Justice Committee on Feb. 16th, 2012

[A voice]

There's a phone ringing.

[An hon. member]

I arranged that phone call to see if it would throw you off.

[Voices]

Oh, oh!

[Bill Rutsey]

Who knows, maybe someone is calling in a bet.

[Paul Burns]

The attractiveness of online product right now.... Where the growth has come in sports wagering is in the technology and access through the Internet.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

That was my next question actually. I don't want to interrupt you, but I only have five minutes, and since two of those minutes have been taken up with the phone ringing, I do want to get on to the points.

I understood that somewhere between $80 billion and $380 billion could be generated in the U.S., or it's estimated from the U.S. that that is what's currently spent on gaming.

[Paul Burns]

That was based on the national gaming impact study done in the 1990s. That was an estimate they felt they had.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

So it might even be more now if in the 1990s it was—

[Paul Burns]

It could be.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

In fact, if I can...and I'm sorry, the phone is throwing me off now.

That amount of money...I mean $80 billion to $380 billion is a significant amount of money. Right now it's still illegal in the United States in most states, so we could generate a tremendous amount of American investors, I would call it, here in Canada.

[Paul Burns]

It would depend on how and where it was offered and their access.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

You say the margins are slim, but 5%...I'll take any percent of that 5%. I mean, we're talking some very significant money.

[Paul Burns]

It could very well be. One of the things we found with online gambling in Canada, because we did some research not two years ago—and this was prior to British Columbia or Loto-Québec offering any online product—was that in the current forms, 70% of Canadians thought it was illegal in the current form they were using, which was offshore sites. Over 50% thought it was being regulated by the government in Canada. In fact none of that was occurring. So it's discomfort with the product. To say they would change their habits is interesting.

I think what the lottery corporations want is a chance to compete. I think what they're looking for now is having to compete for that product and those dollars that they've never had the opportunity to compete for before. So there is potential. I would say about 10% of the gambling product—

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

I think I'm already over my time, so I just want to clear this up.

In Alberta most of the money that's generated from this goes to non-profit groups. Is that the case in Ontario as well? As I said, it's a significant amount of money.

I was a criminal lawyer, and I can assure you that, like Mr. Harris, I saw many families destroyed as a result of gambling. Many people went to jail numerous times, repetitively, no matter what people did. How are you going to deal with that? In Alberta I understand some of the money goes back to fund groups like Gamblers Anonymous and things like that. Does that happen here in Ontario?

[Bill Rutsey]

Oh yes, Ontario is the largest, with about $40 million allocated to the study and treatment of problem gambling. That's more money than any other jurisdiction anywhere in the world. The issue is taken very seriously.

Having said that, the interesting thing is that when you measure rates of problem gambling, and they've been measured across Canada, the United States, and around the world for at least 20 years, whether gaming is introduced or not—there's no legal gaming, legal gaming is introduced, legal gaming is increased—the rate of problem gambling doesn't change. It's about 1% of the general population.

As Mr. Harris said, what you do change is people's access. Building a bar around the corner from your home won't make you an alcoholic, but if your neighbour is an alcoholic, it might make it a little bit easier for him to go get a drink. That's really a good analogy. Problem gambling is a very severe problem for a very small minority of people.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

One per cent is quite a few people.

[Joe Comartin, NDP, Windsor—Tecumseh, ON]

But it already exists.

[The Chair, Conservative, Dave MacKenzie]

Thank you.

Mr. Harris said he had one brief question.

[Joe Comartin, NDP, Windsor—Tecumseh, ON]

Let me respond to that. Alberta, in fact, spends hardly anything. According to a 2010 study, Alberta spends $1.5 million on research. But we don't have any figures, and this was a study done on what all the provinces spend. So my guess is they spend very little by comparison with the other provinces.

[Bill Rutsey]

Across the country it's more than $100 million on an annual basis.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

People can check themselves out of gambling sites as well, can they not?

[The Chair, Conservative, Dave MacKenzie]

Let's try to get it back on track. I know Mr. Comartin is a little delusional about his hockey team, but we did want to...

[Jack Harris, NDP, St. John's East, NL]

I have one quick question on the odds. You mentioned 95% of the money is returned to the people who are betting and there's a 5% take. I don't know if that's a rule; it must be a practice. How does that compare with the competition from the so-called online gambling, the organized crime gambling , or whatever? Is it a rule, that 95%?

[Bill Rutsey]

It's not a rule; it's an average of what occurs when you have people who are interested in a single event, whether it's the Super Bowl or tonight's hockey game. They've studied the teams, and they're not betting with the heart. They take a look at the line and then they place their bets. When people are betting from that perspective, 95% of the time they get it right. Hence, the low return. It's a high-volume, low-margin business.

I think in Nevada sports betting represents one per cent of the overall amount of revenue earned there. What also occurs is that when people come to the sports book, they inevitably buy some food or have some drinks. They'll sit and watch the game, or go off and do something else, or they may even stay overnight. So there's all kinds of additional revenue created. From a bricks-and-mortar perspective, this is a traffic generator. It's just another reason for people to come in.

[The Chair, Conservative, Dave MacKenzie]

Thank you.

Mr. Woodworth, please be brief.