I appeared as a debutante at the City of Toronto Executive Committee session on a new casino and convention development in Toronto today. Here are the notes from my (three minute) presentation:
Dear members of the executive committee,
My name is Dr. Kahlil Philander, and it is my pleasure to be here today to speak about a recent series of casino policy study reports written by International Gaming Institute at the University of Nevada Las Vegas. The UNLV International Gaming Institute (IGI) was founded in 1993 to serve as the intellectual hub for the global gaming industry, and now boasts program graduates who lead gaming institutions and governmental agencies in more than 50 different jurisdictions. Faculty from our institute have provided research-based expertise and testimony in front of many governmental entities, including the U.S. Senate, the Nevada State Legislature, and government officials from Canada, Europe, Asia, and Africa.
My personal expertise is as a scholar in the economics of gambling and gambling policy, and I have worked and published extensively in the areas of gambling economics, tourism, and responsible gambling program design. Along with the executive director of the International Gambling Institute, Dr. Bo Bernard, who himself is a world renowned expert in problem gambling and gambling policy, I have written a five policy papers that address specific myths that arise during casino adoption debates, and that I have observed during this debate. These reports were not based on hearsay or testimonial evidence, but instead relied exclusively on academic peer-reviewed research that can be trusted as the most reliable available evidence.
I am not just a Las Vegas scholar, but also have strong ties to Toronto. Several years ago, I actually lived in the Annex community of downtown Toronto, where I studied under some of country’s finest policy scholars in the University of Toronto’s Master of Economics program.
Although I only have time to speak to a couple issues described in the institute reports, I note that they touch on several issues related to industry cannibalization, problem gambling prevalence, casino social costs, and the economic impacts of casino gambling.
To address the oft-cited “cannibalization” debate, we examined all of the relevant peer-reviewed literature on topic, and concluded that there is no strong evidence to suggest that a GTA resort casino will meaningfully cannibalize incumbent businesses. In fact, we expect that many industries will be stimulated by the casino, given that available empirical evidence has tended to show complementary relationships rather than cannibalistic or substitutionary. This finding was repeatedly found in several different studies, which all varied in terms scope of geography and casino design. Industries such as tourism, entertainment, lodging, food and beverage, may actually observe a positive economic bump from the expansion of casino gaming in the GTA. We also expect that these positive effects will be even greater if an integrated-resort property is built, as opposed to a gaming-only facility.
With regards to the likely effect of a casino on crime, I have read several sources involved in the Toronto debates that suggest that research in this area provides unclear conclusions. This is incorrect. The literature on casinos and crime has produced consistent results in the past 15 years of research. The findings of our review support a view that the proposed casino-resort would increase the total volume of crimes in the area, but that there will be no effect on the overall crime rate, when populations are adjusted for the number of people drawn to the area. That is, with respect to the total volume of crime, casinos seem to have an impact similar to other large recreation/tourism draws, such as a hockey game or the Canadian National Exhibition. With respect to the crime rate, casinos are typically found to have no significant effects. The increase in volume has been repeatedly shown in research to be explained by the number of temporary visitors in the area – meaning that there is no evidence of increased risk of crime-related harm to nearby residents. These findings were consistent between studies that focused on jurisdictions within Canada, and in other international locations.
In terms of problem gambling prevalence, in the most recent and comprehensive reviews of the gambling opportunities and problem gambling literature, researchers previously believed that gambling opportunities lead to linear increases in the problem gambling rate. This was called the “exposure” model. However, in the past ten years, experts in the area have made a compelling argument that this perspective is flawed – or at the very least, incomplete. These researchers suggest that evidence for “adaptation” can be observed, where populations adjust after initial exposure. This adaptation curve can be observed with many diseases, whereby more vulnerable groups develop problems first, but then the disease’s spread begins to diminish as the general population learns more about the disease, better understanding risks and preventative measures.
This “adaptation” perspective also has support in the empirical literature. In the United States for example, problem gambling prevalence rates have remained relatively stable over the past 35 years, despite the introduction of numerous new gambling opportunities during this period. A 1979 study found a national lifetime problem gambling rate of 0.7%, and more recent comparable figures have been 0.4% to 0.6%.
So, while this perspective has been more readily accepted than the “exposure” model in recent research circles, we were surprised that there has not been significant discussion of its merit in this debate. Especially since the population of Toronto has already been exposed to many forms of gambling, and the city boasts World-renown experts in problem gambling science and responsible gambling program design.
While I have only been able to highlight a few of the items that are addressed in our series of reports, the full reports are available at igi.unlv.edu/research. I thank you for your attention to this important issue and if you have any questions, I would be happy to respond to them now.