Tuesday 24 August 1993

Ontario Casino Corporation Act, 1993, Bill 8

Reid Scott

Canadian Foundation on Compulsive Gambling

Hon Paul Hellyer, chairman

Tibor Barsony, executive director

Dr E. Ralph Pohlman, chair, medical treatment committee

Canadian Standardbred Horse Society

Heather Reid, secretary-treasurer

Ted Smith, general manager and registrar

Ontario Hotel and Motel Association

Diane Stefaniak, executive director

Canadian Trotting Association

Tom Gorman, executive vice-president

Union of Ontario Indians

Joe Miskokomon, spokesperson

Tong Communication Ltd

Lanny Tong, owner

Jenny Coco

UNI Convention Productions Inc

Vito Monardo, business manager

Keith M. Koskie, president

Continued overleaf

Continued from overleaf


*Chair / Président: Johnson, Paul R. (Prince Edward-Lennox-South Hastings/

Prince Edward-Lennox-Hastings-Sud ND)

*Acting Chair / Président suppléant: Sutherland, Kimble (Oxford ND)

Vice-Chair / Vice-Président: Wiseman, Jim (Durham West/-Ouest ND)

*Caplan, Elinor (Oriole L)

*Carr, Gary (Oakville South/-Sud PC)

Cousens, W. Donald (Markham PC)

Jamison, Norm (Norfolk ND)

*Kwinter, Monte (Wilson Heights L)

*Lessard, Wayne (Windsor-Walkerville ND)

*Mathyssen, Irene (Middlesex ND)

North, Peter (Elgin ND)

Phillips, Gerry (Scarborough-Agincourt L)

*In attendance / présents

Substitutions present / Membres remplaçants présents:

Dadamo, George (Windsor-Sandwich ND) for Mr Jamison

Duignan, Noel (Halton North/-Nord ND) for Mr North

Eves, Ernie L. (Parry Sound PC) for Mr Cousens

Martin, Tony (Sault Ste Marie ND) for Mr Wiseman

McClelland, Carman (Brampton North/-Nord L) for Mr Phillips

Clerk / Greffière: Grannum, Tonia

Also taking part / Autres participants et participantes:

Drainville, Dennis (Victoria-Haliburton Ind)

Staff / Personnel: Luksi, Lorraine, research officer, Legislative Research Service

The committee met at 1008 in the Huron Room, Macdonald Block, Toronto.


Consideration of Bill 8, An Act to provide for the control of casinos through the establishment of the Ontario Casino Corporation and to provide for certain other matters related to casinos / Loi prévoyant la réglementation des casinos par la création de la Société des casinos de l'Ontario et traitant de certaines autres questions relatives aux casinos.


The Chair (Mr Paul Johnson): Order. The standing committee on finance and economic affairs will come to order on the second day of hearings in Toronto. Unfortunately, we're starting a few minutes late and I apologize for that. I'd like to ask Judge Reid Scott to please come forward. Welcome to the committee, Judge Scott. You have 30 minutes for your presentation, a portion of which you may use for questions and answers from committee members.

Mr Reid Scott: It's an honour to appear before you. I've sat, over the years, on many committees but never appeared as a witness. Of course, as the devil said when he was appointed to the Senate, it's nice to be back in any case.

My presentation will be made in two sections:

(a) A verbal presentation under six headings which appear before you in writing, headed "Discussion Sheet."

(b) A written statement of recommendations also attached, designed to strengthen the legislation and chart a course for the future of gaming and gambling in Ontario.

I should add I have based my approach upon the assumption that the proposal will proceed in some form to final approval and implementation. Second reading approval, in my mind, has eliminated the issue of casinos or no casinos, and the committee should now focus on the following two points: first, identifying and developing strategies to minimize or eliminate any problems that the project creates; secondly, maximizing and strengthening the already positive qualities of your proposal.

My own personal recommendations appear on a sheet before you marked, "Written Recommendations."

I've just completed a four-month study of casino gambling worldwide and have found that it is far more widespread than is commonly realized. Some 81 countries have casino gambling in one form or another.

However, I chose to limit my study to Austria, Europe, England, the United States, Australia and Canada. Each presents a different form of control ranging from Austria, where all casinos are owned and operated by the state, to the United States, where casinos are privately owned and operated but regulated by state gaming and gambling commissions.

Ontario has opted for an in-between concept where the casino licence will be owned by the new crown corporation and the building and operating will be contracted out to private interests on a tendering basis. This has both advantages and disadvantages in that while it saves the enormous capital outlay to build the facilities, it does add somewhat to the problem of controlling the operations of the casino.

While the permanent facility is being built, a temporary casino will operate from the Windsor Art Gallery and then transfer upon completion. I've reviewed some 20 economic and social impact studies in other jurisdictions plus the three studies previously released by the government, and now I've also been able to see the Coopers and Lybrand social and impact study.

I must admit that at first I was quite puzzled by the concept of the temporary casino, the need for it and what possible purpose it might serve since the conventional approach is a series of preliminary studies from which a document is prepared for implementation. I then returned to the 20 or so studies I had reviewed, picked out six of them and made inquiries as to how the actual products compared to the projections. Much to my surprise, the actual casinos that had emerged were in many ways quite different from the projected models, either through false assumptions or insufficient and imprecise data.

Looked at in this light, the temporary casino took on a very different rationale. Either through inadvertence or a stroke of genius, the temporary casino could be an actual working model. It would be a functioning casino with real people working it, real gamblers patronizing it and real police forces responding to problems of law enforcement. In this way, problems as they emerge could be studied and appropriate solutions designed and implemented. I now look on it as an exciting and highly innovative way of testing a paper model.

There are three major problems the current proposal will have to face and overcome:

First, the decision not to build or not to use the hotel in conjunction with the casino until occupancy rates in other hotels reach 75% is a highly questionable one, in my mind. I have not been able to find a successful casino that is not incorporated as part of a major hotel complex. The reasons are simple. Gamblers come to casinos to gamble. If they are forced to leave the casino to go elsewhere for basic services, they may never come back. Gambling alone does not create tourism. If the attractions are already in place, casino patrons may take some time to see them, but their main consuming objective is to gamble continuously until their visit ends or usually until they run out of money.

Secondly, the Criminal Code prohibits dice or crap games, yet they produce 30% of the total take of a casino, and I understand there would be no bingo because of local objections. There is nothing that can be done about this, short of an amendment to the Criminal Code, but it is a serious impediment and I trust that the proponents have remembered this in their projections of potential income.

The third problem: the likelihood of competition from Detroit and New York state.

The proposal assumes that 80% of the visitors will come from the greater Detroit area. No report or data show how these figures were arrived at, but let us assume them to be correct. I believe that I can state with absolute certainty that Detroit will not stand by and see such a situation develop.

There are two proposals already being considered in Detroit: a major proposal called the Detroit Casino Gambling Report -- I have a copy of this, which calls for 10 casinos phased in over eight years -- and the second is the well-known Greektown project of the Chippewa Indians and two developers to designate certain lands as Indian reserves and contract out the building of a major casino to one of the largest casino operators in the USA. I have been in touch with the Washington office of the Secretary of the Interior as to the status of this proposal, and a decision is expected within the next four months.

Crime and its impact: This is probably one of the areas of greatest public apprehension. I have reviewed the two available reports, one from the Windsor police department and the reply by Niagara University. Essentially, there are three types of crime involved: crime inside the casinos, street crime outside and the fear of infiltration by organized crime. All of these three aspects have been thoroughly canvassed in numerous reports in many jurisdictions. From such reports, which represent many years of experience, Ontario can draw effectively upon their successful formulas in each of these fields.

Internal casino crime will essentially be handled by the casinos themselves. They have become very, very good at it over the years. They will need some outside supervision and police because the staff will not be police officers and have no powers of arrest.

Outside crime, larceny, mugging, purse-snatching, pickpockets, car theft, prostitution etc: Studies have shown that this type of crime, if not prepared for, may increase dramatically anywhere that there is a huge influx of people with cash in their pockets or wallets, Atlantic City being one of the worst examples, where increases of up to 60% were found. At the same time, when Disneyland opened, these crimes increased by 90% in its first year and subsequently have been reduced.

The techniques to deal with this so-called street crime are well known, but the most important aspect is one of public perception. It is vital not just to have sufficient additional officers, but that they carry a high public profile so that the public can clearly see and perceive that the area is a safe place to visit, one to which they could comfortably return and which they could recommend to their friends. A clear public perception of safety is essential because once perceptions are established, they are very difficult to change.

The Windsor chief has asked for 24 men, the university recommends 12, the province, I believe, has agreed to 10. This is based on the assumption of 10,000 visitors with 80% coming by car or bus. Clearly, the new force should be deployed in the downtown area in a control division, perhaps called the downtown community control division. In the end, it is really a matter of making a judgement call. My own preference, based upon my years of experience with the criminal courts, is the Windsor police chief's report because it is based upon actual field experience. In such a judgement call, I firmly believe it is prudent to err on the side of the larger police presence, both for the perception of the public and the practical task of crime detection and enforcement.

The dangers of organized crime infiltration: Over the years, other jurisdictions have developed what I conclude to be highly effective and sophisticated methods of dealing with this matter. I believe they will be effective here under the supervision of the OPP because of their greater communication with outside police organizations throughout the world and careful background checks on all personnel of the casinos, its suppliers and other companies associated with it, including junket operators. This, coupled with a strict licensing system, has proven highly effective in other jurisdictions.

Addictive gambling and video gambling: All available studies agree on one thing, namely, that casino gambling is the most potentially addictive of all forms of gambling. The council on compulsive gambling in New Jersey released its report in 1992 on people who had sought help for gambling, 72% of whom were addicted to casino gambling with average accumulated debts of around $37,000. Not all people become compulsive gamblers and studies vary between 3% to 5% of gamblers becoming addicted. However, the magnitude of the problem becomes more evident from an Australian study for Canberra, its capital, showing that for every one compulsive gambler, 10 other people are adversely and harmfully affected in the home or office.

In Ontario, we simply don't know, because despite the fact that gambling is a $4-billion business, there has never been a province-wide study made to determine the percentage range of addictive gambling or the programs needed to deal with such a tragic social problem. All governments have the honour of sharing equally in this alarming omission of public responsibility. The Ernst and Young study which addresses this issue is a first-rate and honest piece of work and should be read from cover to cover. It makes no attempt to hide the seriousness of the problem, nor the fact that Ontario in general and Windsor in particular are totally unprepared to deal with the problem, its detection, recognition and treatment. But it is an excellent report and should be examined and its recommendations followed.

In fairness to all concerned, it should be admitted that the control of addictive gambling is an extremely complex issue, and every study ends with that classic phrase, "Much more research and data gathering are urgently needed to assess the extent of the problem and suggest programs."


Integration into Windsor's plans for economic redevelopment and tourism: The committee should seek an amendment to the legislation designating that a certain percentage of the profits be retained and invested in Windsor's regenerative efforts. It is imperative, I believe, that some of the money raised in Windsor should stay there for its own municipal purposes as decided by the local people, who are best able to make such decisions. The city, if it has not already done so, should be encouraged to set up a Windsor redevelopment corporation to draw up a master plan for the revitalization of the downtown area. The casino could cooperate with such a redevelopment committee and have power to make recommendations for the investment of a proportion of the profits into such schemes and in such amounts as are regarded as reasonable.

Coupled with this should be the development of a training program for Windsor citizens so that as many local citizens as possible can become employed in the permanent positions that will be created. This, I believe, will effectively allow the casino to make a meaningful contribution to the redevelopment of Windsor and would sustain local support and interest.

For reasons which I can elaborate upon in the question period, video terminal gambling outside the casino should be prohibited by legislation. One only has to read the Atlantic City report, which is a horror story. In addition, Nova Scotia has already withdrawn many of its terminals and Manitoba has authorized a $2.4-million study to examine and devise remedial programs.

Written recommendations:

(1) That the legislation be amended to permit the commission to retain a certain percentage of its profits for use in the community in which the casino is located. Such funds should be available as contributions to the upgrading and reinvigorating of the community; and that the commission be authorized to enter into agreements with local municipal redevelopment committees and make such contributions as may be deemed advisable, desirable and feasible in accord with local needs, locally defined.

(2) That the commission be clearly authorized to initiate all such studies as may be necessary to develop an effective program dealing with addictive gambling in Ontario. This project should be headed up by the present Ministry of Consumer and Commercial Relations, which in its study could call upon any other relevant government departments which have an interest in the area.

(3) That the advice of the Windsor police department as to the number of additional officers be accepted and granted, with costs paid by the provincial treasury.

(4) That the commission be authorized to encourage the initiation of training programs for local residents after consultation with the appropriate educational facilities in Windsor so that as many permanent jobs as possible will be available to the local residents.

(5) That the government of Ontario institute a province-wide study of gaming and gambling to assess its economic and social implications and develop a province-wide approach to this complicated business. Again, I would suggest the present ministry be authorized to take the lead, although the government may wish to initiate it in an independent study.

(6) That the casino corporation be authorized to construct a model of seven or more potential sites. It could then conduct a broad, comprehensive study of each site, its needs, the effect upon it of casino gambling socially and economically, the funds required and the programs and training needed. I obtained and read the Coopers and Lybrand study and it will obviously provide an excellent start to this type of investigation.

It is important to realize that what the commission must develop is an overall strategic plan for casino gambling in Ontario. Such a well-thought-out master plan will let the corporation develop a highly efficient, honest, well-policed, rigidly enforced casino program capable of success.

(7) Hopefully the government will continue negotiations with the aboriginal peoples and come to a resolution of how they fit into the overall gaming structure.

(8) The final recommendation is that the legislation be amended by specifically prohibiting any form of video terminal gambling outside the casino until a full social and economic study is completed and subjected to widespread public hearings and a full parliamentary debate.

In conclusion, I have tried to set out some of the major problems which this committee faces, plus recommendations to deal with them effectively. I have not addressed horse racing or charities because I don't have the time, although I would welcome a question, and they, in any event, will be appearing before you. I am pleased that this is to be treated as a pilot project. If it is handled with vigour, caution and care, having regard to its enormous complexities, it gives this committee a truly unique opportunity to design a program specifically tailored for Ontario, one that with proper planning, local consultation and rigid but fair enforcement can prove highly successful.

I therefore conclude that given the proper changes to the legislation, the provision by the government for adequate funds and support staff, and based upon my own experience and study, the project, if treated as outlined here, is well worth undertaking and should be pursued. It can produce a result that will be socially acceptable and economically beneficial, with effective crime controls and adequate treatment programs.

I wish you well. In fact, I almost envy you in meeting and dealing with the exciting challenges that lie ahead of you.

Thank you. I'd be glad to respond to any questions.

The Chair: Thank you. We have about 12 minutes for questions. I'm going to start with Mr Drainville.

Mr Dennis Drainville (Victoria-Haliburton): I'd just like to thank Judge Scott for coming and for saying he's from Fenelon Falls in my riding. You've provided a very comprehensive report. I probably disagree with a number of points --

Mr Scott: I suspect so.

Mr Drainville: -- but I would like you to, if you could, elaborate a little bit on just a couple of points you made, and that is, you gave support for the Adkin report on policing and you indicated that the government would be wise to comply with the recommendations that the chief of police has made in Windsor. That, I'd like you to speak a little bit more about, and the last recommendation that you made as regards video lottery terminals, if you could perhaps expand a little on that.

Mr Scott: I'd be glad to. All the studies show that the increase in the police force actually to be most effective should be in place and trained one year prior to the opening of a casino. There isn't going to be time, obviously, to do that in this case, since the casino is going to open New Year's Eve, so it is important to approve the strongest possible force and to get as much of its training completed and in place and visible by the opening period of time. I really believe that in a matter of this kind, policing is so important, both for perception, as I have said, and because of the other aspects of police enforcement, that you will be very well advised to err on the side of prudence and grant the larger quantity.

With respect to video gambling, you only have to read the state of New York commissioned study, which I will give to the clerk for printing and redistribution -- and it's a horror story. It's the one area that is very, very frightening. It is impossible to police, very difficult to detect and has an enormously addictive influence, particularly on young people who steal from their parents and take money from home and spend their time in the arcades. The machines can be, with a flick of the switch, changed from a Pac-Man to a gambling terminal. You cannot enforce it, you cannot prosecute unless you find the person actually engaged in the criminal act itself, and of course that is virtually impossible.

In fact, the video gambling New Jersey report -- they couldn't even agree on recommendations. They argued and argued and argued, and they finally said: "Here are all the problems. Here are all the dangers. We'll throw it back to you. It's a purely public policy decision at this point."

Mr Monte Kwinter (Wilson Heights): Judge Scott, I want to thank you for your report. Contrary to what Mr Drainville said, I agree with most of what you've said, and I find it interesting.

I'd like to just spend a minute on one statement that you make. You say that gambling alone does not create tourism. One of the concerns that I had in my hearings in Windsor is that deputant after deputant appeared before us to talk about these 4.7 million people just across the river, that if they only had gambling they would get them all into Windsor, or a good chunk of them, to encourage and to stimulate the economy of Windsor.

My question then, as my question is now: If they're there -- they've been there for some time -- why aren't they in Windsor now, and is it only the gambling that's keeping them out?

The answer was -- I'm paraphrasing -- "Well, they're not coming, but with the gambling they will come."

You seem to have found in your study that gambling alone will not create tourism; it has to have more than that. Could you expand on that?


Mr Scott: Yes. They did a very extensive study in Australia when they were going to introduce casino gambling in Canberra, the capital, and they found, after a two-year study, that the casino alone would not attract tourism, and so they ended up with a very complex program of a hotel, an entertainment centre, a casino as part of it, restaurants, arcades and all of that sort of thing to regenerate the capital itself.

All the studies that I have seen say that casino gambling alone -- gamblers are not interested in going around buying cigarette trays and that sort of thing. They go to gamble and that's all they're interested in. They want to stay there and pull the machines and work them for all they're worth. If time permits and there are other attractions around, maybe they'll go and look at them. But gambling casinos alone will not bring tourism. If tourism has other attractions, yes, then maybe they'll go and look at them. But their main attraction is to gamble.

Mr Kwinter: Then that brings me to the question about your concern about the fact that the casino will not be allowed to open its hotel until there's 75% occupancy in the hotels in Windsor. I don't know exactly over what period of time -- does that mean there has to be at least one day in the year that there's 75% occupancy or there's got to be three months consecutively or two weeks or a year or whatever it is -- but how does that fit in with your observations?

Mr Scott: I haven't the faintest idea of what it means. I don't know they're going to regulate that or decide when the magic time comes that the rate is 75%. But you see, the purpose of the hotel is very simple. The hotel is there to keep the gambler there. They go to the casino, they take a room, they gamble for five or six hours, they get tired, they go to a restaurant, they go back to their room and they have a sleep. Then they go back and they gamble for another five or six hours, waiting for the magic moment when that great payoff will take place. So the purpose of the casino associated with a hotel is to keep them there, not have them wandering around the city.

I don't know the answer. I don't know where the figure of 75% came from. I don't know how they're going to establish it, or if it is once reached, does it come off and on? It's, to me, very vague at the moment. I think it needs a lot of fleshing out. But at the moment, I think it's a serious error, and to me, personally, it doesn't make much sense.

Mr Ernie L. Eves (Parry Sound): Just to follow up on Mr Kwinter's question, you refer on page 3 to three major problems that you see the casino project will have to overcome. You talk about the hotel and the highly questionable decision, as you put it -- it seems to be a direct contradiction to what the city of Windsor perceives, having spent last week there and listened to many people, as to what they'd like to see the casino do for the downtown core of the city. They're quite adamant that they want to protect their existing restaurants, their existing hotels etc, etc. As a matter of fact, we heard delegations suggest that the size of the restaurant or restaurants in the casino should be rather limited so that people would be forced to go outside the casino complex. You see to be saying exactly the opposite. So I'd like you to talk about that contradiction, if you would.

I also go to your third major problem about the strong likelihood of competition from Detroit and New York state. What, in your opinion, would happen to the Windsor casino project if in fact some of the fears, I suppose, from the city of Windsor are proved to be founded and there indeed is some serious competition from across the border?

The last thing that I'd like you to comment on is your recommendation 1. We heard many delegations in Windsor talk about direct revenue-sharing by the municipality, as indeed I believe is the case in most other jurisdictions, if not all, in North America. What would be your thought on a direct form of revenue-sharing by the municipality from casino revenues, a percentage, as there is in many other jurisdictions?

Mr Scott: Yes, thank you. I followed your speech in the Legislature on this, and I thought you made the points very well.

Mr Eves: Thank you.

Mr Scott: The Detroit study that I referred to is an enormous document. There are only two in existence. I phoned the authors of it, one of whom was a former judge, and they let me have a copy of the report on promising to mortgage my house to guarantee its safe return. They indicate in there that if the original referendum had included a clause, as it did in Atlantic City, that a portion of the moneys would be allocated for homes for the aged, youth studies for drugs, disabled people, or even contributions towards the reduction of municipal taxes, the referendum would have carried 60% to 40%.

My own view is that Detroit will not sit back and see this happen. It's not going to see an influx of people come here. One of the authors is the chairman of the state Republican committee and he assures me the governor is very much in favour of casino gambling. So when the new mayor takes office, it is anticipated there will be a new referendum, one which in all likelihood will pass. Remember, that will be full-blown casinos just like Vegas and Reno, not the more restricted version we have here. I think the threat is very real, and you don't have that long to prepare for it.

The second point was what?

Mr Eves: About the contradiction.

Mr Scott: Oh, about the restaurants. I can understand why the restaurant people in Windsor want to protect that sort of thing, but you'll have to wait and see what the proposals are from the applicants, because unless they can see an economically viable proposal, they're not going to make one. They're going to insist, I suspect, upon adequate provision for people who come to their casinos to gamble. It may not be as elaborate as they would like it -- you may wish to restrict it -- but you simply will have to, I believe, give the kinds of services that people who go to casinos want -- restaurants, beauty parlours, the whole ramifications -- because that's what they've learned to expect in casinos everywhere else in the world and I suspect that's what they're going to want in casinos here.

While it's going to be a difficult mix to work out, I think the city of Windsor must realize that it is going to be in a competitive position with the casino to some extent and it will just have to market its skills greater and do the best it can to meet the challenge that the casino complex might present for it.

Mr Tony Martin (Sault Ste Marie): Just a quick question, because my colleague has one as well. I also want to laud you on the presentation. I think it was excellent. It reflects a lot of work and thought on this subject. You raise some really interesting issues that I would love to have further conversation about with you, because we're interested in a casino in Sault Ste Marie too; that's the city I represent.

The issue of competition -- Detroit ultimately getting one and the casinos that are already out there; in my community a casino across the river is already in place -- is one that I think we need to address and be honest about. Certainly, the other really important issue is the question of policing.

However, if you tie the two together, I can see us maybe coming to some advantage for Ontario operations. I think right now, communities like Detroit and Atlantic City are seen to be dangerous by folks who go there. I spent a week in Windsor and I was told by lots of people that going across the river to Detroit was a chancy thing to do, so I chose not to, even though I wanted to have a peek, have a look. I've never been there before.

Our communities, my own community and the community of Windsor, I think pride themselves on the safety of their streets, and I think if we do a good job of that, we could put in place a casino that would be beneficial to the whole community, because people will be free to wander and go to other hotels and stay and shop and do those kinds of things.


The government is clear in saying that it will provide whatever policing is necessary. There will be discussion ongoing between ourselves and the police force of Windsor. The art gallery will provide us with an opportunity to try that out and see how that works out.

Do you have any further comment on the advantage that we might have because of the safety factor? If we can maintain the safety perception out there, could we in fact overcome some of the competition that ultimately will come from a casino setting up, say, in Detroit?

Mr Scott: You might be able to, but it may be very difficult because the casino project in Detroit will be 10 casinos phased in over eight years all at one site, and for each new casino that opens they add 50 constables to the police force. They have become very expert in this whole business of control of crime around casinos based on Vegas and Atlantic City.

Your assumptions, as I read them, are recapturing people who go out of town to gamble at Las Vegas and Atlantic City plus 80% coming from the greater Detroit area. Whether you will recapture the people who like to go to Vegas on the junkets, I don't know. You may get some of them but it's quite a thing, you get a free ride and all the rest that goes with it. They're very popular and they're very hard to resist, but you may recapture some.

Detroit does not have a good public image, I admit, but they are working on it and, if adequately policed over the years, I suspect they will slowly reverse that.

Windsor, because of the restrictions -- for example, you can't have a dice table. Now, dice tables produce 30% of the income. It takes 8 or 10 blackjack tables to equal one dice game. You don't have that, yet that's part of the excitement of the casino, the dice games and the excitement it generates. So they will have a lot of attractions that Windsor won't be able to provide. It's going to be a tough marketing job. I think Windsor has its work cut out for it, frankly.

The Chair: Unfortunately, our time has expired. I want to thank Judge Scott for presenting before us today.

Mr Scott: I'd like to file that video gambling material, Mr Chairman, if you'd be good enough to have it distributed at some later date. Thank you for the honour of appearing before you.

The Chair: Thank you very much.


The Chair: Our next presenter today is the Canadian Foundation on Compulsive Gambling. I understand that there are a number of people representing this foundation, if you would please come forward. Please make yourselves comfortable. You have 30 minutes for your presentation, of which you may leave a portion for questions from the committee members. If you could identify yourselves, please, for the purposes of the committee members and for Hansard.

Hon Paul Hellyer: Thank you, Mr Chairman and members of the committee. I'm Paul Hellyer and the chairman of the Canadian Foundation on Compulsive Gambling. On my right is Tibor Barsony, the executive director of the foundation, and on my left is Dr E. Ralph Pohlman, the chief of the department of psychiatry at Markham-Stouffville Hospital, who is the chairman of our treatment committee.

I thank the members of the committee for the opportunity of expressing some views and some concerns about Bill 8, the Ontario Casino Corporation Act.

Perhaps just a bit of background about our organization: The Canadian Foundation on Compulsive Gambling was founded August 15, 1983, and its objectives include education, public awareness, research, counselling and referral, as well as the promotion of the provision of diagnostic and treatment facilities for pathological gamblers. We've had 10 very difficult years but have survived with help from the Ontario Ministry of Community and Social Services and also some private funding from some of the banks and major corporations.

We've made, during this period, much progress in some areas. For example, in education and public awareness we have made considerable progress, although I would believe that even today, notwithstanding our considerable efforts, this is probably the least understood of all of the mental health diseases, that pathological gambling is the least understood and appreciated.

In some other areas, we have not made satisfactory progress and that would be particularly in persuading governments of various stripes to provide diagnostic and treatment facilities in the province of Ontario. This is a matter of deep concern to us, which we will come back to later. We certainly hope that these facilities will soon be available.

The Canadian Foundation on Compulsive Gambling I should say is not opposed to gambling per se. We know that gambling is as old as history and accept the fact that it is a form of entertainment. At the same time, we are deeply concerned about the increased emphasis, about new forms of gambling being introduced, about easier access and about government promotion of gambling. This concerns us because we see the dark side of gambling, of the industry. There are so many tragic cases of people who get hooked on gambling and who lose family, fortune, sometimes even their lives as a result.

For some time we could refer the desperate cases to US hospitals for treatment. When we could, they went to a hospital and went through something similar to the drying-out process for alcoholics: three or four weeks of drying out, including psychological assistance. When that happened and they then joined Gamblers Anonymous, which is the parallel to Alcoholics Anonymous, the results were very good. Unfortunately, we are no longer able to do that because OHIP changed its regulations and the amount of money available per diem now is insufficient to pay for that kind of treatment, so only a very, very small minority of people who have rich backing of some sort are able to receive treatment.

There are no facilities here despite the very great need. As an aside, if Canadians were really very clever and as concerned about our balance of payments as we should be, we would have developed tremendously effective facilities here. Because our costs are lower than the United States, we could have had the trade coming the other way and taken in quite a few American dollars as a result of it.

The actual number of pathological gamblers in Ontario has never been scientifically established. Based on US experience, it's probably between 1.5% and 2.5% of adult gamblers. This means, in terms of numbers, tens of thousands or perhaps 100,000 or more in the province of Ontario. At this very moment we are doing a study with help from the Ontario Trillium Foundation and within a few weeks we will have some data for the first time in the history of the province.

The government of Ontario is financing a similar study for Windsor which it will use for comparison purposes to determine the effects of the casino there. These two studies will provide the first hard data that we have had to work with. It will be of value to everyone who is concerned in all of the various disciplines.

The Coopers and Lybrand study, which you're familiar with, commissioned by the Ministry of Consumer and Commercial Relations, paints a very rosy picture of the benefits of seven casinos for Ontario. It cites potential profits of about $850 million and estimates 13,000 person-hours of employment and about $600 million in labour income that would be generated. This is the plus side. The negatives are not adequately stated. For example, just because gambling is being legalized in other jurisdictions is insufficient reason to do the same here. It is less than credible that the expansion of casino gambling would benefit pathological gamblers by providing honesty in games, more security and consistent odds. Whoever wrote that was dreaming in Technicolor. More casinos will not only result in greater crime, but will also create a greater incidence of compulsive and pathological gambling, with its incalculable economic and human cost.


Most distressing, I guess, is the fact that gambling is not a wealth producer; it is just another tax. The Coopers and Lybrand report states that after deducting operating costs from the casino and providing for winnings, gamblers would lose about $2.3 billion a year. This is a whopping big tax, especially when it applies to so many people who can't afford it.

In a word, it seems, at least to me personally, that the introduction of casinos reflects a kind of moral and intellectual bankruptcy. If I could be permitted a personal note, because this is not foundation policy, if our economy were properly operated, there would be no need for this kind of revenue-producing operation. I think that if the province had sued the Bank of Canada for that portion of its deficit which is due to the induced unnecessary recession, not only would the bank have been able to pay a judgement of a few billion dollars without blinking an eyelash, but we would have been able to get the whole subject of how our economy is operating into the courts, where it would be treated objectively and where, I assume from my experience, for the first time the whole matter of the operation of our economy would be taken seriously by the popular press. Instead, we get all of this bleak information about the future, and we're told that the earth is flat and there's not much that we can do about it. That bleakness includes, in our opinion, the fact that casinos are on their way and that, no matter what anyone says or what alternatives are proposed, we're going to have casinos.

Consequently, our main purpose here today, I guess, is to urge members of this committee to recommend that a substantial proportion of the revenues from casinos be allocated, first, for information to warn citizens, and particularly young people, of the consequences, the potentially disastrous consequences, to their lives of getting hooked on gambling, and, secondly, an even larger proportion of the revenues to be diverted for the provision of diagnostic and treatment facilities, because this is going to be a very expensive operation in the years to come. An American expert has indicated that pathological gambling will be the mental health disease of the next decade. We're going to have to spend a lot of money and a lot of effort to cope with it. I think this is the least that can be expected from governments where policies lead inevitably to such tragic consequences for the unfortunate minority.

I'd like to ask Tibor Barsony now just very briefly to amplify the necessity for the diagnostic and treatment facilities, because he's in the front line. He's the one who gets the distress calls, who has to talk to the people when they're at their wits' end and who knows best just how serious this situation is and how desperate it is to have proper treatment facilities for it.

Mr Tibor Barsony: Mr Chairman, ladies and gentlemen, I did not make a speech. I will try to be brief, just to tell you what's in my heart. Besides being the executive director of this organization, certainly I'm very proud to tell you that in a certain way it's a shame that I am the only certified compulsive gambling counsellor in the province of Ontario.

Besides fulfilling the executive director's job workload, I am the one who, as Mr Hellyer said, is sitting in the front line and facing on a daily basis the hundreds and thousands of people who become affected by this medically recognized illness and develop to be pathological gamblers, facing their families, may they be their wives or husbands or children or parents, their employers, the employee assistance programs, the clergy and even medical doctors who refer patients to me because they are helpless against them. It is true that the Health ministry advocates that there are associated illnesses of these people which can be treated in any mental hospital or any psychiatric ward of a regular hospital. The specific personality disorder, the specific illness of the pathological gambler has to be treated in a specialized clinic.

There are over 75 specialized pathological gambling treatment clinics in the United States. It's absolutely necessary and vital to have at least one as a pilot project in Ontario, and then even more as need will dictate it. Nova Scotia already has six treatment facilities. The small state of Iowa, where gambling is not legalized, has treatment clinics in 13 different hospitals.

I can't tell you the devastating effect this illness has unless you come to my office and see it: the totally broken-down families, the suicide attempts, the children and wives on the welfare rolls or skid row, the broken hearts of parents without any help, without knowing what is really happening with them. That is a direct result of the availability of gambling.

I am not going to blame the casino industry for it, because we don't even have a casino yet and we have many compulsive gamblers. However, the casino project brought the gambling problem into focus in the public eye as much as into the eyes of the government.

We've been fighting for years to receive some moneys from the Ontario Lottery Corp revenues. We've appeared in special committees such as this and we've been turned down because the laws were made much earlier and we can't change them.

Ladies and gentlemen, you are making the law now. Please, for God's sake, don't ignore this problem. In your paragraph 3 and paragraph 7, include our organization. In your paragraph 13, where you are talking about allocation of payments of revenue, please now put in what percentage of the revenues of the net profits, either on the government side or the casino operator side, should go to social care, to education of the general public of this problem, to further research into this problem, treatment of those suffering. Please let us have some measure of prevention of this devastating illness and addiction of the 1990s. It's coming up.

In paragraph 16, let us make not only those who are minors guilty of being in the casino but those who let them in. Let's make the casino operators and the rule-makers responsible for it and let the money -- fines you may levy on the casinos for misconduct of any type -- go for this noble cause as it goes from the casinos of Atlantic City to the tune of half a million dollars every year. That's another source.

Let us make the rules and laws now of many other aspects which I can talk about from here till tomorrow morning, which none of us have time for. I wish we could, and I will do my best, but please, for God's sake and the sake of the thousands and thousands and tens of thousands of people who are suffering from this illness and will suffer from this illness, make the law and make the rules now.

Hon Mr Hellyer: Thank you, Tibor, for your passionate and eloquent portrayal of the situation as it is and as you know it will be in the years to come. I'm going to ask Dr Pohlman if he'll just take a couple of minutes, because he also is in the front line. He treats a number of pathological gamblers and can give you some indication from his own experience of just what he faces on a daily basis.


Dr E. Ralph Pohlman: Thank you, Paul. Good morning, ladies and gentlemen. I'll make this very brief. I'm chief of psychiatry at Markham-Stouffville Hospital and for many years was on staff at Sunnybrook hospital as well. Like many things in this world, I accidentally got a patient about 10 years ago who was a pathological gambler. I didn't know very much about pathological gambling, but I found that not many other people did either. I did some reading and contacted a few people and started treating this man and then became interested in the disorder and through that became involved with the Canadian Foundation on Compulsive Gambling.

As a result, I now see I think probably more compulsive gamblers, or what I prefer to call pathological gamblers, than anybody in my position probably in this country, most of whom come through the Canadian Foundation on Compulsive Gambling, although I get a lot of calls from families, lawyers, clergy, employers, that sort of thing.

By the time they get to me, they are in deep trouble. Many of them have lost their family, their house or business, or have made their first suicide attempt, which is often the way they get to me. All I want to say -- much has already been said by Mr Hellyer and by Tibor Barsony -- is that I think we need to pay attention to the social fallout. I'm not personally opposed to gambling. I belong to a little poker club where I get together with some guys fairly regularly myself, but I don't think it's compulsive.

I think of compulsive or pathological gambling or any addiction as the difference between "may" and "must." "May" means that at the end of the day I may go home and have a drink; "must" means that when I go home at the end of the day I must have a drink. The pathological gambler must gamble. The ones I see sometimes specialize and play only poker or only go to the track. There are others who will gamble on two raindrops rolling down the window; they will bet on anything. These people are heavily addicted. We need to pay attention to the fallout, the fact that with gambling, with the increase of gambling, there undoubtedly will be more people who have problems with gambling, and with video machines they will be younger. I think of video games as the hard-core porn of gambling.

But we have to make provision. I would ask that funding be provided for the foundation on compulsive gambling, so that it can be put into research, treatment and treatment facilities, because there will be social fallout. I think that responsibility and the responsibility for recognizing that side of this industry lies with you. That's really all I have to say this morning.

Hon Mr Hellyer: Thank you, Dr Pohlman. Any of us would be pleased to attempt to answer any questions that members of the committee may have.

The Chair: Thank you very much. We have about 10 minutes left, so we have time for some short questions.

Mr Drainville: Just one very short question: Thank you for that very good response. You indicated before that there has been difficulty continually in getting funding for the foundation. With the expansion of gambling, more and more lotteries, now into casinos, perhaps further into video lottery terminals at some further date, the concerns that you express are real. What are you talking about in terms of your needs right now? What kind of figures are you looking at for being able to respond to this very rapid influx in the gambling possibilities?

Mr Barsony: May I reply to this? Our request, and we have budgetary documentation and plans, is that to keep our Toronto office in operation would require $175,000 a year. I demand, not request, to have an office of the foundation set up in every city where there will be a casino opened up, starting with Windsor. We already have a very capable gentleman under training in the United States to become a pathological gambling counsellor who will head the Windsor office. We are estimating $125,000 to keep the Windsor office or any other office in any other city, may that be Sault Ste Marie or Ottawa, and we will need approximately $700,000 to open up the first such specialized pathological gambling treatment clinic, preferably in the more densely populated metropolitan areas. What we will need further to that, some additional outpatient clinics, whatever, is unknown. We have total presentations for all these figures and proved out what I have been presented totalling $1 million.

Mr Eves: Mr Drainville's already asked one of the questions I was going to ask, so I'll go on to the next one. We've heard various witnesses appear before the committee and say: "There already is gambling in the province. There's gambling in terms of horse racing and there's gambling in terms of lotteries." They almost seem to dismiss the responsibility of government to deal with the societal costs that government, in part at least, helps to create.

How much of a factor -- I realize this is probably a very difficult question for you to estimate or answer -- will casino gambling in the city of Windsor and, indeed, in the province of Ontario be, with respect to compulsive gambling? Would you prefer that there be a direct allocation of funding to deal with these societal costs provided for in Bill 8?

Hon Mr Hellyer: I think, first of all, I'm probably the only one around here old enough to remember when George Drew decided to open up liquor outlets across the province. He said it would not increase consumption. I think any of you who read your yearly statistics will know that proved to be an inaccurate prophesy. There is no question that extra outlets of any kind -- the introduction of new forms of gambling, Sport Select, casinos, whatever -- will increase the amount of gambling and increase the percentage of people who gamble.

We also know from experience in the United States that the ratio of pathological gamblers is more or less constant, so that if you have 80% of the adult population gambling instead of 50%, you will have that many more tragic cases to cope with. So any new sources, any new outlets, any increased publicity is going to result in more cases and, consequently, greater costs as we go along.

The figures Tibor gave you are initial figures just to get one little four-bed treatment clinic opened. Now, that is almost experimental in nature. Once it's opened and you see what the need is, the amount of money required is going to rise exponentially.

If I could just mention the Ontario Jockey Club, which has cooperated with us very considerably over a period of time, it said to us two or three years ago, "We would be pleased to put your phone number on our racing forms," as they do in many places in the United States. "If you have a problem gambling, phone this number." But we had to say, "No, thanks," simply because Tibor can't answer all the calls he gets now and we must have extra counsellors in order to cope with it.

The figures he used are sort of basic figures for the office operation, but once you get into these diagnostic and treatment facilities, the initial cost is going to be what he stated, but after five or 10 years down the road, you're talking about very substantial amounts of money.


Mrs Irene Mathyssen (Middlesex): Thank you for the presentation. I'm quite interested in some of the things you have to say, but I need some clarification, because I am a bit confused by some of that. Basically, you mentioned the Coopers and Lybrand study. I'm wondering if you're familiar with the Ernst and Young study. Basically, is it a good first step? It takes a look at the effects of gambling. Is this overdue? Is it a good first step?

Secondly, Dr Pohlman, you said that a compulsive gambler would gamble on anything; it's a disease that sort of takes over. In connection with that --

Dr Pohlman: Actually, I didn't say that. Some will.

Mrs Mathyssen: Okay, but they'd gamble on raindrops, whether they'd fall or not.

Dr Pohlman: Some will.

Mrs Mathyssen: Some will. So it's a disease that sort of becomes a compulsion. Getting back to what was said about the Ontario Jockey Club offering the phone number, since we need to identify the problem, should the horse racing industry, lotteries, bingos, all share in addressing this problem and if so, is it a monetary sharing? Secondly, how can the government be part of this? What should we be doing? You mentioned clinics. Is there more? Is there a specific way, a specific role for government in this?

Dr Pohlman: Sure. I'm not sure where to start with this. Let me say that we feel we have to have a kind of a seamless, if you like, progression of information for people who are gambling and who may have trouble with gambling.

New Jersey, for example, has the number of a problem-gambling association on the lottery tickets and that sort of thing. As Tibor has said, we have discouraged having that because we couldn't handle all the calls, but we do believe there has to be a system by which people who get in trouble with gambling can know where to go; can be assessed. If they need treatment, that can be formulated for them because it can be different for some people who are gambling addicts.

When we were talking about having a four-bed treatment facility, the fact is that many gamblers that you see may be treated as out-patients. You can provide them with supportive care, social work, get them into treatment and they can go to Gamblers Anonymous.

There are people who need to come in for almost a detox kind of program because you can't get them in for the out-patient appointments; they're at the track. You need to have a time when they can be removed and get into some fairly acute treatment.

Along with the fact that about 30% of pathological or compulsive gamblers -- the terms really mean the same -- are cross-addicted -- that is, they're cross-addicted to alcohol, drugs or some other kinds of addiction; many are very heavy smokers and there tends to be eating disorders in some of them -- often by the time you get them into treatment, they're in poor physical condition because they've essentially neglected everything except the gambling.

I haven't quite answered your question: Where should the funding come from? I suppose I should say I don't care. We know we need to have funding so that we can have a system whereby people can be assessed, where they can be treated if they need to, where there has to be a central kind of clinic, and if that can come from the casinos or from the gambling facilities themselves, that could be fine. That's done in many states in the United States. I think in Illinois, each racetrack has to provide -- I've forgotten the number -- I think it's $40,000 a year from each track. I think it was in Wisconsin there was I think a quarter of 1% of the unclaimed winnings -- I'm not sure about that number.

I think all commercial gambling operations need to share in this because the fallout comes from all of them. I have said that there are gamblers who specialize. I may see someone who -- that's all they do. I had a patient who -- there was not a single day in the last 15 years that he had not been at a racetrack somewhere, and that's all he did. There are those who only play poker and they know every poker game that's going on in Toronto at the back of which restaurant, where the restaurant closes and the game opens at 1 o'clock. These guys know every game that's going on. I say "guys" because most of them are men, although the incidence of women is rising over the last, I guess, three or four years.

There are those who are multiple gamblers. In the spring, they start dropping out of GA, Gamblers Anonymous, because the anxiety and the pressure is enormous at that time. The NHL playoff games are on, baseball is starting, the basketball playoffs: All the sports are starting and the anxiety and the addiction just grabs them and they start dropping out and start gambling again. These are the people who gamble on multiple things.

The Chair: Thank you. I have to interject there. Mr McClelland.

Mr Carman McClelland (Brampton North): You have provided, in part, a very passionate, as Mr Hellyer said, a passionate, eloquent review of some of the personal costs, if you will, associated with compulsive gambling. Not taking anything away from that, I'm wondering if you have any data that would somehow provide us with a measurement of the net costs to our social systems, our health care system and any projected increase in those costs.

Further to that, is the government, to your knowledge, conducting or has it conducted any similar research and is it providing funding for that type of research -- secondly, funding for treatments and the research and development that would be required to provide a network of social services and education programs that you project will be needed as a result of increased gambling in this province?

I guess the question is twofold: Can you put some numbers on it, hard numbers? Are you aware of the government doing that, either in the past or currently doing it, and any information it might have that it hasn't made available to us and, secondly, with respect to that, providing any research data funding for education and treatment?

Mr Barsony: I've got it.

Mr McClelland: Thank you, sir.

Mr Barsony: As far as the cost concerns, because we never had funds for any research, we have to rely on US research. Quite some time ago -- 10 years, in 1983 -- a US congressional study put the cost to the US economy of compulsive gambling at over $10 billion annually. You can draw your own conclusions.

When we're talking about costs, let me just -- a few things. First of all, there is an immediate welfare cost because many people lose their jobs; as a desperation stage of their gambling career, they go and do something wrong. Then there is the treatment cost which costs OHIP hundreds of thousands of dollars to send them to the United States, and it will cost us to set up a clinic here, I just named $700,000 a year.

Many of them end up, because of lack of education and early recognition, committing criminal activities. So you can draw your own conclusion. I am called on a daily basis to different correctional institutions in the province of Ontario to deal with those who are seeking help and finally recognizing the criminal activity caused by a gambling problem. I am regularly called to courts to testify as an expert; parole, probation.

That's a tremendous cost there in keeping people in prison and unless these people receive proper treatment when they're released, I give you a written guarantee that every single one of them will go back to prison. So we're acting as prevention as well, crime prevention in this matter. The costs of embezzling money, the costs of family -- it's almost insurmountable; the costs of loss of productivity, studying the racing form in the washroom or calling in sick because you've been at the casino till 4 in the morning. It's really not measurable other than comparing to that $10 billion.

Dr Pohlman: We don't have the hard figures. We don't know the numbers.

Mr Barsony: As far as the Ontario government is concerned, we've been putting in a tremendous effort in the past 10 years --


Mr Barsony: I'm willing to answer if you're willing to listen. We've been putting in tremendous effort to the government and Mrs Caplan would know because we dealt quite some time with them, but their hands are tied. I can't force the Health ministry, which has the AIDS and the cancer and this and that, to a new project. It's almost impossible, regardless of how hard I feel this is equally important.

So absolutely nothing we received, other than once the Health ministry gave us $5,000 to take a couple of medical professionals to study this treatment in the United States, which we did. We've been receiving from the Ministry of Community and Social Services a $75,000 annual service contract in which it very clearly indicates that with the end of this fiscal year of March 31 it will be over and out, which will certainly put the padlock on our doors.

I think some of you ladies and gentlemen must remember that a couple of months ago I sent a letter to Premier Bob Rae and copied every member of the Parliament on it where I tried to get away this tremendous burden of taking away from the cancer problem, taking away money from the child abuse problem, to give the money from the unclaimed funds of the lottery corporation -- which is not your money, so you don't have to take it away from the government. It's the gambling public's money. Let's put in a referendum and ask the public, would they mind if from that $15 million, $20 million, $25 million which is every year unclaimed and put back into the pot in January or February you take $1 million to aid this problem? I received about 30 positive answers from among yourselves, and that's the end of the story because nothing happened.


It will increase. Casino is considered the hard-core type of gambling and proportionately it will increase the number of people who participate in gambling. But this is the time that it is in the public eye, it is in the eye of the government, and this is the time we have to make sure it will be included in this law and we won't be told five years from now we can't change it.

The Chair: Unfortunately, our time has expired; in fact, we're several minutes over. But I want to thank you very much for presenting before the committee today.

Hon Mr Hellyer: We want to thank you once again for the opportunity. We appreciate it and we're counting on your recommendations when we read them.


The Chair: The next presenter today before the committee is the Canadian Standardbred Horse Society. Ted Smith, the general manager and registrar, is representing that society, if he would please come forward.

Mr Hellyer, before you leave, you've left one of your rubbers here, unfortunately, and I just thought I'd better bring that to your attention.

Hon Mr Hellyer: Thank you very much.

The Chair: You're very welcome.

I regret that interruption, Mr Smith. If you would please make yourself comfortable, and you have another person with you today, if they would be so kind as to identify themselves for the committee and Hansard.

Mrs Heather Reid: Heather Reid, secretary-treasurer of the Canadian Standardbred Horse Society.

The Chair: Thank you very much for being here today. You have 30 minutes within which to make your presentation and field some questions from the committee members.

Mr Ted Smith: Thank you, Mr Chairman and honourable members of the committee. It is a privilege to be here and I do thank you for affording us this opportunity. With me is Mrs Heather Reid, who is the secretary-treasurer of the Standardbred horse society. Mrs Reid won't be speaking, but if there are any questions that might be better responded to by her, she will gladly answer them for you.

I'm sure that the clerk has handed out to you a copy of my presentation. It isn't a long one, it's about a three-page one.

We're not here, obviously, to praise the government for its decision to implement casinos in Ontario; rather, we were against it. I should explain who we are, and that is the Canadian Standardbred Horse Society. A Standardbred horse, for those who may not know, is a horse that races with a harness and a sulky attached to it, which is in comparison to a Thoroughbred that races with a saddle and a jockey on the top.

The Standardbred horse society represents the breeders across Canada, of which 60% reside in the province of Ontario. In fact, we have 5,850 members in this massive province of Ontario who breed, raise horses and sell them at public auction. The society is 84 years old and it is incorporated under the Animal Pedigree Act of Canada. Its mandate is to encourage the development and the breeding of the Standardbred horse by, obviously, registering them with integrity, through industry promotions, public auctions which we run, and I've brought a sample of our catalogue because we do have a sale coming up on September 18 and 19 at the Woodbine sales pavilion. Mrs Reid will distribute those around, so you might have a look at them. Last year we had an opportunity to meet with the casino project team and we asked some of them to come to our yearling auction sale. They did, and I can assure you that they were overwhelmed by what's involved in breeding, raising and selling a horse and the costs involved. So I do encourage any of you who have time that weekend to come and see what goes on in the raising, breeding and selling of a Standardbred yearling.

I guess the key way to present the society and the breeders of Ontario is that we are the suppliers. Somebody has to raise the horses, and we are the suppliers of those horses. Obviously, there are many, many breeders across the province with massive farms that hire many, many people, most of them unskilled labour, who know how to care for and raise horses.

It will surprise you to know that there are over 210,000 registered Standardbreds in Canada and 125,000 of those are owned in Ontario. Presently there are over 10,800 active race horses in Ontario that produce 21,798 racelines annually.

However, our industry is not at its peak, reached in 1988. It has since declined, in 1992, by the number of mares bred. We peaked with 5,000 brood mares being bred in 1988 and it has now declined to approximately 3,700 in 1992. The 1993 breedings are not in, but I would anticipate them being around 3,200 to 3,300.

In essence, the Standardbred horse society and their breeders produce that product which will perform at the racetrack, but I'm not here to tell you a whole lot about the Standardbred horse society. I'm here to tell you that the Premier and the government of Ontario have ignored the breeding and racing industry. The government has a majority, and it's obviously going to use it. It's going to drop the hammer on the breeding and racing industry with the implementation of casinos via Bill 8.

I don't believe, nor do the breeders of Ontario believe, that the government knows what it's doing and we think you have totally and absolutely ignored our industry.

In point of fact, the breeding and racing industry has formed a coalition called the Ontario Agriculture and Horse Racing Coalition, chaired by Dr J. Glen Brown, who spoke with you in Windsor. He has written numerous letters to the Premier asking that he be accorded a meeting with the Premier on behalf of the industry. Never has the Premier given him a meeting, and I can only throw to you, if Bob White in the automotive industry had a problem, I guarantee that he would have a meeting with the Premier. But the Premier keeps referring us to the minister and saying, "The minister will look after you." He is quoted in his letter to Dr Glen Brown as saying, "Maintaining the viability of horse racing in Ontario is a very important priority and will receive the attention it deserves." Well, if that's his point of view, why will he not meet with us?

The breeders in Ontario want to know what the Premier has done, if he thinks he's done something for our members, and what does he plan? The Premier has very easily looked after the jobs at de Havilland, jobs at Algoma Steel, but what's he going to do about the 18,000 jobs in the Ontario breeding and racing industry that can very well be lost with the implementation of casinos? I'm not just talking one casino in Windsor; I'm talking about all of the ones that are planned in the future.

Our industry, the breeding and racing industry, has no trust in this government, nor the Premier, nor the ministers. It believes that the government is looking at ways, via consultants and reports, to prove that racing is declining and will fail. It's the belief among our members that the government thinks: "Well, horse racing's on a decline. It really isn't going to go anywhere. We don't want to help it, so let it go and casinos will take its place." It appears to our membership that the Premier and the government are ignoring racing.

Just to give you some background information, our industry is a partnership. In fact I title it a three-way partnership but, as an afterthought, it's really a four-way partnership because the government is our partner.

I've explained to you about breeders, who produce the product. They breed, raise and sell it in Ontario. Once again I encourage you to come, you the members, to the sale on September 18 and 19 and meet some of these breeders and see some of the products they raise and let them tell you what's involved.


The second part of the partnership is a racetrack. Obviously, you have to have a place to race your horses, and there are racetracks throughout Ontario, of which the Ontario Jockey Club is the biggest, which host the show.

Third, but not least, are the horsemen, who put on the show. They buy the horses, they train the horses, they hire the grooms, they use the veterinarians, they use the blacksmiths, they buy the trucks, they buy the trailers and they race the horses at the racetracks.

Now, you're saying, why is the government a partner? Well, the government is a partner because it gets tax revenue. Without racing, it wouldn't have tax revenue.

The breeding industry in Ontario is grass roots -- I'm sure that no one would have any objection to me saying that -- and it injects money via all of those various things I just talked about, whether it's buying farms, buying tractors, buying bailers, putting seed down for grain and hiring help, buying grease, oil, gasoline, hiring veterinarians, and it goes on and on and on. But it's spinoff, and it injects money into the economy of Ontario, and it is my belief, and the belief of our board and our members, that this government doesn't understand the economic impact of racing, in that our industry has a $2.2-billion annual economic impact across Canada, $350 million alone in Ontario farm products, which represents 6% of the total Ontario farm product. I think Roger George of the Ontario Federation of Agriculture will be speaking to you at some point in time, and he will confirm those figures for you.

Above and beyond that, you get the tax revenue, which is above and beyond the economic impact. Just think: The taxes are above and beyond this economic impact. Without racing, I don't know how casinos are going to fill all of that gap.

If you go back in time, racing did have a monopoly. It had a monopoly across the province where almost 100% of every dollar wagered was bet on horse racing. But now the government, which is obviously the regulator of horse racing, is our competitor. It's our competitor with the implementation of lotteries, with the implementation of Pro Line sports betting, where there was an average of $417 per Ontario resident in 1991. It's now introduced three-day charity casinos. Anybody who reads the Toronto Sun just needs to go to the sports page and you'll see about four or five pages of ads every day. And now it's considering, and obviously will, because it has a majority, dropping the hammer and bringing in casinos.

It may shock you to know that horse racing has now gone down to 27% of all dollars wagered in Ontario. When I met with the minister, Marilyn Churley, I could see her eyes open when she heard that figure. I'm not sure you people know that, but I want to draw your attention to it, because it's factual.

We are no longer a monopoly but we are taxed as a monopoly. The tax is 5% net to the government. The actual tax is higher, but there is a rebate program in place that gives money back to the industry for the Ontario sire stake program for research. For instance, in New Jersey, one of the biggest racing jurisdictions and wagering jurisdictions in North America, the takeout there by the state government is one half of 1%.

But I think a very, very important thing that's being missed by so many people is that racing is taxed at a rate two times what the government will tax its own casinos. Is that fair? Is this fair competition?

I think the purpose of this committee is to make recommendations regarding the legislation that's being presented by the government. Hopefully, this committee will consider suggesting that there be a change in the taxation in racing and that some equality be made on taxation relative to casinos that it's considering.

Our members are asking us, what, where, when and why? No one's talking. Dr Glen Brown, chair of the coalition, had a letter from Elmer Buchanan, and he mentioned a discussion paper on racing. That's the first anybody has ever heard of it. What's the discussion paper on racing? Who's doing it? What's the goal? Mr Buchanan seemed to think we knew all about it.

Another very important thing that is of great concern to our members, and we have lobbied against them for a long time, is VLTs, video lottery terminals. Hidden -- and I use the word "hidden" -- in the legislation for casinos is the right of cabinet, by an order in council, to bring in video lottery terminals. If they come in as well, it is my opinion and the opinion of my board that they will bury the breeding and racing industry.

I just can't imagine, nor can my board and members imagine, nor can our members imagine, that the Premier will not see us. I don't want him to see every organization, and there are a lot of them, in the breeding and racing industry. But we went together and we formed one: We formed a coalition with the Ontario Federation of Agriculture. Dr J. Glen Brown is the chair and repeatedly has asked for a meeting with the Premier and repeatedly he has been denied so. I can't see the Premier doing that to Bob White, and I respectfully request that this committee talk to the Premier and ask him to reconsider his denial of a meeting with Dr Brown.

Finally, to summarize, I would like give you a recommendation. How can we help racing? Consider a reduction on the taxation of racing and make it equal to the taxation of casinos. How can we operate in fair competition if the government proposes to tax casinos at two and a half times less than racing? We are no longer a monopoly. We may have been 20 years ago, but racing is no longer a monopoly; it only has 27% of the dollars wagered.

I want to leave you with a few quotes. Mrs Reid and I have talked to our members daily, and here are three of the most common quotes we get on the telephone or in personal confrontation:

(1) "The Premier and the government have totally ignored our industry."

(2) "Promises, promises, nothing but promises."

(3) "We do not play on a level playing field."

I think if you had to pick two of the three that are strongest, they are that we do not play on a level playing field and that the Premier and the government have ignored us.

As attachments, you will see I have broken down -- I'm sure many of you understand what happens to the $1 bet. When $1 is wagered, broken down it's 100 cents. Five cents goes to the Ontario parimutuel tax, and that is a net tax; it's actually higher but, as I said, some comes back in the rebate program. The federal tax is approximately one cent, which leaves 94 cents. As 78 cents is returned to the winning bettors, those people who have tickets to win, that leaves 16 cents. Seven cents is then retained by the racetrack, and from those seven cents, the racetrack uses that money for employees and their wages, operating expenses, property taxes, depreciation, interest on debts, capital expenditures and corporate taxes.

The nine cents used to pay horsemen is obviously used to pay purses. The purses are reflective of trainers who pay the grooms and their assistant trainers; farmers to buy the hay, straw and grain -- as I said, Roger George will gladly speak on that; veterinarians; horse transportation; equipment dealers; blacksmiths; and taxes.

The breeders use the money in the form of purchasing replacement stock to upgrade their brood mare bands to sell a higher and more competitive product that can compete North America-wide.

The breeders hire a great deal of farm help. As I said, most of it is unsophisticated, labour-intensive, unskilled help. They buy a lot of hay, straw and grain. Once again, they use veterinarians. They're constantly building buildings, putting up fences and fixing up their fields. They purchase a great number of implements from the vehicle dealers. They're always purchasing hardware and supplies such as grease, oil, gas and utilities. There's horse transportation. They buy insurance on the horses.

They pay a great deal of money to register horses, transfer horses, file reports, and do blood typing to ensure the integrity of their animals. They hire blacksmiths constantly to do trimming on the foals and the brood mares and on the yearlings. Obviously, they pay property and business taxes.


That is a very, very general overview of how the $1 wager is used and spent, and I think it probably would be enlightening to some people around this committee to see the breakdown of that dollar.

Your last attachment is one which shows you the takeouts on regular win, place and show wagering in various states and provinces. As you can see, Ontario is at 5%, which is extremely, extremely high. If you want to compare it with New Jersey, New Jersey is one half of 1%.

I would like to leave this committee, from this presentation, with the fact that we understand the government is going to implement casinos. We feel they will dramatically and harshly affect the breeding and racing industry in Ontario, and we do not believe the government is fully cognizant of the effects that it will have on the breeding and racing industry. We are here to ask you to consider some recommendations to take back to the government, obviously the key one being the recommendation of a reduced taxation on racing.

The Chair: Thank you, Mr Smith. We have about two minutes per caucus for either a comment or a short question.

Mr Kimble Sutherland (Oxford): Thank you for your presentation. As I listened to your presentation and presentations that we had yesterday from other representatives of the racing industry, I'm left with the sense that while you're saying before this committee that casinos are going to be the problem for the horse racing industry, in fact the reality is increased competition overall for the gaming dollar. Increased competition overall for the entertainment dollar is part of the problem.

If casinos don't come in, what is the racing industry doing to better market itself, to better deal with that increased competition for the gaming dollar and the entertainment dollar?

Mr Smith: As I said, Mr Sutherland, racing used to have a 100% monopoly. I don't think anyone would disagree with that. If you go over, in track time, 20 years ago, there wasn't much of an industry of horse racing, but a group of individuals from the breeding and racing industry went and spoke with the government and persuaded it to use a small portion of the taxation on racing and reinvest it into the industry in the form of sire stakes, purse assistance and research. That was done, not from the treasury, but from the taxes --

Mr Sutherland: But what are you doing to expand your base, your market base, attracting more people to come to the races?

Mr Smith: Definitely racing is going through a downsizing. Every racetrack in Ontario cannot exist. We acknowledge that. We have to realize we have different competitors, and we do have different competitors. We are going to upgrade the quality of the horses. We're going to upgrade the quality of the racetracks, and some of those smaller racetracks will die and fade away. That's going to happen. But we have found that the public will come and wager dollars on the higher-quality horses when they're racing for bigger purses.

We are starting a major marketing program ourselves. We have a marketing association which we're heavily involved in. In fact, tomorrow night, just myself and Mrs Reid and a few members of my office have put on a new owners' seminar. You may have heard our commercials -- we had them on CFRB -- to try to attract new owners to it. We're having a seminar at Greenwood Racetrack. We had one last June and we had one last August. It's surprising how many people are interested in owning a race horse but don't know how to get to it. There's a very small way that we're doing it, but we understand we have a lot of work to do as well.

Mr McClelland: Ted, you said that in a response from the Premier, the Premier said, "The minister will look after you." In a debate in the House, the minister told me to rest assured that you were being taken care of and that you were happy and your colleagues in the business and the industry were happy. Those were essentially her words. They might not be verbatim, but the sentiment was: "Trust me. The people in the business are satisfied and we'll take care of them. We're meeting with them." I hear that as well from the parliamentary assistant. I heard that in response to Dr Brown last week: "It's okay. We're going to take care of you. We have work to do. It's largely your fault, but we're going to help you out anyway." I'd like your comment on that, please, sir.

Mr Smith: The minister did see us; I acknowledge that. She did see a lot of the different factions of our industry and had promised us that she would gather us all back together for a round table discussion and that something would come out of it. We've never heard back from her.

We in the industry feel betrayed. We definitely feel betrayed by the minister, by the Premier and by the government. We've worked hand in hand with the government over the last 20 years to build racing into a very, very major industry, and we didn't do it with taxation dollars. We didn't do it by going to the treasury and demanding a handout. We did it with our own dollars that were wagered at the racetrack, and through the implementation of the sire stake program and through the research and the better development of quality brood mares and selling of yearlings, we were successful. We created additional jobs in the private sector. Millions and millions of dollars were poured into racetracks, facilities, breeding farms, and the government encouraged us to do so.

We did all of that and we were very successful. Then the government got in and became our competitor. They are our regulator, but then they became our competitor, and it appears now that Queen's Park is going to pull the plug on us. We feel betrayed. We feel neither the minister nor the Premier has willingly wanted to help us.

The Chair: Thank you. Mr Eves.

Mr Eves: Last week when Dr Brown appeared before the committee in Windsor, we heard from various government members of the committee that the horse racing industry was in decline in any event and that perhaps the industry should look to its own shortcomings. Marketing was mentioned. It was suggested that you would do well to follow Mr Tom Joy's example, who wasn't against casino gambling; in fact, if you can believe Mr Dadamo, Mr Joy is looking forward to casino gambling because it will provide some interesting opportunities for Windsor Raceway.

I was reading an article in the Windsor Star of last Tuesday, where Mr Joy says that the 7.5% tax was imposed when horse racing was the only legal outlet for gambling, a tax based on a monopoly that no longer exists. He goes on to talk about the exclusivity that you once had and no longer have.

"`Taxes are the problem,' Mr Joy says. "We pay the highest taxes of any jurisdiction in North America and we have more competition than anyone, but I simply can't get the message across. Our problem is basically a problem with the government. They say they're willing to talk, but it's hard to bring them to the table.'" The government, he says, has a simple choice with respect to his operation: They can have 3% of $90 million with an extended teletheatre facility, or 7.5% of zero.

Isn't the reality that governments of all political stripes have now over the years come into direct competition with the horse racing industry through lotteries, through various charitable organizations and now through casino gambling, to mention a few? Why do you feel that the government will not directly address what I think is a fairly obvious request for your industry to survive in the face of increased direct competition from government -- expending taxpayers' money, I might add -- to go into direct competition with the horse racing industry? Why would they not acquiesce to your request and simply reduce the tax?

Mr Smith: I think part of the response to that is that the government does not understand our industry and that, as you say, it is our competitor. They maybe have not researched the benefit of reducing the taxation on racing and how much more money would be injected back into it by reducing it.

I can just give you a very simple example of the Meadowlands in New Jersey, where, as I said, the tax taken is one half of 1%. They had an absolutely record handle on August 7 for the Hamiltonian, which is a very prestigious trotting race. They got almost $5 million. They just ended their meet last Saturday and won't be opening again until December. They had an overall average increase of 7% over 1992 with this reduced taxation. Because of that, they will be able to increase their purse accounts 15% next year.

The Chair: Our time has expired. Thank you for presenting before the committee today.



The Chair: Our next presenter is Diane Stefaniak, the executive director of the Ontario Hotel and Motel Association. Ms Stefaniak, would you please come forward and make yourself comfortable. You have 30 minutes within which to make your presentation and field some questions from the committee members. When you're comfortable, please proceed.

Ms Diane Stefaniak: I just want to point out that I am wearing a non-partisan jacket. I have colours of all three parties in it, just so you all know that I'm not playing favouritism with any party.

I would like to thank you for the opportunity to speak, on behalf of my members of the Ontario Hotel and Motel Association, on what we think is a very important issue. We are a hospitality trade association of over 1,200 members in accommodation, food and beverage service throughout the province, representing over 60,000 bedrooms and well over 15,000 employees. Approximately 90% of our members are small to medium-sized operators who offer products and services to the tourist.

The Ontario Hotel and Motel Association supports the establishment of a limited number of casinos in selected areas, but we also strongly encourage consideration of video lottery terminals in licensed establishments throughout the province.

The tourism industry has, as all businesses have, been hit very hard by this recession. As you well know, the hospitality industry is extremely labour-intensive and is the largest employer of minorities, women and the unskilled worker. The increases in minimum wage, taxes, the employee health tax and unemployment insurance has hit our industry, we think, the hardest. It has resulted in many closures and staff layoffs and this has meant the livelihood of not only the owners of these closed businesses but their employees.

Unlike a manufacturing plant, there is no inventory in hotels or restaurants. If that room is not sold that particular day or a meal is not served, the revenue is lost for ever. In many instances, recovery is not possible and doors are closed due to poor business. These establishments are quite often family-owned and -run. When the doors close, it generally means the life savings of a family are wiped out.

Not only does tourism employ a lot of people, but it creates jobs through money generated by the tourists. A study conducted by the International Association of Convention and Visitor Bureaus estimates that the average daily spending of a convention or trade show delegate is $143, or $585 per stay. This amount is distributed to the hotel, restaurants, entertainment, retail stores, agriculture and transportation. To get a more accurate picture of the revenue generated, multiply this amount by seven and then by the number of delegates in a city. If tourism wasn't so valuable, I wonder why there are so many countries competing for major events such as the Olympics and the World Fair?

We must use every means to encourage tourists into our province. We believe that casinos are one tool that will help us to do this. At present, there are two legal, fully operational casinos in Canada: one in Dawson City in the Yukon and the other in Winnipeg, Manitoba. Having had the opportunity to visit both cities, I really did not see crime rampant on the city streets, nor people begging so that they could gamble any further. What I did see was another form of entertainment to draw people to the city. I agree that casinos on their own are not sufficient to draw tourists, but they certainly are an asset when making a decision as to which city or area people will visit.

Who are we to judge what form of entertainment people prefer to spend their money on? Not everyone enjoys the theatre. Tickets to the Phantom of the Opera were over $100, but there was never an outcry that this money was spent for an evening at the theatre, whereas if the same amount of money is spent at a casino, it certainly is a different story. Casinos, races and video lotteries are not only means of gambling, but they offer a means of entertainment for all types of lifestyles.

Employment is created and increased through the increased traffic into a community. If the casino is properly run and placed, tourists will come into an area where they might not have if there wasn't this form of entertainment. This increased traffic will help the community through increased revenue from sales of product, lodging, food etc.

We are already losing Ontarians to other parts of the world and Canada that have casinos. Realistically, many will continue their jaunts to Vegas, but on the other hand, there will be many who will look at staying in Ontario for their entertainment.

People will continue to gamble, whether they buy lottery tickets, bet at the races or buy a fund-raising ticket from their son's or daughter's hockey team. Lottery tickets do not increase jobs as much as casinos will. They do not increase traffic and/or tourism into an area like casinos will. They do not provide an opportunity of social activity like casinos will.

Video lottery terminals placed in licensed establishments throughout Ontario will also provide an opportunity for employment and entertainment for the local residents. VLTs have proven, in other provinces, to be the means of survival for many establishments. They have also provided a form of entertainment for many who would have otherwise sat at home hibernating.

In summary, I would just like to reiterate that the Ontario Hotel and Motel Association encourages the expansion of legalized gambling to include casinos in selected areas and video lottery terminals in licensed establishments throughout Ontario. We believe that this form of entertainment will mean employment for many local residents and survival for many businesses. Thank you.

The Chair: Thank you very much for your presentation. We have about eight minutes per caucus for questions and we're going to start with the Liberals.

Mr McClelland: Thank you very much, Diane. I understand where you're coming from in terms of seeing casinos as a potential revenue booster, a draw, for clientele. We've heard from representatives, as you would know, from the Ontario Restaurant Association. Indeed, we heard from many individuals and representatives of various interest groups in Windsor. They said at the same time that they see it as a potential draw, they see it as a bit of a two-edged sword, inasmuch as people may come in and there may be an inclination to stay in the casino. To use the terminology that's thrown about from time to time, the buzzwords, Atlantic City has created some black holes. That's the terminology they use.

It seems to me that we can begin to regulate, initially, square footage, availability of alcohol on the floor, with a view to enticing people out of the casino to spend money elsewhere. That ultimately is what you would want to see happen, I presume.

Ms Stefaniak: Yes.

Mr McClelland: The dilemma I see in that is this: Ultimately, you have a casino running as a profit-making enterprise. They are wanting to do and going to do everything they can to hold people inside. At some point in time, you end up with that tension or that dilemma, trying to make the casino viable and at the same time trying to serve, if you will, the secondary economic benefit to people in and around the area. To what extent do you really think we can sustain, if you will, draw that line in the sand and say, "There will not be x number of seats available, alcohol available, shows available," and so forth?

Let me just summarize by saying this. There was a gentleman who presented in Windsor and said, "Let's be realistic about this." It was one of the merchants. I kind of appreciated his candour. He said: "Ultimately, we're going to have a full-scale casino. Let's deal with it in those terms. It's naïve to think that we are going to start out with this controlled product. It will evolve. The pressures will be there. It's only a matter of time until we succumb."

You know the experience in Atlantic City; just your comments, your suggestions about how you might handle that. As you know, right now it's simply by regulation. There's nothing in the legislation that affords firm protection to your industry.

Ms Stefaniak: I can appreciate that, and you're right. I think if they are smart business people who run the casinos, of course they will want it, just as every hotel manager wants a group of people to stay in his hotel. But the wise person knows that it isn't a single item that keeps that person there. As we said, in the convention business we can bring people into one property, but if we don't get them to experience and taste the rest of the community, they aren't going to come back. They have to experience more than just that one place.

If we just want to talk about Windsor, I foresee that happening. Maybe the first time people go, that's all they'll do is go to the casino, but the wise person will market the rest of the city so that they'll see there are other things to come and see.

Mr McClelland: Atlantic City tried that, and the empirical data suggest that people come on average for six hours. They spend five hours and 20 minutes gambling and the other 40 minutes are left over which includes transportation, eating and shopping. So you have a pretty thin margin of opportunity to work with. That's something for consideration.

I think in terms of your industry, you need to have some help in saying how we are going to ensure the viability of your industry in and around the area so that it doesn't suck everybody in and you die. It's happened in Atlantic City.


Ms Stefaniak: We have to look, and that's why it's so important to have a ministry of tourism even on its own, because it is very important to promote tourism in that community so it isn't just casinos that are there to draw the people.

Mrs Elinor Caplan (Oriole): Just to follow up on my colleague's question, I guess the concern I have is the evolution. We know from all of the evidence that Detroit and the other border cities are not going to sit still and allow their residents to cross the border to come into Ontario simply for the purpose of gambling. It's just a matter of time before they establish their casinos, and we expect them to be numerous and highly competitive.

What do you think is going to happen when the casinos on the other side of the border offer the same environment as they have in Atlantic City and in Las Vegas, where you have craps and you have all the entertainment and all the liquor and all the things the Windsor casino and the Ontario casinos are not going to have, for the policy reasons in Ontario attempting to help the other tourist industries that you represent? I'm very sympathetic to the way the tourist industry is suffering in Ontario these days, but what do you think is going to happen when the United States border cities start to compete?

Ms Stefaniak: Time will tell. I'd like to think that this problem is being looked at right now, that we become the leaders and we don't follow what could happen and we set a standard here that Detroit won't want to open a casino because it won't be able to compete with us. I know reality might be saying a different thing.

Having been in Detroit for a convention a few months ago and having Windsor across the border, a lot of my American colleagues, even though there wasn't that much to do, still wanted to go over to Windsor. I know that's not going to happen, but I think that is something we have to look at, and I'd like to think we leave a window open so that we could adjust with any of the competition from across the border.

Mrs Caplan: I've been to Las Vegas and I've been to Atlantic City, and unfortunately the experience has been well documented, and that is that you have big casinos where everything is self-contained, and the local businesses, particularly the other tourist industries, don't get the benefit. Unfortunately, given the plans that we see for the corporation that's being established here in Ontario, which will not permit all of those added features that the American casinos have in the hopes that it will help the local community, they're going to be subject, in my view, to the kind of competition from the United States which will inevitably lead us to the experience of Atlantic City. That's my concern about the way we're proceeding. I think it's just shortsighted.

Mr Eves: I was kind of intrigued by your recommendation or suggestion about the expansion of video lottery terminals. Even a great number of witnesses who have appeared before the committee who have been in favour of casino gambling have specifically said they would not be in favour of an expansion of VLTs.

There have been a number of difficulties, especially in some of the Maritime provinces, with the implementation of video lottery terminals. We've seen quite an increase, I think it's fair to say, in compulsive gambling problems resulting out of that.

We had the Canadian Foundation on Compulsive Gambling; I don't know if you were here when it made its presentation earlier this morning. It pointed to the fact that there are now six centres in Nova Scotia for compulsive gambling; we have none in the province of Ontario. Of course, Nova Scotia is a relatively small province compared to Ontario. They don't have an exact figure as to what the cost of compulsive gambling is in society, but they point out that for a small, four-bed treatment centre in Ontario the annual cost would be about $1 million a year. They guess that societal costs of compulsive gambling are in the neighbourhood of $10 billion a year.

Do you have any concerns about the expansion of video lottery terminals throughout the province of Ontario, having looked at some of the other jurisdictions' problems, particularly the province of Nova Scotia? How would you profess to address this problem?

Ms Stefaniak: Do you have any statistics from the western provinces, especially Manitoba?

Mr Eves: No, I'm just telling you what this is before the committee.

Ms Stefaniak: No. I don't mean to be rude, but it's simply that every time we hear any negative responses on the video lottery terminals, they are quoting the Maritimes but they're not quoting the western provinces, especially Manitoba, that have proven that it's been successful. It's meant survival for many operators.

I belong to an organization called the Hotel Association of Canada -- not I personally, but my association; in fact, that's why I was in Dawson City -- and we have talked to our colleagues -- unfortunately, the Maritimes weren't there -- from Manitoba. I have questioned them carefully on it, because this is something we've been pursuing for over a year now. I talked to them and I was at a couple of establishments just watching, trying to be objective about it and trying to see the type of people who go into the casinos. In talking to the operators, I have said, "Who comes in and what happens?" A few of them in the rural areas have said: "What has happened is that it's provided a means for somebody who would normally sit at home and probably watch TV to come out and meet some other people. Maybe they're sitting at a machine, but it's also some interaction so they get up and they talk to people."

It's provided a community atmosphere. It really has meant that some of the operators did not have to close their doors, which meant jobs were saved; in fact, they were able to give jobs to the community. In Manitoba, in the areas what they do is they pump some of the revenue back into the community. It does not go back into the provincial pot, so to speak: it stays in the community. It's a win situation for everybody. The community benefits. The licensee benefits. The difference with Manitoba, Saskatchewan and Alberta is that it is run by the government, it is controlled by the government, whereas in the Maritimes it's run by private operators, it's a private enterprise. In the Maritimes they put it at every single corner store practically. I understand now they've withdrawn a lot of them because they realized that was not the way to go.

I'd like to think that we're going to learn from the mistakes of both, but we just see that licensees are very limited in what they can do to bring business into their establishment. Once again, I look at it as a form of entertainment, and if it brings people in -- you know, a lot of licensees will say it doesn't increase sales in alcoholic beverages but it increases traffic flow into their establishment. This is why we feel that it's important to be considered, especially for a lot of the rural areas that won't be affected by the casinos. In fact, some of the people in the rural areas might go to the major centres to gamble. This will maybe keep some of them at home in the community, and that's why we're in favour, but, again, in an age-controlled, licensed establishment. We're not in favour of putting it at every street corner, in the confection stores or anything like that.

Mr Noel Duignan (Halton North): Thank you very much for appearing before the committee this morning and for, again, an excellent brief.

You touched on a couple of very important topics. There's the question of tourism. Just listening to some of the comments and some of the questions, people say, "Look, what happens when Detroit builds a casino? Windsor is basically just going to fold up and go away." I don't believe so. I believe that Canadians can compete and can compete very well. You made an excellent suggestion, that the product we're going to develop will set the standard. I actually truly believe that. Also, what we're doing in the Windsor area is a catalyst, is a tool for the tourism community and for the people, the entrepreneurs, to develop the whole Windsor area, to develop facilities that tourists want. The casino is only one aspect of it. Hopefully, that will be the catalyst so that other people in the community will then build other entertainment areas in the Windsor area that people can come and visit and make Windsor a tourist destination, not just for five or six hours, but for two, three and four days. We truly believe that is the case. I'd like to hear your comment on that.

Ms Stefaniak: I would like to see it myself. I think the Windsor area is beautiful. It's a good gateway from Detroit into the rest of Ontario. I agree; I think if we position ourselves in the right way we market the province, people will come through. They'll stay in Windsor. If we can put theatre there, put other activities there, even if somebody comes, they could come with their family and the family can go to theatre if somebody wants to go into the casino. It doesn't have to be just the casino.

Mr Duignan: That's the point: We're building just one casino.

Ms Stefaniak: Right.

Mr Duignan: It's a pilot project for Windsor. That one casino will act as a catalyst for other draws for the Windsor area. Again, we have never said that 100% of the tourists coming into Windsor will spend money outside the Windsor area. Roughly, it's about one fifth or 20% of the people coming into Windsor who will spend one night or more in the Windsor area. That's where it'll benefit the local store owners, the local restaurants, the other tourist attractions and of course the motels.

Ms Stefaniak: I agree with what you're saying.

Mr Duignan: Again, the whole question of comparing Windsor to Detroit or Atlantic City is not the case. What we're building here is different and unique. As you said, hopefully we'll set the standards for others to come. Windsor is a safe, secure city to bring your family to, and that will be the emphasis.

I hate this notion that when we build a casino, Detroit builds a casino, and then once Detroit does it, everybody phones up and goes, "Oh." I believe Canadians can compete and will compete and have a very successful and unique venture in Windsor.

Ms Stefaniak: I believe so.

Mrs Mathyssen: Thank you, Ms Stefaniak. I think what I liked best was your positive, "We're going to create an opportunity for ourselves." I think one of the things we've been hearing in the questioning so far is the assumption that the Americans will always beat us. Like Mr Duignan, I don't buy into that.

I know that there's been a survey done by the government that shows that 50% of the Detroiters interviewed would still come to Windsor, even if there were a Detroit casino, because Windsor is safer, is more attractive, the value of the Canadian dollar is such that their money goes further and their winnings won't be taxed. They're talking about what we have in terms of attractions.

I want to go back to the horse racing industry. One of the things we've heard is, "Casinos are going to kill us." Yet in the last presentation, from the Canadian Standardbred Horse Society, it talked about the success that New Jersey had just experienced recently by introducing a prestigious event which brought in $5 million in bets. The horse racing industry there had a revival. Is that what the horse racing industry needs to do here? You're taking a very positive tack in all of this. Is that what they need to do, start looking at how they can make that entertainment dollar come their way by pleasing the customer better? Is that the secret?

Ms Stefaniak: I don't know. I don't know the horse racing industry well enough to say. I would like to think that for anybody facing competition we have to relook at the way we're doing business and what we can do to promote it. That, to me, is why competition is healthy. I don't think it's healthy to have a monopoly, because you get lazy, whereas you always have to compete for that dollar now. I think anybody in any type of business has to look at what they're doing and the way they're doing business and how they can increase their business.

Mrs Mathyssen: So when the horse racing industry kept saying over and over again that its demise was because it had lost its monopoly, you're suggesting the opposite, that they have to forget about that monopoly being a good thing?

Ms Stefaniak: I believe in the horse racing industry, because it also helps tourism when they have the races. I think we need it all. But whether they're losing their monopoly and why it is or anything, only they know. They have their marketing plans. If they're good marketers, they know what the reasons are and how they can overcome them.

Mrs Mathyssen: Thank you. I appreciate that.

The Chair: Ms Stefaniak, thank you very much for presenting before the committee today.

This committee is recessed until 2 pm sharp.

The committee recessed from 1215 to 1403.


The Chair: Our first presentation this afternoon is the Canadian Trotting Association, Toronto: Mr Tom Gorman, the executive vice-president, and Ms Callie Davies-Gooch, media relations coordinator. Welcome to the committee. You have 30 minutes for your presentation, of which you may use all or a part for questions and answers. You may proceed.

Mr Tom Gorman: Thank you, Mr Chairman. We actually have about a 10- to 15-minute presentation, and if there are questions, we would certainly be prepared to answer them.

We represent the Canadian Trotting Association, which is commonly referred to in the industry as the CTA. It is an association of individuals, firms, corporations, agricultural societies, all involved in various aspects of harness racing. Our members include racetracks that are conducting race meetings, horse owners, officials, drivers, trainers and grooms. In Ontario, our membership is 9,000 people.

For your information, the objectives of the CTA are essentially to record, store, distribute and promote harness racing information and statistics throughout the industry through its on-line computer network with our 30-member racetracks; our standardized licensing and insurance program; our monthly Trot magazine, which goes to every member; our media relations department, which basically disseminates as much information as we can get out to the public, and our rather healthy Standardbred Canada Library, which is housed in our office building.

The CTA jurisdiction runs from New Brunswick to British Columbia, and from each district we have a number of directors, 11 of which represent Ontario -- nine representing active members and two representing racetracks.

It is our position that the horse racing business is a labour-intensive, agribusiness industry. It does generate in this province $1 billion annually in wagering; 5.7 million people attend the races every year in Ontario. There are approximately 28,000 related industry jobs in harness racing, and if you include owners in that number, that number rises significantly.

The industry pays $350 million a year to feed, hay, straw and local service industries, $90 million to pari-mutuel and property taxes, and to me, those numbers are significant, and those are the numbers that we're quite concerned about and feel are at risk.

We believe that harness racing in Canada and in Ontario is in a fragile state. In the past two years, our member tracks in Moncton, New Brunswick, Saguenay, Quebec, Leamington, Goderich and Orangeville in Ontario and Winnipeg in Manitoba have all ceased their operations in harness racing. Other tracks we know of have some serious financial concerns.

In 1989, our annual membership was in excess of 20,000 people. In 1993, that number has dropped to less than 16,000, and we forecast another 1,000-person drop in the next fiscal year. Equally, there is a dramatic drop in the number of breedings of horses, and that has resulted in substantially fewer available race horses. More tracks these days are offering fewer live races and more simulcast races than ever before.

Our specific concerns with respect to casinos lie in four major areas, and I would like to touch just briefly on each of those areas and summarize the presentation with two very simple recommendations. Nothing of which I'm going to say is going to surprise you, but our position is that if you don't act favourably on those recommendations, the results will be very negative, and that won't surprise us.

There is no question that the impact of casinos on Ontario racing will be substantial. Authorized and respected research suggests that there will be at least a 20% decline in wagering and the loss of at least 10,000 jobs, many of which have no transferable skills. By introducing casino gambling, you are committing what we feel is a very basic gambling sin: You're betting against yourself. You are already a partner in an Ontario lifestyle which needs tuning and attention and not a major blow which could cripple or kill it.

We don't understand why you want to create a crisis situation in an Ontario tradition which simply provides a quick economic fix and not much else. The implementation of casinos here will surely prompt other states, and I'm thinking primarily of Michigan, to get as quickly into the casino business as possible, which will hurt us again and probably your own casino projections as well.

We believe that racing is the epitome of the competitive free enterprise system. We are not afraid of competition. Everyone in racing is an entrepreneur of sorts who takes daily risks, gambles and actually thrives on the competition. Breeders must decide which meetings will produce the most saleable and productive offspring to attract buyers. Owners must decide which of those horses they would like to invest in to be reasonably certain of some kind of a profit on their return. Trainers and drivers must combine their talents to win out over other trainers and drivers on a daily basis. Racetrack operators are competing against all other sport, lifestyle and entertainment options to ensure their success, and not to be left out, the patrons themselves have to match wits with each other, based on their knowledge and analysis of data, in order to bet successfully. All of that is the healthy fabric of what we believe racing is. It's everybody competing against everybody else for a limited amount of money. We accept that and look forward to it.


Racing is already a competitor to the government-initiated lotteries. When those lotteries were created, it created concern but not panic in our industry. We probably made some mistakes back then when they were initiated by not being part of them, but that's history, and lotteries are not our major concern.

What is alarming now is that our fiercest competitor turns out to be our regulator. The very people who make the conditions under which we operate turn out to be our most significant competitor.

Unfortunately, the rules for all the new games are vastly different than those that were set for us a number of years ago. We believe those changes in rules leave racing in a very disadvantaged position as competing games have nowhere near the ongoing capital investment that racing does at all levels. We simply do not have the resources to compete with government-sponsored betting corporations, and if additional lotteries, casinos and Indian gaming initiatives are allowed into the marketplace with unfair advantage, racing, as we know it today, will fail. There's a very high cost to racing and it leaves our marketing and promotional budgets tremendously underfunded as well.

At one time -- and I'm sure you've heard this many times before -- racing had a monopoly on gambling in this country and in this province. Today, racing competes not only with lotteries, quick picks and Sport Select gambling opportunities but also with other forms of entertainment and lifestyle changes, as well as coping with the severe recession faced by everyone. While our share of the gambling dollar has fallen from 100% to 27%, regrettably, taxation levels, the highest in North America, remain the same. If there is to be any hope of racetrack operators and horsemen surviving, the entire tax and takeout levels must be re-examined. At their current levels, those amounts are stifling and they are tremendously unfair.

Public demand and technological breakthrough, along with appropriate legislative approval, has brought racing into the teletheatre era. The advent of full cards of simulcast, teletheatre, intertrack, and common and separate pool wagering reflects a whole new and positive approach to racing. Numbers of and types of mutuel pools, takeouts, contracts between horsemen and racetracks and between horsemen and horsemen become very critical to everyone's survival. Not every track, breeder or horseman is going to survive these changes, but they are necessary, inevitable and we welcome them. Requests and applications to take part in this new format must be scrutinized by authorities, keeping everyone's best interests in mind so that everyone has a chance for success.

Teletheatres are a welcome and necessary initiative, but realistically they are not an end in themselves but they are merely a means to a yet unknown end. Teletheatres should never be considered as tradeoffs for the inclusion of casino gambling and no one should be deceived into thinking that gross wagering dollars are the all-important measure. Care must be taken that the dollars invested have a reasonable chance of returning a profit.

The Ontario rebate program to horse racing is also appreciated and very necessary. That rebate money allows programs and encourages spending which is vital to racing but at its current level does not stimulate any new growth. We believe a re-examination of those programs, and primarily taxes, could solve those two problems.

There's no question in our minds that elected governments have the mandate to make decisions and govern. We appreciate then the chance to come before you and give us the time that you did to allow us to make our input on what we feel is probably the most critical issue that racing has faced in the last 20 years.

By and large, governments are not to blame for the current economics of racing, nor do we ask for any handouts or special considerations once we've established a level playing field. We believe we should and we can stand and fall on our own merits. We accept the risks that everyone takes in racing, from breeders to owners to racetrack operators and anybody else connected with the business. We know it has its ups and downs and we're prepared to live with those, once again, as long as we believe we're treated fairly.

Having said that, at the same time we would like to offer a warning that if the major infrastructure of racing is unfairly challenged by these new initiatives or any other similar initiatives, racing will collapse and there will be immense amounts of capital and numbers of people both wasted and dislocated.

We also do not agree with the fact that someone who may be successful in bidding for a casino in Ontario should dictate the future by making a deal with us. We just don't believe that's the right thing or the fair thing to do.

Obviously, our two recommendations are very simple and very direct. We're asking that you don't proceed with the casino initiative and we're asking you to reduce the level of parimutuel taxation on racing to let that money, which is significant, return to racing and allow racing to become competitive and self-sustaining. Very simply, we cannot compete with you.

We hope that you will not find out too late that we were right and that in your haste to create additional gambling for only short-term economic gain you have destroyed or severely crippled a long-standing way of Ontario life. It isn't too late to do what we believe is right. In opposition, this government was violently opposed to casino gambling, for all the right reasons. That reasoning is still valid. In racing, hunches are very good and we think you should stay with your first hunch; it was the right one. We would like to go back to being partners with you and not competitors, because we don't stand a chance. That's essentially what I have to say.

The Chair: Thank you very much. We have about five minutes per caucus.

Mr Gary Carr (Oakville South): Thank you very much for the presentation. Were you part of the Coopers and Lybrand study at all?

Mr Gorman: No, we weren't.

Mr Carr: How many members are there in your association?

Mr Gorman: In Canada, from New Brunswick to British Columbia, we have 16,000, 9,000 of which are in Ontario.

Mr Carr: So 9,000, and yet you weren't part of the major study that's going to be one of the determining factors. You weren't involved in this study at all?

Mr Gorman: No, we weren't.

Mr Carr: Okay. My next question is regarding the job losses. I want to get fairly specific. I think on page 3 you say that $350 million goes to feed, hay and so on and $90 million to parimutuel and property taxes. You go on to say that you're probably going to see a decline of 20% if casinos come in.

Under the casino you say there will be a decline in wagering. Will that equate to job losses as well, the 20% job loss?

Mr Gorman: Almost probably a direct relationship. We have seen through the shrinking of racing over the past few years without this initiative a significant number of losses of jobs by attrition. The fewer horses you have, the fewer people you need to care for them or do all the things that are necessary for them. It would almost translate into a direct proportion.

Mr Carr: Looking at the number of people employed, the 50,000, if my quick math was right and you lose 20%, you're looking at around how many jobs, 10,000 jobs you figure will be lost in the industry? What are you projecting?

Mr Gorman: To clarify the numbers that are in there, we believe there are around 30,000 jobs related to the industry, and if you include owners, who may have other sources of income, it brings it up close to 50,000. We would estimate a loss of 10,000 jobs.

Mr Carr: And that would be direct and the spinoff in the rural areas in terms of the feed and so on?

Mr Gorman: I guess it would start with the numbers of trainers. You need to train a fewer number of horses, and then that spins off into feed, blacksmith, breeding. There just isn't the demand.

Mr Carr: It would appear the government seems to be intent on going ahead, so I was interested in your recommendations on page 4. I think you may be able to get some of the concessions in terms of taxation. If in fact casinos still come in and there's no change in the government policy -- obviously you're trying to persuade the committee and the government, but if there's no change but you do get some of the tax concessions, instead of losing the 10,000-odd jobs, do you have any idea how many jobs would be lost if you can get some of the help in terms of the taxation? Is that easy to do, to translate into the number of jobs lost, from the taxation issue?

Mr Gorman: That wouldn't be an easy comparison. But by returning the money we're looking for in the taxation back to the industry, then I don't think it's government's problem any more. Then we have the money to work with and it's up to us to sustain ourselves. I think that's what we're really asking for, to not leave us at a disadvantage.

Mr Carr: What would the total amount be? Do you know? If you got the tax changes you're looking for, how much would be turned back in to the industry to help it survive?

Mr Gorman: Right now there's a 7% tax on parimutuel wagering, 2% of which is rebated in very significant programs to the Ontario sire stakes and purse supplements to all the racetracks. Those are good programs. We believe it should take maybe another half of 1% to run racing through the racing commission. So we're looking for somewhere between 4% and 4.5% to be returned, and that would give the money back to racing that we think it deserves and will put the taxation level in Ontario similar to the other, more progressive jurisdictions in North America.


The Chair: Mr Sutherland, you have five minutes and Mr Dadamo would like to ask a question as well.

Mr Sutherland: Thank you very much for your presentation. I guess I didn't quite understand the point. You said you didn't consider lotteries to be competition even though there's about $4 billion, yet you see casinos being -- I think you said "It would have a very negative effect," or something to that effect, on the horse racing industry even though that's a much smaller amount than the $4 billion from lotteries. You also mentioned about the taxation issue.

My understanding is, and please correct me if I'm wrong, that part of the problem too, though, is there's been declining numbers of people coming to the track. In terms of the demographics of the people who are coming to the track, it's an older population.

What is your association doing in terms of marketing? There's more competition overall for the gaming dollar, for the entertainment dollar overall, and the industry has been having some difficulties attracting new people coming. Are your actual numbers of people down or is it just the amount of betting that is down, and what are you doing to meet the demands of this growing competition? Even if we don't have a casino, you've still got that competition out there, other forms of entertainment, other forms of gaming. How are you going to respond to that in general?

Mr Gorman: Your first point about lotteries: We missed the boat on lotteries. We didn't know at the time. We were the only source of gambling in the country before lotteries. We knew they were coming, we weren't sure what their impact would be, and quite frankly we missed joining in with them. So we learn as we go. We don't want to do that again.

With respect to declining attendance, you're quite right, we have declining attendance whether you bring in casinos or not. Our organization invested $200,000 over the last two years to start a media relations program to try and disseminate as much racing information as we could to publications, trying to establish, or re-establish, a presence in the newspapers and on radio for the highlights of the racing. We're only one organization of about a dozen, but we've invested $200,000 in a media relations program to try and reverse at least the trend in the media that was ignoring racing.

The Chair: Mr Dadamo, you have two minutes.

Mr George Dadamo (Windsor-Sandwich): Mr Chair, thank you. Every once in a while we seem to have to correct the record. Bear with us.

When we go back to the Coopers and Lybrand study, I need to tell you that of course not, we didn't talk to every group and every association, but we did make efforts to talk to people who represent some association and we did talk to the ag and horse racing association. Dr Glen Brown came to Windsor on Thursday and I said some nasty things to him, and I still don't regret them five or six days later.

I want to take you to an area that we need to discuss, and one is that I have the distinction of having the interim casino in my riding and also the Windsor Raceway. We've talked to Mr Tom Joy over and over again, and he's not about to roll over and play dead. I said that on Thursday as well. He says many associations like yours don't speak for his and all you want to do is to highlight the fact that the industry's going to pot and he says it's not for him, necessarily.

But he's also said to us that Americans, who they rely on heavily, who cross the Ambassador Bridge talk about the traffic slowdowns. They have Hazel Park, which is geographically closer to them, so they don't come as much or as many times to the Windsor Raceway. They blame Customs, Customs blames them; everybody blames somebody, and people come now and they blame the government of Ontario.

I'd like to find out from you what you feel the reason is that -- you're not relying on Americans. A lot of the racetracks within the interior of Ontario are not near border crossings. If they're relying on Americans and saying, "Americans aren't coming over and it's really messing us up," what's the reasoning that's keeping Ontarians or Canadians away from your racetracks?

Mr Gorman: First, I'm very familiar with the Windsor situation since I managed the track there for five years, so I know all about it. The reason is simply a change in lifestyle. Lifestyles have changed. Home is an entertainment centre now. Gas prices are very expensive. It's expensive to move around. Fort Erie Race Track used to be a tremendous racetrack because it was an afternoon away from Toronto. It's now too expensive to drive to Fort Erie at 55 cents a litre and $25,000 for a car. There are a number of things that impact racing that none of us in this room have control over, and lifestyle changes is one of them.

I would make a second point that we probably didn't market properly 20 years ago when we knew our population was getting older, but we've never had the resources to do it. We do not have, as it says in one of these studies, a multimillion-dollar promotional campaign to try and retain those people. We just don't have it. But we know we've lost them. We know we've missed a whole generation. We're concerned that if we lose any more, the next generation won't have to worry at all.

Mr Kwinter: Mr Gorman, your projection of the loss of 10,000 jobs is based on how many casinos?

Mr Gorman: More than one. One casino will not do 10,000 jobs worth of damage, but we have to believe that if there's one casino and it's at all successful, there will be more.

Mr Kwinter: Let's say there were six. Would that have a greater effect than if there were two?

Mr Gorman: Absolutely. I think there's a multiplier effect. I don't know the numbers, but certainly one will impact probably Windsor, London, Sarnia. The Sault might not bother anybody too much, but if you get one moving east into Toronto, you start to impact on these tracks. Mr Joy says himself that this is probably his year of decision. He will either be successful this year or he will close.

Mr Kwinter: Are you familiar with the results at Meadowlands, their current year's operations?

Mr Gorman: Yes.

Mr Kwinter: That is a racetrack that is in a casino state, and it seems to me that they've had a pretty good year. As a matter of fact, they've had a 7% increase over 1992. How do you account for that, and is there something that we could learn from that?

Mr Gorman: I think part of it is they made a determined effort. Because their business had declined dramatically the three previous years, they made an all-out effort to return to health. They did that primarily through simulcasting, but it will cost them Garden State Race Track, which is closing, and there are some other tracks that are pretty shaky there. But through their simulcast program, and probably their reduction in taxation -- they only operate there at a half of 1% tax -- the New Jersey Sports and Exposition Authority made a determined and committed effort to turn that situation around, so they spent significant dollars to do it.

Mr Kwinter: If you had to pick one single feature of the environment in New Jersey that allows Meadowlands to sort of prosper -- and I don't know the relative figures as to whether they're prospering more this year than they were three or four years ago, but certainly they're doing better this year than they did last year -- what would you think the number one determinant would be?

Mr Gorman: My own opinion is that it's the renewed marketing program.

Mr Kwinter: And that is because they have the money to do it.

Mr Gorman: In connection with their simulcast program. The tracks have gotten together in that state and worked out a deal they can all survive by. But they have the money to do it and they have the taxation level to get that money.

The Chair: Thank you very much for presenting before the committee today.

Mr Gorman: Thank you, Mr Chairman.


The Chair: Our next presenter is Joe Miskokomon, grand council chief, representing the Union of Ontario Indians. Welcome. You have 30 minutes to make your presentation and field some questions.

Mr Joe Miskokomon: Thank you, Mr Chairman. I welcome the opportunity to be here today to discuss the proposed legislation concerning casinos in Ontario.

The Union of Ontario Indians represents 41 first nation communities in Ontario. The territory ranges from north of Thunder Bay, south to Sarnia and east to Pembroke. Our communities are located near large urban areas and will be directly impacted by any casino development in Ontario. The chiefs of the first nation I represent are very concerned about this issue and the approach that has been taken.

We all know that gaming is a dynamic industry with great potential for social and economic development and growth. I believe that the keys to success of the gaming industry in Ontario are cooperation, coordination and control. Cooperation will ensure the greatest benefit for both the government of Ontario and the first nations, which will in turn ensure that the industry is effectively controlled.

We don't have to look too far to appreciate the potential of first nation communities resulting from the casino industry. Tribes in the United States have experienced tremendous economic growth as a result of the casino operation. We know from the Minnesota tribes that the casinos are lifting them from decades of poverty and neglect and powering their drive to self-sufficiency. Casino development has allowed US tribes to contribute to local, state and national economies. In Minnesota alone, Indian people paid an estimated $35 million in state taxes as well as generating goods and services estimated at $550 million in 1991 directly resulting from the casino industry.


Whole communities have benefited extensively from casino operations. High unemployment has been replaced by virtually full employment. Importantly, these positions are in all aspects of casino management, operation and the broader service sector. In addition, employment benefits have also been realized by surrounding non-native communities. The Chippewas of Sault Ste Marie, Michigan, alone employ 2,500 natives and non-natives as a result of their casino operation. In addition, proceeds go to pay for government-style services to meet the local needs of the citizens. These have included housing renovations, construction of health care facilities on reserves, support for early childhood education programs, establishment of on-reserve post-secondary schools, transit services to on- and off-reserve health facilities, housing and nutrition programs for elderly and support for new independent businesses.

The development needs of the first nations in Ontario are self-evident. Extraordinarily high unemployment, poverty and poor health conditions plague our communities. Currently there are 45 capital projects to build schools in first nations in Ontario on an ever-increasing waiting list. Community infrastructure includes the basic services such as roads and sewers that are in desperate need of repair or construction. Development opportunities have been historically robbed from us or eliminated because of protectionist legislation and exclusionary criteria.

The casino industry presents us with a desperately needed development opportunity, one that we are working earnestly to keep. It will now be up to Ontario to be judged by the first nations and others whether or not this most recent opportunity is realized by first nations or if yet another barrier to growth and development is thrust upon us.

Today I wish to relate to the committee my concerns about both the process and activities of the Ministry of Consumer and Commercial Relations regarding the issue and proposed legislation. In addition, I outline the specific recommendations that I feel are necessary for successful casino development for the Ontario economy as a whole and in the best interests of both natives and non-natives within Ontario.

Minister Churley, in her remarks to this committee on August 16 in Windsor, stated that MCCR is "currently discussing with aboriginal groups their participation in the gaming industry" and that they "are currently negotiating self-regulatory agreements with a number of first nations with respect to charitable gaming." Minister Churley went on to state that she felt first nations should be involved like everyone else and that they would discuss their involvement. In response to these statements, there are several things that must be cleared up.

First, the ministry has not entered into any formal negotiations on casinos with the first nations. In fact there has not even been a committee struck to discuss the issue of first nation casino development. The few meetings that have been arranged have come about as a result of our insistence on beginning a dialogue. At these meetings, Ontario has been unprepared to begin any negotiations or even state a clear position as it relates to first nations.

Second, Minister Churley mentions inclusion of first nations in the gaming, not casino gambling issues. This approach contradicts other statements which talk of the need to negotiate in an atmosphere of cooperation and respect.

Ontario and the first nations, as you all know, have signed an agreement that recognizes a special government-to-government relationship and respects the inherent right of first nation self-government. This fact sets the tone and environment for all discussions between our governments.

I remind Minister Churley and the government members of the Statement of Political Relationship between the first nations and the government of Ontario that was proudly announced as a new relationship by Premier Rae and his government over two years ago. This relationship requires government-to-government negotiation and not the mere inclusion or consideration that Minister Churley has indicated.

Finally, Minister Churley has still not stated the position or readiness of the government of Ontario to enter into negotiations. The Union of Ontario Indians and its member first nations have been prepared and ready to negotiate to ensure that cooperation and consistency are maintained.

There is a great opportunity for casino venture cooperation that will benefit all of Ontario. We have witnessed the very negative consequences that have resulted from the lack of coordination between first nations and provincial governments in other provinces. Dangerously explosive situations have been created in Manitoba and Saskatchewan. This is a situation that we wish to avoid.

Some five years ago, the first nations of the Union of Ontario Indians recognized the opportunity of growth and development in the casino industry, and also the need for cooperation. We immediately moved to consider the essential issues of regulation and management. At that time we built a concept called the Anishinabek Gaming Commission, which specifically addressed the issues of safety, investigation and compliance with all relevant regulations. We tabled a document with the Ontario government that clearly outlines the roles and responsibilities of the proposed commission as well as providing a code of ethics and a specific charter and bylaws for the commission.

Since the tabling of that document, it has received further consultation and support from many Anishinabek communities. The commission is viewed as a regulatory body fulfilling the functions of safety, control, management and accountability in member territories and also to ensure policy coordination with the governments of Ontario and Canada.

We have still, after five years of very persistent efforts, not even received a response from the government of Ontario about this document and the possibility of beginning negotiations. The opportunities for cooperation are being diminished by this inaction. Still, we continue to be committed to this avenue. I sincerely hope that the minister is also committed to this approach and that her ministry will resolve this inaction in favour of a new approach that in fact respects the SPR and the essential need of negotiation and cooperation.

Both procedurally and substantially, we have been disappointed by the approach of the Ontario government to casino development and implementation. I'd like to take a few minutes to outline some specific disappointments and then in turn provide recommendations that will ensure that this process improves to the best interests of all residents of Ontario, both native and non-native alike.

First, the Windsor project and the process that has been pursued thus far by the ministry indicate an apparent lack of openness and cooperation. In fact, no consultation occurred before the announcement of the Windsor project, nor was consideration given to the impact on the surrounding first nations communities or other industries such as horse racing.

Secondly, the legislation currently under consideration, Bill 26, the Gaming Services Act, and Bill 8, the Ontario Casino Corporation Act, also falls short of our expectations. It does not, we feel, sufficiently address the issues, as many important areas have been left to interpretation. For instance, recognition of first nations' authority and the consequent fostering of cooperation with a body such as that outlined in the Anishinabek Gaming Commission remain unclear. Also, the concept of management agreements between Ontario and other governments or entities is not addressed. These issues of interpretation are critical not only to the negotiations with first nations but also should be made clear to all Ontarians.

The legislation, more by what it does not state as opposed to what it does, has negative consequences on first nations. Unfortunately, attempts to eliminate the Indian Act, the federal legislation covering all Indians in Canada, has not yet been successful despite the fact that there is widespread recognition that the legislation is paternalistic and does not respect the rights of our people. Section 88 of the Indian Act states that all laws of "general application from time to time in force in any province are applicable" to Indians. In other words, in order to respect the commitments of the Statement of Political Relationship, first nations must be made exempt from this legislation and a separate legislative arrangement or section within the legislation be added to respect Ontario's relationship with first nations.

Thirdly, the exercise surrounding the economic impact study preparation and announcement was ineffective and an additional cause for concern. Waiting for the study prepared by Coopers and Lybrand was part of the rationale for the inactivity of the Ministry of Consumer and Commercial Relations. We currently agree with the importance of fully understanding the economic environment before moving towards implementation in any industry. However, we failed to see that the study should in fact stall the initial processes of discussion and development.


Now, with the release of the report, we are even more convinced that it was a mere stall tactic on the part of MCCR, as it does not contain a single reference to first nation communities. It provides no indication of the impact or effect on first nation communities that fall clearly within their identified casino market areas.

Beyond the lack of relevant information for first nations supplied in the study, it contains no new information. A simple assessment of population indicates the areas most likely to be able to support casino development. Further, the approach of the study in determining square footage that could be supported in the various areas is one that our contacts in the industry south of the border dispute. Their experience has determined that casino size should be determined by the volume of equipment -- machines, games etc -- that can be supported and not square footage.

This approach leaves open the possibility of movable or rotating sites that would respond to peak tourist seasons, especially in northern locations where the permanent population alone could not support a casino infrastructure.

Finally, it now seems unclear what in fact will be the relevance of this extensive study, as the ministry has downplayed its findings in reports to the media.

Ultimately, it is clear that progress to date on this issue has left a number of critical gaps that we believe may jeopardize the successful implementation of the casino industry in Ontario. I reiterate the need for cooperation of controlled development that considers all relevant factors and players. In response to this situation, I put to you the following recommendations:

(1) The Ministry of Consumer and Commercial Relations must pursue activities and approaches that respect the policy and commitment of the government of Ontario in the Statement of Political Relationship. This necessitates a separate and unique arrangement with the first nations and not inclusion in this proposed legislation. I recommend that first nations be made exempt from this legislation.

(2) We appreciate that Ontario must fulfil its mandate of control of gaming and gambling operation as a result of the Criminal Code of Canada. Other provinces have liberally interpreted this mandate to allow gambling in areas not under direct government supervision. Similarly, we believe that Ontario can live up to its obligation and recognize the participation of first nations in the gaming and gambling industry.

Management arrangements or other arrangements that recognize first nation authority and ability to participate in gaming and gambling activities can be worked out between the first nations and Ontario. In this way, any apparent contradiction in the SPR and the Criminal Code mandate can be avoided. As proposed, Bill 28 outlines the registration of gaming assistants and suppliers as the only recognized participants in the industry. Nowhere is there an indication of the possibility of management agreements or other arrangements appropriate to first nation participation in gaming and gambling.

(3) Ontario must pursue a negotiation process on a government-to-government basis. This negotiation must begin with an immediate response from Ontario to the Anishinabek Gaming Commission and the necessity of supporting this concept in an effort to ensure controlled and consistent development throughout Ontario. Negotiation will begin to foster the cooperation that Minster Churley has indicated is an important objective for the ministry.

(4) The issues of management agreements, licensing arrangements and benefit sharing could become items for discussion in the negotiation process.

Adherence to these recommendations will ensure the appropriate involvement of the first nations in the casino industry in Ontario. In addition, I recommend the following as essential requirements for the industry as a whole.

(5) Serious consideration must be given to the consolidation of Ontario's gaming and gambling industry. The relationship of the proposed Ontario Casino Corp to the Ontario Lottery Corp and to the Ontario Racing Commission, and indeed the racing industry as a whole, is unclear if not non-existent. These sectors of the same industry must not become competitors but rather be complementary to one another. Without coordination and cooperation, the racing industry will experience loss of jobs and revenue. From our side, we would be prepared to discuss and support participation in the racing industry once Ontario has committed to a lowering of the tax takeout or providing equalization payments in the purse structure.

Ontario has a responsibility to ensure that this industry is developed in a careful and conscientious way. The opposition levelled at this initiative fairly represents some legitimate concerns about the industry. Ontario must reassure residents that casino development can be a partnership that leads to important revenue generation and job creation. This opportunity requires consultation and involvement of all parties to ensure an all-encompassing approach.

To be frank, many opponents feel that this initiative is an attempt by the Ontario government to jump at a money-making scheme. Casino development should not and must not be allowed to be pursued on this basis. The ministry must very seriously consider the requirements of control and management that follow from the involvement of all stakeholders.

Minister Churley in her speech last week in Windsor stated, "Surely gambling is gambling." This contradicts earlier statements that drew a sharp distinction between various gambling activities. Now is the time for a consistent and clear message that reveals once and for all the position of the Ontario government and does not keep individuals in the industry and potential players guessing and waiting.

I suggest that Ontario move swiftly to consider and implement the recommendations I outlined today. Respect for the Statement of Political Relationship and a consistent, clear position from Ontario are required for successful casino development in this province. I do believe that there is a great potential for the casino industry to inject revenue in economies that are in desperate need. At the same time, I feel Ontario has much work ahead and must start immediately to consider the whole issue. It will involve negotiations with first nations, involvement and coordination with the race horse industry and charitable gaming industry and meaningful consultation with all those affected.

At the outset I stated that the casino industry is a development opportunity for first nations, one which the first nations have prepared themselves for and now are ready to move ahead on. We have been concerned about the important issue of management and control and have moved to address these matters. In return, we ask Ontario to respect the Statement of Political Relationship between our governments and move in earnest to ensure that negotiations begin. Only in that way will another barrier to first nations development be avoided. Meegwetch.

The Chair: We have about four minutes per caucus.

Mr Martin: Mr Miskokomon, and I appreciate the work and the effort that went into this presentation. It's certainly going to be helpful.

I don't think there's any doubt but that this government wants to and is working along with your community and aboriginal peoples to try and resolve some of the issues you've raised here and I guess I can say confidently that we will continue to do that. I hear you saying we should probably move more quickly than we are, perhaps.

In light of some of what you've said here and the issue of cooperation and coordination, which is a concern for me, I come from Sault Ste Marie where we have Garden River First Nation, which is very interested in the issue of casinos. I've had many conversations with Chief Jones about it and you raise it in your submission, the question of doing this properly so we don't flood the market and destroy everybody, as opposed to having a few well-placed, well-developed, first-class operations that make money and contribute to the economy of both your community and ours.

In light of what you imagine the structure that you would put in place for your community in cooperation with what we're proposing here today, how would you see that developing? How would you see, perhaps, something happening in my area that will be beneficial for both communities so that in the long term this will be a positive as opposed to a negative experience for us all?

Mr Miskokomon: Thank you for asking. We've seen several issues on that. One is that I think it's important to understand that there has to be a regulatory body that has to take into account safety and investigations, accountability, management control, those kinds of issues that are being put forward. I don't think it's proper to advance site-specific locations first, because we get into this whole issue of how many should be going where. We've got, as you well know, something like 29 applications into MCCR for casino sites. We clearly know that's not a viable option in terms of the marketplace today. So what we have to talk about is: What is the regulatory body going to be? What is that in relationship to the Ontario Racing Commission and the Ontario Lottery Corp and so on? I think those have to be harmonized first as an administrative tool of the government.


Secondly, when we've been talking about site-specific locations, we've been talking in terms of -- I don't believe you require a square footage in terms of what makes a casino viable. It takes into account the amount of devices within a given operation and the amount of population. We've talked in terms of having solely owned Indian casinos situated in Indian communities.

We've talked to MCCR about having Indian casinos that are situated off Indian communities. We've talked about having Indian casinos that are co-owned between Indian communities and the government of Ontario. We have talked about having Indian casinos that are co-owned between municipalities and first nations. We've talked with MCCR on not only one first nation participating within a casino, but there would be a given district where there would be a number of communities participating. There would also perhaps be areas of joint venturing between municipalities and individuals if necessary. So the list of options is available. It's open to us.

Mr Martin: Could I just have one short one?

The Chair: Very, very quickly, Mr Martin.

Mr Martin: Okay, it's another issue, Chief. You've obviously made up your mind that casinos are good for your community and are going to be something that would be an economic stimulant that will be positive. You know the moral questions, the question of this being a tax on the poor. How do you respond to that?

Mr Miskokomon: I've been asked that question before and I thank you for raising it. As you know, our communities are the poorest of the poor in Canada. I don't see that as a rationale to remain poor.

Mr Kwinter: Chief, I'm really interested in your presentation and your allusion to the Statement of Political Relationship and the fact that you want this to be negotiated on a nation-to-nation basis.

Hypothetically, I'm just curious, given the fact that you've asked for certain exemptions based on the first nations sort of principle: What would be the first nations' position vis-à-vis the Criminal Code about not allowing dice games at a casino? Is that something you feel you would want to negotiate because of the first nations' position as opposed to being subjected to the Criminal Code, or is that something you would say that, whatever those laws are, those are the laws and we would adhere to them? I'm just curious to know what the position would be.

Mr Miskokomon: First of all, our proposition is not to evade the Criminal Code. We believe that there are ways of developing a relationship with the government in Ontario that in fact would adhere to the Criminal Code. Throughout the last decade, during our negotiations on constitutional reform, we've always said that the Criminal Code would prevail, as would the Charter of Rights, so we're not trying to evade anything from that way. What we are saying is that, in terms of fulfilling the elements of the Criminal Code, what you have to do is build a regulatory body in order to fulfil that.

We understand the dilemma that the government finds itself in, in terms of not being able to delegate, again, an already delegated right from the federal government. We've talked in terms of inclusionary things within the regulatory body, the gaming commission that we call it, in order to fulfil those elements of the Criminal Code.

What we're talking about is: If casinos are going to go forward, we understand that they are going to have potential for tremendous economic impact within our communities. We're not trying to evade anything in the legal way, but what we're saying is: We have to also build self-governing institutions that recognize that there are degrees of management and control within those self-governing institutions. At the same time, as many people said -- and your previous witness just said -- the fear of having that kind of negative impact on such things as the racing industry -- I think there are ways you can work cooperatively in conjunction together rather than pitting one against another.

The way this bill is going to go forward, we'll have three separate commissions within Ontario all vying for the same entertainment dollar. Someone is going to lose unless there's cooperation.

Mrs Caplan: To follow along, Chief, I heard very clearly from your remarks a frustration you were feeling on behalf of the first nations. I see you're smiling. One of the things you've asked for is a consistent and clear message from the government. What do you mean by that? What is it that you'd like to hear them say very specifically to the first nations?

Mr Miskokomon: I'd like to hear them say they'd sell us the whole right on casinos and we'd take it over for them. But recognizing that this probably won't take place, Mrs Caplan, what we're saying simply is that there is room in the business to have cooperation between first nation people and the government of Ontario. What we would like to see is a realization of the Statement of Political Relationship, so it's not smoke and mirrors, it's not just another trick, it's not a trick treaty here, that you say on the one hand, "Yes, we agree to self-government; we want to conduct business on a government-to-government basis; we believe in the inherent right to self-government but, by the way, we'll tell you how to run your casinos," or, "We'll tell you how to do this," or, "We'll tell you how to do that." That's not the spirit we want to foster. We've moved into a new era. What we want to do is begin those discussions on the kinds of agreements we've already set out and I think people are ready for it.

The Chair: Sorry, our time is running very short.

Mr Carr: I sometimes wonder if people are watching two different presentations, to hear Mr Martin say that he heard cooperation, when what I saw in this document is an overwhelming condemnation of the process, which in all fairness is what both opposition parties have been saying. I don't think we should be surprised that the same incompetence that's gone on in this process has gone on in other areas too.

I was interested in the point on page 7, where you say, "Dangerously explosive situations have been created in Manitoba and Saskatchewan." If the government proceeds as I think it will down the lines of what it proposes and, as you know, in the Coopers and Lybrand study it listed various areas. If the first nations don't receive the authority to operate one of the casinos, what do you see happening in the province if it goes with these casinos and the first nations aren't a part of it? What do you see happening?

Mr Miskokomon: I don't have my crystal ball with me today, but what we have seen in the past and very clearly within not very many hours' drive out of Toronto, in the state of New York, where there had been casinos opened up, there was a loss of two lives. That community was under seige between warring factions.

When we look at the experience that happened within the United States, which we've been following for a number of years, the allegations that there is dirty money coming in and that there is a potential for criminal activities to begin, we want to eliminate that right from the get-go. What we want to talk about right off the bat is to start dealing with the kinds of security issues, the kinds of safety elements, the kind of accountability that's going to be necessary, regardless of who does it. Regardless of whether your government does it or someone else, those things have to be in place. What we're trying to do is to eliminate all of that right from the beginning, to foster a spirit of cooperation and saying, "How are we going to work together?"

I'm tired of coming in front of standing committees for the past 12 years and talking about the kind of situation that exists within our community that would not be tolerated anywhere else in Canada, yet life goes on.

Mr Carr: Do you believe right now that you have the authority to open up a casino if you choose to? Do you believe you have the legal authority to do that right now without the permission of the Ontario government?

Mr Miskokomon: Well, regardless of what the courts say. The courts based their ruling upon the Jones case in Shawanaga. That court case was lost and said that was not a part of the right. We've heard very recently, within the last two weeks, that the Royal Commission on Aboriginal Peoples has said that the whole issue of self-government is already contained within subsection 35(1). We, as Indian people and Indian leaders who have dealt with the Constitution for the past 12 years, believe that this right has never been given up. All we're looking for is a recognition. We're not looking for a granting of authority; we believe we own it. We've had it and we'll continue to hold it. If anybody says, "Are you prepared to accept delegated authority to do this?" the answer to that is, "Absolutely not." What we want is simply the recognition that our governments have in order to conduct business just like anyone else in this country.

The Chair: Thank you very much. Unfortunately, our time has expired. Mr Miskokomon, thank you very much for presenting before the committee today.

Mr Miskokomon: Thank you, Mr Chairman. You'll notice in our presentation that we passed around we're holding a gaming conference this week, beginning tomorrow night. We invite all the committee members to come and talk to the members from the United States and the tribes that are going to be there on what their experience has been.

The Chair: Could I just ask you how many people will be attending this forum?

Mr Miskokomon: We're expecting around 200 people at this point. But if you come, there'll be 225.

The Chair: Okay. Thank you very much.



The Chair: The next presenter today is Lanny Tong, representing Tong Communication, Windsor. If you would come forward and make yourself comfortable, you have 30 minutes to make your presentation.

Mr Lanny Tong: Anai anishne. Hi, how are you?

The Chair: Hi. When you're ready, proceed.

Mr Tong: Those brochures are interesting. The brochures happened to be at the metropolitan airport in Detroit yesterday when I was accompanying my cousin and my uncle to return back to California. We happen to have had a family reunion since you were in town. I've had some wonderful times. I just approached the brochure section of the ticket counter and I happened to pick that up. It said "Minnesota" and I opened it to the middle page and there was an advert for the one particular casino group. It was so interesting to me that I thought I'd just grab about 14 of them and distribute them to you, and if there's any criticism of that by anyone, basically that's how it came to be. Sometimes things occur in the process of just going about one's business. I have no interest in anyone associated with any particular casino, but I did talk with the manager of the airline. He explained to me how that promotion came to be and I suggested we could get the arrows coming the other way and have the same promotion coming to Windsor.

I'm hoping that there can be some sharing of the provincial profits with the native people and I'm hoping you'd consider that and structure something like that. I'm thinking that perhaps the casino could be called the Grand Chief Casino after our favourite guest, who was before me, or it could be the King William Casino -- just a couple of names I thought of. I'm sure there's a lot of brainstorming going on.

Mr Carr: How about the Bob Rae Casino?

Mr Tong: You know, I have to tell you this: During the provincial election I voted for one person. That was a write-in vote and I know that it was disqualified, but I voted for Chief Terry Doxtator at that time. The interesting thing was that I went down to the Can-Am Indian Friendship Centre of Windsor to understand how to spell his name correctly without realizing he was the director there. I was reviewing some newspapers afterwards, thinking he was the man at Oka whom I saw on TV, and he was so favourable. Mr Lessard, I'm going to vote for you next time. I'm in your riding and I definitely am going to be voting. I'm specifically going to be voting --

Mr Carr: Two; just you and him.

Mr Tong: No, I can cast only one vote. No, I think what's happening is favourable. I think it's timely that the government in question right now is satisfying a role, and over the long run there will be pensions for all. Perhaps it could be a consideration for community development in the area of, if possible, a spiritual dwelling for native people. Perhaps a longhouse could be constructed. I know we're talking about other facilities, but that's just a suggestion. I feel very deeply about that.

I'm hoping to establish the type of harmony which the grand chief spoke of. I'm on the Windsor Powwow Committee. We had a successful event. Our first annual was coincidental in time to the Art in the Park event. We're going to be coming into Windsor and it's going to be an annual affair. It was just a wonderful time. It was beautiful.

Basically, that's as much as I really should say. I'm just happy to see you again; I missed you. It was very nice to have you in town. I am sure that you will return. I think that's going to be the case. The Peabody bridge is down. My brother drove me to come here, but it's an amazing effect to have the appearance of the Renaissance Center from that distance. It's just overwhelming. Construction is going on at the bridge and it took 15 minutes to get from the metropolitan airport. They've got the construction off to the side now and it's just a smooth throughway. There's no interference. It's just amazing what's happening. It's going to happen to the other cities eventually too. It's going to be good. I really congratulate everyone involved and I mean all of you.

Meegwetch. Thank you very much. I have this here because I identify particularly with a particular site in the riverfront development. I've come to the city council, so it's fair for me to introduce it now, but I consider that there's an Odawa burial site in the riverfront development, so since I've come before council four times and I basically have the same theme all the time, I think it's fair. I gladly introduce that here, ladies and gentlemen, because this is how it is that I've been motivated to come here. I travelled overnight and I intend to go back, but I'm very happy to have come. It just compliments Queen's Park to see you here. It's amazing too. Again, it's another one of these overwhelming situations. The process is terrific. Congratulations.

The Chair: We have about 21 minutes or so for questions; that's seven minutes per caucus.

Mr McClelland: I think Mr Lessard should have the bulk of the time.

Interjection: Your question is, would he like to manage Wayne's campaign?

Mr Kwinter: Mr Tong, you did me a service actually by distributing that brochure.

Mr Tong: You're welcome. I want to see what you're going to do with it.

Mr Kwinter: I just want to read a little bit from it and I just want to get your reaction to the comment when they talk about Grand Casinos. I'd like to read it into the record. It says:

"Less than two hours north of the Twin Cities are two of Minnesota's premier casinos -- Grand Casino Hinckley and Grand Casino Mille Lacs. Each casino offers more than 100,000 square feet of fun with over 1,400 video slot, poker and Keno machines; at least 48 Vegas-style blackjack tables with limits of $3 to $1,000; Royal Ascot -- the first horse racing game of its kind in the US; plus, all-you-can-eat buffets and lounges with live entertainment. Casinos are open 24 hours a day, seven days a week. Try your luck at the tables or just come for the food and entertainment."

The reason that has sort of attracted my attention is that those are the kinds of operations that are being run in the United States and other places. That is not the kind of operation that is being contemplated in Windsor or anywhere else that I know of.

Mr Tong: All that's irrelevant; I have nothing to do with casinos.

Mr Kwinter: No, no, no. I'm not suggesting that you do.

Mr Tong: We can take care of what's outside of the casinos, entertain everyone, protect everyone and care for everyone.

Mr Kwinter: The point is that, as I say, you were kind enough to distribute this material. I'm just trying to get a reaction from you or maybe from the members of the committee. The point that I'm making is that if this exact facility were duplicated in Detroit, where --


Mr Tong: That's just two gas stations on the same corner; that's all you're going to get.

Mr Kwinter: No, except that you have a situation --

Mr Tong: You have no view of the skyline in Detroit. You have no view of the skyline. We have what they want.

Mr Kwinter: -- where people are encouraged to go there and eat and be entertained as much as they want at no charge. They can be there 24 hours a day. They have an array of games that will not be available --

Mr Tong: They can have more of it. It will be less; it will be different. No one goes down there for that sort of thing if they have an opportunity for a choice. Once they've been here once, they'll return and they'll keep coming to all the others.

I have nothing to do with casinos. I avoid a lot of things. That's why I can sit here and identify with the spiritual element of this whole thing.

Mr Kwinter: Thank you. I want to wish you well on the next campaign.

Mr Tong: I'll tell you, I think you're the most positive influence on the panel. I really appreciate what it is that you do because you motivated me. I read the newspaper a day late and it stimulated me when I read what you said.

The Acting Chair (Mr Kimble Sutherland): I believe we still have a couple of minutes for the Liberal caucus. Are there further questions? No? Okay, moving on, then, Mr Carr?

Mr Carr: Holy smokes, he says the nicest things about every person who goes along. I'm wondering what he'll say about me.

Mr Tong: When you avoid voting, you can do that. I go with whoever is in and I go with everybody and that's it. That's why I get along. I just made friends with the grand chief. He's coming down to Windsor.

Mr Carr: I had a question, just a little bit about your background. I notice you're in communications. Forgive me, but what is the other reason? You have no reason to come other than your interest in the issue or --

Mr Tong: I'm going to be able to be familiar with you. I can talk to you on a first-name basis in the future. I'm a Windsor native. I'm uniquely identified. I have an honours degree in cultural anthropology and I'm actually putting it into effect. The only time I've done that is when it was personally an involvement that was close to my heart, where the spirit from that grave went into my heart and I reacted to it.

I was hoping to see that we would represent ourselves well. Harmony was the key word. It's happening and it is an evolution and the development is wonderful to observe. I think I'm two steps ahead. You people are three, but I mean, I've got this intuitive factor here and I have to keep my mouth shut on half of the issues, and I do.

Mr Carr: Where is the grave site that you're talking about in Windsor?

Mr Tong: It's around a road called Louis Avenue and I really appreciate introducing it. Our council has offered the native people to do whatever it is that they would want to do, but I would like the opportunity to have a conversation with them before they -- the case is similar to what we see here. There's this discrepancy in understanding and I feel I'm trying to skirt that.

Mr Carr: And your job is in communications?

Mr Tong: I'm very independent. I make little money, but I make great relations.

Mr Carr: You should get into politics. Run for the nomination for the NDP. Thank you. I wish you luck.

Mr Tong: I'd probably have to go through Mr Lessard just to be able to qualify to go into the casino.

Mrs Caplan: No.

Mr McClelland: Maybe you should run against Mr Lessard.

Mr Tong: No, I'm just saying with my criminal record.

Mr Wayne Lessard (Windsor-Walkerville): Mr Tong, thank you for making the trip to Toronto to appear before the committee. I guess that interest was so high in the city that you couldn't get on the list there.

Mr Tong: When I saw the grand chief was here at 2:30, I specifically appreciated coming at 3, because I just made a friend. That's about the most important thing for me today. I got a ride to around Streetsville. I was up all night just reviewing and enjoying myself. I'm sort of on a guardian spirit quest right now, it seems. I'm going to be heading back home. I'm just happy to see you and it's nice to be here. It's the first time I've been here; it's very impressive.

Mr Lessard: I hope that you have a look around Queen's Park. It's an impressive building as well.

Mr Tong: I've got no time for that; I've got to go.

Mr Lessard: You say that you're here as a representative of Tong Communication of Windsor. Is that a business?

Mr Tong: I've only registered myself as of last year as that. I've been studying organizational communications. I'm the best amateur communicator in the world.

Mr Lessard: So this isn't a business where you expect to somehow be able to benefit from the coming of the casinos.

Mr Tong: I'd just as soon introduce people to each other. That's basically it.

Mrs Caplan: Is this an interview, Wayne?

Mr Lessard: You said that you were stimulated to come here by reading Mr Kwinter's remarks in the newspaper. I wondered what those were.

Mr Tong: He may have solved our big legal suit in town, because there's no reason for it to dissuade them being one of the four. If there is the one, then we've got no $100-million lawsuit any more. If someone else is selected, then Mr Docherty can go to another town. We'll lose him and then we'll be really up the creek. So let's get intelligent here.

The Chair: Thank you very much, Mr Tong, for presenting before --

Mr Tong: Thank you. I'd also like to get everybody's name, if I may, so I know to whom I was talking. It's a pleasure. It's just a wonderful system, and the system has a woman; that's why I appreciate it, more than anything.

The Chair: Thank you very much, Mr Tong.


The Chair: If Jenny Coco is present -- it's a little early, but I'd invite you to the front. You have 30 minutes to make your presentation, and you may use all or a portion of that time and you may use some of that time to field questions from the members as well. So if you're ready, please proceed.

Ms Jenny Coco: Thank you, Mr Chairman, members of Parliament and guests. My name is Jenny Coco. I'm a local resident of the city of Windsor. Unlike the previous speaker, I am employed in a family business and I am the financial consultant there. I hope to address my issues pertaining to Bill 8.

Firstly, I want to express my pleasure and to congratulate the province of Ontario and the Minister of Consumer and Commercial Relations for taking this important step in the economic stimulation of the economy in the city of Windsor. Secondly, I want to comment on the strong attributes of Bill 8 and to make some suggestions which might make the proposed bill even better legislation, so I would hope.

I strongly support this legislative initiative of the province. Not only does Bill 8 provide the means for contributing to the economy of Windsor in the province; it is an important step in providing proper legislative grounding for the casino gaming industry in the province of Ontario. Also, by creating a crown corporation, Bill 8 provides the means for responsible management and control in structure.

Firstly, to address the economic stimulus: It would be job creation, economic diversity and revitalization of a suffering tourism and hospitality industry, which are so desperately needed in the city of Windsor in Essex county. This is particularly true for the downtown business community and in the downtown commercial area. The casino project will create the opportunity to see that these needs are addressed. Although there is no consensus on how many thousands of jobs will be created by this provincial initiative, there is a wide agreement that the potential number of direct and indirect jobs to be created is substantial.

There is also wide agreement that the economic benefits of Bill 8 will have significant impact on other Ontario communities, as well as provincial and federal treasuries. For these reasons, the province must see that Bill 8 and the legislative authority for casino gaming is put into place.

If protection of the horse breeding industry, in support of the agricultural economy of Ontario, is justification for pari-mutuel wagering on horse racing, then the stimulation of economic development on an even broader scale is reason enough for legislation providing for development of a casino gaming industry. This committee has heard a number of representations calling for the protection of the horse racing industry. I do not doubt the importance of racetracks and horse breeding in the agricultural economy of Ontario. Furthermore, a person would have to be extremely naïve not to think that casino gaming will have an effect on wagering at the racetrack. But the racing industry has been facing increasing pressure from a wide range of competitors for the entertainment and gambling dollar. Casino gaming will have an influence on pari-mutuel horse racing, just as do movies, which compete for the entertainment dollars, and lotteries and charitable gaming, which compete for gambling dollars.

The role of the province, however, should not be to protect the interests of one narrow industry from competition. Instead, it should be to provide a basis for broad economic development. As with every form of competitive business, it is the responsibility of the horse racing industry to meet the new competitive and declining markets with innovation, energy and diversification.


Through Bill 8 there is an opportunity to realize large-scale economic benefits for the province, but the province must also see that the benefits are effectively realized and that any associated social or cultural risks are minimized.

The casino project team has taken an important step in this respect by proceeding with an interim casino. I also congratulate the project team in its very astute decision to proceed with an interim casino and to locate the interim casino in the downtown business district of Windsor at the Art Gallery of Windsor.

This decision will accelerate the much-needed economic stimulus to the downtown area. It will also provide valuable experience for the city, the province and the operator prior to opening the permanent casino.

The art gallery is a showpiece building and one of the most attractive settings in the city of Windsor. Locating the interim casino at the art gallery building will ensure the casino patron realizes the best possible impression of Windsor as a place to visit and of course to revisit.

My comments in regard to Bill 8 are now going to be addressed. The creation of a crown agency to take absolute ownership of the casino is a vital part of the legislation of commercial casino gaming in Ontario.

Also the revisions of the Gaming Services Act that are contained in Bill 8 are significant steps in providing a reasonable regulatory function in ensuring the integrity of casino operations. It is critical that the legislation ensure that the conduct and management of casinos avoid even a whisper of misconduct. The public must have confidence in the province's ability to control the conduct of the casino industry and to manage a wide range of social problems from organized crime to compulsive gambling behaviour.

The province must also be seen to place the interests of communities and residents above those of revenue generation for treasury coffers. I also believe that minimizing social and cultural risks should be as serious and as specific as are the revenue and economic considerations.

While I commend the content of Bill 8 as it presently stands, I suggest that a number of improvements could be made to the legislation which take my concerns into account. These recommendations are not put forth as criticisms of the present bill but as enhancements to make the needed bill even more effective in achieving its purpose of economic development while minimizing the social and cultural risks which might accompany this initiative.

Firstly, the bill must be more explicit in providing a role for municipalities in the management and control of the casino industry. Considering the economic and social influences of a casino on any host community, there should be more specific influence by the community in several decision-making areas.

When considering the experimental nature of the pilot project, the enormous cost of land and infrastructure being incurred by taxpayers of the city of Windsor and the potential social consequences, community influence in decision-making is particularly important for the community of Windsor. I suggest that more municipal influence can be achieved in the following changes which should be incorporated into the bill.

Bill 8 provides for a five-member board of directors. I suggest that this board be expanded to a minimum of eight members and that there be a majority of municipal representation on the board. These municipal appointees should represent the host municipalities on a proportional basis. It is important that local citizens believe that their objectives have the same priority as the province and the private sector of the casino.

I also recommend that Bill 8 be specific in establishing an independent watchdog committee to monitor the social and economic impact of the pilot project in casino gaming as it progresses throughout the province of Ontario. This is a vital function in view of the intensity of economic change and the sometimes conflicting objectives of the operator, province and municipality and the risks of large-scale social influences from casino gaming. By incorporating this committee into the legislation, the province can ensure its continued existence and can see that this committee is as objective and as independent as possible in its reporting, primarily to the public.

I recommend that Bill 8 state that this watchdog committee consist of a combination of professionally qualified persons selected from academia and from the community at large. A carefully selected committee can provide an independent evaluation of the economic benefits and sociological effects of the casino project on the daily lives of the community residents.

I also recommend that this committee form the nucleus of a provincial as well as Canadian centre for gambling studies to be located at the University of Windsor and funded from casino revenues. This research centre would be a joint program of the faculties of law, social science, including sociology and criminology, business administration as well as other interested disciplines in this growing national industry.

Just as the purpose of Bill 8 recognizes the economic benefits of casino gaming, there needs to be statutory recognition of the risk and social impacts, whether this be compulsive gambling behaviour or increases in street crime. There should be a statutory designation of a monitoring and research function.

Bill 8 should also provide for the creation of policies designed to mitigate excessive gambling behaviour. While the committee and research functions just described will go a long way towards this purpose, I recommend that this legislation specifically provide for the funding of public education and other prevention programs and that it provide for the funding of programs for active counselling and treatment of compulsive gambling behaviour.

Bill 8 appears to provide for the operation of casinos without restriction. The bill appears to give the crown corporation blanket authority to open casinos whenever and wherever it pleases. This exposes the corporation to tremendous pressures from private and public interests. It also gives reason for legitimate concern by the residents of Ontario and some municipalities who do not want to have casino gaming or who may disagree with the size and scope of casino operations being planned. These people may fear that the province, through the crown corporation, can impose a casino on their community without the consent of the municipality. Even though that is certainly not the intent of the province, there may be a perception of the province's placing revenue generation ahead of the interests of the local community.

Bill 8 must be explicit in the means by which casino gaming is to be expanded beyond the pilot program. Expansion should not only be legislatively contingent on ministerial approval according to a definitive licensing format but the municipality should have a strong voice in the expansion process and the ability to accept or reject the province's proposal for its community.

Third, the sections of Bill 8 concerning the repealing of the Gaming Services Act and substitution by the Gaming Control Act go a long way to improving the regulation and controlling for charitable gaming. Commercial casino gaming, however, is significantly larger in scope than charitable gaming and the social risks and consequences are profoundly larger. For these reasons, I recommend that Bill 8 be more explicit in providing for the separation of audit and control from the operations of the crown corporation and in separating the ministerial responsibilities from other forms of gambling. Separation of operations and control is vital in achieving maximum integrity of gaming operations in fact and in perception.

We strongly recommend that an independent investigation and auditing agency be established independent of the ministry responsible for the crown corporation, and furthermore that the mandate of this agency include an autonomous review of security and integrity of gaming operations. Only in this way can one maximize impartiality and independence in the ongoing review of casino operations. The independence of this agency provides an important and desirable check and balance to the operation of the crown corporation.


In addition to providing for the separation of the audit function from operations, the proposed legislation should be explicit as to ministerial responsibility for casino gaming. While responsibility for licensing and regulation of charitable gaming and other forms of gambling should continue to be within the Ministry of Consumer and Commercial Relations, the crown corporation charged with the mandate of operating and managing casino gambling on behalf of the province should be accountable to a separate ministry determined by the cabinet. Separating location of responsibility from existing gaming interests would allow for the development of the regulatory structure and procedures of casino gaming somewhat free and independent of the influence of existing charitable gaming controls.

Furthermore, independent charities and private suppliers operate charitable casino gaming, and therefore it is properly controlled through extensive regulation. The Ontario Casino Corp will have absolute ownership of the Windsor and subsequent casinos that will be empowered to control casino gaming through operation either directly or indirectly or through the private management company. As such, a different control model is required for the two models of operation.

In conclusion, I again congratulate the province of Ontario and the Minister of Consumer and Commercial Relations for taking this important step in the introduction of a new economic catalyst for the city of Windsor. I would also like to thank the members of organized labour, the Downtown Business Association and community, and our local members of Parliament especially for helping us to see this project to its present stage of fruition.

I strongly support this legislative initiative of the province and want to re-emphasize that the purpose of the comments and recommendations in this submission is to ensure that the pilot casino project can best accomplish its objectives and that this important initiative will result in economic benefit to the community as well as the province with a minimum of accompanying social risk.

Again, thank you for granting me the opportunity to address this important issue to our community.

The Chair: Thank you very much. We have about four minutes per caucus.

Mr Carr: Thank you very much for your presentation. You know a great deal about the legislation. I'm just wondering what the interest is, why you took so much time to learn and understand and get into the details. Is there any particular reason?

Ms Coco: I was a member of the original committee that prepared the business plan that was presented to this government.

Mr Carr: There seems to be an urban-rural split over this issue. You may have been here when the horse racing folks were in earlier. They say it will cost jobs. What do you say to the people in rural Ontario in the horse racing industry who are fearful that casinos are going to put them out of business?

Ms Coco: I think that diversification is required. Historically, they've been losing revenues over the last six years, I think some of them have reported. As such, they've publicly reported those figures, and I think that something ought to have been done well in advance of the present day.

Mr Carr: Because it's not dissimilar to what happens in other industries that have -- when Algoma gets in trouble, the government gives them money and attempts to get them over the hump. It seems with the horse racing, we say, "Sorry, you're on the decline." One can say that with the situation with Algoma and de Havilland, and there we say: "No, it's a viable industry. They need support. The aircraft industry needs support around the world from governments." But when it comes to horse racing, we don't take the same attitude and apply it.

But my next --

Ms Coco: Pardon me for interrupting, but I think they may have addressed it in their presentation in terms of the tax implications and their overtaxation.

Mr Carr: The other question relates to the same situation. Some of the questions that have been asked: A lot of people in Windsor think this is going to attract a lot of people from the US. We saw some of the comments in here where our casino is not going to be similar to the one that was listed here, for example.

Do you really think we're going to attract the 8,000 Americans a day that the government is projecting to come across and spend money in Windsor when they have options such as this at fairly cheap rates from Michigan right now, casinos that have 24-hour entertainment, liquor and so on? Do you think we can do a better job in terms of attracting the Americans across the border to Windsor?

Ms Coco: Yes, I think we can if we do a proper marketing proposal, and I think that if we have more of the local representation involved in that, it will be targeted accordingly.

Mr Carr: How much do we spend for that marketing? Because I think it needs major, major dollars. Here you see an airline that's a part of it. How much do you think Windsor should spend in order to attract them?

Ms Coco: I'm not a marketing consultant, but I would assume that vast dollars would have to be allocated accordingly. I will say that presently there is an enormous number of people coming into Windsor just for bingos and other charitable functions, and I'm sure the market is even larger. If you look at the number of Ontario residents going down into the US market and gambling, there are significant numbers in revenues lost there.

The Chair: Thank you. Mr Dadamo.

Mr Dadamo: Oh, thanks very much. I wasn't expecting it so quick.

Jenny, you've painted a pretty good picture of the city of Windsor and the downtown, and there was no pun intended with the art gallery and that kind of thing. The three Windsor members, of course, always felt that the art gallery was the prime choice, and should have been, of the three. But understanding that we had a pretty good relationship with the other two proponents, Devonshire Mall and also the Windsor racetrack, we went into this with the idea that downtown needed to be revitalized, as the mayor has said many times, and that the art gallery, as I said, was the best choice.

I know, just for public record, that others have done it, but in your own words, how can you best describe what we as Windsorites feel the art gallery will do for the downtown area, which has sort of been slipping away and needs to be revitalized?

Ms Coco: I think this will allow for the endowment of the art gallery in the future. I also think it's strategically located in a prime location. I think the other two were not in the location that was required. It was initially with the intention of rejuvenating downtown business, and that is suffering right now. If you walk down the street, if you talk to local merchants, you will know that they're in a strategically unpredictable state.

Mr Dadamo: And 600 people rallied, pushing for the art gallery. That was heard loud and clear by the government, and I guess we reacted in the proper way. Thanks. My colleague Kimble Sutherland has a question.

Mr Sutherland: You mentioned that the business you're in is a financial consulting business. I was just wondering if you could outline for the committee whether you've had any inquiries from any of your clients who have indicated that they're going to be looking at carrying out new investment as the result of a casino going in there, and maybe what type of investment, whether that's adding on to existing investments and businesses or is new investment altogether.

Ms Coco: I don't know if I misstated my profession, but I stated I was the financial adviser to the family business. In doing so, I can't address the question that you've just initiated.

Mr Sutherland: Okay, sorry. I misinterpreted what you do. Then what types of comments have you heard as to the types of investments people would be looking at making as a result of a casino coming in?

Ms Coco: I think the casino coming in will increase the condominium projects in the Windsor area. I also think it will increase the number of retailers in the downtown area. A lot of them have closed shop. There are a lot of vacant buildings downtown, and I think the local developers could attest to that. I also think, though, that it's important that the city not stop strategically planning after it has done the gambling casino. I think that is only one step we can take. I think we have to be proactive and then basically caucus and think, "What can we best do next to rejuvenate and keep the city of Windsor rejuvenated?"

The Chair: Thank you very much. Mr McClelland.

Mr McClelland: Thank you, Mr Chairman. Mr Kwinter and, if you would be good enough, time permitting --

The Chair: Mr Kwinter.

Mr Kwinter: Ms Coco, I have a copy here in front of me of a publication called Gaming and Wagering Business. It's dated August 14, so it's relatively current. The title says "Gambling on Canada: Windsor will be site of Ontario's first casino, to open by 1995." It's a fairly extensive article, looking at the whole aspect of casino gambling and what is going to happen.

One of the people who is quoted is Alan Feldman of Mirage Resorts Inc of Las Vegas, which reviewed but passed on the Windsor casino; they had looked at it and decided not to bid. There's a comment he makes that I would like to read to you, and I would like to get your reaction as someone very much involved and interested in what is happening.

"If a casino in Windsor is going to be a success, it is going to be a roaring success" -- this is someone else saying this, by the way -- "and that is going to attract the attention of the authorities across the river. Some believe the entrée of Detroit into casino wagering would seriously impair the Windsor project."

This is where Mr Feldman makes his comment:

"`Oh, it should have to,' said Feldman of Mirage Resorts Inc. `The market in Windsor is Detroit. Assuming there is a casino somewhere in Detroit, why on earth would anyone want to schlepp to Windsor?'"

Those are his words. I just would like to get your response to that.

Ms Coco: First of all, I'm insulted by the comments. Secondly, I think that "schlepp" isn't the appropriate word.

Mr Kwinter: Those are his words, not mine.

Ms Coco: I'm criticizing his comments. You've just articulated them and recited them. None the less, I think if you want me to voice my opinion, it is such that I think: Why do Detroiters now come to Windsor? Why do Americans now come to Windsor, as some of them do? Some of them may continue to come, not only to Windsor but to Toronto. It's not just for a gambling casino. That is one enticive measure and that is only one measure. As I've said previously, I think the city of Windsor cannot be stagnant. I think this is only one initiative that we're going to take, and we'll have to proceed and caucus and be proactive and, "What are we going to do next?" I think this will help the economy at this point in time. I think we have to be quick and I think we have to do it readily.

Mr McClelland: I think one of the concerns many of us have, Ms Coco, is that at this point in time none of us is prophetic, so all we can do is give the best shot at it, and you've come up with some very good suggestions and ideas.


I wonder if you could, just for my benefit -- maybe I missed something. I didn't quite understand when you were talking about the five-member board being expanded to eight and talking about a pro rata representation. Were you thinking in terms of additional cities or Windsor specifically? If you could sort of flesh out that concept that you have, because I either missed it or maybe you just sort of threw it out as an idea that needs to be developed somewhat further. I'm sure you've given it some thought. If you could help us or help me with that, I'd appreciate it.

Ms Coco: My thoughts in that area are predominantly to go ahead and assume that we have an eight-member board. Then what we would do is have at least five members of local representation and perhaps --

Mr McClelland: Excuse me. Windsor local, or are you talking about local as in --

Ms Coco: Windsor-Essex county representation.

Mr McClelland: Okay. You see, my problem was if you were thinking in terms of five from each potential city, each potential locale, and I kind of lost the train of thought there.

Ms Coco: And then I think that if the province did proceed with other centres for casinos, then what they could possibly do is have the three members from the province at large go ahead and maybe be the representatives on the other panel so that they would still continue local representation. I think it's important to keep local representation there. I think that they best suit the needs and each community's needs differ.

Mr McClelland: So you would envisage a multipanelled operation with a different construction of that panel depending on the locale?

Ms Coco: Yes.

Mr McClelland: Okay. I can envisage some difficulties with that off the top of my head, but I'm just interested in the thought and will give it some consideration. Thank you.

The Chair: Ms Coco, thank you very much for presenting before the committee.

Ms Coco: Thank you.

The Chair: It would appear, although I'm always willing to be corrected, that Mr Koskie is not here at this time. Because he is scheduled to be here at 4 pm, we'll recess until 4 pm, and at that time we'll determine whether we plan to continue or not.

The committee recessed from 1544 to 1558.

The Chair: We will bring the committee back to order.


The Chair: I want to welcome Keith Koskie and Vito Monardo, representing UNI Convention Productions Inc. Welcome to the standing committee on finance and economic affairs. You have 30 minutes to make your presentation, within which you may choose to leave some time for questions from the committee members. You may proceed.

Mr Vito Monardo: Gentlemen, I'm not a public speaker so you'll have to bear with me. I'll read from my text.

After the opportunity to examine the first CNE charity casino effort, UNI sought to build a business with one goal in mind: to prepare a pool of skilled individuals who could facilitate the future needs of government-run casinos as well as the needs of limited-stakes charity casinos. Invited by the province's ministry governing charity casinos, suggestions and submissions were provided at great expense and a relationship was established between the supplier and the province.

Tempted by changes in terms and conditions, many gaming entrepreneurs began taking higher risks and investing in a gaming future, without any direction from the province, until finally in February 1993, conditional licensing was granted and new terms and conditions were employed.

The efforts of many gaming suppliers were not specifically geared to limited-stakes charity gaming alone but rather casino gaming in whatever form was adopted by the province.

Today, it appears that the province has lost touch with its suppliers. A casino project was initiated and a line appears to exist between government efforts and the efforts of the suppliers.

Our presence today is motivated by the need to make public the concerns of this supplier, and it is hoped that any criticism of the ministry that governs us or the efforts of the casino project be taken in the proper light and not misconstrued as adversarial.

Perhaps at the end of this exercise, UNI and its principals might emerge with a clearer perspective of the direction that our provincial partners are taking and where we might fit into the Ontario gaming agenda. What is certain is the fact that our future is questionable and our efforts might go unnoticed and unappreciated. What we intend to avoid is a scenario where the province is moving in one direction and pushing us in another.

We've provided a description of our company today and I'll walk you through it. We operate a division called Casino Classic Training Centre. We train gaming assistants for Ontario's casino industry, both limited stakes and hopefully in the future government casinos. Over and above the training of skills, we try to pass on the proper posturing and employ some instructions in the maintenance of integrity.

We also run a production company where we supply equipment to charities, and we also run and offer management to the charity casino industry.

We have undertaken recently to start UNI Casino Security. We want to supply trained security personnel for limited-stakes gaming and government-operated casinos.

Finally, the school is endeavouring to develop training for video lottery terminal markets, including security, repair and maintenance.

If we were to be successful in preparing individuals to fill all the above requirements, we will have achieved our goal: That is to be the supplier to both the limited-stakes charity gaming industry and the provincial government-run casinos. The benefits would be reflected by a high provincial or at least Canadian content, and we have hopes of discouraging any reliance on foreign suppliers.

The problem, as we see it, is that the government and the local entrepreneurs are moving at different speeds and perhaps in different directions.

Recent news suggest that the government casinos are likely to appear in more jurisdictions than just Windsor. As the casino project picks up steam, local suppliers scramble to keep pace with what is beginning to resemble a runaway train. Rather than encouraging limited-stakes charity gaming entrepreneurs, recent changes in terms and conditions seem to be geared to restricting our growth and thus reducing our profitability. In fact, a feeling of being regulated out of business exists.

Today, gaming suppliers pay hefty licensing fees to participate in the growth of this new industry. If it is the ministry's intention to restrict and discourage our growth, why impose licensing fees at all? Why continue what might be construed as a breach in fiduciary obligation, rather than make clear the fact that a place does not exist for Ontario entrepreneurs in the gaming industry? It has been said that the skills and knowledge to run full-scale casinos do not exist in Ontario. This fact is changing rapidly.

In the running of the Casino Classic Training Centre, in excess of 300 individuals have received new skills or skill upgrading at our facility. Approximately 15 individuals have been exported to other jurisdictions, including Alberta, Quebec and America, where gaming skills of a higher calibre are required. However, very little credit has been given in response to our efforts in spite of the fact that generally our product has passed the test of more demanding markets. Only recently has the ministry begun to issue licences to gaming assistants.

What concerns us is the following: First, any individual who is able to fill out an application form is accepted, anybody who can facilitate the $50 fee is accepted and anybody who passes a background check is accepted. It has not been incumbent on any applicant to prove that he has either the skills or the experience to practise in the field. Doctors, lawyers -- the list goes on for ever -- are all required to give proof of their training and their abilities. Why not gaming assistants? Surely, a more diligent approach to licensing can be conjured up by the regulatory bodies.

Secondly, the same slim criteria have been used in issuing licences, albeit conditional, to suppliers. As a result, the number of licensed gaming suppliers has grown dramatically since February 1993. What concerns us at UNI is that anybody who can write a cheque and pass the test of history can get a licence. Greater financial requirements are necessary to avoid potential embarrassment to our provincial partners, the industry and, in this case, the charitable community.

Looking at the terms and conditions, we understand the motives of the ministry. Maintaining a high level of integrity is essential. For this reason, we humbly have paid our licensing fees to the ministry in exchange for an opportunity to practise and employ the skills at the level that we have achieved strictly on our own efforts and ingenuity. Given a reasonable length of time, local entrepreneurs will display the ability to perform at levels that should encourage our government to rely on us rather than foreign operators.

In a perfect world, the runaway train would be encouraged to slow down long enough to give grass-roots entrepreneurs enough time to show that Ontarians are capable, that integrity does exist here at home and that the government is able to embrace us in our efforts. If this were to happen, ladies and gentlemen, the maximum economic benefits would trickle down naturally to the greater number of our constituents.

As operators and suppliers to the limited-stakes charity gaming events, we wonder sometimes whether the ever-changing terms and conditions are being dictated with the goal of keeping us in business or putting us out of business. Certainly, restrictions on the kind of locations, the frequency of venues, the size of venues and the promotion of venues represent the minimum requirements that we must have to survive at all. The trend of government seems to be one of making business more difficult rather than being accommodating.

Earlier, we referred to the province and the ministry that governs us as our partners in the gaming industry. I find it disheartening to suggest that on one hand we have been encouraged to participate by our partners and on the other hand measures are being taken to reduce the chances of our success. In business, this would be construed as an unfair advantage taken by the stronger partner, and in reality a breach of fiduciary obligation does exist.

In general, we have at least progressed to the point where the costs of administration, ie, licensing fees, have been accepted by the industry. In fact, we're quickly becoming self-funded, and the analogy that we participate in an industry where the tail wags the dog is real. It has to change. Terms and conditions that are for ever changing, and more often than not changing to the detriment of the private participants must be avoided if Ontario intends to maximize the benefits of gaming and achieve self-reliance. Today, there are many benefits that stem from the efforts of the ministry, the supplier and the charity. We have provided a simple chart that breaks down the allotment of funds generated regularly at limited-stakes charity venues: Location and rental ranges between $2,000 and $6,000 for a three-day period; equipment rental between $1,000 and $2,000; advertising between $3,000 and $10,000; labour between $15,000 and $25,000.

The benefits are obvious.

Real estate: The cost of the space has allowed some people who have marginal businesses to stay in business as they rely on our business to keep them going.

Equipment suppliers enjoy a better yield on their investment of expensive equipment that's necessary.

The large number of dollars that are necessary to promote charity venues have added a new source of revenue for advertisers, whether they be newspaper or radio, during a period of weakness in our economy.

There are licensing fees, of course, and the taxes where applicable.

Perhaps the most important of all benefits comes from the employment. It should be noted that unemployment numbers in this province have shown almost no improvement at all in recent months. In fact, the only bright light that has appeared recently is reflected in improved employment numbers in regard to part-time employment. We're sure that these figures could further be enhanced by the addition of the part-time employment that has been created by the licensed gaming suppliers in Ontario. Students, individuals with skills that are no longer in demand and individuals whose only skills have been the skills taught to them by gaming suppliers have become more reliant on the opportunities created by gaming suppliers and less reliant on welfare and UI for their survival.

Recent news suggest that government casinos are likely to appear in more jurisdictions than Windsor. Our greatest concerns surround the government's future plans. Our fear is that government casinos will decimate and destroy viable limited-stakes gaming efforts as they spread through the province. More importantly, there has been no sign that the government's plans have included licensed suppliers, and it's been approximately a year since it was confirmed that the opportunity would be made available to suppliers to enjoy better terms and conditions.

The efforts that have been made by these reformed or recent entrepreneurs have been ignored. The province's attitude that what we are trying to do and what it is trying to do are completely different became apparent during the second running of the CNE casino. The complaints were addressed with a response, and I quote one departed ministry official as saying, "That is that and this is this." The same individual had qualified anybody with interest in gaming as an upstart.

Today, the unequal playing field continues to exist, except now our competition has grown past the CNE and includes the provincial government itself and perhaps the Indians.


If the government were to allow casinos to spread throughout the province, what is now a fragile, growing industry would suffer irreparable damage. All the skills and efforts that have been expended might continue to be ignored by virtue of the fact that the province has not adopted a policy of encouraging the maturing of limited-stakes gaming entrepreneurs. The pool of talent that exists and the pool that is being created might not get an opportunity to benefit from the government's plans.

I open the floor to any questions you might have.

The Chair: We have about six minutes per caucus. We're going to start with Mr Lessard.

Mr Lessard: Thank you for your presentation to the committee. I'm just trying to put this in the context of Bill 8, the bill we're referring to, to permit one casino at this point in the city of Windsor. I wonder whether you're familiar with that bill and have any recommendations that deal specifically with it. I know that in part of that bill we're dealing with amendments to the Gaming Services Act which really affect the area of business you're related to. I wonder whether there are some additional changes with that legislation that you are interested in seeing.

Your business is in the area of training, and you want to make sure that we have people available in Ontario to fill the jobs that do become available in the casino once it's set up in Windsor. Another question I have is whether you're aware of the work that's being done in Windsor by St Clair College to train people. That training is actually going on right now, and also the training is going on with respect to the maintenance and repair of slot machines. So there are some efforts that are going on right now, and I'm trying to understand what your criticisms are in that area.

Mr Monardo: Let me respond to those items. In fact, you've touched on points that make us very, very sensitive. We started training people long before terms and conditions were implemented. One of our concerns in viewing what occurred at the CNE was that the calibre of talent that was employed at the first CNE effort was deficient, so we focused on the need for the next event and possibly the need that might arise if terms and conditions were imposed.

Training is one of our businesses. What we're trying to do is provide individuals who will fit into the scheme of things. We're trying to touch on all areas that will be necessary to run a casino. In regard to St Clair College, yes, we're aware that the college is out there, we're aware that it gets the credit for training people, we're aware that Windsor will depend on St Clair to supply its people, but we question whether St Clair College offers a course that is as good as ours and we wonder why we haven't been encouraged and why assistance from government hasn't been offered to allow us to continue to train people as well. If we are able to supply Carnival Cruise Lines, sight unseen, with capable individuals to work in an established market, why don't we get encouragement right here at home?

Mr Keith M. Koskie: I'd also like to comment on that, because I've gone to the ministry and requested that it either recognize and regulate or register casino schools, because there are a lot of fly-by-nighters coming in and they're doing discredit to the industry. Their comment to me was that eventually the fly-by-nighters will go away. In the meantime, they're damning the reputation of credible schools. I'm not saying that we have the only credible school; there are other credible schools, but there is no regulation governing what are proper standards or guidelines for teaching.

What concerns me is that they're recognizing St Clair College. I see the motivation for giving a college the training because it creates more curriculum, it creates a reason to give the colleges funding, but St Clair College, other than the fact that it's been given the mandate to supply dealers to the Windsor casino, doesn't provide jobs for these people. We do. If anybody's more qualified to decide whether a dealer should be employed in Ontario, it's us, because we're the people who are actually doing it.

Mr Lessard: It's clear from my knowledge of St Clair that it won't be able to satisfy that entire market and that there will have to be people who will be trained by other persons. There needs to be not only training facilities but also some standardization and accreditation as well, and that's part of the role that St Clair college is playing. They're trying to come up with some ability to measure the capability of people after they've done training, either in Canada or those who have come from the United States as well. You'd agree that's an important function as well.

Mr Koskie: That's definitely an important function. We actually developed training manuals for all the games and we've presented to the casino project in the hope that we would get some sort of recognition of the efforts we're doing, and have so far received nothing. In fact, after we made our presentation of our manuals to the casino project, all of a sudden they recognized Windsor. Well, why can't I, as a private operator, be recognized? Why does it have to be a government body that decides what's good for the casino marketplace, the argument again being that we're the people who are employing them?

The Chair: Mr Kwinter.

Mr Kwinter: I'd like to follow up on this discussion. Take a look at the request for proposal. It states that the ministry has signed a formal agreement with St Clair College in Windsor respecting staff training for casino operations. It goes on to say that there's also a relationship in training programs, in setting this all up, and also the whole issue of licensing.

When we were in Windsor we had representations from St Clair College and the people who are running this program. According to them, they have gone out and looked at the various institutions in the United States that are recognized as providing the kind of training for the people the major casinos are hiring.

I understand your concern. You're operating now in these charity casinos and you feel that you should be able to have access to these major casinos that the government is planning. I think that's an issue that's going to have to be addressed.

Certainly the impression I got from St Clair College is that it felt, given the effort it's put into its program, that it would like to be in a position that no matter how many other casinos are opening up and no matter what other programs are introduced to maybe other community colleges or other educational institutions, including yourselves, that it have some role in making sure there was uniformity throughout Ontario, to make sure that whatever standards were established were uniform standards and that the employer would be in a position to know that if they got someone who had been accredited by one of these institutions, they knew what they were getting in the way of a level of competence that had been attested to by the institution. I'd be interested in hearing why you feel that's a problem.

Mr Monardo: We don't feel that's a problem. We feel that's good, and if, as and when the standards become readily available to us to scrutinize, then we can gear our courses to meet those standards, if they are higher than ours. In the interim, what we've undertaken to do is to set standards of our own.

Last year, the criteria for having somebody deal at the CNE was that they were honest and that they knew the rules. For the most part, those are the two easiest things to facilitate through a school, but having a proficient dealer on the table involves much, much more. You can give them the skills; then they need an opportunity to practise their skills so they can raise themselves in their deliberate efforts, efforts that can be scrutinized by people, to a level where you can separate the good from the bad, the more proficient from the less proficient.

What we've done at our school is to go beyond what the ministry has required. At every step of the way, we find that the calibre of dealer we turn out is generally better than what is being turned out on the street. We in fact invite other people to work for us in our charity venues, but if they don't meet our standards we ask them to retrain again. We've done everything we possibly can, without any guidance, without a history in this province at all, to meet levels that we perceive to be acceptable.

Mr Koskie: We've also sought the external experience, in the sense that a lot of our key instructors were all trained in other jurisdictions; we've gone out and sought the professionals to do this training. So we feel we have a very high-calibre product, probably a lot higher than St Clair College.

Mr Kwinter: Just to expand on it, what you're saying is exactly what the successful operator will be saying. All of the proponents, to my knowledge -- there may be the odd one that isn't, but I think all of the proponents -- are experienced casino operators. I may be wrong in that, but let's say that whoever gets it is an experienced casino operator or will be affiliated with an experienced casino operator. They will have exactly the same outlook: that all they want from St Clair College or any other institution is that there be a minimal standard of competence, that these people have had training to get them to a certain level.


That does not guarantee them that they will have a job, and the people at St Clair College made a great point about saying, "We're not going to guarantee that all these people are going to get a job." The particular casino operator will have determined what they require of their employees and the way they want them to operate and they will then provide the additional onsite training, in a training program that I'm sure will predate the opening of the casino, as to the methods and the operations that they, as that particular casino operator, want to have.

You may say, "Well, mine is better than theirs," and they may say, "Well, ours is better than yours." That is going to be a decision that the operator is going to have to make.

The obligation of St Clair College and others like it is to make sure that there is a pool of employees available to that operator who meet a minimum prescribed standard. Once that happens, as with any other job, if you're an apprentice it doesn't guarantee that you're going to be the best guy in the plant; you've then got to go and get the onsite training, and some are good and some are bad and they shift them around. That's exactly what will happen in that industry.

Mr Monardo: Our concern, Mr Kwinter, comes from the way things have unfolded in the province. We look at the gaming industry as a new one. It's exciting and it attracts attention. When you look at our billing alone for a three-day venue and you consider the fact that we create $20,000 to $25,000 in work for people with specific skills or new skills, the benefits are there.

What I'd like to suggest is that the train is moving too quickly. When you start looking at an industry where you have no in-house skills in Ontario and you're forced to look outside of the province to get those skills, I might suggest that if on the one hand you have limited-stakes gaming administered by the MCCR and on the other hand you have a government facility that is being planned, that perhaps the government facility be slowed down long enough for Ontarians to meet the criteria.

Nobody would suggest that you have to go out of the country to get somebody to run a casino for you. I mean, it's not brain surgery we're performing. For the most part, casinos have been in existence for a long, long time. The proper research, the specific adjustments to meet our constituents' needs could all be made. If we slowed the process down long enough to let the suppliers in this province get more experience, deal with the changes that would have to be implemented to run an efficient facility, we would in fact not have to depend on somebody else's set of standards from abroad but our own set of standards here.

Nobody said when we entered into this project that the standards being set by Vegas were the standards we had to employ. As a matter of fact, when you look at gaming, there's no reason to believe we can't create specific games to suit our jurisdiction alone. So why move quickly to push this stuff through and in a manner where you've got a casino project rushing this way and you've got MCCR administering us in a different direction and we're just not moving together? The benefits aren't there and there's no cohesiveness in the effort.

What we are is governed by the same province, perhaps the same ministry, and the standards we're working under are completely different, the directions are completely different and the benefits that could be made available to government just aren't being expropriated from our side of the industry.

I would argue that the limited-stakes gaming community has done a pretty good job in teaching itself how to operate, has done a pretty good job in trying to set up little businesses that run effectively and equitably, and with any help at all could be profitable and could rise up to fill the gaps that are necessary in Windsor and later in Toronto and all the jurisdictions that have been recently mentioned in the newspapers.

What I'm suggesting is that there really isn't a lot of benefit if we start importing talent. If we start developing our own talent, then perhaps the full economic benefits would come our way in Ontario.

When I look at gaming in particular and I look at the way it has varied from province to province, I might suggest that Ontarians might get a little offended if in fact we didn't have an identity of our own. Why is it that we have to adopt everybody else's standards? We're unique in Ontario; we have specific needs; there are specific goals that we're trying to address. Slow the game down. Take an extra year to get there. Offer it exclusively to Ontarians and see if companies in this province can't rise up to meet the demands.

What I see is the situation today, where the people who are employed by us are out there in the training ground, and we've already lost people to Quebec who in fact are being trained specifically for the Quebec casino. We've offered people to cruise lines in the United States who in fact are being trained there specifically for what goes on on their cruise lines. There's absolutely no reason why the training ground can't stay within our jurisdiction and later we can't be invited to participate, but to ask us in one breath to rise to the occasion in such a short period of time is certainly unfair and not necessarily to the benefit of this province at all.

Mr Koskie: I'd like to make one other comment about St Clair College. Because it is a college it can have student loans and student funding for its students. Being a private operator, I don't benefit from any of that opportunity. There are a lot of situations, like Jobs Ontario as an example, that had approached me and said, "Would you consider taking people off welfare and training them to give courses?" I said: "Yes, but I can't guarantee them jobs. They still have to pass the course. If they can't count to 21 and multiply by one and a half and know all the rules, then I can't guarantee them employment, but I am quite willing to train them, but it has to suit my schedule." In other words, if I'm forced to carry them in a scenario with my class, obviously my paying customers are going to go first, because I have costs associated to training.

When I operated training last year I lost in the neighbourhood of $15,000 to $20,000. It was a loss-leader. We did it intentionally to develop the talent. We never expected to make money. This year we're operating maybe at a marginal profit, if that, because we know it's a loss-leader. The opportunity of training does not afford us income; what it does is create talent so that we're more effective at doing our job, which is charity gaming.

I think our biggest concern in regard to that is that the government, by recognizing St Clair College versus what we're doing, the college has an unfair advantage. So we should be entitled to the same opportunities even though we're private. We're not a government body but we're doing just as good a job, if not a more credible job.

Mr Eves: What impact do you think government-owned casinos in the province will have on the charitable casino industry in the province of Ontario?

Mr Monardo: I think they'll just blow us right up. I don't think we'll be around at all.

We've gone through changes in terms and conditions. One of the most significant changes is restrictions on promotion. We're no longer allowed to advertise using the word "casino" alone. What we must do today is advertise ourselves as Monte Carlos and/or charity casinos.

The intention is clear. We offer only one game, that's blackjack, whether it be charity- or Vegas-type rules, and we offer rapid blackjack and a wheel of fortune. There's only been one operator in this province that's been able to employ any other games over and above that and it's the same operator that runs the CNE casino year in, year out. I would argue that that is no longer a test but more of a reality in a recurring venue.

The fact that we have talented people who have the skills to run roulette, baccarat and other games and we're not able to employ them or to use those tools to enhance the viability and the profitability of charity events would suggest that we're being forced into a position where growth is not possible and that we're dealing with a scenario where the deck is stacked heavily against us as a group in terms of meeting any of the requirements that government might have to fulfil the needs of Windsor, Toronto or any other casino that was to come.


I would suggest that somewhere in the near future, a sign of good faith would be to allow us to employ roulette where we have skilled individuals or to allow us to employ baccarat as a second game, or that we create games that fit the gaming mould that are exclusive to our own province and teach those, as in fact I believe rapid blackjack was developed.

So our problem really becomes that we've paid fees, we've gone forward, we've tried to fit into this industry and now we're governed in a manner where existing is very, very difficult. The three-day venue is a hell of a lot of work; it's expensive; there's no continuity. The advertising practices that we have to employ are so restricting that they go beyond what would normally be imposed on any other business, and I want to get to that specifically.

There's a need for us to display the name of the charity, the location, the dates, the permit numbers -- they're all disclosure items, no more important than the disclosure items included in a prospectus for a public offering, and if you were to achieve full, true and clear disclosure, then in fact the advertisements wouldn't be misleading at all and there would be no problem. But being restricted to a licence that is granted a day and a half and two days before your venue and not being able to promote in a method that would encourage larger attendance and would encourage you to meet more of the constituents really are hampering our business.

We spend $4,000 to $6,000 in promotion, and we've been restricted now to the Sun, a very, very expensive place to advertise and without a specific section, and then we only get to advertise for a very, very short period of time. These restrictions are being imposed on us deliberately. Why not be able to advertise an event for two weeks in advance or three weeks in advance?

Why are we forced to have a very, very small window and thus be forced to expend dollars that may not be necessary to ensure the crowds that we have? Why is it that we have a policy where Windsor has an approved casino project going forward and now the rest of the province looks like it's going forward as well, but we have no bylaws or no suggestion in the bylaws that would at least permit us to meet the criteria that have been set down by MCCR? I'm suggesting three days a month at the same location being the maximum permitted.

I could go out tomorrow and rent a place, make the capital improvements that are necessary to create a real, live casino-type atmosphere. They would be one-time charges. I could operate within the guidelines that MCCR gives me, which is 36 days a year, and perhaps offer a charity a location that is more facilitating at a lesser cost. But we don't have bylaws to allow that. As a matter of fact, nobody's had the ability to grapple with whether or not three days per calendar month would be considered regular or occasional, and because we haven't dealt with all those things, the industry that exists here that might supplement the government up here is warped. We have very little room to move. As a matter of fact, our concern is staying alive more often than getting better.

Mr Koskie: My comment about whether we will survive when Windsor comes to Toronto, because primarily we do business outside of Toronto, but Toronto is our main focus: It's the biggest marketplace where everybody wants to be, and I would say that a consensus among all the operators is, when Windsor comes to Toronto, we're dead; it's over.

The Chair: Mr Koskie and Mr Monardo, thank you very much for presenting before the committee today.

Mr Monardo: Thank you. If I could impose on you for one second: This province has shown the ability to close an eye in different circumstances. I look at the horsemen who complain the casinos are going to put them out of business and I look at a group of individuals who in fact have had the benefit of employing lotteries at the terminals or at the wickets for a number of years and not succeeded in taking advantage of building pools or getting revenues that could keep the industry viable.

In spite of the fact that violations of the lottery act have existed in the horse racing industry and have gone ignored until recently, might I not suggest that in this very, very stringent approach to gaming, even if the charity industry be eliminated, more room for growth and experimentation be allowed?

The Chair: Thank you very much.

Just a note to committee members to remind you that placed before you today was the itinerary for August 30 when we'll be travelling again around the province. I just wanted you to note that.

If there isn't any further business, this committee is adjourned until 10 am tomorrow morning.

The committee adjourned at 1636.