Ontario's Gambling Monopoly is a Tax on Marginalized Families

June 10, 2020
Cardus

FOR IMMEDIATE RELEASE

June 10, 2020 

HAMILTON – In the wake of questionable Ontario Lottery and Gaming (OLG) spending, leadership controversies, and contentious layoff decisions, gambling in Ontario is ripe for reform. And now, a new report finds that Ontario’s “gambling monopoly operates as a tax on the marginalized—preying on the poor and those who are playing hard to join them.” In Pressing Its Luck: How Ontario Lottery and Gaming can work for, not against, low-income households, think tank Cardus shows how the poorest 20 percent of Ontario households see an estimated 4.5 percent of their incomes taxed away by gambling. That’s a rate 2.5 times greater than what the wealthiest 20 percent lose by gambling. Ontario’s income tax system, by contrast, taxes the wealthiest families at nearly ten times the rate of the province’s poorest. The report also finds:

  • Up to 24% of Ontario’s gambling revenue comes from problem gamblers.
  • OLG spends 4.5 times as much on marketing to encourage gambling as it does on problem gambling prevention and treatment.
  • Up to 83% of all Ontarians gamble, but nearly half of OLG revenue comes from just 20% of the population.
  • Ontario households likely spend over eight times more on gambling than they report.

“With casinos closed because of COVID-19, the provincial government has a golden opportunity to re-imagine gambling,” says Johanna Wolfert, a Cardus researcher and report co-author. “Ontario should reform gambling, using OLG revenues to boost the income equality or savings of the province’s low-income households instead of taxing them disproportionately to support the rest of the province.”

Pressing Its Luck outlines several possible reforms to turn OLG revenue toward reducing poverty instead of mixing it in with the province’s general tax revenue:

  • Create the Ontario Gaming Equality Benefit, which would re-direct OLG’s $2.5 billion annual contribution from general revenues to low-income families. Direct payments would be similar to what already happens through Ontario Works or the Ontario Disability Support Program.
  • Incentivize savings by using OLG profits to boost the savings accounts of low-income families. This approach might follow the RESP model where the government tops up account holders’ contributions.
  • Flip OLG’s priorities, so that the corporation no longer spends almost 4.5 times as much on marketing as it does on prevention and treatment of problem gambling. 

“No government should be using a system that targets the poor more than the rich to finance its policy agenda,” says Brian Dijkema, Cardus Vice-President of External Affairs and report co-author.

Pressing Its Luck: How Ontario Lottery and Gaming can work for, not against, low-income households is freely available online.

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Daniel Proussalidis
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About Cardus
Cardus is a non-partisan, faith-based think tank and registered charity dedicated to promoting a flourishing society through independent research, robust public dialogue, and thought-provoking commentary. To learn more, visit our website, follow us on Twitter, and like us on Facebook.

Topics: Inequality, Gambling

ABOUT CARDUS

Cardus is a non-partisan, not-for-profit public policy think tank focused on the following areas: education, family, work & economics, social cities, end-of-life care, and religious freedom. It conducts independent and original research, produces several periodicals, and regularly stages events with Senior Fellows and interested constituents across Canada and the U.S.