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April 29, 1999
Standing Committees
Community Services
Meeting topics: 
Community Services -- Thur., Apr. 29, 1999

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1:00 P.M.


Ms. Maureen MacDonald

MADAM CHAIR: I think we have a quorum so I am going to call the committee to order and we will get started, although we may be joined by one or two other members as the meeting goes on. I would like to welcome, again, Porter Dillon Limited and Sterling Research Incorporated. I am just going to turn it over to you.

MR. JOHN HESELTINE: Once again, my name is John Heseltine. I am with Porter Dillon Limited. I am the Project Manager for this socio-economic impact study of video lottery terminals. Kerry Chambers is with Sterling Research Incorporated and John Jozsa is with me in Porter Dillon Limited. Kerry did moderate the focus groups and helped us with the social research aspects of the work and John is our economist and he did the economic impact component of the work.

I have put together a small presentation basically to go over the research that was done. I summarized what I consider the main points or major points that we have made in the report. It will probably take me 10 or 15 minutes and I hope it will be helpful for the subsequent question and answer segment.

Our work has been completed consistent with our proposal which was submitted in September and reviewed by the committee. We have done secondary and primary research. The secondary research involves the sources listed on this overhead. We reviewed various popular journals, including the database from the Chronicle-Herald concerning this subject, Maclean's Magazine and various other publications which are cited in the report. We also reviewed in considerable detail, I feel, studies that have been done in the past in Nova Scotia. Our colleague, Mr. Chambers, completed a number of those studies. A good deal of the work is consolidated together in the annual reports of the Nova Scotia Alcohol and Gaming Authority which are very useful, convenient publications for this purpose.


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We also, as everybody is aware, relied quite strongly on the Focal Research survey which was a comprehensive survey of VLT players and problem players in the Province of Nova Scotia, completed in 1998; a good survey of recent origin.

There is also a substantial body of literature on gaming and VLT play relating to economic impact, social impacts and so on and we reviewed a good portion of that in academic journals and other materials that we obtained largely from the Alcohol and Gaming Authority library.

In addition, we went through a program of primary research which was, I think, specified in fair detail in our proposal. The first component was strategic interviewing and we have interviewed the associations that were listed in our proposal. That included: people from the Alcohol and Gaming Authority; from the Atlantic Lottery Corporation; Sheraton Casino; RCMP; I believe we interviewed an individual from the Bar and Beverage Association; and various individuals with associations/societies that help people with gambling problems.

Another component of our research was consultation. We have met four times with the committee and we have gotten your input throughout the project. We have tried to take that into account in preparation of the report. Also, as I believe everybody on the committee surely is aware, at the request of the AGA and the Gaming Corporation within the last week, or two weeks I guess it is now, we met with them in our offices in order to get their input and comments on the study, again which we have incorporated to the best of our ability, or what we consider reasonable, into the report.

Finally, a major component of our research was the conduct of six focus groups, three of which were held in the Halifax region and three of which were held in the Pictou County area. Those focus groups were divided into groups of non-VLT players, regular VLT players and problem players. Of course, we used those sessions as a means of increasing our understanding of the behaviour and preferences and so on of players, non-players and problem players to assist us in developing our economic impact assessment and certainly to generally help us illustrate the issues related to VLT play in our report.

The economic and fiscal impact analysis then relied on these sources. Assessment of the impact of VLTs by Canmac Economics which I believe was done for 1997 which we used as a model for the 1998 study. We also used, as I have mentioned, the Focal Research survey considerably in terms of data it provides on the population that is of interest to us in this study - that is regular VLT players and problem VLT players. As I have said, we conducted focus groups and they were an important basis for our assessment of economic impact supported by the Focal Research survey in particular and the other components listed here. So again our consultation with the AGA and the Gaming Corporation was important to our economic assessment in particular. We have been able to refine the report to a degree with respect to diversion of gambling to First Nations reserves as a result of some of the information that was recently provided to us by the Gaming Corporation.

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We did make use of academic literature from various journals, including some work that was conducted by a Dalhousie professor that was published in an American journal and certainly a number of other sources of that type; studies in other jurisdictions referenced by the Alcohol and Gaming Authority in their reports that we obtained through their library. As in all studies of this type, of course, we have made use of Statistics Canada data and also made reference to information or parameters from the Nova Scotia Department of Finance input/output tables which Mr. Jozsa was involved in constructing in the past and is very familiar with.

We certainly want to make the point that it has been our objective, based on our proposal, to produce an objective assessment of the impact of VLTs and certainly our study has indicated positives and negatives. So I thought I would try to point out some of the major positives and negatives that are identified in our report. Certainly with respect to the positive aspects of VLTs, it is obvious that a good number of Nova Scotians play them. The majority play them without difficulty and enjoy playing these games and derive some entertainment.

The legalization of video lottery terminals in the province was partly motivated by a concern with illegal video lottery terminals, and indications from our consultation with RCMP and published materials is that it is believed that legalization has had a significant impact on reducing the number of illegal machines in the province. Our calculations indicated that the expenditure on video lottery machines supports about 175 jobs in the province. The province obtains about $81 million in revenue from video lottery terminals and some of that funding is diverted through the Gaming Corporation to the gaming foundation to funding for research into gambling and to assistance toward organizations involved in assisting problem gamblers. Also, as the operation of VLTs, we have determined is a very profitable aspect of business, it is a profitable business to be in, there is no question that they are of benefit to licensed establishments in their profitability in the province.

On the negative side, we have indicated that in the long run it is not possible for players to stay ahead playing VLT machines which is not particularly consequential for the majority of players but certainly is for the group that is identified as problem players. Our focus group research and other sources have indicated significant impacts - personal, family and community impacts - resulting from problem play with video lottery terminals.

For those players who have problems, outside research and our consultations indicate there are likely to be impacts on their productivity. There is a higher proportion of problem players who are in debt as a result of playing video lottery terminals. We calculate, on the basis of information from studies done outside of Nova Scotia, that the overall impact on the economy is a cost of $74 million resulting from VLT play.

There is, of course, a whole range of actions that the committee and the Legislature can consider as a result of this study, presumably based on, I hope, careful consideration of the information that we have provided but certainly we have discussed and assessed the

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potential of removing VLTs as a legal gambling option in Nova Scotia. Those roughly are, I guess, the key consequences as we see them of withdrawing legal VLTs from Nova Scotia.

Certainly, it results in reduced access to VLTs for players or for those who are interested in playing; we believe less potential for current non-players to become players although it won't prevent that entirely. There is the potential that illegal VLT operations, which were active before legalization, might be restored. There is certainly an expectation, which we have now calculated, that there would be some transference of VLT play to First Nations reserves which will continue to have the legal right to operate VLT sites. There is the potential, obviously, that problem players and regular players as well will transfer the income that they are currently spending on legal VLTs into some other activity, potentially other gaming activities; potentially other social activities, entertainment; legal and illegal. Certainly, we have indicated that our research with respect to problem players indicates a strong likelihood of transference to other forms of gambling.

Not all the jobs supported by VLTs will be lost as a result of withdrawal but a substantial proportion, and we calculate that at 150 jobs. The same goes with revenue for the government; we said $81 million is the amount of revenue the government obtains and roughly $57 million is our calculation of the loss that would result for the province. To the extent that VLTs support the profitability of licensed establishments in the province, obviously the loss of the ability to operate legal VLTs on-site would impact on the profitability of those operations.

Finally, we cannot reach a definite conclusion about the reduction in rehabilitation costs and economic costs associated with problem play because there will continue to be other gambling alternatives and, in fact, there will continue to be VLT alternatives in the province to the degree that access would be reduced. I think it would be reasonable to expect some reduction but we are not in a position; there is not enough information to reach any conclusion about what that reduction would be.

I have provided that on a summary and I hope maybe that gives a few guidelines or points, I guess, about what we have summarized or what we put in our report, which, obviously, provides a lot more supporting detail.

Kerry, John and myself are here, obviously, again, to answer any questions.

MADAM CHAIR: Thank you very much. The floor is open for comments or questions and I will keep a speaker's list and I will try to look at some equity around time as well. Mr. Montgomery.

MR. LAWRENCE MONTGOMERY: I have a question related to it, with reference to the last point. You were talking about costs pertaining to employment costs, labour costs, et cetera. On Page 4 of the blue section, it indicates that, "Data do not allow us to state

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definitively the quantity of these various costs in Nova Scotia. Banning of VLTs is unlikely to completely eliminate these costs. Problem players strongly indicated that they will likely shift to similar compulsive behaviours, including continued VLT gambling.", probably elsewhere.

Yet on Page 68 in the report, of the white pages, "The precise dollar value of these costs is, unfortunately, even more difficult to define. It cannot however be disregarded. Three major categories . . . are relevant.".

My question would be, how relevant? You have indicated that definitively you can't come up with a figure, so what I am saying is, there seems to be a little bit of a contradiction there. The question I would have would be, how relevant?

MR. HESELTINE: I don't believe we are contradicting ourselves. Obviously, in both cases we have indicated that it is very difficult to come up with a figure as to what the cost is and what the avoided cost might be. In fact, I would go beyond saying it was difficult, we didn't feel it was appropriate to attempt to come up with a specific number. Our calculation of the overall economic cost suggests that there is a significant economic cost related to VLT play. So my feeling would be that certainly it is relevant and we can only leave it, I guess, as a qualitative judgement in terms of what the avoided cost might be. John, I don't know if you would like to add anything to that.

MR. JOHN JOZSA: The line you cite on Page 68, that comes out of a section that deals specifically and only with financial and economic issues and that is why those are the three, we think, I believe, biggest dollar cost items. The later discussion gets into the social impacts, which are much more difficult to put a dollar cost on, lost time at home with spouses, so again there is not a contradiction. This is one piece of that discussion on the blue pages and then later on - I don't have the exact page - there is the second piece if you will, and hence the socio-economic title to the study.

We do use estimates from other jurisdictions to get a sense of about how big this thing is, just to put that discussion out. So, there are actually two pieces of the discussion, Page 68 and then later on we talk about some of the social issues. Together, we come to the blue page.

MADAM CHAIR: Mr. Balser.

MR. GORDON BALSER: I guess my question would be, we have the document and the intention of this meeting is to sort of receive that as the final draft and then I think I am wondering where we go next in light of there is going to be some discussion about various items within the document itself. There is a letter here from Dara Gordon, the Vice-Chair of the Gaming Corporation, and in that she highlights some concerns they have about what the next step will be. I see there are nine items that question how we will have an arm's-length

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process to ensure that the information contained in the report is impartial, unbiased and fair. Is that capturing the nuance of the letter as I read it?

MADAM CHAIR: Well, I certainly wouldn't presume to speak on behalf of Ms. Gordon but our process, as I understand it, is, we were under the legislation given the job to contract, to tender a socio-economic impact study, which is what we have done. We have the study now. The standing committee receives the study and tables it in the Legislature and at that point in time, it becomes part of the public domain for debate and discussion.

This letter was received yesterday. It will be discussed as part of our agenda today, as we talk about where this report will go and how we will proceed with it.

MR. BALSER: So, until such time as the report is tabled in the Legislature then it is not in the public domain, other than the fact that we are discussing it at an open meeting?

[1:30 p.m.]

MADAM CHAIR: The report itself physically goes first to the Legislature. It doesn't go to any other group. It doesn't go to the Government Bookstore. It doesn't go to the media, although the summary and all of these discussions are fully available to the press. I have discussed, with the Committee Clerk, what the process and precedents have been for other similar arrangements and this is the process that has been used in the past.

MR. BALSER: So, at some point then we are going to discuss what is next. I guess my concern, to some degree, is at what point will people have an opportunity to respond to the content of the document, whether it be people who are opposed to VLTs or those who have a vested interest in seeing that they are maintained. I think that there has to be an opportunity for the larger public audience to review and respond to it before we, as a committee or the Legislature, embark on any new direction. That is to be discussed, I guess?

MADAM CHAIR: Yes, and that is fair enough. Under the legislation, we have no other mandate other than to have commissioned a report that looks at the socio-economic impact of VLT use in Nova Scotia. We were not asked, as a committee, to advise the House on what government should do. That was not part of the legislation. We were asked to commission a study. We were given a time-frame to bring that study back to the House and that is what my interpretation of the Act is, and that is what we have been doing precisely.

MR. BALSER: So, not to belabour the point, but I guess it comes back to the fundamental question of what is next. Granted we can cross t's and dot i's at this meeting and then ultimately say, yes, the document now is in the hands of the committee. But I think, at one point in time, there was a fair amount of public interest in what would come out of this and what would be recommended. Be that as it may that the committee doesn't necessarily have a mandate to make recommendations, I think it would be incumbent upon us to at least

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suggest something that should happen with this that would include, as I said earlier, an opportunity for various people to respond to what is in there rather than nine of us and a few others regurgitating what we have heard and read. Enough said about it, I guess.

MADAM CHAIR: Mr. [Charles] MacDonald.

MR. CHARLES MACDONALD: Can I just have some clarification maybe from one of the gentlemen we have here today. On Page 24 in the report - and to go to a member of the standing committee and Mr. Pye had concerns at the last meeting - ". . . VLT machines and the environments in which they are placed are being modified to facilitate player expenditures . . . the Automatic Teller Machines are being placed in many bars, often near to VLTs. He also voiced a rumour that VLTs . . .".

Is there any regulation regarding VLTs in the vicinity of banking machines?

MR. HESELTINE: Not to the best of my knowledge.

MR. CHARLES MACDONALD: Would you check on that one? Our understanding is there are regulations in place as to the placement of banking machines and that comes from the banking industry. These are things, I guess in looking at this report, is kind of the stuff, we're giving the nuts and bolts, we want things to be perceived by the public that they got the right information if and when it does go public, Madam Chair.

That comes through the banking association and not through the VLTs, that they have specific regulations as to where they do place their banking machines and that sort of thing. There are many areas in the report that we have similar types of concerns. I think that goes, again, to the letter that we got today as well. Maybe we should be reviewing the report. It should be opened up to other agencies, or whatever, for review before it is made public so that we can be assured that what is contained in the report is . . .

MADAM CHAIR: We will have a chance to discuss that before we leave today.

MR. HESELTINE: I would say with respect to that particular line, essentially, we were quoting and indicated in the report what Mr. Pye had said, and not actually saying one way or the other that ATMs are being strategically placed near VLTs. In fact, we don't know one way or the other. I believe there was another piece of information with respect to that that we were able to review with the Gaming Corporation about the use of bill changers in machines and that is referenced in there. Again, we have identified that and the source in the document.

MADAM CHAIR: Mr. Montgomery.

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MR. MONTGOMERY: On Page 5 of the blue section, it is indicated that, ". . . it is imperative to aim market research at harm reduction.". Then over on Page 24, what Mr. [Charles] MacDonald was just referring to, I think a good portion of what we see there approaches that. It looks at that, does it not?

MR. HESELTINE: Yes, I think it is quite clear that the Gaming Corporation has undertaken an initiative and it has various components which, we were fortunate, they provided us with information. To the degree possible, we have tried to incorporate that into the report so that the members of the committee know what the Gaming Corporation is doing.

MR. CHAIR: Mr. Pye and then Mr. Muir.

MR. JERRY PYE: First of all, Madam Chair, through you, I guess I would like clarification. I didn't fully understand what MLA Charlie MacDonald had mentioned with respect to that it was sort of the responsibility of the banking industry to not place ATMs in facilities that have video lottery machines. Allow me to tell you that if it is not in the interest of them to do so, they are doing it and doing it quite rapidly.

As a matter of fact, they are encouraging the owners of these facilities. It may not be the banking industry, but private industry is out there encouraging these people to take in the ATMs and they may even be getting a commission off of them. Not only are the ATMs located in the facilities where VLTs are, there are also the debit machines and there are also the credit card machines, which people can extract credit cards from and they go on continuously.

As a matter of fact, the hours of operation, I believe that the Atlantic Lottery Corporation shuts down VLTs for most premises and operations in Nova Scotia at 1:00 a.m., however, not on reserves. Not only that, if people have used up their credited amount for a given day of a maximum of $500 or whatever, they wait until after 12:00 midnight and then go back and collect more money and go through the gambling process, a truly addictive manner and which something has to be done. If, in fact, the Gaming Corporation isn't addressing that issue now, it is one that we should make sure that they address.

I was under the impression, Madam Chair, that we, as a standing committee, had the authority to bring forward or to engage in a consultation study on the socio-economic impact of VLTs in Nova Scotia. We, therefore, would accept this study, we would bring it forward and before we were to take it to the Legislature, I was under the impression that we also had the authority to make recommendations. I hope that is still the case and I hope that this standing committee does make some recommendations, as well, before it goes to the Legislature, just simply as a package. That was the whole thrust, or my thought of the thrust, behind this whole process. Now, I don't know if that is true. You will have an opportunity to respond to that later.

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I am very pleased to see that we are going to address the letter from Dara Gordon of the Nova Scotia Gaming Corporation with respect to what is before us. As you know, at the last meeting, I voted against the consultants meeting with the Nova Scotia Gaming Corporation. I felt that they had already provided sufficient input and we will talk about this at a later time during the day. Thank you.


MR. JAMES MUIR: Just a minor thing, but it would be in the construction of the report, Madam Chair. On Page 24, where you report Mr. Pye's comments from the last meeting, if you remember, at the meeting with the Gaming Corporation and the Alcohol and Gaming Authority, I did ask Dara Gordon, specifically, about putting bill changers on those machines and she told me, no, yet, you didn't report that.

MR. HESELTINE: Oh, I think we did, actually.

MR. MUIR: Someplace else in there?

MR. HESELTINE: Yes, we did. I believe we have actually referenced (Interruption) Footnote 56 on Page 24, actually, refers to it. Specifically, the RFP indicates, I guess, the potential of putting bill accepters on the machine, subject to approval by the NSAGA, the Alcohol and Gaming Authority. If you look at the very bottom of Page 24.

MR. MUIR: I see that but I was thinking of her comment. She indicated they were not planning to do that, yet, the common - I think I had used the term - street talk, is that they were certainly going to go ahead with that and she denied it. That was my point.

MR. HESELTINE: Yes, I guess I felt that where there was, clearly, a documented source about that, that it was best of her to do that.

MR. MUIR: Then they need permission.


MADAM CHAIR: Mr. Montgomery.

MR. MONTGOMERY: Yes, I would just like to talk about a few things here. First of all, you have indicated in your summary, pretty well, basically, that most people put in $20 and that is it. There is not a problem. So it is used as a form of entertainment.

The other thing is, pertaining to those who have problems with VLTs, indicates that it is not so much the VLTs, a change in style of their life has happened. I think that is pretty common and a summary of one of your statements.

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MR. HESELTINE: Yes, we did reference that at least twice.

MR. MONTGOMERY: Thirdly, that the need for education - and I think the study, itself, will point to that - will supply that information to people. The perception of the non-player focus group was that the people who play and have problems lose everything. This is probably not an accurate perception.

MR. HESELTINE: Yes, I think, probably, as I think we have indicated in our report that, certainly, there are some misperceptions with respect to what percentage of the population would be identifiable problem gamblers.

MR. MONTGOMERY: So, therefore, the need of education and, therefore, the report itself should serve that purpose, is what I am saying.

MR. HESELTINE: Yes, from that point of view and to address other related issues.

MR. KERRY CHAMBERS: If I could just pick up there. In general, problem gamblers go through several different phases. They go through a winning phase, a losing phase, a desperation phase and that is why it is very difficult to simply count up heads in the province and say, this is how much it is going to cost because at any given point in time, they may be in a different, particular situation.There are people out there who eventually will suffer severe consequences from their gambling. I think one thing that is important to note is that a lot of these people are not just VLT gamblers; they are gambling in a lot of different areas, on top of video lottery.


MR. PYE: Madam Chair, I have to apologize. I was not in my office and did not pick up this book. I guess this is the last report that has come forward. The other two reports, I have.

I believe at our last meeting, I had asked, in reference to the number of individuals who have been cited as problem gamblers, or the numbers in Nova Scotia that have been cited as problem gamblers. That was pointed out at 6,400 individuals, I believe. I said, what is the impact of that? Can we see what kind of a number goes beyond that? How does that affect family members and what is the ratio? The direct impact is 6,400 but the indirect impact is larger. I am just wondering, how many people are, in fact, affected by the problem gambler. Is there a greater number?

MR. HESELTINE: I wonder if I could answer.

MR. PYE: I did ask it for clarification on that.

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MR. HESELTINE: I did try to respond to it but I have got to admit in a very rough way. One reason why I was reluctant in the end to apply the household size number for Nova Scotia is that it is clear from the evidence in the Focal Research survey that individuals who are problem gamblers come from smaller than average households. The Focal survey does not give us specific information that would tell us what the average was so we could say how many people were in the household.

What I have said, if I recall, is that it is logical to assume that most of us, and most problem gamblers, therefore, probably have at least two close relationships in their life. So you can, obviously, multiply the 6,400 people who are estimated to be problem gamblers in the province by three, essentially, and get a number around 20,000 as people who are likely to be significantly affected by this.

Obviously, for a calculation of this type, it depends very much on what level and if we were to expand to an average circle. I do know there is social research that indicates that most of us have about 100 connections and there is evidence in the Focal survey that a large percentage of Nova Scotians identified themselves as knowing people who had problems and so on.

It is a difficult question to say anything specific about but we have tried to acknowledge that, obviously, the impact of problem gambling is not entirely confined to the 6,400 people who are estimated to be problem gamblers.

MR. PYE: That is the point I want to clarify, Madam Chair, because we are doing a socio-economic impact of VLTs in Nova Scotia and if we do not identify family members who are directly affected and we decrease that by numbers of the identified individual, then we really do not get a true picture on what kind of an impact there is out there. I think it is important that we identify the real impact that is out there and not just simply the direct impact.

As I see it, the number of 6,400 is easily dismissed but the number of 18,000 to 20,000 people is not so easily dismissed. That is the important point to make clarity with.

MADAM CHAIR: Mr. Balser.

MR. BALSER: The legislation that brought about this study was founded on the idea that by having a moratorium in place, we would, I think, by and large, keep the problem from becoming worse while we sought input about how to fix it. I guess my question would be, while you are not to make recommendations, would it be your conclusion that a ban on VLTs would, in effect, eliminate the problem to the degree that, I think, there is, perhaps, a public will or desire?

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MR. HESELTINE: I would be willing to answer that, because I think it is in our report that, essentially, it would not because there are VLT alternatives that exist. There is a significant legal VLT opportunity that will continue to exist at First Nations sites. There is the potential to re-establish illegal VLT play and some of our contacts indicated that if legal VLTs were no longer available, they would move to illegal VLTs.

Finally, there is obviously strong evidence of codependencies, and so on, among individuals who are identified as problem VLT players. So there is strong reason to believe that they would obviously move the money that they spend on VLTs over to those other activities. So we, certainly, have not indicated, I feel, that there is a one-to-one relationship between the withdrawal of VLTs and, I guess, ameliorating the related problems. I don't know.

MR. JOZSA: There is a second point that we make in the report, and that is for those who have yet to be exposed to VLTs, like any product, if you just are not exposed to it, there is a greater likelihood you may not be attracted to it, because you won't go out of your way to stumble on this one type of product.

For the current problem players, I think our report describes quite clearly, it is going to be a tough haul. For those yet born who may not have exposure, obviously less exposure means a less chance of - if I am not exposed to tea, the less chance I am going to drink tea; I will drink coffee, maybe. So, as John said, it is not just a one to one, it would just be nice if we could come here and say, here's a light switch.

MR. CHAMBERS: I would just like to make the comment that problem gambling in general, whether it is video lottery terminals or bingo or playing cards in the back room of a restaurant, is a very complex issue. For instance, if the committee or the Gaming Corporation is looking at altering the machines the thing about harmonization is that if they alter them to the point that the problem gambler no longer sees the value in playing them, that theoretically could create a market for illegal machines again. So, in terms of social policy, you have to be very, very careful as to what you are deciding, what you are looking at.

The information that is here, I believe, we have taken the time and effort to construct it to the best of our ability. Notwithstanding that, I don't personally think that a ban on VLTs would remove the problem of pathological gambling.

MR. BALSER: My intention was not to put you on the spot but I think what you have said needed to be articulated, so that there are no misperceptions. I appreciate your candour, thank you.

MADAM CHAIR: Mr. [Charles] MacDonald.

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MR. CHARLES MACDONALD: I just want to go back to the education side again, John. Nova Scotia, I take it, we are about third or fourth in Canada for the number of VLTs or are we lower than that?

MR. HESELTINE: Yes, I believe the Prairie Provinces all have more than we do.

MR. CHARLES MACDONALD: On the education side, are we doing better for our size or are we on an even keel, education-wise, for our spending and our emphasis on education in Nova Scotia?

MR. HESELTINE: I will give an answer and then Kerry may well want to elaborate a bit more. My impression is that Nova Scotia is doing a fairly good job. Certainly, the level of gambling research in the province seems to compare well with other jurisdictions in North America. There is an ongoing effort to address problem gambling, including problem VLT play in the province. The degree to which that is being disseminated to the public, I guess there might be some question there because a fair bit of the research seems to indicate that there is considerable misperception about (a) the scale of the problem, and (b) the exact nature of the problem.

MR. CHAMBERS: I think that Nova Scotia is, from what I have seen, probably well ahead in terms of education. For example, the Department of Health has a curriculum supplement that was developed two years ago, which is being put in place, I think. I actually helped, I didn't develop it but I read through it and gave input on that. It is a very good educational tool that, if I am not mistaken, begins in Grade 7 and goes all the way through to Grade 12. So it is starting to try to teach young people about gambling and responsible gambling.

I have done a fair amount of public opinion research into perceptions of gambling and video lottery gambling and other types of gambling, both surveys and focus groups. I think that there is a fair amount of misperception of what is going on in Nova Scotia's society. More importantly, I think that most Nova Scotians don't recognize the risks or the signs of risk of when they themselves are developing a problem or others around them are developing a problem. One has to take into account that this is a very difficult problem to identify. There is no smell of liquor. There is no stumbling around. Oftentimes, a spouse or a partner or an individual only finds out long after the persons themselves have been over-gambling in one area or another. Nevertheless, there are signs that people can learn to identify. I think that that is where we were kind of going with education. I don't think very many people want to drive off a cliff and if most people see the warning signs before they do, they are probably not going to.

MR. CHARLES MACDONALD: If I may just finish up. There was only one other thing. It goes back and what Jerry said. Initially, it was about the banking machines and I think there is regulation within the banking process on that side. I don't disagree that we have debit

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cards and client cards within the establishments themselves. You may very well have banking machines but I think there are regulations as to positions and where they are. That is my only comment in that area.

MADAM CHAIR: Ms. Atwell.

MS. YVONNE ATWELL: Just given what you said about education in the schools, starting in Grade 7.

MR. CHAMBERS: I believe it is Grade 7.

MS. ATWELL: Well, somewhere around there. In your opinion, do you believe that if there is a combined effort on educating the public around VLTs, plus a moratorium on VLTs, do you think the combination would be more effective, less effective, or the same if you only had the education and there was no moratorium on VLTs? The reason I am asking the question is I am thinking about young people now who are maybe starting to look at that, or the effects of that.

MR. CHAMBERS: This is my own personal opinion and I would like to state it as such. I guess I am quite impressed with Queensland and New South Wales, Australia's approach where they have what they call the Break Even Program where government, the gaming industry and the community have come together at the grass-roots level. As far as I know, I am not totally familiar with the process, but I believe that each individual community works together with these organizations and they have monthly meetings. It is to promote education, to promote responsible gambling, to identify people in the community who are at risk, and possibly intervene before they get too far down the line, that sort of thing.

Having said that, these particular jurisdictions have probably 10 times the number of VLTs per capita - they call them EGMs - than Nova Scotia does. Their pathological and problem gambling rate is substantially higher; it is twice as high. But I think like anything else, and again this is just my own opinion, there needs to be kind of a grass-roots approach with government involvement with the gaming industry and so on and so forth.

MR. JOZSA: Clearly, as Kerry just said, from an economics marketing perspective, you ask the question, education with a moratorium. Well, if you limit access to any product, fewer people are going to be exposed to it. Of course, as Kerry just suggested, in Australia where there is in the order of 10 times more VLTs, it is in the order of two times more problem VLT players. So, it is not a one-to-one thing, but we do know that the more shelf space you get, the more folks are going to buy your products, especially if it is legal. Why not? It might be fun.

[Page 15]

I think the answer to your question is, is VLT play the kind of activity the Nova Scotia community says, it's okay, as is golf or tennis. Is this an okay thing to do? If it is, we have certain constraints on it to keep people safe and whatnot, but it's okay. But a moratorium, all of a sudden, suggests, gee, it's kind of naughty. The side effects of that moratorium could be who knows what. On the other hand, if you had a complete elimination of them - well, Muslim countries don't allow alcohol. I can guarantee you, there are fewer alcoholics in a Muslim country, but I can't guarantee you there are not other places where the social stresses have expressed themselves. They don't have alcoholics, but maybe they have some other place where social stress has expressed itself. I just wish we could stand here and tell you, it's a one-for-one deal.

[2:00 p.m.]

MADAM CHAIR: You are saying, it not cause and effect?

MR. JOZSA: There is a cause, but it is not one to one. In everything we read, it's a brew of all the stresses we bring upon ourselves.

MR. CHAMBERS: Can I make one last comment. I think that before bingo, let's say before 1985, when the law was changed to allow mechanical gaming machines, there was basically informed consent. People knew the game of bingo, they knew pretty much their odds of winning and so on and so forth. I think that with these new forms of gambling, there is less so-called informed consent and that is, in my opinion, where we need to be going, that people are informed, they know the consequences, they know the risks involved, they know that you can have a good time, but you have to be responsible about it. Or, here are some of the warning signs of when you're falling away from that. Again it's just my opinion, but that is where we need to be heading.

MADAM CHAIR: Mr. Pye and then Mr. Muir.

MR. PYE: Once again, through you, Madam Chair, to Kerry. When answering a question of MLA Charlie MacDonald with respect to how Nova Scotia fares with respect to putting money into education and research with respect to gambling, I think you might somewhat be correct in that. I don't have any information to document that you are wrong. However, the problem is that problem gamblers and/or associations or agencies to deal with problem gamblers, they are not getting the money. There seems to be that dollars flow, but they are going into research and into education. Yet the people who have already hit rock bottom as a result of using the gambling machines are not getting the funds and/or the agencies that need to help these individuals are not getting the funds. That is now.

It's okay and it's fine to bring in an educational program and to develop that over a period of years, but still there is a responsibility upon government, if government is, in fact, the party responsible for legalizing gambling, then it is also the responsibility of government

[Page 16]

to address the social problems that come with that. Here we don't see that. As a matter of fact, I will tell you that two agencies - in fact, I have received copies of their letter from the Nova Scotia Gaming Association this month - were denied funding even though they had problem gamblers in their facilities. I think therein lies a problem that we have to address.

I don't know if you have looked at that with respect to Australia and New South Wales. I believe that they do have money that goes into agencies and/or the community to address these particular problems. I may be wrong, but through you to Kerry, I would like to see if, in fact, that is true and why we haven't addressed that particular one. That is the first question, Madam Chair.

MR. CHAMBERS: I guess I would have to make a neutral comment on that. There is at least one agency in Halifax that was funded as a drop-in centre.

MR. PYE: Yes, $275,000.

MR. CHAMBERS: There also are Drug Dependency services around the province which also have funding. One other thing is that any association or individual can apply to the Department of Health for a $5,000 grant to examine ways to help in their community or whatever; $5,000 is certainly not a lot of money.

On the other hand, I agree with you that there are problem gamblers out there who are not getting the assistance they need. Having said that, there are a lot of problem gamblers out there who are not coming forward. For one reason or another, we don't know. I don't know. I have talked to these people and it is hard to find the reason why they won't come forward. I have my own personal theories. One of them is the labelling of the term addiction. It might actually stigmatize people into not coming forward. I can't comment on how the corporation and the Department of Health allocate their funds but I do agree with you that there needs to be funding for assistance for problem gamblers of all types, not just VLT problem gamblers.

MR. PYE: My final question, Madam Chair, is to Kerry. Again, you mentioned prior to 1985, and that was pre-VLT machines, I would assume, because they did come in in 1986, did they not?

MR. CHAMBERS: No, they were introduced in Nova Scotia in 1991.

MR. PYE: I do apologize, then. Then prior to the introduction of VLT machines in 1991, they first went into corner stores and we do know the problem that that created, but prior to that, do we have any evidence or any information that tells us how many people were addicted to gambling in the Province of Nova Scotia and how that issue was addressed?

[Page 17]

MR. CHAMBERS: No, actually the first study of problem gambling was done in 1993 through Drug Dependency and prior to that, to my knowledge, there was nothing; it was not an issue.


MR. MUIR: Madam Chair, just continuing along with that line of questioning that Mr. Pye raised. Did the people in the focus groups complain about lack of assistance? If you look at the list of disbursements from this problem gaming fund, there doesn't seem to be a whole lot of it going back into "the problem gambler". Was that an issue that was raised in your focus groups? I can't remember.

MR. CHAMBERS: Once again, it wasn't raised in the focus groups among the problem players mainly because most of them were not at the point where they were seeking assistance, so I can't comment any further on people who are seeking assistance.

I should comment that I am presently doing a participant observation study where I am actually going out and sitting with people as they are playing VLTs. Again, it is a question that I have to continually ask myself, at what point these people will realize - they realize that they have a problem but they are not at the point where they are ready to seek assistance. Perhaps it is like an alcoholic, I am not sure. I don't think they have to hit bottom like a lot of people think. I think they just have to realize at a certain point that their time has come. They have to do something about it.

MR. MUIR: Madam Chair, this problem gaming fund is done through the Nova Scotia Gaming Corporation, I believe. Did you form any view about the decision-making process about how these funds are distributed or who makes that decision?

MR. HESELTINE: I certainly haven't on the basis of the information we received. In fact, there aren't any specifics as to the criteria that are applied to disburse that money. The information we received was what money was spent and identification, basically the table that you have in the report and the information concerning the status of the fund. But I have to say, we didn't ask specifically why one program was supported as opposed to another.

MR. MUIR: One final question, if I could, Madam Chair. Do you know who, as a representative of the Gaming Corporation, makes those decisions?


MR. HESELTINE: No, and did not ask.

[Page 18]

MR. PYE: Madam Chair, can I comment directly to that? I have a letter, Mr. Muir, that I will present to you and other members of the committee where there is, in fact, an advisory group, when someone makes application to the Nova Scotia Gaming Corporation, it is reviewed by the Nova Scotia Alcohol and Gaming Authority, it is reviewed by the Department of Education, it is reviewed by Health and there are three or four different agencies. It is their report that they pass on to the Nova Scotia Gaming Corporation that entitles the organizations to get the funding because in the letter it indicated that they did not receive the support of these organizations. Therefore, the funding was denied.

MR. MUIR: So it was not the Gaming Corporation in itself making the decision.

MR. PYE: So it is not totally the Gaming Corporation, itself, . . .

MR. MUIR: And I think that is important to realize that.

MR. PYE: . . . and if I get the permission from the agency to forward a copy to you the I will forward it.

MR. JOZSA: I, John Jozsa, am just going to offer an opinion. Obviously, the corporation, they are what agency? I guess the analogy is not direct but just remember 15 years ago the notion of the person who went to the bar with you would get free pop all night so that nobody would drive home under the influence, that just didn't exist. But the companies, obviously, wanted to be responsible, whether it is alcohol or cigarettes, or one would assume they would, but there is some direction from legislation that says, if you are going to sell these products, they can have a downside if they are not used properly. Therefore, you are going to have to do certain things, the alcohol industry, to help out. So there has to be some direction from the community, that is Nova Scotians, you and me, of what people who purvey certain products must do to have the right to sell certain products.

We have come a long way, for example, as I mentioned last time in terms of alcohol; 15 years ago you drove home under the influence, it was a bit of a joke. Now, you are a pariah in the community for doing that kind of thing. We have changed our attitudes and it is powerful. So when there is a direction from the community and I guess my opinion is that obviously it has to come at the end of the day from the Legislature to say, well, if you are going to do these things, we think we have to provide certain information. It is part of the deal.

MR. HESELTINE: We have, incidentally, referred to it in the report as counter-advertising; essentially, the idea that a pack of cigarettes is a vehicle for warning people of negative health effects of cigarettes and certainly, the same thing, to some degree, is already done on VLT machines and could be done to a greater extent.

[Page 19]

MADAM CHAIR: Therein lies the debate, though, how well have we done in regulating tobacco. Mr. [Charles] MacDonald.

MR. CHARLES MACDONALD: I want to go for a second to a different area but if I read our information right, we are talking about the casual player who spends somewhere between $200 to $225 a month on VLTs, or $2,400 to $3,000 a year, and the problem gambler who will spend up to $800 or $850 a month, or $9,500 to $10,000 a year, on the VLTs. At the same time, I would look at golf enthusiasts who may place twice as much and some more, probably, year-round if they got the golf courses. It is not the poor people that we are looking at, it is not poor individuals, I guess the analysis indicates that they are of means, they have the ability to spend this money. Where is the great difference in this? There is no doubt that the man who goes to the golf course on a weekly basis and every evening or whatever, at some point in time he is taking money away from the family as well. I look at all these areas and there are many of them.

MR. CHAMBERS: I conducted a series of focus groups and, again, I stress that focus groups, as you know, are not statistically representative of the population, but they do show trends. I conducted a series of focus groups with general, everyday Nova Scotians and asked them, first of all, what their favourite leisure activity was and they came up with all kinds from reading to ice-climbing. Then I asked them at what point would somebody consider your favourite leisure activity as a problem. They came up with all kinds of things. So, I said okay, let's talk about gambling now. At what point does gambling become a problem? There was very little difference between the two.

A comment that was made by a participant in that group that stood out in my mind and still does is that Bill Gates could own a stadium full of video lottery terminals and play them all day long, he doesn't have a problem because he can afford it but the minute Bill Gates' son or daughter comes in and says, can you teach me how to ride this bicycle and he says no, buzz off kid because he is too consumed with those machines, then they do have a problem.

So, that's the thing about Nova Scotia's society, the people, we have to decide what is a problem and what isn't and then take our actions from there.

MR. CHARLES MACDONALD: Are you saying that that compulsive golfer does not present the same problem to his family as this VLT player? When you look at it, and you look at both groups, and that is only two of them, I think there are many more of them out there when you look at it.

MADAM CHAIR: Maybe we should suggest a comparative study the next time between golf and VLTs.

MR. CHARLES MACDONALD: Well, we are looking at the impact on our society.

[Page 20]

MADAM CHAIR: That's right.

MR. CHAMBERS: I would suggest that any inordinate compulsive behaviour is damaging to the individual and the people around them. That doesn't mean that we should not take care and precautions to ensure that these people receive treatment, that they know that what they are doing is harmful to themselves and others.

MR. JOZSA: At the same time, I know there are compulsive workers, people who are workaholics but even in that group, a good employer is supposed to have a health and safety program that says, wait a minute, for our own good - this is society's job, as the Chair pointed out, this is where the debate opens up. Are the impacts that we describe okay in your minds, legislators, as representatives of the people, is that okay?

I can tell you, if I raised the speed limit by 10 kilometre an hour, x number of people will die because of it and you are going to have to decide if that is okay for the benefits I get. I have my own view and express it every four or five years, and I will do it again. Your question is very relevant and why do we accept compulsive work and compulsive golfing, if we don't accept - it is a strange relationship we have with gaming. It is truly a value question. What I had hoped we had described here is to show you what you get and what you don't get if you make certain decisions and then we live with it.

MADAM CHAIR: I don't mean to limit or cut off debate if there is further, but I think we need to sort of get on with making a decision about the report, accepting the report and dealing with this correspondence we have with respect to a peer review process for the report. So, if there aren't any further questions or comments, maybe we could move on to the correspondence. I will ask members of the committee, I think that maybe the consultants have an interest in the discussion and we should proceed with the discussion of this correspondence with them here.

Is that agreeable?

It is agreed.

So, late yesterday afternoon, I received this letter from Ms. Gordon, the Vice-Chair of the Nova Scotia Gaming Corporation. In it she is requesting or suggesting that prior to the release of this report that it be subjected to a process of peer review. She has outlined, as you see, terms of reference for a peer review including the review of the statement of purpose of the study, the research questions that were posed, the methodology that was used, the limitations of the research, the literature, researcher biases, ethical considerations, et cetera.

This is the correspondence that we have in front of us and I would like to hear what members of the committee have to say. Mr. Balser.

[Page 21]

MR. BALSER: Madam Chair, I guess the first question that springs to my mind is, if we were to follow the recommendation of the letter, who would fund a peer review?

MADAM CHAIR: That's an excellent question.

MR. BALSER: Just the flavour of the letter kind of casts aspersions on whether or not the process - at least that is my interpretation of it, I will qualify it by saying that but certainly my interpretation of what is written here brings it into question.

MADAM CHAIR: Maybe I should just also indicate to members of the committee that after receiving this, I took the opportunity to look into what the practice has been with respect to tendering research and reports for government. I could find no indication of any other research that had been done that had, in fact, undergone a process of peer review, number one. Number two, in looking at the terms of reference and what have you around the procurement processes, no reference is made to anything like this. The peer review process is certainly one that we are all aware of in academic settings before publication in academic journals and what have you but it is a most uncommon, if not unprecedented, undertaking in the context in which we are operating. So I share that information with you.

Mr. Balser and then Mr. Muir and then Mr. Pye.

MR. BALSER: I would say, in my opinion, that the taxpayers of Nova Scotia paid for this and they should be given the opportunity to judge it. I would hazard to guess that if the process by which it is judged is open, that people who have conflicting views would have the opportunity to respond and out of that would come a synthesis of what the general public thinks of the document.

MR. PAUL MACEWAN: Sounds like dialectic thought in action.

MR. BALSER: There you go. Boy, I wish I had thought of that.


MR. MUIR: Madam Chair, the letter from the Gaming Corporation, I don't know why they would come to us and ask if they want to do peer review, I can't see any reason why we would put the thing out to peer review. We have contracted these gentlemen to give us a study and I am quite sure that once this document is made public that peer review will be done.


[Page 22]

MR. PYE: Madam Chair, I guess I wanted to say the same thing, that I am somewhat dismayed because to me it calls into question the competency of this committee and I have difficulty with that. We were instructed by the provincial Legislature to hire consultants to do this report. If, in fact, the Gaming Corporation wants to do a peer review, it will have the opportunity to do that after it is tabled in the Legislature and after we have gone through that process and if they want to put through an expense of their own, by all means, allow them to do so. We can't stop them.

MADAM CHAIR: Are there any other comments?

MR. MACEWAN: I don't have any specific comment to this but I would just like to ask, in general terms, on this particular item, where do we go from here? By this particular item, I mean this, because the committee can receive the report but it is quite a different thing to endorse the report. That may be more contentious, I don't know, but I don't think there is any doubt about the right of the committee to receive the report. It has been commissioned, it has been presented. That is it. If others want to read it and consider it and ponder it and do all that they want with it, that is their right, too. But we have received the report and it is tabled, I should think.

MADAM CHAIR: I tend to agree with you, Mr. MacEwan. You know, looking at the legislation, the legislation is clear. It says, "Within 30 days of the Act, the Standing Committee will tender, engage, an independent person or body to carry out a study on the socio-economic impact of video lottery terminals on the province and within six months that person or body shall carry out the study and report thereon by filing a report with the clerk of the Assembly.", which is, you know, this process.

It seems to me what we need to do is have a motion saying that the report be now tabled, that we have done the job, we have received the report and it will be filed with the Clerk of the Assembly. That gives us an opportunity to allow the report to be out there in the public domain, let the debate begin or continue and it certainly doesn't prevent us, I think as a committee, in discussing it further if we want to do that and looking at recommendations if we want to do that.

It seems that the important thing is to get the report into the public domain and have this material, this research which - you know, I look at the amount of work that has been done by Porter Dillon and Sterling Research. It is a tremendous amount of work that you have put into this. I think that we should recognize that and acknowledge that and the sooner we can get it out to the public, the better, in terms of having a more informed discussion about VLT use in Nova Scotia, which I think was the intent underlying the legislation in the first place.

MR. MACEWAN: Well, I would so move, Madam Chair, if you want a motion on the floor, I will move everything that you said but I am not proposing to make recommendations as part of that motion. The motion would simply be that the report be received and tabled in

[Page 23]

the House as the findings of the consultants. It doesn't necessarily follow from that that we do or do not endorse the content.

MADAM CHAIR: Is there a seconder for that motion?

MR. MUIR: I second the motion, Madam Chair.

MADAM CHAIR: Is there any further discussion?

MR. PYE: Well, excuse me, Madam Chair, I do have some difficulty. I guess I may be wrong. I was under the impression that as a member of this committee, not only would I be receiving a consultants' report with respect to the socio-economic impact of VLTs in Nova Scotia but that we, as the Standing Committee on Community Services, would be making recommendations as well. We had specifically implied to the consultants that they were not to make recommendations, that in fact that would be left to this committee. I do believe that those very comments would be in the minutes. I have difficulty with just tabling this report to Nova Scotians.

There is a tremendous amount of work that has gone into this report and I think we got value for our dollar. I want say that right off the top. I do think that there is a concern with respect to where we go from here and I have a concern. I have a concern that we have had sufficient information to at least put forward some recommendations, to the Legislature along with this report, even if it were a brief recommendation, and that we send that forward along with this report and then allow it to go out. I think that doing it this way is somewhat shirking the responsibilities of this committee.


MR. MUIR: I was just going to say that I really see what Mr. Pye is speaking of as a different issue. I think Mr. MacEwan and you were speaking to receiving the report, and where we go from that is a different question to me.

MADAM CHAIR: That is right, yes.

MR. PYE: Are you sure?

MR. MACEWAN: I am sure. I was in no way attempting to preclude the committee's right to make judgements ad infinitum but it is a separate motion, I should think.

MADAM CHAIR: Because we didn't have a motion, we just had some agreement from what I was saying, I think that this committee can have ongoing discussions about this report and can decide to work on recommendations if we want. The important thing is to meet the mandate and the legislation which is to do the report, to do it in a time-frame which

[Page 24]

we are very close to going over, and to get it into the House and into the public domain. Actually, the debate in public may help inform the committee if we do want to work on recommendations and I think that is a really important thing that we need to keep in mind. We have had the benefit of all of these drafts and the discussion, but most people haven't had that benefit.

There is a motion on the floor. It has been moved and seconded. Would all those in favour of the motion please say Aye. Contrary minded, Nay.

The motion is carried.

I would like to thank John, John and Kerry for all of the work you have done on behalf of the committee. I realize it has been a very long process and I echo what Mr. Pye has had to say. We really have gotten value for our dollar, which wasn't easy to get in the first place, those dollars. So, thank you very much.

MR. HESELTINE: Thank you for your help in the course of doing the report and particularly to Darlene for setting up our meetings, and so on, for us. We appreciate it.

MADAM CHAIR: Before we adjourn, I want to indicate to the members of the committee that I will be corresponding with Ms. Gordon in response to her letter, communicating to her what our decision has been here today with respect to a request for a peer review process. I will have Darlene send you copies of that correspondence so that you will have it for your records.

Our next meeting day is May 20th at 8:00 a.m. We are adjourned.

[The committee adjourned at 2:32 p.m.]