What could be better than a big casino in downtown Toronto? Why, it's practically free money! Just pull the lever and hit the jackpot. Jobs and revenues and tourism dollars will rain down on us like April showers.
That's the sales pitch, anyway. The casino lobby is furiously courting cities across North America, promising to fill their coffers by peddling a little harmless fun to the public. Toronto Mayor Rob Ford is all gung-ho. The people who run the Ontario Lottery and Gaming Corp. can scarcely contain their excitement. Don't be so old-fashioned. You'd have to be soft-headed to resist.
But not all is going smoothly. The casino lobby didn't reckon with the Sikhs. Or the Jews, the Protestants, the Muslims, the Catholics, the Buddhists and the Jains. These groups usually don't have much in common. But, last week, 250 of the city's faith leaders got together to say No to a casino in Toronto. They don't like the devastation that gambling brings to families and communities, and they particularly don't like the signal that casinos send about our civic values. "This isn't about politics," Christopher White, the minister of Fairlawn Avenue United Church, told me. "It's about city-building." And, in his view, there are a lot of better ways to build a city.
Personally, I don't mind if people gamble. If they want to throw their money down the drain, too bad for them. But I agree with Rev. White. I don't think the government should act as their enabler.
Warren Buffett doesn't think so, either. "It's a terrible way to raise money," the legendary investor, who opposed casinos in his home state of Nebraska (and won), told reporters during an annual shareholders meeting. "… It's a tax on ignorance. I don't like the idea of the government depending, for certain portions of its revenue, on hoodwinking citizens."
As for the business case – the 10,000 well-paying jobs, the economic development and all the rest – don't believe it. The Rotman School of Management's Martin Prosperity Institute studied the potential economic impact of a casino in Toronto, and its conclusions were damning: "So far, all we have are numbers – lots and lots of numbers. The important thing is that all of them are meaningless."
Urban theorist Richard Florida, the institute's director, has been tracking the casino craze around the world. "I call them city ruiners," he told me. "Casinos generate a lot of social costs, and they're a regressive form of taxation. They take money away from poor people." They're also the wrong message for a city to send, because they smack of desperation. Casinos aren't for cities on their way up. They're for cities out of options.
"Casinos are brand killers," said Mr. Florida. "People in the outside world would say, 'Toronto is a great city, so why are they putting a casino there?' "
All governments live to some extent on the avails of vice. In Ontario, the OLG (according to its annual report for fiscal 2011) extracted $6.7-billion from the public's pockets, of which $2-billion went to provincial coffers. This money is recycled into good works, which are conspicuously advertised to show how indispensable the OLG is. Governments promote casinos as painless revenue streams that create economic development. In fact, the casino business is a rather inefficient transfer of money from middle- and lower-income groups, some of which goes to the state in taxes, some of which pays the operating expenses and some of which goes to the owners.
Thriving major cities don't need casinos. And even minor cities have rejected them. In Surrey, B.C., a coalition of citizens, students and faith groups (including evangelicals and Sikhs) defeated a $100-million casino proposal in January, even though it was strongly backed by the provincial government.
The casino debate doesn't split along the usual party lines. Toronto's mayor has the construction unions on his side. On the other side is a mix of left-leaning city councillors, conservative rabbis and ordinary people who're uneasy about a casino but aren't quite sure why. I think I understand. They're proud of the city, and they think we can do better.
"I think it's cynical on the part of the state to raise money from people who basically can't afford it by promising them a dream that is not going to come true," Mr. Buffett told one interviewer. "The state ought to be trying to do something for its citizens, not do something to its citizens."
Said Mr. White: "A casino is smoke and mirrors. Let's create new business opportunities with sustainable middle-class jobs that will give people dignity. Surely we're capable of that."
Correction: Thursday print edition and earlier online versions of this column incorrectly attributed a quote to Berkshire Hathaway chairman Warren Buffett. In fact, the statement "The modern slot machine is one of the best ways to remove money from suckers known to man" was made by Berkshire Hathaway vice-chairman Charlie Munger.