Winners and Losers

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Part One: A tax on the poor

Theres an excellent column by Russell Wangersky in Tuesdays Telegram, in which he tears a strip off the gambling industry and those who profit from it. It seems that some governments across the country are poised to enter the online gambling business because, well, other people are making money at it.

You can read the full column here.

Wangerskys commentary got me thinking about legalized gambling, something Ive been observing with some bemusement since 1973, when the Government of Canada launched Loto Canada to help pay for the 1976 Montreal Olympics. The provinces got into lotteries around the same time.

Back then, it was rigidly controlled. Lottery advertising was permitted, but the ads were informational, stating in plain text how much the prize was, dates of the draw, and so on. The odds of winning were actually there, in the fine print.

But those understated lottery ads fell out of fashion as governments, realizing what a cash cow lotteries were, relaxed rules on advertising in favour of the hard sell. Nowadays, big bucks are thrown at creating sophisticated advertising in which the lure of winning is almost irresistible. Sometimes, its done with bad humour, as with the happy dance ads, or the couple in the small Toronto apartment (Atlantic Canada where a million goes a long way).

But the most insidious ads use emotional triggers to put you in the winners bubble to create, for a moment, that wonderful illusion of being instantly rich. They use professional actors, writers, directors and production standards to make you experience, firsthand, the joy of winning millions.

There was the family on the dock, where the father smug in his riches gave a spectacular cottage to both of his adult children. Who hasnt watched that one without thinking, Yeah, me too!

There was the group of workers in the boardroom, who learn that their office pool has won. Now this ad is slick; I counted something like 27 cuts from face to face to face, all reflecting the euphoria of winning in a 30-second ad. An expensive production. And its hard not to be moved by it.

For regular folk like you and me, these ads taunt and tease us with the dream of financial security, dangling it carrot-like in front of our faces. They do everything in their power to make us think we will win, without explicitly guaranteeing it, and do nothing to manage our expectations about winning. Is there any reference in these ads to odds against winning a million? Nope. Not even in the print ads, where there would be space for it. Such transparency is not good for sales, after all.

Yes, there is a section about the odds of winning on the ALC web site. But even here, the wording is managed carefully to avoid dampening your enthusiasm. Heres the opening paragraph:

ALC offers a wide variety of entertaining games that offer a chance to win prizes ranging from a free ticket to millions of dollars. Part of ALCs mandate for offering our products responsibly is to help players understand the odds of winning our games. The one thing all games have in common is that winning or losing is based on randomness. While the dream of winning is exciting, its important to keep in mind what the true chances of winning the top prize are.

By working so hard to dodge the truth in that last sentence, theyve actually lapsed into bad grammar. They should have said, While the dream of winning is exciting, its important to keep in mind that the actual odds of winning a big prize are extremely remote.

But the truth hurts, doesnt it? And it doesnt sell lottery tickets.

Yes, we are talking about lotteries here, probably the least harmful of the various gambling products. But imagine if equally powerful ads were deployed to market video lottery terminals (VLTs). That would be like promoting booze to alcoholics, or crack cocaine to street gangs. Why is it okay, then, to push lotteries so aggressively on us working stiffs?

Heres why: because lotteries are a tax on the poor, and revenues to government increase when more people buy tickets.

And dont get me started on those break-open games.

Who hasnt stood in line at the convenience store, while the person in front holds up the show, snapping those things open, tossing the occasional winner back on the counter and exchanging it for another handful of tickets.

I will never forget the day, more than a decade ago, when I stood behind such a woman at the Irving in Manuels. A long line had formed behind her before she finished and stormed out, leaving the garbage bucket overflowing with spent tickets.

Shes the last person who should be doing that, the cashier said to me, in a quiet voice. I know her. She does this whenever she gets her welfare cheque. I feel bad for her children.

Sounds like a welfare stereotype, I know, but its a true story and I suspect its not an isolated case. This really is a tax on the poor.

And then theres VLTs, the nastiest, most sinister form of legalized gambling. Weve all heard about families broken by VLT addiction, individuals who stole from their employer to support their habit, and people who killed themselves because of their addiction. These stories are not isolated cases they occur with some regularity. And it is a great shame that our governments, addicted to the revenue themselves, allow this travesty to continue.

Tomorrow, part 2: A call to action.

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  • Pamela
    July 27, 2010 - 14:54

    In my time as a small store owner/operator in outport NL I have seen it all when it comes to "small time," gambling. Those "rip offs," as we called them, are exactly that and while there are winners in each box, it is devastating to have the bigger prizes awarded out of a newly opened box when you still have hundreds of non winners left to sell. Imagine, handing out 20 bucks (and more) worth of those rip opens at a time, knowing there are no winners among them besides perhaps a free ticket or a five dollar winner, to people you know personally who really could spend that 20 (or more) elsewhere on better things. At the same time, you also know you need to make your money back and sell those useless tickets. Still, you feel like a criminal.

    It would break my heart to see how someone, with literally their last 50 cents, genuinely hope that the ticket they are about to break open will provide them with the next batch of groceries. I have seen one family; who had their heat cut off in the fall and constantly sent their daughter to school with nothing to eat, cash in 20-30 bucks worth of winning scratch tickets and spend the winnings on, you guessed it, more tickets. Now, usually, the ones who bought these tickets also were our best customers when it came to beer and cigarette sales. The cycle doesn't seem complete without the whole package. What can you do?

    I have personally known individuals who couldn't make vehicle payments because they lost it in one of those VLT's and I know of three individuals who were driven to suicide because of them. One death was a direct result of a gambling addiction and while the other two who died certainly had other issues, gambling and the money troubles that came with it were factors.

    From what I experienced over the years, about 5 percent of the population keep small community based stores going in lottery ticket sales. The rest are a mix of occasional users or never buy's. One thing that I would have liked to see is some kind of lessoning of pressure to sell those tickets. As a store owner you pay upfront for what you have opened to sell, for small stores that is a financial drain so if someone wants to blow their last few bucks on tickets, yee haw. Used to be worse, with more pressure to sell. You used to have to pay for the lot of what you had onsite, so if you carried four types of tickets you were out almost 400 hundred bucks for what you had displayed plus another few hundred for what you carried in inventory, but that changed a few years back and your inventory isn't paid for until activated.

    Store owners don't make much at all on those tickets at all. All around tragic, really. But, we always figured that if we didn't take that lotto money handed us someone else would.