousand more cars a year on the highway and on local roads. Or forty, even sixty thousand. And more…

Twenty thousand people at a year-round slot barn averages to 55 people a day. Not very many, especially for 300 slot machines. Forty thousand means 110 gamblers a day. But of course the visits will not be homogenized, but bunched at holidays and weekends (yes, these facilities are open Christmas and Easter…).

And of course averages are just snapshots of the middle ground. there will be people who spend less, other who will spend more. Some will come for a couple of hours of entertainment and spend $25. Others will spend a full day in front of a machine pumping quarters into its ever-hungry mouth.

A municipality needs to plan for the days when the slot warehouse will be full, with people coming and going 24 hours a day. We’ll need every penny of that revenue to upgrade and widen roads, install traffic lights, hire more police and bylaw officers to control parking and speeding…

I have yet to be convinced by any argument that a “gaming facility” offers any significant benefits to the town aside from a handful of hospitality-sector jobs.

Gambling cycle
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* According to the OLG, it already takes approx. $6 million a year in Collingwood from net sales of lottery tickets at the 22 locations that sell them here. This would be on top of that.