Government Control of Canadian Cambling Revenues and Taxes

Canadians recognize gambling as an important source of government revenues, and prefer increased gambling to higher taxes. At the same time, Canadians want restricted access to VLTs, increased services for problem gamblers, and public consultations prior to the introduction of new games.

The Criminal Code of Canada allows provincial governments to set gambling regulations, and restricts gambling provision to the provinces, charities, exhibition associations and First Nations groups. This places provincial governments in a dual role as both the regulator and primary benefactor of gambling – a role that critics feel is a conflict of interest. To avoid this perception, many provinces operate their regulatory agencies at an arms length from government to ensure effective monitoring of provincial gaming operations. This chapter explores Canadians” perceptions of government involvement in the gambling industry.

GOVERNMENT REVENUE GENERATION
Canadians see gambling as a legitimate means for provincial governments to raise revenues. When asked, “if (your province) needed to raise more money, which of the following options would you support: raising taxes or more revenues from lotteries, VLTs and casinos,Ó gambling revenue is the overwhelmingly preferred option. Two-thirds of respondents (67%) indicate that gambling revenue is a preferred method of raising money, 19% prefer raising taxes, and 13% favour neither option.

It is reasonable to assume that the current high tax rates in Canada played a role in this response. It is not a trivial matter to consider an increase in taxes in Canada, and yet, interestingly, almost one in five respondents preferred this option to increased gambling. This suggests a strong anti-gambling sentiment among these Canadians.

Responses to the Ògambling versus higher taxesÓ questions are subject to regional variations. One-quarter (25%) of the Atlantic region respondents state a preference for higher taxes, while only 8% of Quebec respondents favour this option. There is also a near-linear relationship between preference for higher taxes and education, with preference for this option increasing with education level. (Only those with professional degrees [e.g., degrees in law, medicine, optometry, theology] broke this patternÐsee Figure 3.) Of those respondents with a household income over $100,000, 28% favour increased taxes, a strong statement by those who carry the highest current tax burden.

It is interesting to note the relationship between gambling participation rates and willingness to use gambling to raise government revenues. Those who do not gamble are less willing to raise revenue through gambling (59%) than those who do gamble (70%). These data suggest that non-gamblers may hold anti-gambling feelings.

DEBT FINANCING
Overall, Canadians are willing to use gambling revenues to fund a variety of government obligations, including debt repayment. When asked if “gambling revenue should be used to help governments pay off debt,” 66% of respondents agree that they should (38% strongly agreeing). Only 31% disagree.

FIGURE 3: PREFER TAX REVENUE TO GAMBLING
(BY HIGHEST EDUCATION LEVEL)
Less than Grade 12 / 12%
High School / 14%
College, Trade Dip. or below Bachelor’s / 16%
Bachelor’s Degree / 31%
Professional Degree / 21%
Master’s Degree / 47%
Doctorate / 60%