Alberta’s Gamble with Gambling

The “crack cocaine” of gaming hooks a senior mandarin—and the provincial treasury
Before the trial, Raymond Reshke wore his shame like a bad suit. The tall, self-effacing, then-fifty-seven-year-old had, after all, lost “everything you could imagine in life.” The grandfather and churchgoer had financially destroyed friends, squandered at least $500,000, and lost his job as the assistant deputy minister of Alberta Infrastructure, the second most important civil office in the province. After Reshke pleaded guilty to defrauding the provincial government of over $100,000 in January 2004, the crown prosecutor didn’t think those collective losses were punishment enough and successfully argued for more. The judge sentenced Reshke to a nine-month jail term.

Prison didn’t erase Reshke’s sense of remorse, but it did prove a revelation. At “The Fort,” a crowded minimum security jail on the outskirts of Edmonton, the polite former civil servant met other middle-aged white males doing time for a different act of self-destruction: drinking and driving. But the majority of inmates were young aboriginals, many with gambling addictions, a dark problem that Reshke knew intimately. Between working on the cleaning crew, watching black-and-white TV, or just fighting boredom, Reshke listened to their stories and shared his own. “I played video lottery terminals,” he told them, but in Reshke’s case his addiction just happened to be aggressively promoted by his very own employer, the government of Alberta.

Alberta is the gambling mecca of Canada and a true pioneer in transforming a social vice into a respected government revenue stream. Eight out of ten Albertans gamble on legally sanctioned “games people play,” a coy government tag line. Albertans can buy lottery or scratch-and-win tickets at 2,292 outlets, gamble at one of seventeen splashy casinos, or visit 1,077 video gaming-entertainment centres, where they can try their luck with video lottery terminals (vlts). With fourteen different types of gambling readily available, Alberta boasts that its people have more “gaming” entertainment choices than any other province. With only 10 percent of Canada’s population, Alberta accounted for 19 percent of the nation’s $7-billion net gambling profits in 2003–2004.

To keep track of windfall profits, in 1999 the province established the Alberta Ministry of Gaming. Alberta Gaming, as it is known, last year proudly reported that the province’s adult population spent $20 billion on gambling. The new ministry now has the same import and respect as the education or health ministries.

Gary McCaskill calls that number mind-boggling. “That’s a lot of money that could be used for different things,” he says. McCaskill, who serves as the executive director of Edmonton’s Problem Gambling Resources Network, notes that the province’s gaming success story has a dark side. According to the Canadian Problem Gambling Index, Alberta has the second-highest rate of problem gamblers in Canada: at 5.2 percent it is edged out only by Saskatchewan’s 5.9 percent. Most are addicted to gambling on electronic machines. A 2004 review of the academic literature found that vlts and slot machines can establish addictions that destroy families and individuals faster than any other form of gambling. “While there is unanimity about the superior revenue generating capacity of electronic gambling machines for both the state and gambling venue proprietors, there is also concurrence on the distress these machines can visit on the public,” concluded the Alberta report. McCaskill adds that Reshke’s story is pretty common. “If you don’t stop, the machines will take you to the place where Reshke went: jail or suicide.”

Alberta wasn’t the only province to experiment with vlts as an efficient revenue generator in the early 1990s. New Brunswick, Quebec, Nova Scotia, and Newfoundland also signed on, and the machines now colonize eight of ten provinces, earning billions for cash-strapped governments. Canada’s bars and hotels now support nearly 90,000 electronic gaming machines, and for every $100 wagered an estimated $30 goes into provincial treasuries. No wonder then that Premier Ralph Klein is such a stalwart supporter of the gambling business. He plays vlts while cruising casino tables in Edmonton. Now a consistent source of hard cash, in 2004–2005 Alberta Gaming made more by mining citizens through vlts — $635 million — than Alberta Energy did from oil-sands royalties between 2001 and 2003.

Equipped with a randomly programmed microprocessor, a vlt is essentially a glitzy slot machine that entices players with intermittent rewards of up to $1,000. Watching adults play blackjack, keno, or poker on a vlt is a lot like watching stupefied children play a Nintendo GameCube. A European manufacturer boasts that vlts offer “a rich environment of capabilities and functionalities . . . . The player can bet, play and cashout the remaining credits at any time.” In the US, the games are known as poker machines. But Canadian politicians never liked that frank moniker. Fearing it smacked of vice, they choose the benign phrase “video lottery terminals.”

The more agreeable term, however, hides a malignant legacy. vlts have spawned bitter protests, public health condemnations, higher suicide rates, troubling crime statistics, and persistent questions about why provincial governments should regulate, promote, and profit from legally sanctioned addictions. Many researchers argue that government promotion of gambling not only violates its role as chief protector of citizens’ welfare, but also creates “a lot of collateral damage, and that’s what we are seeing,” says Garry Smith, University of Alberta professor emeritus and a gambling research specialist at the Alberta Gaming Research Institute. “They get blinded by the revenue.”

Reshke’s personal odyssey into the gambling underworld oddly parallels Alberta’s dependence on electronic gaming income. A product of rural Saskatchewan, Reshke graduated with an economics degree from the University of Saskatchewan in 1971. Friends described him as intelligent and blessed with a heart of gold, but he had no real job prospects. After months of fruitless searching, Reshke was offered a junior position in the treasury department of Alberta’s struggling Social Credit government, and he and his wife of four years moved west. The hard-working son of German Baptists earned a series of positive performance evaluations and rose through the ranks under Peter Lougheed’s charismatic Tory administration and then under Don Getty’s lacklustre one. By 1991, he had become Assistant Deputy Minister for Public Works Supply and Services.

That fall, Reshke arrived in Las Vegas with a team of Albertans to study the possibilities of machine gambling at an annual gaming conference. The diligent researchers included the province’s future deputy premier, Ken Kowalski. All stayed at the famous Mirage Hotel. The government’s interest in gambling and vlts was purely pragmatic: hobbled by debt due to low oil prices and bad investments, Alberta’s dispirited Tories required “alternative sources of revenue.”

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