Lawyers salivating over governments’ addiction to gambling

February 22, 2010

By Gavin MacFadyen
Legal Columnist
Troy Media

Gavin MacFadyen
Gavin MacFadyen

NEW YORK, Feb. 22, 2010/ Troy Media/ — When we were children, there would inevitably come a time when we would protest in a pique of self-righteous indignation that, “You’re not the boss of me!” That same sentiment stays with us the rest of our lives. We become convinced that our personal freedom trumps all comers and no one has the right to stick their nose into our business.

But freedom is a double-edged sword. It has consequences. Everyone wants to swim unmolested in the ocean. That giddy feeling lasts until the drowning begins and then all the happy splashers are fighting for the proffered life raft.

So where exactly is the bright line drawn between personal freedom and personal responsibility? In at least one arena – gambling – that line is becoming blurred.

Loto-Quebec settled with the plaintiffs

In 2001, a class action suit was brought by 120,000 problem gamblers in Quebec. They demanded that the costs of treating their addiction be covered by Loto-Quebec – the quasi-crown corporation allegedly responsible for the personal and financial disaster unleashed upon their lives.

Now, addiction treatment did begin being covered by the province in 2002 but this suit sought damages for the period from 1994-2002 when it was not. In January, Loto-Quebec settled with the plaintiffs for $50 million. While that is an enormous sum under any calculation, it is a far cry from the $1 billion initially sought.

Make no mistake, when the topic is gambling, the sums thrown around are eye-popping. Nelson Labrie is a former journalist who was the first witness called in the Loto-Quebec case. His testimony recounted how playing VLT’s (Video Lottery Terminals) caused him to lose his home and more than $250,000.

But that’s loose change compared to the annual revenues racked up by provinces thanks to gambling. In the last year that is estimated to be $3.8 billion in Quebec, $3.7 billion in Ontario and $2.6 billion in B.C. In all three cases, this dwarfs the money flowing into government coffers through taxes on cigarettes – i.e. in Ontario that figure for 2009 was just over $1 billion.

So before we condemn the problem gamblers for being victims of their own vices, it must surely be recognized that provincial gaming boards from coast to coast are reaping a huge and bountiful harvest from what some consider to be a scourge. Does that windfall not likewise bring with it a measure of responsibility and, if that responsibility is not being met, does it not then lead naturally to liability?

That is now an open question. Because of the settlement, Loto-Quebec avoided having its obligations to the gamblers it covets spelled out in court. This, according to gaming counselor Sal Boxenbaum was an unfortunate outcome. He has told various media outlets that he would rather have seen Loto-Quebec forced to place more prominent warnings on its machines.

He may still get his wish. The settlement goes before a judge on March 8th to be ratified and, at that time, plaintiffs unhappy with the settlement may give voice to their reservations. The interesting and most telling outcome of this affair is that the plaintiffs, although able to prove the harmful nature of VLT’s were not able to prove that they were, in and of themselves, addicting.

Given that, why would Loto-Quebec settle? Savvy lawyers from coast to coast must be salivating at the prospect of future litigation in this area. The corporation settled because it is scared of what the outcome might have been. Like big tobacco, they realize the product they are peddling is a wrecker of families, of lives and of futures. Not for nothing is Las Vegas the suicide capital of America. Sooner or later they fear a reckoning in court and will do anything in their power – including coughing up 50 million taxpayer dollars to make the problem go away – at least temporarily.

But the floodgates are about to open. There is an ongoing class action in Ontario albeit with a different issue. In that case, 10, 474 gamblers who signed exclusion documents with the OLGC (Ontario Lottery and Gaming Corporation) are suing because they were not prevented entry into the province’s casinos as they had requested. In other words, they still went to gamble, they lost, and are now upset ex post facto with the OLGC for letting them in. These documents have since been ruled to be contracts and so the case moves forward.

Taxpayer ultimately on the hook

It is well settled in the law that bars can be held liable for continuing to serve drinkers who are manifestly intoxicated. Casinos are trying to portray themselves as entertainment venues where the onus for moderation is on the shoulders of the patron. They do not see themselves as responsible for the financial devastation that their “recreation” can provoke.

In Canada, where the governing gaming corporations are public entities, this means that the answer to the question of who is responsible will ultimately involve the taxpayer who, as with all things, ends up footing the bill. While communities have undoubtedly benefited financially from gaming in the areas of education, non-profits, health care and sports, there may in the very near future be a demand for a concurrent accountability.

Those who believe in a higher power often remark that God’s greatest gift to humanity was free will. What we are coming to understand more and more in our society is that free will can indeed be exercised all the way into despair. The question remains: who pays for it?

Channels: The Calgary Beacon, February 23, New Brunswick Telegraph-Journal, February 25, the Flin Flon Reminder, February 26, Canada Free Press, March 4, 2010

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