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Play Now, Pay Later: Legalized Internet Gambling in British Columbia
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Play Now, Pay Later: Legalized Internet Gambling in British Columbia

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Presentation on the rise of internet gambling. Please note, changes in gambling policy may have taken place since the time of this presentation (April, 2010).

Presentation on the rise of internet gambling. Please note, changes in gambling policy may have taken place since the time of this presentation (April, 2010).

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  • - This is a new revenue opportunity for the provincial government – as the provincial government tries to capture some of the money that is leaving the province
    - Since the start of this study, several games have been added. Most notably a new blackjack game that takes BCLC closer to having its own online casino.
  • - This is a new revenue opportunity for the provincial government – as the provincial government tries to capture some of the money that is leaving the province
    - Since the start of this study, several games have been added. Most notably a new blackjack game that takes BCLC closer to having its own online casino.
  • A broad definition of gambling
    Through this definition it can be argued we are all gamblers in some way or another
    Gambling has been around since ancient times (give example)
    Talk about some of the most well-known games
  • Expansion of the internet in the late 1990s
    Gambling software includes the creation of encrypted communication protocols
  • - This is a new revenue opportunity for the provincial government – as the provincial government tries to capture some of the money that is leaving the province
    - Since the start of this study, several games have been added. Most notably a new blackjack game that takes BCLC closer to having its own online casino.
  • SOGS: Problem was a high false positive rate
  • - This is a new revenue opportunity for the provincial government – as the provincial government tries to capture some of the money that is leaving the province
    - Since the start of this study, several games have been added. Most notably a new blackjack game that takes BCLC closer to having its own online casino.
  • Victoria: 25% Immigrants (7.8% Asian) Finland: 4% Immigrants (1% Asian) Atlantic Canada: 5% Immigrants (3.6% Asian) BC: 25% Immigrants (13.6% Asian)
  • SOGS: Problem was a high false positive rate
    SOURCE: http://www.stopgamblingnow.com/sogs_scoring.htm
  • SOGS: Problem was a high false positive rate

Transcript

  • 1. Bharminder Sihota DEFENSE PRESENTATION April 8, 2010 http://usaplayers.com/ http://usaplayers.com/
  • 2. 2  BCLC is one of only two legalized online gambling schemes in Canada. British Columbians spend roughly $87 million a year on illegal offshore gambling websites. In August 2009, British Columbia Lottery Corporation (BCLC) announces an increase in the online deposit limit from $120/week to $9999/week and expansion in the number of games.
  • 3. 3  This is an increase of over 8000% in the weekly deposit limit
  • 4. 4 Any scenario that involves looking at chance and risk Playing a game for something of material value, or to wager on an uncertain outcome
  • 5. 5 There are several factors that led to the proliferation of internet gambling Expansion of the Internet During the 1990s Creation of Gambling Software For both casino games and other types of wagering Encrypted Communication Protocols For safe and secure money transactions Safe Residence With Tax Leniency Low taxes, low fees, low levels of law enforcement, and favourable gambling legislation
  • 6. 6 OFFSHORE • Not legally permitted in Canada. • Unable to prosecute due to jurisdiction. • Own the vast majority of the over 2000 gambling websites. LEGALIZED • i.e. BCLC, ALC. • Canadian provinces have legal authority to provide online gambling. • Land-based casinos hesitant to expand to the internet due to legal uncertainty.
  • 7. 7 2002 – Gaming Control Act 1997 – Gaming Proceeds Distribution Act 1987 – BC Gaming Commission 1985 – British Columbia Lottery Corporation 1974 – Lottery Act 1969 – Transfer of Jurisdiction
  • 8. 8 Net Gambling Income to BC Government (1974-2009) $0 $200 $400 $600 $800 $1,000 $1,200 74/75 79/80 84/85 89/90 94/95 99/00 04/05 Millions Year
  • 9. 9 Province Year of Most Recent Prevalence Test Type of Prevalence Test Severe Problem Gambler Prevalence Rate Moderate Problem Gambler Prevalence Rate Problem Gambler Prevalence Rate Saskatchewan 2001 CPGI 1.2% 4.7% 5.9% Alberta 2001 CPGI 1.3% 3.9% 5.2% British Columbia 2008 CPGI 0.9% 3.7% 4.6% Manitoba 2006 CPGI 1.1% 2.3% 3.4% Ontario 2005 CPGI 0.8% 2.6% 3.4% New Brunswick 2001 CPGI 1.4% 1.8% 3.2% Nova Scotia 2007 CPGI 0.9% 1.6% 2.5% Newfoundland and Labrador 2009 CPGI 0.7% 1.7% 2.4% Quebec 2002 SOGS 0.7 (5+) 1.0 (3-4) 1.7% Prince Edward Island 2005 CPGI 0.9% 0.7% 1.6%
  • 10. 10 Percentage of Government Gambling Revenue Distributed to Problem Gambling (2007/08) 0 0.5 1 1.5 2 2.5 3 BC Saskatchewan Manitoba Ontario Quebec New Brunswick Nova Scotia Canada (No information available for ALTA, PEI, NFLD)
  • 11. 11 Land-Based Casinos • Currently 17 land-based casinos • 8 are located in the Lower Mainland • Several are destination casinos Community Gaming Centres • 27 Chances gaming centres • 14 = Bingo Halls • 13 = Community Gaming Centres • Located in smaller communities Retailers • Located in malls, convenience stores, pubs Online • PlayNow.com • Largest variety of games
  • 12. 12 • Addiction • Medical problems • Psychological and family problems Traditional Gambling • Exacerbates problems of traditional gambling (i.e. addiction) • Isolated and sedentary nature • Keeping adolescents away Internet Gambling • Criminal element • Includes gamblers and providersRisks to Society • Counselling, health care, law enforcement • Costs of health care and law enforcement systems skyrocket if problems go untreated Costs to Society
  • 13. 13 Why are British Columbians more susceptible to gambling addiction than people in other jurisdictions? This problem takes on added importance when looking at the current situation in BC, with legalized internet gambling, and new policy changes indicating a higher weekly deposit limit and more games online 39 different games available online, compared to 20 at retailers and 15 at land-based casinos
  • 14. 14 Primary Methodology: Case Study Analysis These cases were selected based on one major criterion: Atlantic Canada Finland Victoria, Australia
  • 15. 15 Predictors of Gambling Prevalence Category Characteristic Measure Demographic Characteristics Unmarried Population What is the percentage of people who are not currently married? Gender What is the male/female breakdown among those who have gambled in the past 12 months? Unemployment Rate How high is the unemployment rate? Student Population What percentage of the population do university students represent? Indigenous Population What percentage of population is indigenous? Gambling Laws Age Limit to Gamble What (if any) age limit to gamble exists? Time Limit on Gambling Is there a time limit imposed on online gambling? Online Spending Limits Are there spending limits for the legalized online gambling options? Online Gambling Options How many legal online options are available? Social Characteristics Support Services Does each jurisdiction have strong help/counselling/information/research services? Strong History of Immigration Is there a history of immigration in the jurisdiction? Alcohol and Drug Laws/Prohibition What are the rules regarding alcohol and drugs? How strict are the laws? Attitude Towards Gambling as a Problem Does the public feel that gambling is a problem?
  • 16. 16 1. Depth of Support Services 2. History of Immigration (Especially Asian Immigrants) 3. Online Gambling Limits 4. Online Gambling Options CHARACTERISTICS THAT HAD AN EFFECT
  • 17. 17 Long Term Objectives • Reduce the Prevalence Rate of Problem Gamblers to Below 2.5% • Reduce the Number of Immigrant Problem Gamblers Short Term Objectives • Make the Public Aware of the Services Available for Problem Gamblers • Lower the Number of Moderate Problem Gamblers
  • 18. 18 • Increase deposit limit from $120/week to $9999/week • Increase number of gambling options at PlayNow Option 1: Status Quo (SQ) • Programs designed specifically for immigrants • Looking at their unique problems by examining their cultural values • Partly based on current strategy towards aboriginals in BC Option 2: Culturally- Sensitive Treatment Plan (CSTS) • Refer more people to treatment through awareness strategies and counselling • Media campaign targeting the 54% of the population that do not know there are free services available Option 3: Increase Treatment Awareness (ITA) • Lower deposit limit to same as ALC ($1000/week) with sliding scale for some. • Research centre to look at gambling prevalence among internet gamblers, collaborate with stakeholders Option 4: Research and Lower Limits (RLL)
  • 19. 19 Criteria Definition Benchmark Measure Value Cost Cost of problem gambling programs Annual $ directed towards problem gambling. 2009/10 budget is $4.6 million. <$12 million = High $12-$18 million = Medium >$18 million = Low 3 = High 2 = Medium 1 = Low Stakeholder Acceptability Net income for provincial government 2008/09 net income was $1.07 billion. 2009/10 estimate is $1.12 billion. >$1.12 billion = High $1.07-$1.12 billion = Medium <$1.07 billion = Low 3 = High 2 = Medium 1 = Low Net income for land-based casinos 2008/09 net income was $1.34 billion, less than BCLC’s estimate of $1.40 billion. 2009/10 estimate is $1.46 billion. >$1.46 billion = High $1.34-$1.46 billion = Medium <$1.34 billion = Low 3 = High 2 = Medium 1 = Low Revenue distribution to non- profit sector Charities and local governments received $240 million last year, will receive $171 million this year. >$240 million = High $200-$240 million = Medium <$200 million = Low 3 = High 2 = Medium 1 = Low Effectiveness Health care use by problem gamblers % of severe and problem gamblers using services. In 2007/08, it was less than 1%. Victoria had 6.1% seek a doctor’s attention, while Nova Scotia showed 4.9%. >6% = High 5%-6% = Medium <5% = Low 3 = High 2 = Medium 1 = Low Moderate problem gambler prevalence rate 3.7% of BC residents are moderate problem gamblers. All successful cases were near or below 2%. <2% = High 2%-3% = Medium >3% = Low 3 = High 2 = Medium 1 = Low Transitional Equity Winners and losers among,  BC Government  Federal Government  Land-Based Casinos  Gamblers (X2)  Non-Profit  Law Enforcement  Offshore Casinos  Support Groups Government is currently big winner with increase in gambling limit. Gamblers weighted double, since they are the ones who need protection. >6 Winners = High 4-6 Winners = Medium <4 Winners = Low 3 = High 2 = Medium 1 = Low
  • 20. 20 Criteria Definition SQ CSTP ITA RLL Cost Cost of Problem Gambling High (3) High (3) High (3) High (3) Stakeholder Acceptability Net Income for provincial government Medium (2) Low (1) Medium (2) Medium (2) Net Income for Land-Based Casinos Medium (2) Low (1) Low (1) Medium (2) Net Income for Non-Profit Sector Low (1) Low (1) Low (1) Low (1) Overall 1.67 1 1.33 1.67 Effectiveness Health Care Use by Problem Gamblers Low (1) Low (1) Medium (2) Low (1) Moderate Problem Gambler Prevalence Rate Low (1) Medium (2) Medium (2) Medium (2) Overall 1 1.5 2 1.5 Transitional Equity All 8 Stakeholders (Gamblers Count Double) Low (1) Medium (2) Medium (2) High (3) Total Maximum = 12 6.67 7.50 8.33 9.17
  • 21. 21 Short and Long Term  Immediately Implement Option 4: Research and Lowering Limits Benefits from Implementing this Policy  Accepted by more stakeholders than any other policy  Not too costly  Will help reduce number of moderate problem gamblers  Will work towards long term goal of reducing problem gambling prevalence rate  Research centre will help target other goals
  • 22. 22  The internet has changed gambling in a very quick and profound way, i.e. PlayNow evolving quickly.  Among other things, this research has looked at one of the major consequences of these rapid changes: problem gambling.  Implementing Option 4 (RLL) will allow the government to balance its interests as both the provider of gambling, and the caregiver to those suffering from addiction
  • 23. 23
  • 24. 24 1985 CCC Amendment: Full Provincial Control 1969 CCC Amendment: Partial Provincial Control 1925 CCC Amendment: Gambling at Exhibitions and Fairs 1892 Criminal Code of Canada
  • 25. 25 Help • BC Problem Gambling Helpline • No online capabilities Counselling • Counsellors available via phone or internet • All regions of the province covered • Specific services for youth, seniors, women, aboriginals and several minorities (Chinese and Vietnamese ONLY) • Also have Gambler’s Anonymous and Gam-Anon Information • Recently developed Game Sense to warn of the risk associated with gambling, but not about internet gambling. • BC’s information budget is very small: $1.5 million in 2007/08 (less spending per capita than all other provinces where data was available) Research • Neglected portion of BCLC strategy • Spent only $340,000 in 2007/08, compared to $4 million by Ontario • Spend less per capita than almost every province where data was available
  • 26. 26 Risks • Potential problems for society • Results that put members of society in danger, due to problem gambling Costs • Cost to everyone in society due to problem gambling • Certain, as opposed to potential that exists in risks
  • 27. 27 1) Academic Achievement – Contradictory theories 2) Depression, Anxiety, OCD – They were factored into the unemployment rate + there were few concrete reports, tough to find statistics (some jurisdictions measure these things, some don’t, and some do it differently than others) 3) Knowledge of helpline – Incorporated into information part of Support Services characteristic 4) Distance from casino – Not as relevant since we are dealing with online gambling, plus only saw one report 5) Country/Region – Factored into immigrants characteristic 6) Household Income – Conflicting theories (very close to being same as unemployment) 7) Family history of gambling – Incorporated into immigrants characteristic, plus hard to measure/find data
  • 28. 28  BC Problem Gambling recognizes that First Nations have a higher rate of problem gambling.  Also identify cultural differences as a major reason for gambling.  Program consists of counsellors working with First Nations communities that are sensitive towards gambling.  Try to raise awareness of cultural values, and how best the communities can retrieve them.  Big achievement was developing a video (“Balance”) specifically looking at the issue of gambling among First Nations.
  • 29. 29 Dimensions of the CPGI -Gambling Involvement, Problem Gambling Behaviour, Adverse Consequences, Problem Gambling Correlates -In total there are 31 questions that capture the social context of gambling – Only 9 items are scored -Possible answers: Never (0), Sometimes (1), Most of the Time (2), Almost Always (3) -If you score 3-7 you are moderate problem gambler, 8+ (max = 27) = severe problem gambler CPGI Question # 9 Scored Items 5 Have you bet more than you could really afford to lose? Would you say never, sometimes, most of the time, or almost always? 6 Still thinking about the last 12 months, have you needed to gamble with larger amounts of money to get the same feeling of excitement? 7 When you gambled, did you go back another day to try to win back the money you lost? 8 Have you borrowed money or sold anything to get money to gamble? 9 Have you felt that you might have a problem with gambling? 10 Has gambling caused you any health problems, including stress or anxiety? 11 Have people criticized your betting or told you that you had a gambling problem, regardless of whether or not you thought it was true? 12 Has your gambling caused any financial problems for you or your household? 13 Have you felt guilty about the way you gamble or what happens when you gamble?
  • 30. 30 - There are 16 questions, comprising 37 items, which ask the respondents about their gambling activity and associated behaviour. - There are 20 scoring items, all equally weighted, requiring a yes (=1) or no (=0) answer. - A score of five or more indicates a probable pathological gambling (= to severe problem gambler). SOGS Question # 20 Scored Items 4 When you gamble, how often do you go back another day to win back money you have lost? 5 Have you ever claimed to be winning money gambling, but weren’t really? In fact you lost? 6 Do you feel you have ever had a problem with betting or money gambling? 7 Did you ever gamble more than you intended to? 8 Have people criticized your betting or told you that you had a problem, regardless of whether or not you thought it was true? 9 Have you ever felt guilty about the way you gamble, or what happens when you gamble? 10 Have you ever felt like you would like to stop betting money on gambling, but did not think that you could? 11 Have you ever hidden betting slips, lottery tickets, gambling money, IOUs, or other signs of betting from your spouse, children or other important people in your life? 13 Have money arguments ever centered on your gambling? 14 Have you ever borrowed from someone and not paid them back as a result of your gambling? 15 Have you ever lost time from work (or school) due to betting money or gambling? 16 If you borrowed money to gamble or to pay gambling debts, who or where did you borrow from? A From household money B From your spouse/partner C From relatives or in-laws D From banks, loan companies, or credit unions E From credit cards F From loan sharks G You cashed in stocks, bonds or other securities H You sold personal or family property