The Ontario Lottery and Gaming Corporation is modernizing. And that means expansion, new casinos and licensed gaming facilities in yet untapped markets across the province. It also means an aggressive public relations campaign extolling the virtues of OLG’s community involvement.

You may have seen the TV ads: OLG claims to have rejuvenated Brantford, Windsor, Sault Ste. Marie. But what about Ontario’s First Nations communities? What has OLG done for them, and how will they be impacted by the planned expansion?

The reality is that when it comes to First Nations and Aboriginals in Canada, gambling giveth and gambling taketh away. OLG says Ontario’s First Nations will share in their expansion’s profits, but statistics suggest First Nations communities are already being torn apart by gambling addiction at a disproportionate rate. Can OLG’s reward balance the risk?

Problem gambling: The risks

 Extensive research over the past decade-plus has shown that this country’s First Nations and Aboriginal persons are exponentially more likely to become “problem gamblers” (broadly defined as gamblers who have suffered negative effects due to gambling). A 2002 study by Statistics Canada found that 11 per cent of Canadian Aboriginals were already problem gamblers or at moderate risk of becoming such. This is compared to only 2.6 per cent of non-Aboriginals.

StatsCan has also consistently shown that the demographic makeup of Canada’s First Nations and Aboriginal populations is alarmingly similar to the profile of an at-risk gambler.

For instance, individuals who have attained less than a high school education have been found significantly more likely to become problem gamblers. As of 2006, 50 per cent of on-reserve First Nations persons between the ages of 25 and 64 had less than a high school education.

Similarly, problem gamblers have been found, on average, to be younger than non-problem gamblers. Meanwhile, the median age of Canada’s Aboriginal population skews very young — 27 years old, versus 40 for the country’s non-Aboriginal population.

Not in my backyard

 These statistics do not mean all young, undereducated First Nations and Aboriginal Ontarians will become problem gamblers. But they do suggest a predisposition toward problem gambling that becomes a much more tangible threat when viewed alongside plans to put casinos practically next door to First Nations communities as part of OLG’s expansion.

Hamilton, ON, is the proposed site of a much-discussed new casino. As a city deeply impacted by the decline of Canada’s steel industry, Hamilton has problems of its own that, depending on who you ask, would either be alleviated or compounded by a new casino. But any OLG projects in Hamilton would also be a mere 40 km jaunt down Highway 403 from the Six Nations of the Grand River First Nation.

With 11, 000 residents, the Six Nations reserve accounts for nearly seven per cent of Ontario’s entire First Nations population. What’s more, a vehement “not in my backyard” campaign waged by residents of Hamilton’s downtown has increased the likelihood that the planned casino site will shift from the city’s core to its outlying suburbs, all the closer to Six Nations lands.

To its credit, the OLG recognizes, and is trying to address, the risks posed by problem gambling. According to Senior Manager of Media Relations Tony Bitonti, OLG has the best funded Responsible Gambling program in North America. And the OLG does ensure that First Nations benefit from Ontario Lottery and Gaming ventures.

Revenue sharing

As per the Gaming Revenue Sharing Financial Agreement, OLG provides 1.7 per cent of its gross revenue (including money from slot facilities, casinos, and lotteries) to the Ontario First Nations Limited Partnership (OFNLP), which distributes the money among the 132 First Nations bands it represents. In 2012/2013, OFNLP’s 1.7 per cent cut entailed an estimated $120 million.

The deal sounds lucrative, to be sure. But it wasn’t achieved without sacrifice. Prior to 2011, Ontario’s First Nations had a 100 per cent share of Casino Rama’s net profits. For the 1.7 per cent gross revenue deal to take effect, Ontario’s First Nations had to surrender their stake in Rama and, more significantly, drop a long-standing lawsuit against the Province of Ontario concerning casino revenue. Known as the WinTax suit, the legal battle was over a 1996 agreement that called for 20 per cent of First Nations gaming revenue to revert to the Province. According to OFNLP, the WinTax case was potentially worth nearly $2 billion.

Now, in the long run, a 1.7 per cent cut of gross gaming revenue could well be more valuable than a full stake in Casino Rama or a big court settlement. But how much OFNLP’s share is worth depends on how well OLG performs. When asked what would happen to OLG’s contributions to Ontario First Nations communities if the Gaming Corporation’s profits shrink, Bitonti said only that “if [OLG’s current] modernization strategy is implemented in its entirety, OLG’s total gross revenue will increase, which will, in turn, increase the share received by OFNLP.”

That is, of course, a best-case-scenario outlook. And whether OLG turns a profit or not, the personal and societal challenges created by problem gambling will remain, and will have to be addressed, likely at great cost.

The Centre for Addiction and Mental Health warns that problem gambling can lead to increased risk of depression, anxiety, substance abuse, even suicide, not just for gamblers but their families. That $120 million awarded to OFNLP this year, earmarked for health, education, and community, cultural and economic development according to the OFNLP partnership agreement, only amounts to a little over $900,000 apiece when divvied up between all 132 member bands.

OLG is not ignoring Ontario’s First Nations. It is providing them with a source of revenue, and is attentive to the dangers of gambling addiction in Aboriginals and non-Aboriginals alike. But maintaining a positive balance between help and harm will be of dire importance as OLG expands.

Behind the flashy TV ads, and the multi-million dollar revenue sharing deals, there are real people struggling with addiction and its long-lasting, far-reaching ramifications. They must be the priority. 


Peter Goffin is a writer and recent political science graduate living in Toronto. His work has appeared in The Toronto Star, OpenFile, and This magazine.