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Publicly Owned Casinos A Plum For Political Hacks May 11, 2003 WINDSOR, Ontario--There's really only one problem with government-run casinos and video poker machines, as Canadians have learned over the last decade: The people who get hired to run them are there forever--because they become government employees. And you know what that means. Surly union leaders take ownership of a public asset. Political hacks get cushy management jobs, staffing levels explode, balance sheets get murky, and some very bad employees get jobs for life. The Province of Ontario was also desperate to plug a multi-billion-dollar budget deficit when its legislature approved casino gambling in 1992. Just let us try one temporary little casino, the government of the day begged. If government runs it, everyone will know it's on the level, and if we hire professional companies from Las Vegas to do the day-to-day work, it will get done right. We'll create a few jobs, they said; we'll be able to pay a few extra public health bills and improve education. There are now three huge, full-blown casinos in Ontario and a dozen or so small ones. They employ more than 15,000 people, most of them way overpaid by U.S. standards. Still, the casinos make hundreds of millions in annual profits. But now our governments are hopelessly addicted to the cash--and the money disappears without a trace into the maw of general revenues. Hospital waiting lists are longer than ever, and public schools are still what they are. As for their level of honesty, slot machines and video poker machines can be adjusted. And by the measure of slot payout, Ontario's government machines are less "honest" than those in some private casinos. Privately run casinos in Las Vegas, for instance, advertise slot payouts of up to 93 percent of the total money wagered. Ontario's slot payouts are a secret, but insiders say they are in the 82 percent range. In a word, the staff of government-run houses are greedier than privately run ones. They have to be to cover higher wages and costs. But gamblers seem to like Ontario's government casinos. They are attractive, well-kept, safe. Service levels are excellent, too--if you are lucky enough to visit when the staff all show up. Because, as you know, some people who have jobs for life don't always answer the bell. At Casino Windsor last year, the government had to declare war on absenteeism when the number of staff calling in "sick" hit 20 percent on the casino's busiest days. On sunny summer Saturdays, up to 500 casino workers in a shift of 2,500 people would call in "sick"--and management couldn't do much about it because it is virtually impossible to fire anyone in government in Canada. At least with private ownership, there is competition--and the chance that managers who are political cronies or dealers who don't show up for work might one day be put out of a job by disgruntled customers. When was the last time you heard of a government agency voluntarily dissolving
or downsizing? Personally, I support people's right to gamble if they
choose to. But if the government is going to run this vice, they should
reduce the overall tax burden by the same amount they take in.
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