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ASSESSING THE SOCIAL AND ECONOMIC IMPACT OF GAMBLING Dr. Harold Wynne University of Alberta WHY BOTHER? Fish Are Being Harmed Alberta Tar Sands People Are Being Harmed Problem Gambling WHO’S DOING IT? Canadian SEIAs Vallaincourt & Roy (2000) – Canadian National level

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assessing the social and economic impact of gambling

ASSESSING THE SOCIAL AND ECONOMIC IMPACT OF GAMBLING

Dr. Harold Wynne

University of Alberta

why bother
WHY BOTHER?

Fish Are

Being Harmed

Alberta Tar Sands

People Are

Being Harmed

Problem Gambling

who s doing it
WHO’S DOING IT?

Canadian SEIAs

Vallaincourt & Roy (2000) – Canadian National level

Blue Thorn Research (2006) – BC lower mainland

Hann & Williams (in progress) – Belleville racino

Anielski et al. (in progress) – Nova Scotia provincial level

Williams et al. (in progress) – Alberta provincial level

Canada

United States

United Kingdom

Australia and NZ

who s doing it4
WHO’S DOING IT?

American SEIAs

National Opinion Research Centre (1999) – Gambling impact in U.S.

U.S. General Accounting Office (2000) – Gambling impact in U.S.

Garrett (2003) – Casino gambling in America

ECONorthwest (2005) – Indian gaming in Oregon

Koo et al. (2005) – Casino gambling in Ohio

Rappaport Institute (2005) – Casino gambling in Massachusetts

Policy Analytics (2006) – Indiana’s riverboat casinos

Canada

United States

United Kingdom

Australia and NZ

who s doing it5
WHO’S DOING IT?

United Kingdom SEIAs

NERA (2005) – Casino in the Wembley development area

February 2008 – “Super Casino” for Manchester dumped

PM Brown overturned PM Blair’s decision because of “fears the

negative social effects of promoting gambling would outweigh the

potential tax revenue and any regeneration benefits for Manchester”

The turnaround had been influenced by research into the

broader effects of casinos such as James Packer's

Crown casino in Melbourne.

Canada

United States

United Kingdom

Australia and NZ

who s doing it6
WHO’S DOING IT?

Australia SEIAs

Australian Productivity Commission (1999) – socio-economic impacts

of gambling in Australia

Pinge (2001) – Impact of EGMs in Bendigo, Victoria

SA Centre for Economic Studies (2001) – impact of EGMs in South

Australia

SA Centre for Economic Studies (2005) – Community impacts of

EGMs in Victoria

SA Centre for Economic Studies (in progress) – Economic impacts of

Gambling in the South Australian community

New Zealand SEIAs

AIGR (2001) – socio-economic impacts of gambling in New Zealand

Adams (2004) – gambling impact assessment in Auckland

Canada

United States

United Kingdom

Australia and NZ

what have they discovered
WHAT HAVE THEY DISCOVERED?
  • Blue Thorn Research (2006) – BC lower mainland
  • Purpose
  • BC Government wanted to know costs/benefits of adding 4 new
  • venues in Vancouver, Langley, and Surrey (2 racinos & 2 casinos)
  • Method
  • telephone survey; patron survey; key informant interviews
  • estimating the “multiplier effect”
  • Conclusions
  • 14 conclusions about social impact; 4 “trends” about PG
  • no conclusions about the economic impact
  • Reported Limitations
  • “Because of the small number of observations and available data
  • in the period after gaming venues were introduced, no statistically
  • valid multiplier estimates are available”
  • “The impact analysis in this report is limited because it is based
  • on data collected shortly after the casino opening dates”

Canada

what have they discovered8
WHAT HAVE THEY DISCOVERED?
  • Policy Analytics (2006) – Indiana’s riverboat casinos
  • Purpose
  • Indiana Legislative Council wanted to assess impact of
  • riverboat casinos system
  • Method
  • uses Grinols (2004) cost/benefit framework to measure specific
  • Costs/benefits in 7 areas to analyse player data
  • compares counterfactual policy—what if Indiana had no casinos?
  • Conclusions
  • “The benefits to Indiana citizens from Indiana’s policies of
  • licensing, regulating, and taxing ten riverboat casinos are
  • significantly larger than the costs”
  • Reported Limitations
  • none
  • Walker (2006) provides a “review” citing 7 major limitations
  • beginning with reliance on “one researchers perspective (i.e., Grinols)

United States

what have they discovered9
WHAT HAVE THEY DISCOVERED?
  • NERA (2005) – Casino in the Wembley development area
  • Purpose
  • identify the costs/benefits of a proposed casino for the WDA
  • London Borough of Brent added “social impact” assessment
  • Method
  • framework from literature to identify benefits, costs, transfers
  • used employment multiplier
  • estimated day/night and foreign casino visitors
  • considered comparator developments (hotel/office, residential)
  • Conclusions
  • “The casino is more beneficial than either comparator over the four
  • year period although the scale of this benefit declines over time”
  • “There will be a number of social impacts in Brent as a direct
  • result of the development of a new casino”
  • “A casino will increase the rate of problem gambling locally and
  • any negative impacts will be felt disproportionately”
  • Chinese population within the borough will be more likely to visit
  • a casino and may be more vulnerable
  • Reported Limitations
  • GBDVS data are “significantly aggregated” which “introduces
  • measurement error into our distance measures”

United Kingdom

what have they discovered10
WHAT HAVE THEY DISCOVERED?
  • SA Centre for Economic Studies (2005) –
  • Community impacts of EGMs in Victoria
  • Purpose
  • “Not the role of the researchers to provide recommendations to the
  • Victorian or Western Australian Governments, as the primary aim of
  • this project was to report the impacts of different gambling
  • environments at the State and regional level.”
  • Method
  • match Western Australia regions (no EGMs) with Victoria regions
  • on key factors (7 pairs of regions)
  • mail-out survey (N=7000); consultation with key stakeholders; analyse
  • available data, conduct surveys
  • Conclusions
  • “From a public policy perspective it is likely that a more limited
  • number of destination centres would contribute significantly to harm
  • minimisation, the effectiveness of monitoring and regulation, industry
  • self-regulation, improved monitoring of programs such as self-exclusion
  • and the capacity to provide consumer protections.”
  • Reported Limitations
  • “data limitations restrict definitive judgment on the impact of
  • gambling on many community services”

Australia

And

New Zealand

what are the research implications
WHAT ARE THE RESEARCH IMPLICATIONS?
  • 1. Analytical Framework is Needed
  • careful consideration of candidate perspectives (Walker)
  • 2. Data is Key and Often Limited
  • small number of observations after venue opens (BC)
  • data are often difficult to disaggregate (GBDVS)
  • 3. Consider the Counterfactual and Comparators
  • no casino (Indiana) or alternative developments (Wembley)
  • 4. Consider Disproportionate Effects on Vulnerable Populations
  • low income groups and Chinese population (Wembley)
  • 5. Consider Assessing “Matched Pairs” of Communities
  • compare West Australia (no EGMs) with Victoria (27,000 EGMs)

Research Implications

final comment
FINAL COMMENT

The size of the social costs—40 percent—of the costs of drug abuse—

are not so great that the economy cannot sustain them. The economy could

almost surely sustainthe costs of three, four, or more social problems

of this size.

The question, however, is why should the economy accept an unnecessary social

cost? Unlike American prohibition of alcohol, which most regard as a failure,

criminalization and prohibition of casino gambling was successfully practiced for

most of the twentieth century. Perhaps we can learn ways to offer gambling

That do not lead to harmful consequences.

However, if not, the logical implication is to ask whether the experiment in the

present generation should be allowed to continue or should be reversed.

Earl Grinols. Gambling in America: Costs and Benefits. 2004