Feeding the million-dollar babies

Part 1 of 2: Video lottery terminal addictions an ongoing issue

Published on March 25, 2014

In less than a year, from May 2013 to March 2014, a single video lottery terminal (VLT) active in this province ate more than $650,000 in cash, according to a printout from the machine obtained by The Telegram.

It was not a one-off. Three machines in the same location were fed more than $600,000 from the people in the seats in the same time period.

Not all VLTs in the province are taking in that kind of cash, but there is no publicly available documentation to show how much any one, or all machines collectively, are taking in.

The printouts from individual machines are available to the different VLT operators at the province’s bars, restaurants, hotels and other licensed establishments, for checks against the information automatically downloaded to the Atlantic Lottery Corp. (ALC).

Annually, the ALC issues a public report on its work, including its take from VLTs, but states only a single number of net profit, taking out the winnings paid to a limited number of users and ultimately hiding the raw amount of cash in.

On the machine that ate more than $650,000, for example, the net revenue was less than $140,000.

Discussion about VLTs remains centred on the question of whether or not they unfairly strip money from a limited number of people, including those with identified addictions, in order to benefit the public coffers.

At least one self-identified gaming addict has told The Telegram they feel the lack of reporting by the ALC of the money being taken in by the machines hides the real impact of VLTs.

“I would venture to guess that many readers are astounded by this (printout) information and are probably wondering why more people aren’t complaining. The answer to this question is because many people (I included) are gambling secretly behind the backs of their families and loved ones. Most of these people are afraid to tell anyone how much money they lose on a consistent basis,” the individual stated, insisting upon using the name John Doe, interacting with the paper through a letter and subsequent email exchanges.

They supplied a single machine printout to the paper.

Independent of that, The Telegram was able to obtain others from a second location, for comparison and some context.

“Over the past few years I have played the VLT machines on a regular basis and have no issues admitting that I have somehow become addicted. When I first started playing there was the odd time when I would go home with a few hundred dollars in my pocket, and more often than not I would go home a few hundred down,” wrote John Doe, who would not state their real name or meet with a reporter out of, they stated, concern for embarrassment to their family.

“In total over the past few weeks I have deposited several thousands of dollars into the machines with absolutely no return. I lost $500-$600 four days straight, during the same hours of the day and in the same building,” the anonymous player said.

They went so far as to contact the ALC when they became aware of how much money individual machines were taking in from a relatively small number of people — though the numbers remain unclear.

“If someone sits at a machine for an hour and loses a $100 or even $200, for some then so be it. But there is absolutely no way that a machine should be able to profit $800 from one person in a two-hour time period,” John Doe stated.

The response from the ALC was a warning against any player chasing losses, paired with an offering of assistance to deal with the gaming addiction.

That offer of help was refused by John Doe who, simply put, did not trust the source.

In 2005, the government revealed a plan to curb problem VLT usage. It included a freeze on the number of terminals, plans to cut back the number, enhanced addictions services and changes to VLT programming to deter inappropriate use.

The idea was applauded by the Newfoundland and Labrador Association of Social Workers.

“Video lottery terminals have become increasingly problematic given their addictive nature and vast accessibility,” the association stated in a 2007 position paper.

“The (association) believes that it is important to address the systemic issues of poverty and inequality, and the links to VLT use in this province, as poverty is deemed to be the greatest threat to health.”

From 1991-2005, the number of VLTs in the province had grown to about 2,700 in 600 locations. The provincial government committed to cutting the total to 2,280 over five years. The current number is about 2,000.

Year over year, regionally, Atlantic Lottery is regularly making less net profit overall on VLTs. However, Newfoundland and Labrador’s share of the regional total has increased.

Newfoundland and Labrador contributed $122.69 million in net video lottery receipts for year-ended 2013. That is virtually unchanged from the $123 million reported in 2009.

ALC spokesman Craig Ennis says the corporation supports responsible VLT usage, stating machines pay out 93-95 per cent of what they take in.

“In 1990 we assumed management of the VL(T)s and before that time they were unregulated, didn’t have some of the safe guards that can be found now and they were found in locations where minors could access them,” he said.

“What we’ve done for responsible gambling is there’s wagers and amounts won displayed in dollar amounts, there’s pop up reminders for length of play, there’s forced cashouts and there’s deposit limits. And in addition to that, we have our employees and our retailers trained in responsible gambling so that they can carry out that (ALC) mandate for responsible gaming.”

Asked specifically about the lack of public reporting of straight “cash in” and money paid out, he said he would have to ask about the reporting process. He later stated via email the ALC is not permitted to report those totals.

“ALC’s annual reports on net revenue numbers as it is required to do so by International Financial Reporting Standards accounting principles and is industry standard. We are not allowed by these international accounting standards to report on revenue because we would be in a position where we could overstate earnings, which is contrary to acceptable accounting practices,” he stated.

“To give you a for instance, a player could put $20 into a machine but only decide to play $10 and cash-out the other $10, so if we reported top-line it would suggest our revenue is equivalent to all deposits however the player has the choice to cash out at anytime. Hence why we report on net, because it is an accurate/actual number.”

The ALC acknowledged all of the information is tracked. It also acknowledged not all of the information is publicly released.

In leadup to the publication of this story, The Telegram contacted John Doe to let them know it was coming. The anonymous player said they lost another $1,000 to the machines over the weekend.

afitzpatrick@thetelegram.com

— Telegram photo illustration