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A blackjack table at the River Rock Casino in Richmond, B.C. (JOHN LEHMANN/John Lehmann/The Globe and Mail)
A blackjack table at the River Rock Casino in Richmond, B.C. (JOHN LEHMANN/John Lehmann/The Globe and Mail)

Series: Bad Bet

Casinos spend millions to make losers feel like winners Add to ...

Paul Isaacs played slot machines, roulette and baccarat. He played so much that, in an obsessive spree lasting less than two years, he lost more than $1.2-million.

Casinos, in turn, rewarded Mr. Isaacs with Rolex and TAG Heuer wristwatches, theatre tickets and limousine rides. And when his home sustained smoke damage, he and his family stayed free at the Fallsview Casino Resort in Niagara Falls, Ont., for 21/2 months, meals included.

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It's a card casinos play often. Government-owned gaming emporiums are spending hundreds of millions of dollars to provide gamblers with "comps" - from hotel rooms to hockey tickets to cruises - feeding players' habits and leading some to financial ruin.

Documents obtained under Freedom of Information legislation - part of a four-month Globe and Mail investigation - show annual spending on comps in Ontario, Quebec, Saskatchewan, Manitoba and Prince Edward Island totals more than $405-million, with a large part of it - $276-million - concentrated in four resort casinos.

Instead of trying to restrain problem gamblers, the casinos reward them - making big losers feel like big winners and fuelling a $13.67-billion business nationwide. Problem gamblers account for one-third of revenues, studies show, and government-operated casinos could find out who they are.

Their losses are recorded on player's cards that are inserted into slots or handed to dealers.

Governments have made some efforts to curb compulsive behaviour. In Ontario, the government spent $39-million in fiscal 2009 on treatment, research and prevention of problem gambling, with the Ontario Lottery and Gaming Corporation adding a further $9.6-million on responsible-gambling initiatives (the highest figure in North America, it says). But the same year, it laid out $558-million on marketing and promotion of casinos, more than half in comps.

Mr. Isaacs, a retirement-home manager, and his mother are now suing the OLG and Falls Management Company over his financial disaster: His truck was repossessed, he was evicted from his home and he applied for social assistance.

"There's a huge societal interest here that needs to be looked at and protected, more so than it has been up to now," said Mr. Isaacs's lawyer, Roger Yachetti. "Governments can become addicted to the income from gambling and not enough attention is paid to the evils."

In fact, 3.5 per cent of Ontario adults said in a 2006-2007 survey that they had a problem with gambling the previous year. Before casinos mushroomed in the mid-1990s, only 2.1 per cent of Ontario adults said they had a gambling problem at any point in their lives, according to research by Robert Williams, the Lethbridge co-ordinator of the Alberta Gaming Research Institute.

Problem gambling is recognized as an impulse-control disorder, often referred to as a hidden illness because there are no obvious physical signs or symptoms as in drug or alcohol addiction. But compulsive gamblers do tend to be prone to addiction: 70 per cent are smokers and 25 per cent have issues with alcohol. These gamblers are unable to stop playing even when it hurts them or loved ones.

The siren song of comps doesn't help. "They send you stuff all the time like 'Free buffet lunch,' or 'Spend $20, get $20 free'… they are constantly luring you back in," said Elizabeth Stewart-Patterson, 39, of Halifax, who filed for bankruptcy in which gambling was a factor. "They are monitoring what you are spending but they don't once come over and say, 'Do you think maybe you've put enough money in that machine?' "

Throwing gas on a fire

Four resort casinos - two in Niagara Falls, one in Orillia and another in Windsor - are the only ones in Canada that provide the biggest perk of all: house credit. From 2000 to May, 2009, they bankrolled 5,680 gamblers with $86.8-million, according to a Freedom of Information request.

That means big-time gamblers who qualify had an average of $15,469 in available credit from January to May of 2009, and $27,619 in all of 2008. Those figures, Dr. Williams said, are "pretty huge."

"You are throwing gasoline on a fire when you further extend house credit and lines of credit to people who've presumably maxed out their credit cards and ATM withdrawals."

The OLG said the resort casinos do not openly advertise house credit and only make it available to players after a successful background check. Only a tiny fraction - one quarter of 1 per cent of loyalty-club members - have active credit accounts, said a letter that accompanied the Freedom of Information figures. And they stressed the numbers reflect credit that was available; not all of it may have been used.

"We're in the gaming business," said Greg Medulun, until recently director of communications for Niagara Casinos, adding that those who have their credit limit raised are subject to a 24-hour cooling-off period before they can use it. "But we're not gambling on credit by any means."

Some compulsive gamblers try to rein themselves in through self-exclusion programs, a type of voluntary ban available in each province. But the results have been spotty. Many have been able to return repeatedly to casinos, sparking lawsuits in Ontario and Manitoba over massive losses.

In Mr. Isaacs's case, he twice banned himself from casinos by signing a self-exclusion form, then requested to be reinstated.

According to a statement of claim, which contains allegations not yet proven in court, Mr. Isaacs's gambling dates back to 1997, but it intensified between January, 2005, and November, 2006, after he asked to be reinstated and the casino comps piled up. With his losses topping the $1-million mark, he became despondent and emotionally traumatized, while his mother, whose money he also lost, experienced a significant decline in health, the statement of claim says.

The statement of defence acknowledges Mr. Isaacs received substantial comps: some $133,009 of them, with the bulk - $122,781 - redeemed from 2005 to 2007. The defence deducted them from what it says were his total recorded gambling losses - $626,561 - putting his net recorded losses at more like $493,552.

"Casino gambling is a form of entertainment," says the statement of defence. "Casino patrons pay for that entertainment through their wagering, just as theatre patrons pay for a ticket to a play or sports fans pay for a ticket to a game. Mr. Isaacs's wagering was an expenditure, not a loss that is recognized at law."

Allison Sparkes, the OLG's director of communications, said Mr. Isaacs never gambled while he self-excluded; he self-excluded twice, confirming on both occasions that he abstained from gambling. He then voluntarily reinstated himself after following the requisite exclusion periods and 30-day cooling-off period after the request was made.

However, "he did take use [of]his entitlements to complimentaries, primarily through use of hotel suites and restaurants," she said.

But Mr. Yachetti said that while Mr. Isaacs followed the rules for reinstatement after self-exclusion, being allowed back in caused his gambling problem to worsen. Comps, he added, are "insidious inducements to have people continue in their losing ways to try to get back their money."

From smoked meat to limos

How comps are determined is something of a secret. It is based on a theoretical loss formula - the longer people gamble, the more they are expected to lose as the house always has the edge.

"We cannot be specific about amounts of money played," said Jean-Pierre Roy, director of media relations for Loto-Québec, where an FOI request revealed that $49.8-million worth of comps were provided in fiscal 2007-2008. "…We're in competition so basically, of course, the calculation comes from the duration of play and volume of play."

According to the FOI request, the Quebec comps included golf, hotels, Grand Prix tickets, $100 gift certificates, limo rides, toiletry bags, Christmas platters, theatre tickets, lobster and smoked meat.

Peter Chen, an addiction therapist at Ontario's Centre for Addiction and Mental Health, said clients tell him they received a call, saying there was a gift waiting for them, such as a watch or jacket. "If somebody is trying to stay away from the casino, they'll get urges to return," Mr. Chen said. "The urges can come from different sources, such as advertisements or internal stressors in their own life. Another source of that could be getting mail that is inviting them to come back because they have a gift waiting for them."

Ernest Sanderson said he and his wife, Judith, met Ringo Starr, Engelbert Humperdinck and Reba McEntire. He and 30 other gamblers were flown to Miami, then taken on a cruise in the Gulf of Mexico, courtesy of Casino Rama, he said.

"We used player's cards because we would get the perks - the rooms, the meals, limos picking us up at the door, meeting celebrities," wrote Mr. Sanderson in his examination for bankruptcy in September, 2007, documents of which were filed in court. Their player's cards, in fact, reveal they earned more than $7,407 in food, accommodation, parking and concert ticket comps at Casino Rama from April, 11, 2001, to Nov. 16, 2004.

Mr. Sanderson and his wife filed for bankruptcy after racking up what he said was about $1-million in gambling debts. The couple played video poker at casinos three or four days a week.

"At no time would a supervisor walk by and say, 'Maybe you should stop,' " Mr. Sanderson, 65, said in an interview. "…You know the people with the problems. They should be singled out and talked to."

At their height, said Jordan Rumanek, the Sandersons' bankruptcy trustee who did Freedom of Information searches on their player's cards at Casino Rama and Woodbine Raceway, the couple was "going [to casinos]more than they were going to their jobs."

In the past five years, Mr. Rumanek has seen the number of gambling-related bankruptcies in Toronto double.

"You are always hoping for the big win, that's the whole concept of gambling," Mr. Sanderson said. "… It was like being hypnotized."

In June, 2007, both Mr. Sanderson and his wife signed self-exclusion forms, banning themselves from Ontario casinos and they say they have sworn off gambling.

Jenna Hunter, media-relations manager for Casino Rama, said comps are like other business-reward programs, such as Air Miles, and are directly related to the money spent or points earned.

As for the Sandersons' cruise, she said: "It is common practice in the gaming industry to offer exclusive, off-site events to certain qualified patrons." That particular trip, she said, would most likely have been one of Casino Rama's player trips that are only offered once a year.

"At the end of the day, though, from a business perspective, there is a maximum amount a casino would want to offer any player in complimentaries," wrote Ms. Hunter. "While we cannot disclose that exact value for obvious business competitive reasons, we know you will see the business sense in controlling marketing spending on a per-customer basis."

Yet even those who work in casinos see problem gamblers and often want to stop them before they bet again. Stuart Slaven, 26, a games dealer at Edgewater Casino in Vancouver during 2005-2006, said it could be a depressing place to work.

"There were times when I wanted to shake one of the players and say, 'Get out of here. Don't come back,'" he said. "Not out of anger but just because it was doing them no good to be in the casino."

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