Program Item Details
TITLE: Mark Anielski, President, Anielski Management Inc, Edmonton
SUBJECT: #201 AGRI Conference on the Economic and Social Impacts of Gambling: Social Wellbeing Index
SYNOPSIS: ..
AUDIO: Download Audio (mp3 format)
TRANSCRIPT:
#201 May 23, 2006
Interview starts at 9:50
Intro: Just as politicians point to the annual GDP as an indicator of economic wellbeing, perhaps they should also be using another index, one that measures our overall social wellbeing. That was the message presented by economist Mark Anielski to participants at the recent conference hosted by the Alberta Gaming Research Institute.
Mark Anielski
MA: Well we’re trying to develop a framework for measuring the wellbeing impacts of gaming or playing games of chance for Canada which would set hopefully an international precedent for a framework that researchers and future policy analysts can use to assess what impacts, both positive and negative, that gaming has on Canadians.
CC: WHY IS IT THAT A FRAMEWORK IS NECESSARY? /p>
MA: Well a framework is necessary because it provides an analytic tool for making trade-offs in terms of Is there in fact a demonstrated net benefit or net cost of gaming at different scales – the individual scale, the family household scale, the community scale. And looking at all the benefits, including the benefits to industry and employment and taxes, and then all the social costs that are sometimes very difficult to get at.
CC: HOW IS IT THAT YOU ARE LOOKING AT THIS?
MA: We’ve done a very massive research, a literature research and so we’re trying to piece all the good pieces of research together to come up with a taxonomy, you know, the top listing of research that would inform the development of a meaningful framework, and we can show where the gaps are in terms of data that will direct us to future research.
CC: NOW YOUR BACKGROUND IS AS AN ECONOMIST AND SO YOU’RE LOOKING AT THE MONEY THAT IS GOING TO THE GAMING. AND CERTAINLY GAMING HAS BECOME A GROWTH INDUSTRY IN ALBERTA. YOU SEE IT GROWING ALL AROUND THE WORLD. WHAT KIND OF MONEY ARE WE TALKING ABOUT HERE, JUST LOOKING AT THE ALBERTA EXAMPLE?
MA: Wel, for example, last year the gross gaming revenues were 20.6 billion dollars. So that means 20.6 billion dollars was in effect coming out of people’s jeans and going into VLT’s and casinos. That’s a staggering amount of money. Oil and gas sales alone last year were 64 billion dollars and so these are significant. Gaming gross sales are about 10.9 percent of Alberta’s GDP last year. So they’re massive in size
CC: THAT 20 BILLION DOLLARS COMING FROM GAMING, HOW DOES THAT COMPARE TO ALBERTA’S BUDGET?
MA: Alberta’s budget last year if I recall correctly was around 25 to 26 billion dollars. So it is significant in comparison. Now granted a lot of that 20 billion gets paid out as prizes. About 92 percent of VLT. for example, sales get paid out as prizes. So you could say the gross profit to the province was about 1.8 billion dollars last year. So it’s still significant. It’s actually larger than oil sands revenues last year.
CC: NOW THOSE REVENUES, HOW ARE THEY AFFECTING THE WELLBEING OF THE PEOPLE WHO ARE IN THE CASINOS AND PUTTING THAT MONEY OUT?
MA: Well actually don’t know what the impacts are on individuals. I would argue that we should have a smile index and see how many people actually smile when they’re in casinos versus when they go to Disneyland or other places of entertainment. We don’t really know a lot about what people experience in the problem gambling group. And so that’s part of the research that needs to be done. There is some research going on, but more has to be known about all of the ripple effects of that person’s choice to gamble and become a pathological or problem gambler.
CC: WELL ONE OF THE CONCERNS IS THAT THERE’S A DISPROPORTIONATE AMOUNT OF MONEY THAT DOES COME FROM PROBLEM GAMBLERS. I’VE HEARD AS MUCH AS 35 TO 40 PERCENT.
MA: According to recent research it’s 39 percent of gaming revenues are coming from problem gamblers. That’s the equivalent of $20,000 per problem gambler. So $20,000 per problem gambler is going to the gross profits, which is enormous, considering the average household income of a Calgarian is about $28,000.
CC: THAT SOUNDS LIKE A HUGE TAX!
MA: Well you could argue that gambling is a very impressive, regressive form of taxation. I call it revenue harvesting, because it entices people to spend their money on a game of chance that they know, maybe they don’t know, that there’s a probability of losing, and it’s clear that everyone loses. The house always wins. And yet, we assume people are rational in economics. But even with the knowledge of those odds, people are still playing and putting their financial and family wellbeing at risk
CC: WHAT ARE THE FACTORS THAT YOU’RE LOOKING AT THEN TO DEVELOP THIS FRAMEWORK FOR RESEARCH BASED ON THE FACTORS YOU’RE GETTING FROM THE AMOUNT OF MONEY THAT’S GOING IN FROM DIFFERENT HOUSEHOLDS, VARIOUS DIFFERENT ECONOMIC AND SOCIAL VALUES?
MA: Well, I mean, the first cut would be to look at the revenue side of cash flow. So how much is contributed by problem gamblers to gaming revenues? How does that relate to the family, the average problem gambler’s socio-economic profile, like their income? The typical problem gambler tends to be male, aboriginal, lower educated. So, what does their economic profile look like? And so there’s those things.
And there’s things like impacts on bankruptcy rates and suicide. So there’s a bunch of social costs, like breakdown of relationships, and community impacts that all need to be categorized. There are a lot of data gaps, it’s clearly going to be a lot of research that’s needed to fill those gaps.
But what we trying to do is basically draw a blueprint. It’s kind of like drawing a blueprint for a house. You figure how many rooms can we build with data that we’ve got and how many rooms still need work to complete the house?
CC: YOU’VE JUST FINISHED YOUR PRESENTATION. WHAT WOULD YOU SAY IS THE TAKE HOME MESSAGE?
MA: I think the take home message is, if we’re going to look at gambling, we need to look at it from the perspective of real economics, which is looking at the impacts on wellbeing, the net wellbing impacts at both on the individual household level as well as at the community level . And really ask ourselves, is gambling the best public policy choice we have in, particularly in terms of fiscal policy. Is it the bestchoice? Because if it’s not, if there’s an alternative, for example, raising oil sands royalties to off set these gambling revenues, is that maybe a better choice, a less regressive choice, that has less negative impacts on wellbeing overall for Albertans? That’s the message I’d like to leave people with.
CC: THANK YOU VERY MUCH, MARK.
MA: Thank you.
That was Mark Aneilski, president of Anielski Management Inc. He spoke at about weighing the social and economic impacts of gambling at the recent conference in Banff hosted by the Alberta Gaming Research Institute.
FEATURED LINK: Alberta Gaming Research Institute
FEATURED LINK: Anielski Management Inc.