We’ll call Loto-Quebec’s withdrawal from poor neighbourhoods and villages the “Norris effect,” in honour of Alex Norris, the former Gazette investigative reporter whose series of articles a few years ago drew attention to the corporation’s strategy of concentrating VLTs in poor areas.
But the withdrawal will create a vacuum. The number of “sites” with VLTs will be reduced by at least 31 per cent. That is, Loto-Quebec will abandon at least 31 per cent of the market it has created since it muscled into the VLT racket 10 years ago and pushed out the underworld.
“The setting up of a network of VLTs by Loto-Quebec has had the effect of causing the disappearance of tens of thousands of illegal machines,” the corporation says in its 2004-07 development plan, in which it announced its withdrawal.
So it’s only logical, then, that if the network is reduced, the illegal machines will reappear, just as the underworld once met the demand for liquor created by Prohibition in the United States in the 1920s.
What Prohibition should have taught governments is that once they get into the vice business, there’s no turning back. And the underworld doesn’t share Loto-Quebec’s newly found scruples about exploiting the poor.
The corporation’s plan notes in neighbouring Ontario, which doesn’t allow electronic gambling machines outside of casinos and off-track betting parlours, police estimate there are more than 20,000 illegal ones.
And what a lucrative market it is. VLTs generate 30 per cent of Loto-Quebec’s revenues (they brought in $1.1 billion last year) and half its profits. And its revenues and profits from the machines satta king continue to grow, while those from lotteries and casinos have tailed off. That growth is in spite of a reduction of the number of machines and sites in the past five years, and the replacement of the machines two years ago with new models that don’t allow excessive play (an unlikely feature of illegal VLTs).
What’s more, VLT players are good customers. The corporation’s plan says that among Quebecers who gamble legally, those who play the machines wager more in a year (and hence lose more) and are more susceptible to become pathological gamblers. This allows Loto-Quebec to rationalize pulling its VLTs out of poor areas while leaving its lottery machines and scratchers.
That might not be consistent. But then, neither is it consistent for government to be both profiting from vice
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