The government’s monopoly on gambling is more than just a lucrative but harmless form of entertainment, it is a hidden tax on the poor, vulnerable, and addicted, argues this report from Cardus.
Authors Johanna Lewis and Brian Dijkema outline why gambling should be seen as a regressive revenue source.
“Relative to income it taxes the poor more heavily than the rich. Households in Canada’s lowest income quintile spend an average of 5.7 percent of their income on gambling each year. This is nearly three times the rate paid by the country’s highest-quintile households. Meanwhile, between 15 and 50 percent of gambling revenue comes from problem gamblers, even though they make up only 1 – 4 percent of the population,” they write.
Polls show that around a third of Canadians plan to fund their retirement with lottery winnings.
“Building financial security for all Canadians, but especially for the most vulnerable, is widely recognized as an important policy priority. With public budgets already upended by the pandemic, governments have a unique opportunity to kick their gambling addiction with relatively little disruption to provincial balance sheets. It’s time to reform the provinces’ gambling scheme to work for, not against, low-income households.”
Lewis and Dijkema offer policy option recommendations to mitigate the impact that gambling has on the most vulnerable:
- Return gambling profits to the poor through cash transfers
- Use gambling profits to promote asset building with matched savings
- Help build emergency funds by offering prize-linked savings
- Reduce provincial gambling corporations’ marketing budgets and put the money toward problem-gambling research, prevention, and treatment
