Alberta disproportionately taxes the poor though gambling to pay for government programs

FOR IMMEDIATE RELEASE

July 15, 2020 

A new report finds that “those at the margins of society are paying disproportionately into the coffers” of the Alberta Gaming and Lottery Corporation (AGLC). In Royally Flushed: Reforming gambling to work for, not against, Alberta, think tank Cardus shows how the lowest-income households in Alberta pay the provincial government an estimated 7% of their annual incomes through gambling – triple the proportion that the wealthiest Albertans hand over to the government though games of chance. Alberta’s income tax system, by contrast, taxes the wealthiest families at nearly five times the rate of the province’s poorest.

The report also finds:

• AGLC generated more than three quarters of its 2019 profit from slot machines and video lottery terminals, which are designed to override players’ conscious, rational control.
• Albertans are likely spend almost six times more on gambling than they report.
• AGLC revenue is treated exactly the same way as general tax revenue; it is not designated specifically for community improvements.

“Alberta made a mistake in 2019 when it started shovelling AGLC’s casino, lottery, and slot machine proceeds into general government revenues,” says Brian Dijkema, Cardus Vice-President of External Affairs and co-author of Royally Flushed. “That simply solidified the status of Alberta’s gambling system as a regressive form of taxation, disproportionately taking money from those who can least afford it.”

Royally Flushed outlines possible ways to turn AGLC revenue toward reducing poverty instead of mixing it in with the province’s general tax revenue:

• Create a gaming equality benefit, which would re-direct AGLC’s $1.4 billion annual contribution away from general government revenues toward low-income families through monthly support payments similar to the province’s social assistance system.
• Use AGLC profits to incentivize savings – one of the best ways to ensure families don’t turn to usurious payday loans. This can boost the savings accounts of low-income families, following a model similar to government top-ups of RESPs contributions or through prize-linked savings accounts.

“I hope Alberta’s government takes this research seriously and seizes the opportunity to turn bad habits into good,” says Johanna Wolfert, a Cardus researcher and report co-author.

Royally Flushed: Reforming gambling to work for, not against, Alberta is available online.