Charity Role in Canadian Gambling

While few Canadians cite funding charities as their motivation for gambling, Canadians do strongly believe that charities should be the primary beneficiary of gambling’s proceeds.Canadians indicate that 60% of gambling proceeds should be targeted towardcharities–significantly more than current levels. Overall, gambling is seen as an acceptable way to fund the charitable sector.

Charitable involvement in gambling in Canada started with raffles and bingo in the early 1900s. For most of this century, charities and exhibition associations were the sole operators of gambling permitted by CanadaÕs Criminal Code. However, this changed in 1969 when the Federal government modified the Criminal Code to allow governments to conduct lotteries.This decision brought an end to the charitable monopoly over gambling and has subsequently given rise to a gambling system that is primarily operated by provincial governments. Despite this change, charitable gambling revenues have grown dramatically. In 1997, more than $700 million was generated through charitable gaming.

Charities have also been co-contributors to the expansion of gambling. They have successfully lobbied governments to protect their interests when considering new gambling policies. As a consequence, provincial gambling expansion programs are often accompanied by an expansion of gambling opportunities available to the charities. Additionally, when provincial gambling expansion replaced or made redundant one form of gambling for the charities, provinces have set up gambling profit-sharing schemes to offset revenue losses and appease the charitable sectorÕs concerns.

Reliance upon charitable gaming revenues can present challenges for some charities, as some organizations have expressed concerns that they may be contributing to social problems. In addition, because of its reliance upon gambling revenue, the charitable sector risks being used by government to justify the expansion of gambling. Public attitudes related to charitable gaming are explored in the following section.

Of the $5.4 billion in net gambling profit (after expenses) generated each year in Canada, charities will share between15-20% of the revenue. This total includes revenue generated directly from the operation of charitable games and lottery grants available in some provinces. The remaining 80-85% of revenue is retained by the provinces to fund programs and special projects, and to pay off debts. Although exact figures are unknown, charitable gaming revenues as a portion of total revenue derived from gambling have decreased steadily over the last ten years. Across Canada, it is the provinces, rather than the charities, who have been the primary beneficiaries of gambling expansion.

This pattern runs contrary to public opinion. When asked “who should primarily benefit from the proceeds of gambling,”43% of respondents indicate that charities should be the primary benefactor, more than twice the number of individuals who think the provinces should be the big winners from gambling (17%), and well beyond support for all three levels of government combined (28%) (see Figure 18). Other potential beneficiaries receive little public support:

¥ Nine percent feel that the gamblers themselves should benefit from the proceeds of gambling. This result might be interpreted as a call for more favourable payout rates from the games.

Charities – 43%
Provincial Gov’ts – 17%
Combinations – 10%
Gamblers – 9%
Municipal Governments – 8%
No One – 3%
Federal Government – 3%
Private Companies – 2%
First Nations – 2%