Canadian gambling history dates back to 1892, when the Canadian Criminal Code banned all gambling activities. However, by 1969, the Criminal Code was revised to allow for provincial governments to sell tickets for lotteries that would benefit worthy causes. In 1985, the federal law was amended to allow for slot machines and video gaming devices, all under the control of individual provinces and territories. Since that time, gambling has grown at an exponential rate to include thousands of casinos, lottery ticket locations, bingo halls, and race tracks. Some First Nations, private companies, and charities also work under government licenses to provide gambling establishments. By 2002, 18.9 million Canadians were gambling.

The rise in gambling has produced an economic benefit to provinces, which enjoy an increase in revenue through provincial control of all gambling activities without having to increase taxation, but sometimes, at the price of public health in the form of gambling addiction. With growing availability, gamblers now do not have to travel to casinos or to charity events to place their bets. They can place their bets from the comfort of their own offices or homes at online casinos or sports-related betting sites. Online gambling, illegal in Canada, is still accessible through the Internet, where anyone can bet on anything from cards to hockey games to dog racing. In 2003, the United States General Accounting Office estimated that there were approximately 1,800 online casino sites with revenues of roughly $5 billion.

Gambling Industries: Any establishment that operates gambling facilities exclusively such as bingo halls, casinos or video gaming terminals will be part of the gambling industry. It includes those engaged in providing gambling services such as lotteries or off-track betting, but excludes hotels or other facilities with gambling machines on the property.

Government Casino: These commercial casinos are licensed and regulated by governments. They can vary in terms of public and private ownership and involvement in their operations and management. Some are run totally as Crown corporations while others have much more commercial involvement in their day-to-day operations.

Online Gambling: Gambling that occurs on the Internet, and which can include poker, casino games, and sports betting. Online gambling is difficult for governments to regulate.

Pathological Gambling: A condition where gambling becomes excessive and becomes a major factor in one’s life. Pathological gamblers cannot resist the urge to gamble, causing disruptions in their personal lives, their families, and their work environments.

Video Lottery Terminal (VLT): These electronic games of chance pay out using receipts which can be redeemed for cash payments. They are regulated by each province’s lottery corporation.

Evidence of gambling activities has been found at ancient archaeological sites throughout the world, including Egypt, India, China, Greece, and Rome. When John Cabot arrived in Canada in 1497, he found that the Native population had a number of games of chance. During the Industrial Revolution in the nineteenth century, the gambling industry experienced great change. The aristocracy had always gambled at fashionable spa retreats. However, in the second half of the nineteenth century, gaming houses or casinos became central attractions in European locations such as Nice, Monte Carlo, Baden-Baden, and Wiesbaden. Health spa locations had become gambling resorts.

Other more mundane changes in the nineteenth century increased the allure of gambling for a wider range of people. Cards, which had first become popular for gambling in the fifteenth century after the invention of the printing press, began to be printed with numerical values instead of ambiguous images for each card. Games of chance based on these numerical values (blackjack and baccarat) became more accessible for all classes of society. Roulette was simplified to a wheel consisting of thirty-six numbers. Coin-operated gaming machines were introduced in the last quarter of the nineteenth century. The early version of the slot machine invented by Charles Fey made its appearance in San Francisco, California, in 1905. Increased betting on horse races was encouraged by the proliferation of horse racing information in newspapers and journals, as well as the growth of the telegraph system. This allowed for information about bets to be transmitted quickly and easily facilitating betting for all classes of society—not just the wealthy who could actually afford to attend horse races.

In North America, New Orleans had been a centre for gambling since the early 1700s. In 1823, New Orleans began licensing the first American gambling houses. Similar establishments soon started across the US. However, laws against gambling were enacted as early as 1855 in San Francisco. In Canada, the Canadian Criminal Code declared a complete ban on gambling activities in 1892, when gambling went underground.

In Canada, legalized gambling was not reintroduced until 1969, when the Canadian Criminal Code authorized provincial governments to start conducting lotteries. However, in the US, legalized gambling was reintroduced in 1931 when Nevada reversed a twenty-year ban and introduced legalized casino gambling. Reno, just 200 miles east of San Francisco, was the biggest gambling centre, but with the building of the Hoover Dam, Las Vegas became prominent. Workers traveled to Las Vegas for gambling during the construction phase, and afterwards, the Hoover Dam attracted tourists who stayed and gambled there. By the 1950s, criminally-connected entrepreneurs such as Bugsy Siegel and Meyer Lansky had opened luxurious resorts on the Las Vegas Strip. The city was promoted as America’s Sin City, and millions of visitors were drawn to the glamour and entertainment that accompanied the games of chance. By the 1980s, the gaming industry came under increased government regulation.

Gambling was also making inroads in other US states. New Hampshire introduced lottery sweepstakes in 1964, casino gambling was approved for Atlantic City, New Jersey, in 1978, and Indian tribes were permitted by the US Supreme Court to open gambling operation on reservation lands in 1987. For a time, the Mashantucket Pequots from Connecticut owned the largest casino in the world, the Foxwood Resort Casino. That title has been challenged since then, as several casinos in Macao, China, have claimed this honour.

But perhaps the more startling change in gambling has been the astounding growth of online gambling. Online casino sites offer card games, roulette, and virtually any kind of gambling activity available. Several governments have banned online gambling. Although there are few reliable statistics about online gambling, a survey study by the US General Accounting Office in December 2002 estimated the amount of money which would be spent on online gambling in 2003 to reach $5 billion. In late 2001, as many as one in twenty Ontario residents had tried this activity. Online gambling activity has a strong Canadian connection. Cryptologic, a Canadian company, is a major supplier of internet gaming software.

The gambling industry in Canada is very strong. Even though gambling had been banned in 1892 in Canada, as early as 1900, charitable gaming was permitted. By 1910, horse betting was allowed, and by 1925, gaming at agricultural exhibitions was permitted. Provincial government lotteries were legalized in 1969, leading to a national lottery for the Montreal Olympics in 1974. During the 1980s and 1990s, casinos and VLTs spread rapidly. By 2002, two-thirds of all Canadians were participating in some form of gambling and governments had come to depend on gambling revenue.

By 2006, the Canadian gambling industry employed 40,000 people, and net revenue from government lotteries, casinos, and VLTs rose to $13.3 billion dollars. However, in the various provinces, not all gambling activities are legal. All provinces and territories allow lotteries, horse racing, and charitable gaming. New Brunswick, Prince Edward Island, and Newfoundland & Labrador are the only provinces which do not allow casino gambling or slot machines. VLTs are also not available in Ontario or British Columbia. Internet gambling is considered illegal in all of Canada.

Many very worthwhile activities have been funded by gambling revenues, including the 1976 Montreal Olympics. The Ontario Lottery and Gaming Corporation (OLGC), which runs lotteries, casinos, slot machines, resort casinos, and bingo, has been operating for over thirty-two years. The proceeds of gambling revenue in Ontario support the Ontario Trillium Foundation (OTF), which funds programs in health care, physical fitness, culture, and sports.

Despite the growing employment and government revenue generated by the gaming industry, the consequences of gambling in Canada also include social and health concerns. The gambling industry depends on pathological gamblers whose gambling addictions have grave consequences. Casinos estimate that about 80 percent of their revenue comes from 20 percent of the gamblers. This kind of pathological gambling can take a toll on personal and family life, potentially increasing financial problems, emotional stress, alcohol dependence, relationship stability, and depression. In Ontario, the Ontario Problem Gamblers Helpline, set up in 1997, offers information about gambling addiction treatment services and financial and family counselling services, as well as self-help groups and other resources for pathological gamblers.

Summary: The gaming industry is a major part of the entertainment industry in Canada. It generates $15.3 billion annually and employs over 51,000 people at an average salary of $40,000 per annum, and over half of the people employed in this sector are women (57 percent). Gaming contributes over $8.6 billion per year to government coffers, which in turn, is used to support various programs, services and charities nationwide. Gaming continues to grow and is the life-blood of several Canadian communities, attracting tourists from the United States, Europe, and Asia. The vibrancy of gaming has allowed Canadian entertainment and gaming facilities to develop into world-class venues, capable of attracting big-name international performers. The success of the industry has helped to revitalise the towns, cities, and First Nations communities in which gaming facilities have located. As the gaming industry moves increasingly online, Canadians will need to adopt rules and regulations to ensure Canada continues to play a prominent role in this vibrant industry, as well as reaping its rewards.

One cannot dismiss the massive impact of gaming in Canada. In terms of revenues generated annually, the gaming industry revenues rival those of movies and television plus spectator sports combined (professional sport via sanctioned lotteries can be seen as adjunct to gaming). As part of the entertainment economy, gaming ($15.3 billion annual) ranks just behind full-service restaurants ($17.2 billion annual) in terms of economic contributions, placing gaming ahead of accommodation services ($14.3 billion), and air travel ($11.9 billion) in Canada. Aside from direct economic impact, the gaming industry reaches into other sectors of the Canadian economy as well, contributing notably to food and beverage, transportation, printing and publishing, and financial and legal services. On top of the $15.3 billion generated annually, gaming contributes a further $11.6 billion in labour income in terms of wages, salaries and supplementary income, directly and indirectly accounting for 135,000 jobs nationally (Lipton 2003; Azmier 2005). 

For aboriginal communities, the establishment of casinos on First Nations land has generated revenue streams that could only have been imagined a few decades ago. For example, Ontario-based Rama Mnjikaning First Nation, which is home to Casino Rama, Canada’s largest and most successful aboriginal gaming facility, has annual revenue of $500 million. After taxes are paid to the province, the First Nations’ portion of the proceeds from the resort are invested in education, health and housing for First Nation members throughout Ontario. An example of this positive payoff is the use of gaming proceeds to support a program to teach the Mohawk language in schools at Kanehsatake and Khanawake. By earmarking casino proceeds to programs and services aimed at improving aboriginal lives, First Nations are gaining a measure of control over their economic and social well-being, empowering their communities and lessening dependence on government assistance.

The economic contribution of gaming seen in aboriginal communities is paralleled in non-aboriginal communities in which gaming is prominent. In non-aboriginal communities, programs that retain elements of Canada’s history and culture find support through tax revenues directly derived through gaming. Summer programs in many towns—parks and recreations, historic forts, community programs, summer camps, etc.—receive tax dollars from local government coffers traced directly or indirectly to the lucrative gaming sector of the economy. More and more, gaming revenues support provincial infrastructures, provide for debt repayment, health care, education and social services, grants to charities and treatment of gambling addiction throughout the country. Gaming supports programs, provides money to repair infrastructure, and relieves the tax burden on individuals who would otherwise need to pay for these services out-of-pocket.

The revitalization can be seen nowhere better than in towns once dedicated to horseracing. Horseracing, once a popular sport, has fallen off as top entertainment in Canada, signifying the detachment Canadians increasingly feel for their rural past. However, in 1998, in a need to change, race tracks began to introduce slots and casinos to their venues. The newly dubbed "racinos" (racetrack and casino facilities), have been a marked success, breathing new life into the struggling industry and revitalising venues such as the now renamed Fort Erie Race Track and Slots and Woodbine Racetrack and Slots in Ontario. At many of these racinos, the horse racing has become of secondary importance to the off-track betting, casino gambling, dining, and entertainment offered at these facilities. For many communities like Niagara Falls or Fort Erie, Ontario, casinos have brought in tremendous revenue streams that have balanced the loss of manufacturing jobs and automobile plant closures in these regions.

With all the growth in racinos, casinos and gaming, there is a misplaced belief that gambling is running rampant and will be the ruin of Canadian society. Statistics, however, suggest that gaming is far from the social problem that gambling opponents suggest. Problem gambling is estimated at between 1 and 1.5 percent of gaming participants in Canada. More importantly, the proportion of problem gamblers neither rises nor falls with gambling limits or with the numbers of people involved in gambling. In general, Canadians do not gamble as a consequence of addiction or desperation. In fact Canadians are quite responsible and conservative in their gambling practices and studies indicate that the entertainment motivation is the primary motivation for Canadian gambling. The majority of gamblers are middle-class, and gambling is done for entertainment and usually with a pre-determined budget for that purpose. A household in Canada, making on average $80,000 a year, spends less than $800 a year on any form of gambling (lotteries, casinos, horse racing, etc.), which translates to less than 1 percent of the total family income per year (Marshall 2005).

At present, there are around eighty permanent casinos, 40,000 slot machines, 40,000 Video Lottery Terminals (VLTs) and over seventy horse racing tracks in Canada. The transformation of horserace facilities to racinos, demonstrates the ability of this industry to adapt and change to keep itself vibrant. The gaming industry’s malleability will be tested in coming years with the growth of online gambling worldwide. For Canada’s gaming industry, which at present relies on physical venues for much of its success, it will be important for it to tap into the lucrative online market if it hopes to continue to grow and thrive. As gaming has become a large contributor to the Canadian economy, it will be in all our interests to see that the industry receives the legal support required to maintain its position.

In deference to US lawmakers, who have staunchly opposed online gambling via the Unlawful Internet Gambling Enforcement Act (UIGEA 2006), Canadian lawmakers have been reluctant to create national regulatory regimes to allow for Internet gambling. Because inter-provincial online gambling is prohibited under Canada's Criminal Code, Canadians end up spending a billion dollars annually gambling on websites based outside the country. By distancing themselves from the US's prohibitionist stance to online gaming, Canadians could create online gaming laws, as happened in the United Kingdom, to ensure that revenues from online gambling stay in Canada and contribute to the Canadian economy.

Aboriginal communities already have begun to make inroads into this area. The Mohawk of Kahnawake, arguing they are violating no provincial or federal laws, have set up a very lucrative operation that may account for as much as 60 percent of all online gambling worldwide. The endeavour, which includes sites such Lucky Charm Casino, PokerStars or Sports Fever Casino, is a hot property worth in the billions of dollars per year. The Mohawk online gaming consortium employs 200 people at present, with the hopes of adding another 500 jobs in the future. Online gaming also raises a substantial portion of the community's revenue, which is fed back into the town for everything from upgrades to the hockey arena to equipping hospitals and upgrading schools, where the traditional Mohawk language is still taught.

Seeing that the gaming industry accounts for nearly 12 percent of Canada’s gross domestic product (GDP) and that gambling has become a huge money maker for various governments in Canada, it would be wise for provincial and territorial governments to take the lead of the Mohawk consortium and begin to move their efforts online also. Recently, the government of British Columbia and the Atlantic Lottery Corporations have made inroads in that area, becoming the first jurisdictions in Canada to allow inter-provincial gambling. Their move will, undoubtedly, motivate other provinces and territories as well as the federal government, to pursue this area as well.

Summary: The negative effects on individuals and communities unbalance the economical benefits of gambling. The dramatic increase in the number of casinos, online gambling, and video lottery terminals is creating more gambling addictions and other problems related to gambling, particularly among youth and lower income families. Gambling encourages reckless financial behaviour and can lead to serious mental and public health issues, such as the breakdown of families and friendships, bankruptcy, job loss, and legal woes. Gambling is also associated with the development of other addictions such as alcoholism and drug abuse, and can lead to depression, and even suicide.

According to the Canadian Medical Association (CMA), since the 1990s, Canada has seen a substantial increase in gambling activity, particularly in government-owned legal gambling sites, such as casinos, horse tracks, gaming sites, and video lottery terminals (VLT). International online gambling has also dramatically increased in popularity. This growth has been accompanied by a rise in problem gamblers. In 2002, estimates showed that five percent (1.2 million people) of the adult population were problem gamblers. Notably, VLT players are the most affected, with one in four VLT players at risk of becoming problem gamblers. So grave is the issue, that the Canadian Government, the Canadian Public Health Association (CPHA), and the Canadian Center for Addiction and Mental Health have classified gambling addiction as a serious mental and public health issue.

While it was reported that gambling, lotteries, and gaming sites brought in about 15.3 billion in 2008, Canadian citizens and their communities are paying more than they realize for gambling. The Mood Disorders Society of Canada reported that since 2003, problem gamblers generate approximately 35 percent of Canada’s yearly gambling revenue. The fact that problem gamblers are generating such a significant percentage of gambling revenue is a serious social problem.

Support for gambling addicts, such as Canada’s Gamblers Anonymous, has existed since the 1960s. However, the surge in gambling in the 1990s saw gambling become more and more of a mental and social health issue, and consequently numerous agencies and programs sprang up around the country to help problem gamblers. In fact, since 1993, provincial governments have had to fund services for people with gambling problems, which theCanadian Medical Association Journal reports costs Canadians approximately $15 million in tax dollars per year (Korn). Provinces also donate a percentage of their gambling revenue to help problem gamblers.

The problems associated with gambling are often more extreme in social settings, where incomes are below average, job prospects are not favourable, and social stresses such as alcoholism, drugs, unstable family life, crime, and violence already exist. Furthermore, lower income individuals and families also spend more of their money on gambling than people in other income divisions. In 1998, Statistics Canada reported that lower income families spent proportionally more on gambling activities than middle or higher income families (2.2 percent as opposed to 0.5 percent). Because online sites and gaming stations are easy to access, youths are also more inclined to gamble, with reports of a 4 percent increase in youth gamblers between 2001 and 2005.

This trend is not only the case in Canada. Countries around the world such as the United States, Australia, and New Zealand are reporting similar environmental correlations between gambling addictions and disadvantaged social conditions. The results are such that poor social conditions and problem gambling worsen each other, creating an unhealthy cycle that is difficult to overcome.

The issue of youth gambling is of great concern to Canadian mental and public health professionals. As of 2005, there were twice as many youth with gambling problems than adults (3.4 percent to 1.5 percent). The Canadian Association for Mental Health reports that youth gambling has risen dramatically, and that young adults between the ages of eighteen and twenty-four make up the highest percentage of problem gamblers in Canada.

Canadians that become addicted to gambling at a young age are likely to continue engaging in unhealthy gambling behaviour into adulthood. In fact, adult gamblers that have developed addictions often report beginning to gambling as youths, before the age of nineteen. This is worrisome, as nearly 62 percent of youth aged fifteen to twenty-four reported gambling at least once in 2007.

Gambling habits can lead to irresponsible financial decisions and actions, jeopardizing stable economic situations. Careers can be put at stake by out of control gambling, leading to missed promotions, job loss, and long-term unemployment. Youth gambling also sets the stage for long term mental health problems, such as depression, addictions, intimacy issues, and relationship woes.

Gamblers often put at risk the financial and emotional wellbeing of their families and friendships, especially when their pastime becomes an addiction. Staking family assets, savings, credit, and other items to gambling can destroy a family financially and leave them riddled with debt. Casinos and racetracks make it simple for gamblers to access money and savings quickly and impulsively by placing ATM machines and cashless gaming products within their facilities. Online sites and gaming stations, such as slot machines, often accept bank cards and credit cards, which can and often does result in massive financial losses for some gamblers and their families. VLT players make up the highest percentage of problem gamblers, and report greater financial and personal losses that any other gambling category. Problem gamblers sell, steal, and borrow in order to finance their addiction. High gambling losses can range from a few hundred dollars into the millions. Assets, such as cars, homes, electronics, and so forth are also staked in order for a gambler to continue playing. This becomes very serious for low income families, when a problem gambler spends much needed tax refunds or government unemployment cheques on gambling.

Worse is the destruction of the family structure due to one or both partners’ gambling addiction and its associated problems. Gambling habits are often hidden from partners, as are financial losses, which can lead to feelings of hurt and betrayal once the full extent of a problem gambler’s gambling activities comes to light. Further, the stress of both the financial losses and the addictions can lead to physical and emotional conflict between partners and/or parents and children.

A 2009 study by the University of British Columbia reported that gambling addicts had higher rates of divorce and family problems than other members of Canadian society. The effects on families is of great concern, because on-line gambling sites and gaming machines are much more likely to be abused in areas where people are disadvantaged. Increasing the breakdown of families in areas that are already suffering poverty and other social challenges worsens many public health issues, particularly for the children of parents with gambling addictions.

Canadian health physicians are becoming increasingly concerned about the effects of gambling on the mental health of gamblers and their friends and families. There has been a flood of research into the effects of gambling on mental and physical health, and the conclusions are alarming.

While some gamblers can engage in casual betting, those who do become addicted to gambling exhibit a wide array of problems. The effects of the stress of gambling emerge physically in the form of ulcers, skin conditions, weight gain or loss, headaches, stomach problems, and weakened immune systems. Some gamblers have insomnia, and others sleep disorders. According to the Canadian Health Network, the physical side effects of stress and anxiety from gambling forces a quarter of moderate to severe problem gamblers to seek medical aid.

Gambling often encourages other unhealthy behaviour and can lead to the development of other addictions, such as alcoholism and drug abuse. More grave, however, are the mental health conditions that are brought on by gambling. The Canadian Health Network also reports that a third of problem gamblers experience depression and anxiety, which can lead to more serious situations such as suicide. The Canadian Community Health Survey from 2002 highlighted that problem gamblers were six times as likely to contemplate suicide than non-problem gamblers (18 percent versus 3 percent).

Often, the friends and families of problem gamblers experience mental and physical health problems as well. The breakdown of fundamental relationships only serves as a catalyst for more gambling related problems.

The expansion of government-sponsored gambling activities needs to be curbed in light of the increased number of problem gamblers in Canada. Problem gamblers make up a significant percentage of Canada’s gambling revenue, and so by increasing legal gambling sites, federal and provincial governments are, in effect, encouraging problematic gambling activities. The repercussions on public and mental health are such that they outweigh the financial benefits of government-owned gambling sites. All Canadians suffer from the effects of problem gambling—particularly vulnerable members of society such as youth and those lower income individuals most at risk of developing gambling problems. All Canadian taxpayers absorb the high cost of treating problem gamblers, which the revenue cannot fully offset. Lawmakers and mental and public health are at odds when it comes to the true value of gambling profits.

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