Toronto Casino Is Not A Political Issue

[This article originally appeared on the mises.ca blog on January 23, 2013]

The idea of a casino in Canada’s largest city has been discussed on and off for the past few years, and the topic seems to have picked up ground in recent months. This week National Post, owned by Postmedia, whose president and CEO, Paul Godfrey is also chair of the Ontario Lottery and Gaming Corporation*, came out with another poll suggesting a “significant lead” (of 52-54% for vs. 42% against and 6% undecided) for the construction of a Toronto based casino. The National Post poll and ensuing article, as most other treatments of the issue within media, are centered on the “social cost” (gambling addiction, environmental impact, related industries, such as the sex industry, etc.) versus “social benefit” (jobs, tax revenues) argument. Yet, from a free market point of view, the arguments which have come to dominate the issue are completely irrelevant.

In the Province of Ontario gambling is socialized and cartelized. This means that the Provincial government possesses a licensing monopoly over all major forms of gambling. Similar to the case of alcohol, we are told that governmental restriction on gambling is for the public good; likewise, proceeds generated from gambling, just like proceeds from sales of alcohol, are used to finance the multitudes of social programs that operate with ongoing losses. It is the opinion of this writer that the latter reason is far more important to governments when it comes to deciding whether to liberalize the sale of alcohol and gambling. Much like in the case of alcohol, where government restrictions have not eradicated alcoholism; restrictions on gambling have not stopped certain persons from losing their shirts at government licensed casinos.

Ludwig von Mises argued against governmental prohibition of goods and services, as a gateway to the prohibition of thought:

The problems involved in direct government interference with consumption are not catallactic problems. They go far beyond the scope of catallactics and concern the fundamental issues of human life and social organization. If it is true that government derives its authority from God and is entrusted by Providence to act as the guardian of the ignorant and stupid populace, then it is certainly its task to regiment every aspect of the subject’s conduct. The God-sent ruler knows better what is good for his wards than they do themselves. It is his duty to guard them against the harm they would inflict upon themselves if left alone. … And why limit the government’s benevolent providence to the protection of the individual’s body only? Is not the harm a man can inflict on his mind and soul even more disastrous than any bodily evils? Why not prevent him from reading bad books and seeing bad plays, from looking at bad paintings and statues and from hearing bad music? The mischief done by bad ideologies, surely, is much more pernicious, both for the individual and for the whole society, than that done by narcotic drugs. (Human Action, p-p 728-729)

Gambling is a marketable product. It has appeal to some—as represented by a portion of the 52-54% in the NP poll; but not to all—the 42% + 6% of the same poll. In this respect gambling is not unlike exercise and fitness, professional sports, or even fast food: there is a market out there for it, but it consists of only a portion of the population. And just like with fitness and exercise, professional sports and fast food, some are occasional participants, while others live and die by it. Granted, there are voices arguing for the regulation of fast food, as well as regimentation of all aspects of life. These experiments were tried and tragically failed in the USSR, North Korea and Cambodia, to list a few.

Now, it should be clarified that not all of the 54% of the respondents to the National Post poll find gambling appealing, nor does it suggest that these 54% are the same persons that would frequent the eventual casino. The 54% represent a portion of the public that 1) like this author find no appeal in gambling, but feel that individuals ought to be left alone in making decisions as to how to spend their time and money; 2) find the idea of “job creation” appealing; 3) appreciate the additional entertainment that casinos bring; 4) are compulsive gamblers; 5) are occasional gamblers; 6) welcome the contributions to municipal, provincial and federal budgets brought on by the casino; etc. Likewise, some of the 42% + 6% include persons who, like the present author, are against the idea of a government sanctioned casino; i.e. that are against the idea as a public works project. In this respect, the NP poll, much like any other on the topic, is completely irrelevant. Such is the political approach to market issues.

The fact that gambling is socialized necessitates the anti-market approach employed in the case of the Toronto casino, where political factions face off against each other in deciding over what is fundamentally a market issue. The market approach is to know if there is enough of a market in a given geographical location to warrant an investment. If gambling were free of government interference as it should be, then there would be no need to spend “public” money to conduct surveys and propaganda for or against the issue. Private entrepreneurs would put their own money on the line according to their own forecasts of the profitability of the possible undertaking. The market has a very simple solution for any contentious issue: those who find a product or service unappealing are free to abstain, while their money cannot be used to finance an investment that they don’t approve of. The political system denies dissenters to walk away from something they stand against. Under the political system pro-lifers are forced to pay for abortions; opponents of war are coerced into financing it; anti-casino advocates have no choice but to fund it.

But, if the government restricts gambling due to its deleterious effects on society, isn’t it morally wrong for it to fill its own budgetary deficits through gambling? If the government’s argument that gambling is addictive and exploits character flaws is correct, then isn’t it immoral for it to prey on these weaknesses of its “own people”? Clearly there is some disconnect between the stated goal and reality—the same disconnect that is present in all “sin taxes.” As with all “sin taxes,” governments claim that a good or service must be prohibited due to its negative effect on society; yet they happily designs ways to increase the sales of these goods or services due to the fact that tax revenues collected from these activities allow them to fund vote-buying programs such as socialized healthcare, daycare, education, etc.

*Surely there is no connection here!