There has been much debate about the impact of gambling on society and whether it has an overall positive or negative effect. Besides problem gambling, there are various societal problems – and benefits – that arise from the state monopoly over gambling.

A significant societal problem caused by gambling is an increase in crime rates. It is generally difficult to track gambling-related crime, because police reports often do not specify whether a specific crime was caused by gambling. Typically, crime associated with gambling takes the forms of fraud, embezzlement, counterfeiting, theft, credit card theft, identity theft and cheating at play. Casinos present a good opportunity for criminals to use counterfeit bills and for money laundering.

The 2007 study, Problem Gambling in Canadian Federal Offenders: Prevalence, Comorbidity and Correlates, funded by the Ontario Problem Gambling Research Centre, found that problem gamblers were likelier to commit income-related crimes than people without gambling problems. In the survey, 59 per cent of pathological gamblers, 33 per cent of sub-clinical gamblers and 7 per cent of non-problem gamblers in a population of 255 male offenders resorted to crime as a result of gambling.

When the River Rock Casino opened in Richmond, B.C., the crime rate increased by four times, according to a 2006 RCMP report. Money launderers from the surrounding area came to the casino, some from Washington state.

The prevalence of gambling due to the government’s interest in making a profit means that new demographic groups are vulnerable, especially youth. According to Jeffrey Derevensky, a professor and director of clinical training at McGill University, although 80 per cent of youth report gambling at least once – and about 30 per cent at least once per week – youth gambling rates remain fairly stable – stable, but perhaps unacceptably high. Furthermore, the availability of gambling is growing and youth will be more likely to gamble online when internet gambling becomes legal. The government has “normalized (gambling) so that gambling is … considered as ‘gaming’ and a source of entertainment,” Derevensky told The Interim.

Government involvement in the gambling industry may lead to an overall lack of transparency. The state becomes compromised, because it is the beneficiary of gambling revenues. Derevensky recommended instating an independent regulatory board, instead of relying on government-regulated boards. Currently, he said, “the government is monitoring the government.” There have been several instances where government-run lottery organizations have run into scandal and corruption, especially the OLG.

After an opposition request under the freedom of information act, OLG executive expense claims were released in 2009, which included a nanny, alcohol, expensive dinners, a cloth grocery bag, dry cleaning and a pen refill. The board of directors resigned and CEO Kelly McDougland was fired. This occurred after another OLG scandal in which retailers claimed millions of dollars from 1999 to 2006 by defrauding customers of their winnings.

A study by Statistics Canada shows that net revenue from government lotteries, VLTs, casinos and slot machines rose from $2.73 billion in 1992 to $13.7 billion in 2007, before dropping slightly to $13.67 billion in 2008. This money is used to fund government programs and charities and allows for more money to be spent without increasing taxes. (No doubt gamblers also feel good about “helping” the community, because some of the funds go to schools and hospitals.)

During 2008 and 2009, the OLG, for example, put $3.8 billion back into the Ontario economy, including $110 million for charities through the Ontario Trillium Foundation. However, in the book Casino State, Thomas Klassen and James Cosgrave note that the Trillium Foundation was created after government-run casinos threatened to put small charitable gambling endeavours out of business.

According to the authors, “not only has this strategy made community and charitable groups reliant on the state for funding, but it also allows the state to direct funds to some groups, and not others, based on political considerations.” Although the government ostensibly improves society by investing money in its programs and charities, citizens are often unable to choose towards which groups they can direct their gambling money.

Because of the revenue involved, provincial governments take an active role in promoting gambling as a cultural value in society. A study by the Ontario Problem Gambling Research Centre, Commercial Gambling Advertising: Possible Impact on Youth Knowledge, Attitudes, Beliefs and Behavioural Intentions, analyzed advertisements from 2000 to 2003 and found that, although many advertisements do not fall under the scrutiny of the Gaming Control Act of Ontario, gambling activities such as lotteries encourage the consumer by promising financial and social success. For example, “a series of Casino Rama advertisements imply that participation in casino entertainment is a possible way of reversing a person’s string of bad luck.” According to Derevensky, although advertising has little effect on youth gambling in general, “it gets problem gamblers to gamble even more.”

Besides government revenue, gambling industries such as casinos claim to help local economies through new employment opportunities and increased tourism. However, casino boosters overlook the possible economic costs involved in dealing with more crime and programs for problem gamblers, as well as educational programs to promote responsible gambling. Furthermore, the development of large casino facilities and the industries that support them may harm smaller businesses and small-scale private charity-based gambling opportunities.