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Sep 1, 2007 - Keywords: video lottery terminals; legitimation crisis; Crown ... This article deals with two forms of electronic gambling: video lottery terminals.
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Tensions and Contentions: An Examination of Electronic Gaming Issues in Canada Garry J. Smith and Colin S. Campbell American Behavioral Scientist 2007; 51; 86 DOI: 10.1177/0002764207304854 The online version of this article can be found at: http://abs.sagepub.com/cgi/content/abstract/51/1/86

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Tensions and Contentions An Examination of Electronic Gaming Issues in Canada

American Behavioral Scientist Volume 51 Number 1 September 2007 86-101 © 2007 Sage Publications 10.1177/0002764207304854 http://abs.sagepub.com hosted at http://online.sagepub.com

Garry J. Smith University of Alberta

Colin S. Campbell Douglas College

This article addresses electronic machine gambling in Canada, in particular, how it evolved, the social problems associated with the activity, and why it continues to flourish in spite of evidence-based research showing it to be the most addictively potent gambling format. Also discussed are the corporate principles applied to the promotion of electronic machine gambling and how this distorts regulatory objectives. Keywords: video lottery terminals; legitimation crisis; Crown corporation; addictive organization; moral syndromes

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his article investigates the history and current phenomenon of electronic machine gambling in Canada. Beginning with shifts in Canadian public attitudes toward gambling in the 1960s, the following interrelated developments ensued: a cultural liberalization of gambling (Cosgrave, 2006), monopolization of legal gambling by Canadian provincial governments (Patrick, 2000), and a 1985 Criminal Code of Canada amendment that decriminalized electronic machine gambling (Campbell & Smith, 1998). This reorganization of the Canadian gambling landscape resulted in a rapid and radical proliferation of legal gambling formats. The implementation of electronic machine gambling in the early 1990s produced impressive revenues for provincial governments, but also engendered adverse impacts that potentially compromise government social responsibility objectives. In analyzing the chain of events that ultimately led to 87,000 electronic gambling machines (EGMs) in Canada (Azmier, 2005), we discuss the following central issues: (a) how electronic gambling evolved in Canada, (b) the problems associated with widely available EGMs, (c) why EGMs continue to flourish despite controversies surrounding their implementation, and (d) how corporate practices used to administer provincial gambling operations give rise to what we might call “addictive” organizations. In explicating these developments, we draw principally on the work of Bakan (2004), Morton (2003), Wilson Schaef and Fassel (1990), Jacobs (1994, 2004) and Kingma (2004). 86 Downloaded from http://abs.sagepub.com by Flavia Bembea on October 30, 2009

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What Are EGMs? This article deals with two forms of electronic gambling: video lottery terminals (VLTs) and slot machines. EGMs are found in numerous cultures and in various guises around the world; although similar entities, they are colloquially known as “fruit machines” in Britain, “pokies” in Australia and New Zealand, “video poker” or “slots” in America, and “VLTs” or “slot machines” in Canada. Dickerson (1996) asserts that “machine characteristics are essentially the same for all countries and players” (p. 152). Common features of EGMs, according to Reith (1999, pp. 107-108), include the following: (a) randomly generated outcomes and prizes are won when a certain pattern or configuration of images is produced; (b) player participation involves activating the machine by inserting money and responding to commands and options flashed on the screen; (c) although gamblers are theoretically free to play at their own pace, the machines are designed to encourage a rhythm of repetitive continuous play; and (d) they are normally located in adult-only environments such as private clubs and/or liquor-licensed premises (notable exceptions include Britain, where they are also found in non-age-restricted locations such as cafes, sports centers, and arcades, and in Nevada, where they are also in grocery and convenience stores and airports). In this study, EGMs refer to both VLTs and slot machines. Although alike in design, Canadian slots and VLTs are distinguishable mainly by their location and, in some cases, by payout mechanism. VLTs are found in premises with liquor licenses (bars and lounges), whereas slots are found in casinos and at racetracks (racinos). VLT winnings are displayed as credits on the computer screen and are redeemed by presenting a receipt to a cashier, whereas with slot machines, coin winnings drop into the machine hopper and are immediately accessible to the player. With some new slot machines also having the credit feature, increasingly the only difference between slots and VLTs is their location. The next section examines factors that precipitated the growth of EGMs in Canada.

The Evolution of EGM Gambling in Canada The Liberalization of Canadian Gambling Attitudes Although gambling in Canada has long been a tenuous activity in terms of public acceptance, during the past 35 years, various social, economic, and political forces have softened Canadian attitudes toward gambling. Prior to 1969, Canadian provincial governments’ role with respect to gambling was to enforce Criminal Code statutes against illegal gambling and oversee horse racing and small-scale games of chance that occurred in conjunction with agricultural fairs or licensed charitable

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fund-raising efforts (Morton, 2003). Following watershed Criminal Code of Canada amendments in 1969 and 1985, Canadian gambling expansion advanced through several stages, starting with relatively benign and passive gambling formats (lotteries) to more active formats (casinos) and, ultimately, to more up-tempo, continuous gambling formats (EGMs). Coincidental with this expansion, gambling venues were permitted to open 7 days a week and for longer hours, to increase the maximum bet size, and to serve alcohol and place automated teller machines (ATMs) in betting areas. Now, in addition to their traditional regulatory role, provinces sanction and promote gambling as well as profit from it. In effect, what was once frowned on (and in some cases, deemed illegal) is now normative in Canada. Various explanations have surfaced for the liberalization and legalization of gambling in Canada; in particular, authors have cited the waning of protestant values (Cosgrave, 2006) and the ascendance of capitalist ideals that structure behavior in the interests of profit (McMillen, 1996). A more tolerant view toward legal gambling emphasizes the secularization of society and a growing ambivalence toward the so-called minor vices (Morton, 2003). Moreover, Morton (2003) claims that an emphasis on a consumer-driven and service-based economy resulted in a gradual reorientation away from thrift toward spending, and during the period of gambling expansion, communitarian beliefs were supplanted by an emphasis on individual liberties. These cultural, social, and economic forces coincided with emergent beliefs among politicians that legal gambling could undercut criminal elements, that gambling revenues could bolster provincial budgets and restrain tax increases, and that funds could be made available to charitable and nonprofit organizations. In short, a pragmatic worldview took root based on the premise that if gambling could not be suppressed, then at least some public good should come from it. In turn, the greater public acceptance of legal gambling caused criminal justice authorities to relax their surveillance of illegal gambling, believing that resources could be better spent monitoring more serious crimes, such as drug trafficking, prostitution, and child pornography (Smith & Wynne, 1999). As gambling metamorphosed from sin to vice to popular entertainment in Canada, four major trends were evident: (a) a move from criminal prohibition to legalization; (b) a consistent pattern of lesser federal responsibility and greater provincial authority over gambling matters; (c) an escalation of new gambling products, with an emphasis on fast-paced electronic games; and (d) legal gambling expansion being driven by vested interest groups, not the public at large (Campbell & Smith, 2003, p. 123).

The Legalization of EGMs in Canada A Criminal Code of Canada amendment in 1985 dramatically altered the Canadian legal gambling landscape in two ways: first, by finalizing the transfer of authority over legal gambling from federal to provincial jurisdictions and, second,

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by legalizing computer video and slot machine–style gambling (Campbell & Smith, 2003). Eventually, all 10 provinces embraced some form of electronic machine gambling (i.e., VLTs, slot machines, electronic bingo, satellite bingo, electronic keno, or combinations thereof). The Criminal Code amendment permitting these activities was made with little public input and has been a lingering source of controversy ever since. It took 5 years following the 1985 Criminal Code amendment before New Brunswick first provided convenience-location VLTs in 1990. The fiscal rewards of VLTs proved so enticing that 8 of Canada’s 10 provinces eventually installed the devices. Ontario and British Columbia were poised to implement VLTs, but before they could, VLT gambling had become a flashpoint of public concern in other jurisdictions. Thus, the decision to forego VLTs in Ontario and British Columbia appeared to be made for the pragmatic reason of avoiding an anticipated negative public response. Both provinces do, however, offer slot machines in casinos and at racetracks. Currently there are 39,109 VLTs and 47,878 slot machines in Canada (Azmier, 2005). In recent years, the primary source of gambling growth in Canada has been slot machines. Between 2000 and 2004, the number of slots in Canada increased by 52% (as opposed to only 2% for VLTs). Azmier (2005) speculates that this disparity is because of a waning tolerance for VLTs among the public and regulators. Slots are seen as less harmful than VLTs because they are found only in designated gambling venues (casinos or racetracks) as opposed to the convenience locations where VLTs reside. Provinces that did introduce VLTs saw rapid and substantial increases in their gambling profits. In 2003, Canada’s nearly 40,000 VLTs produced government revenues of Can$2.7 billion, and although VLT profits vary from province to province, it is estimated that for every $100 wagered, $30 goes to government coffers (Hall, 2003). Because electronic machine gambling is a relatively recent phenomenon in Canada, its impact on communities, provinces, and the nation at large has not been definitively documented nor well understood. Some observers have speculated that EGM revenues may not outweigh the social and economic costs created by those who become addicted (Costello & Millar, 2000; Doughney, 2002). The dilemma facing provincial governments is that EGMs provide the most lucrative source of gambling revenue—but also the most contentious. Complicating the issue is the fact that EGMs were once outlawed, and despite their now legal status, public support for EGMs does not appear to be broadly based in Canada (Azmier, 2000). A recent survey of Nova Scotians’ public attitudes toward gambling revealed a low approval level for VLTs (25% of the 800person sample were in favor) versus majority approval ratings for all other formats except Internet gambling. When asked what should be done to reduce problems associated with VLT gambling, 34% said VLTs should be banned, and a majority of respondents supported reducing VLT hours of operation, cutting back the number

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of VLTs in the province, and putting VLTs in centralized locations. Although not specifically about VLTs, the Nova Scotia attitude survey appeared to single out VLTs as the most problematic gambling format. Most respondents expressed the view that something needs to be done to reduce the harm caused by VLTs, even if it means paying higher taxes (Omnifacts Bristol Research, 2005). It should be noted that the presence or absence of EGMs in a province is not a function of political ideology: Political parties of all leanings find the revenues hard to resist. Nor are these political leanings necessarily stable; there have been instances where opposition parties who campaigned against EGMs won the election and decided later to retain the machines. In this article, we argue that the existence of EGMs in a province creates a tension between two primary government gambling policy objectives: revenue generation and social responsibility. The tensions are manifold: If citizen welfare concerns come first, revenues may be sacrificed; conversely, if financial exigency prevails, community well-being could well be jeopardized. In our view, in Canada, the reliance of provincial governments on EGM profits has resulted in inconsistent public policy, limited research and evaluation, and minimal preparation for detrimental community impacts.

Benefits of EGMs EGMs are highly profitable for all 10 Canadian provinces. In Alberta, for example, the portion of total government revenue from gambling sources in 1992 (prior to the arrival of EGMs) was 1.1%. More than a decade later, this proportion increased nearly fivefold to 5.1%, almost entirely because of rapidly increasing EGM proceeds (Azmier, 2005). This burgeoning gambling revenue was a key factor in paying off the provincial debt and keeping Alberta’s provincial taxes the lowest in the country. Without the presence of gambling, the Alberta government would have had to raise taxes significantly to maintain the same level of service. Economic spinoffs from EGMs include employment in the hospitality industry, tourism, bolstering the horse-racing industry, and funding for charitable and nonprofit organizations. Though harder to quantify, there appear to be social benefits associated with electronic machine gambling in the sense that this is a voluntary recreational outlet that offers entertainment, excitement, and stimulation as a counter to one’s daily routine. There is also the possibility of winning money, and if not, at least the player is contributing to worthy causes.

EGM Justification in Alberta, Canada In this section, we examine the official rhetoric surrounding the introduction and maintenance of electronic machine gambling in one province, Alberta. A search of

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Alberta Hansard (the verbatim account of the province’s legislative proceedings) from 1991 to 2004 reveals that VLT-related issues were vigorously debated in the Alberta legislative assembly. These debates included the following matters: (a) whether VLTs should even be allowed in the province; (b) if allowed, where they should be located; (c) how VLT revenues should be disbursed; (d) whether individual communities should be permitted to opt out of having VLTs; and (e) whether, and to what extent, VLTs are associated with problem gambling. VLTs were launched in Alberta on March 12, 1992 (following a brief trial period during the Calgary Stampede and Edmonton Klondike Days summer fairs), in 30 age-controlled licensed beverage rooms throughout the province. Since its inception, the Alberta government’s VLT program has been a politically sensitive issue. The unanticipated negative impacts of VLTs resulted in several government public reviews, two opposition bills calling for their elimination, referenda in 41 Alberta communities asking whether VLTs should be removed or retained, and periodic media stories about addicted VLT players committing suicide, engaging in criminal acts to support their habit, or losing their life savings. The main reasons given by Alberta government spokespersons for implementing VLTs were to (a) generate revenue for the Alberta Lottery Fund, (b) prevent illegal gambling machines from gaining a foothold in the province, (c) keep disposable funds from exiting the province (Alberta Gaming and Liquor Commission, 2001), and (d) help the moribund rural hospitality industry (Goyette, 1998). Slot machines were first tested in 1993, but did not become a permanent feature in Alberta casinos until 1996. Initially, only 25 slots per Edmonton and Calgary casino were permitted. This number doubled in 1997 and rapidly expanded during the next 8 years. In 1997, slots were also allowed at provincial racetracks as the linchpin in the province’s Racing Renewal Initiative. VLTs were capped at 6,000 in the province in 1996, but no upward limit was placed on slot machines (Alberta Gaming and Liquor Commission, 2001). Considerably less furor surrounded the introduction of slot machine gambling in Alberta than was the case with VLTs. Slot machines were perceived as less dangerous than VLTs because of their location in designated gambling venues (they are found only in major centers that can support a casino or a racetrack, as opposed to VLTs, which are spread throughout the province) and the fact that a portion of slot revenues (15%) goes to charitable or nonprofit groups, as opposed to zero dollars coming from VLTs. Last year in Alberta the 5,992 VLTs generated Can$577 million in net income for the government, and the 6,513 slot machines produced a Can$479 million profit.1 Taken together, EGM revenues in 2003-2004 were Can$1,056 million, which amounted to 63% of total gambling revenues for the province (Alberta Gaming and Liquor Commission, 2003-2004).

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The Public Debate About EGMs in Alberta The 15-year presence of EGMs in Alberta has been characterized by alternating cycles of turbulence and dormancy, and divisive issues surrounding EGMs remain unresolved. Several years after VLTs had been operating in bars and lounges throughout the province, opposition members introduced Bill 202, the Lotteries Amendment Act (Legislative Assembly of Alberta, 1995, 1996), which called for the elimination of VLTs in the province. Anti-VLT discourse centered on the rising incidence of problem gambling attributed to the perceived addictive nature of VLTs, the social and economic damages created by out-of-control VLT gamblers, and the alleged invidious characteristics of the machines themselves (for example, prohibitive odds, credit system of payouts, built-in near misses, and entrancing sights and sounds). In Alberta, a pro- or anti-VLT stance was based to a large extent on one’s philosophical position, as Wiseman (2000) has noted: Differences of opinion about statesponsored gambling are usually a struggle over which value is preeminent, freedom or virtue. Indeed, in the 1998 VLT referenda debates, “freedom of choice” was the rallying cry of the pro-VLT faction, along with dire predictions about tax increases and program cuts if VLTs were voted out. VLT opposition focused on the human, social, and economic costs associated with excessive play, for example, addiction, suicide, family upheaval, crime, and diminished quality of life in the community. These debates did not take place in a vacuum. Although the lion’s share of VLT revenues goes to government coffers, VLT retailers are also stakeholders who retain 15% of the profits from machines on their premises. During the 1998 Alberta referenda debates, VLT retailers contributed Can$1 million to fund a public relations campaign featuring pamphlets, posters, newspaper ads, press conferences, and public meetings, which produced the following pro-VLT commentary: • “Singling out VLTs as a greater ill than other forms of gambling is unfair. It’s like saying beer is OK but scotch or rum should be banned.” • “The number of problem gamblers in society is exaggerated.” • “Addicted gamblers will seek out other forms of gambling if VLTs aren’t available or find illegal machines to play.” • “Everyone shares in the profits from VLTs because the revenues are used for community betterments.” • “Without VLTs, as many as one-third of the retailers would go out of business.” • “Maybe in hindsight VLTs shouldn’t have gone into bars. But they did, so let’s not destroy somebody’s livelihood by removing them or moving them to different locations.” (excerpted from Gold, 1998, p. F1)

It is interesting that the verbiage used to defend VLTs in Alberta was similar to that used in Australia by government and poker machine industry officials to defend the proliferation of “pokies” (poker machines) in that nation. For example, they

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argued (a) that the problem (gambling addiction) is not as bad as it is made out to be; (b) that there is no alternative—we need the money to balance our budget; besides, if we take out EGMs, our citizens will go to neighboring states to play and/or we will face an explosion of illegal machines; (c) freedom of choice—the state should not discourage capitalistic acts by consenting adults—and (d) consumer surplus—the idea that players gravitate to the product and that the benefits (primarily revenues) outweigh any negative consequences (Doughney, 2002). In this instance, the “precautionary principle,” which is widely seen as an appropriate response to public policy considerations that might put communities at risk, was not invoked by provincial governments seeking to implement electronic machine gambling. The essence of the precautionary principle is that due diligence should precede the introduction “of any policies or activities that could irreversibly harm people or the environment, even if there is no definitive proof the harm will occur” (Bakan, 2004, p. 44). Part and parcel of the precautionary principle is an understanding that harm-minimization alternatives will be fully explored, that the burden of proof should be on proponents of the activity rather than on potential victims, and that the public right to informed consent should be honored. Ultimately, a number of attempts have been made to mitigate the impacts of problem gambling in Alberta: (a) funding problem gambling prevention and treatment programs as well as a research center to study gambling impacts; (b) equipping EGMs with “responsible gaming features,” such as clocks, cumulative wagering totals, hourly interruptions in play, slowing the speed of the machines, and forced cash-outs after a certain time spent on the machine; (c) capping and/or reducing the number of EGMs provincially, regionally, and/or per establishment; (d) initiating EGM retailer responsible-gambling programs; (e) abolishing retailer bonus and incentive systems based on EGM revenue production; (f) allowing communities to vote on whether they want VLTs (eventually, 41 Alberta communities voted on whether to retain or remove VLTs; the overall provincial vote was 54% to keep and 46% to remove; 8 communities voted VLTs out); and (g) moving VLTs out of convenience locations into designated gambling venues.

EGM Research One of the authors of this article has held that the scholarly literature on EGMs is, with few exceptions, decidedly critical (Smith & Wynne, 2004). Information on the workings and impacts of EGMs was scanty until the early 1990s, when academics began analyzing their design and construction (Griffiths, 1990, 1993). In the mid-1990s, research centered on the playing patterns and behaviors of EGM users (i.e., who plays, why they play, how often and how long they play, and how much they spend; Nova Scotia Alcohol and Gaming Authority, 1998-1999; Wynne, Smith, & Volberg, 1994). Later in the decade, there was an emphasis on laboratory research

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differentiating the playing styles of problem and nonproblem gamblers under various experimental conditions (Coventry & Norman, 1998; Diskin & Hodgins, 1999; Toneatto, 1999). More recently, a spate of impact studies have surfaced dealing with topics such as EGM distribution and density (Tremayne, 2000), EGM regulations (Doughney, 2002), the economics of machine gambling (Doughney, 2002; Mizerski, Jolley, & Mizerski, 2001), the development and assessment of EGM harm-reduction features (Blaszczynski, Sharpe, & Walker, 2001; Breen & Zimmerman, 2002; Dickerson, Haw, & Shepherd, 2003; Ladouceur & Sevigny, 2003), and case studies critical of EGM manufacturers and policy (Bridwell & Quinn, 2002; Doughney, 2002). A nationally representative Canadian community health survey used the Canadian Problem Gambling Index (CPGI; Cox, Yu, Afifi, & Ladouceur, 2005) to ascertain current 12-month problem gambling prevalence rates (moderate and severe problem gambling levels were combined to determine the prevalence rate). A random sample of 34,770 Canadians ages 15 years and older participated in the study. Key survey findings included the following: (a) The highest prevalence of problem gambling occurred in provinces with high per capita concentrations of VLTs and permanent casinos (slot machines are the predominant gambling format in Canadian casinos), (b) four of the five provinces with both VLTs and casinos produced the four highest problem gambling prevalence rates, and (c) the two provinces with permanent casinos but no VLTs (Ontario and British Columbia) ranked 5th and 8th out of 10, respectively, on problem gambling prevalence rates. In conclusion, the authors noted that VLTs are strongly associated with the likelihood of disordered gambling and that considerable public health costs have resulted from the rapid and prolific expansion of new forms of legalized gambling (VLTs and casinos) in Canada (Cox et. al., 2005; Smith & Wynne, 2002). A recent study conducted by one of this article’s authors noted a number of adverse consequences associated with this gambling format in Alberta. In a survey of 206 on-site VLT players using the CPGI, the sample breakdown of gambler subtypes was nonproblem (18.9%), low risk (19.9%), moderate risk (39.3%), and problem (21.8%). These percentages are substantially higher than those registered for VLT players in general population surveys. Aboriginal respondents were especially prone to have a VLT-related gambling problem, as 38% of the subsample scored as problem gamblers and 29% as moderate-risk gamblers (Smith & Wynne, 2004).

Sociological and Policy Perspectives on EGMs In this section, we explore sociological and policy perspectives that shed light on these phenomena. For instance, addiction in general has been linked to the prevailing ethos in developed countries and has been posited as a toxic side effect of free market societies (Alexander, 2001). Ostensibly, this is because “dislocation” (meaning “insufficient psychosocial integration”—a state in which citizens find difficulty

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in flourishing simultaneously as individuals and as members of their culture) is a byproduct of capitalism (Erickson, 1968). Adams (2004) contends that widespread gambling in a society may subtly erode democratic processes and institutions. Purportedly, this happens in three main ways: (a) Inevitable alliances between primary stakeholders (governments and the gambling industry) can expand gambling “in ways that override the wishes of the majority”; (b) the globally linked gambling industry has the power and resources to pressure governments and their citizens into making uninformed decisions related to gambling expansion; and (c) on a microlevel, the availability of gambling proceeds to charitable and nonprofit organizations constrains some individuals and/or groups from partaking in democratic processes such as public debates, protests, and social activism, thus minimizing serious challenges to gambling regulatory frameworks. Jacobs (2004) describes how “mass amnesia” has caused the collapse of vital cultures: Cultures that “jettison the values that have given it competence, adaptability and identity become weak and hollow” (p. 176). To endure, a culture must tenaciously retain the underlying values responsible for its nature and success. Jacobs cites governments’ reliance on gambling revenues as an erosion of traditional values such as decency and integrity and a sign of cultural drift. Kingma (2004) maintains that the liberalization and expansion of gambling discussed earlier in the Canadian context was part of an international phenomenon that resulted in state gambling public policy’s shift from “alibi-model” to “risk-model” principles. Although discussing gambling in the Netherlands, Kingma’s critique applies to the gambling policies of other industrialized nations. The alibi model was in vogue prior to gambling’s expansion and was typified by tightly regulated gambling under the following conditions: (a) legalization that was intended to avoid illegal markets, (b) the discouragement of private profiteering, and (c) gambling proceeds that were directed to social programs such as welfare, sports, and other identified “worthy causes” (Kingma, 2004, p. 49). The risk model emerged along with, and as a result of, global gambling expansion in the 1980s and is exemplified by (a) gambling’s being viewed as a legitimate form of commercial entertainment, (b) a belief that gambling revenues should augment government coffers and spur the economy, and (c) gambling markets’ requiring state control to minimize the risks of addiction and crime. Using Habermas’s (1975) “legitimation crisis” as an explanatory tool, Kingma (2004) postulated that the paradigm shift occurred during the 1970s and 1980s, when legislation lagged behind aggressive gambling practices, ultimately creating a situation where “politics gave in to market demands without convincing and conclusive (legal) justification” (p. 55). The upshot of this policy inversion was gambling proceeds’ being directed away from decentralized social welfare initiatives toward government coffers and the introduction of new gambling formats designed not as intrinsically pleasing, recreational amusements but for profit maximization.

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The gambling policy transformation process that occurred in the Netherlands was paralleled in Canada, in that the legal gambling expansion of the early 1970s was justified using alibi-model principles. The original intention was that federal and provincial governments, agricultural societies, charitable and religious organizations, and other community-based nonprofit groups would generate modest funds from soft-core gambling formats such as lotteries, raffles, and bingo. The link between legal gambling and worthy causes turned out to be an effective strategy for helping to transform gambling from a vice into a respectable pastime. Upon recognizing gambling’s enormous revenue-producing potential, provincial governments took steps to control Canadian gambling markets. This included forming Crown corporations2 to operate provincial gambling enterprises, contracting with international gambling corporations to build and manage government-owned casinos, pressuring the federal government to abandon the legal gambling arena, constricting the involvement of charitable and nonprofit groups, and escalating gambling offerings by phasing in casinos and authorizing increased numbers of EGMs (Alfieri, 1994; Azmier, 2005; Campbell, 2000). These actions solidified provincial gambling monopolies and interjected corporate principles and practices into provincial gambling operations. A major concern with provincial governments’ acting as corporations is that corporations and governments are distinct entities with often contrasting goals and functions. The primary mission of corporations is to increase shareholder value, regardless of whether their operations contribute to the public good (Bakan, 2004). Conversely, government’s first responsibility is to protect and promote the public interest in ways that the public is fully informed of and approves (Greene & Shugarman, 1997). If corporate success is measured by profit maximization, the ultimate gauge of a government’s effectiveness is its contribution to the general wellbeing of the citizenry (Whittington & Van Loon, 1996). Others have claimed that a test of a good government is reflected in how it provides for the most vulnerable of its citizens (Jackson & Jackson, 2001). In line with the distinction between corporations and governments, Jacobs (1994) conceived of two distinct “moral syndromes or survival systems” that apply to discrete ways of functioning in society: The “guardian syndrome” describes entities such as governments, the military, religious and educational organizations, and judicial systems, whereas the “commercial syndrome” pertains to organizations involved in establishing markets and producing and trading goods. According to Jacobs, harmony ensues when each syndrome maintains its own identity and integrity. Any significant breach of a syndrome’s integrity—such as adopting an inappropriate function—leads ultimately to “a systematic process of intractable corruption” (Jacobs, 1994, p. 132). Following Jacobs’s (1994) logic, aberrations occur when governments or corporations embrace functions outside of their moral syndromes, in this instance, governments’ behaving like corporations in administering their gambling operations.

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We would argue that when corporate principles were applied to the delivery of EGM-style gambling in Canada, the following distortions surfaced: (a) Profit maximization became the overriding purpose of gambling policy; (b) harsh trade-offs were accepted as inevitable and acceptable costs of the gambling business, for example, when EGM profits came with collateral damage in the form of human suffering; (c) an unsympathetic attitude toward EGM victims was adopted, and gambling addicts were labeled as being weak, irresponsible, immature, and sick individuals; (d) negative externalities were created that affected third parties who had not consented to nor played any role in the adoption of EGMs; (e) gambling policy decisions were based on incomplete cost-benefit analyses, the benefits being easily quantifiable in terms of profit and jobs created, whereas the costs are often hidden, take years to materialize and are impossible to quantify precisely; (f), private-sector gambling companies became government partners in the gambling industry and thus positioned to influence the political process through lobbying, campaign contributions, and selective information sharing (Bakan, 2004); and (g) Saul (2005) notes a subtle link between corporate cupidity and gambling expansion; to wit, the penchant of neoliberal governments for lowering corporate taxes results in their missing contributions having to be replaced by “stealth taxes,” such as state-run gambling (p. 252). Besides behaving as corporations in running their gambling operations, provincial governments in Canada have two major advantages over private sector interests: (a) They have monopolies limited only by the dictates of the Criminal Code, which means Canadian gamblers have no legal choice but to consume the offerings presented by the state (Cosgrave, 2006); and (b) they self-regulate, which means that painful or embarrassing revelations about their operations or policies can be dealt with internally, often without public disclosure. Another drawback of corporatizing government gambling operations is that governments become overly reliant on the revenues. Ordinarily, the term addiction applies to people, as opposed to organizations, and may be defined as “an ingrained habit that undermines one’s health, work, relationships and self-respect, that individuals feel they cannot change” (Peele & Brodsky, 1992, p. 9). Although the government-as-gambling-addict metaphor makes for catchy headlines and memorable sound bites, it is in a sense misguided because governments are not actually gambling. Consequently, the excitement and euphoria elements are missing, and unlike those who play, government assets are not at risk, because their insurmountable house edge guarantees a profit in the long run (Barrett, 2000). Governments do, however, sanction, regulate, promote, conduct, and manage gambling operations and benefit from gambling revenues. In our view, although it is a misnomer to label governments “gambling addicts,” it is accurate to say that EGM-friendly governments have a gambling revenue dependency. Although less debilitating than an addiction, a dependency may still indicate misaligned governance because it results in “the loss of other opportunities,

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losses of autonomy, and distortions in business and community relationships” (Adams, 2004, p. 3). Although the claim that governments are addicted to gambling is not supportable, Wilson Schaef and Fassel (1990) argue that entities such as government departments and corporations qualify as addictive systems if “the organization exhibits processes and behaviors that are common to individual addicts” (p. 8). The authors maintain that addictive systems are closed systems that expose individuals in them to the processes of addiction and addictive thought patterns. Closed systems distrust new information; consequently, new information is either modified to fit the existing paradigm or rejected out of hand. Addictive organizations are said to resemble a hologram where each piece of the hologram contains the structure of the entire entity. In other words, an addictive organization is like the individuals who comprise it, and the individuals in it are clones of the organization. In our view, given their fixation on maximizing and preserving gambling dollars, provincial-government gambling organizations are susceptible to acquiring an addictive worldview and behaving similarly to active individual addicts. Denial is the primary defense mechanism of addicts, and the first step toward recovery is recognizing and admitting the problem. We maintain that EGM stakeholders are typically in denial; for example, when EGM operations are challenged, governments exhibit some classic denial symptoms, such as blaming others (e.g., machine manufacturers and irresponsible players), spin doctoring, belittling contrary viewpoints, and disavowing responsibility for negative outcomes. Provincialgovernment gambling regimes employ public relations personnel to act as intermediaries between politicians and the media. To use Goffman’s (1967) terminology, this strikes us as classic “impression management”—a way of controlling information in a manipulative fashion to save face. In our opinion, there are several other ways that provincial-government gambling organizations behave like individual gambling addicts. These include (a) a discrepancy between what is said and done, for instance, mission statements that seldom correspond with standard practices; (b) a preference for avoiding conflict and difficult issues; (c) an inability to tolerate straight talk, honesty, or directness; (d) a predilection for patching up problems rather than facing and solving them; and (e) seeing the above behaviors as normal functioning.

Conclusions The purpose of this article was to show how a paradigm shift in gambling public policy, followed by the legalization of EGMs, led to governments’ using corporate principles to market EGMs. Ultimately, these developments resulted in a situation in which provincial-government gambling organizations have exhibited classic

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symptoms of addictive organizations. This does not mean that individuals within these organizations are inherently dishonorable; presumably they do not set out to harm or deceive. According to addictive system theory, moral insensitivity evolves as individuals try to cope in an addictive culture (Schaef, 1987). In our view, organizational perspectives inevitably influence the work-related thoughts and actions of organizational employees. Eventually, those submerged in an addictive system are unable to make consistently healthy decisions. This process may occur on a subliminal level: Regulators may believe they are acting in the public’s best interest; however, they fail to realize they have a distorted perception of the ideal system and themselves. Just as individuals can recover from addictions, so too can organizations. Although it may perhaps represent an oversimplification of the healing process, some immediate steps that might help include admitting that EGMs may be more dangerous than other gambling formats and adopting more rigorous EGM harm minimization strategies. This means committing to an organizational priority shift whereby Canadian provincial gambling operations are blatantly transparent and social responsibility and community well-being become the paramount objectives of all Canadian gambling policy.

Notes 1. As of this writing, the number of VLTs in the province has remained the same, whereas the number of slot machines increased to 7,582, a 1-year growth rate of 16% (Azmier, 2005). 2. Provincial Crown corporations are government owned but ostensibly at arm’s length from government control. They are usually formed to pursue economic and social objectives that generate revenue by selling goods or by providing services on the open market (Canadian Tax Foundation, 2004). In Canada, Crown corporations are the favored business entities used by provinces to manage and conduct legal gambling operations.

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Garry J. Smith is a University of Alberta emeritus professor and a researcher with the Alberta Gaming Research Institute. Colin S. Campbell is head of the criminology department at Douglas College in Coquitlam, BC.

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