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From Special Report: NMM (New Media Markets) Spotlight On The Emergence Of Satellite Porn Channels In The UK

October 26 1995

Is the UK rushing to watch TV porn? 

By David South

Financial Times New Media Markets (London, UK), October 26, 1995

ISSN: 02654717

OCLC Number / Unique Identifier:1266447669

The aspect of satellite and cable programming most feared by the British government when it pushed the development of new media in the mid-80s looks set to become firmly entrenched as a part of the emerging television era. 

Next Wednesday, the USA’s most famous soft-pornography channel will arrive in the UK, almost certainly heralding a satellite porn war for the eyes of the British public. 

The Home Office, which used to look after televsion, was worried that porn would be one shock too many for the British and would create havoc with British television laws. But the mores of the marketplace have changed the climate, although the Broadcasting Act and the Independent Television Commission (ITC) still create limits that are stricter than in most other countries. 

Hard-core pornography – such as that shown on several continental channels which can be picked up in the UK – remains out of bounds, as evidenced by the Department of National Heritage’s recent proscription of the hard-core TV Erotica. 

But the drawing of the line between hard-porn and soft-porn changes over time: the programming now permitted by the ITC is a lot stronger than many might have thought likely a few years ago. The porn channels have learned how to push the boundaries of acceptability and, with competition increasing, are likely to push their luck even further.

Politicians, journalists and old-fashioned new-media programmers – for instance, the United Artists people who were dismayed at the decision of parent company TeleCommunications Inc to bring Playboy over to the UK – may believe that porn channels serve only to cheapen the quality of life. 

But the supply side of the marketplace detects that there is a widespread demand for porn and (ironically) religion and so programmers will follow the demand by supplying suitable programming. 

The soi-dissant “adult” channels estimate their potential audience at between 7 per cent and 30 per cent of cable and satellite homes – between 400,000 and 1.7 million homes at present penetration levels. 

Their main target market is the consumer of “top shelf” magazines which range from the glossy, even glamorous Playboy to the more downmarket magazines of the “reader’s wives” variety.  According to the Campaign Against Pornography, the top six pornographic magazine titles sell about 2.5 million copies a month. Altogether, there are about 200 pornographic titles on sale in the UK. 

Deric Botham, programmer at the recently-launched Television X – The Fantasy Channel  and a porn-industry veteran, estimates that the total UK sex industry – from videos and magazines to sex aids, but excluding prostitution – generates revenues of £4 billion a year, a figure which is difficult to substantiate but is equivalent to 10 times the investment in the UK film industry in 1994. 

According to Botham, “our research shows that people want this thing and the majority of people want it to some degree.”

The porn channels are finding it relatively easy to find satellite capacity, largely because they are forced by the rules to operate at a time of day (i.e. night) when most channels have quit their transponders and are only too happy to find someone to sub-lease them to. 

According to Botham, “our research shows that people want this thing and the majority of people want it to some degree.”

The first of the new porn channels will be the Playboy Channel, which likes to think of itself as being a cut above the others. The others, it claims, are for “sad, lonely men”. Playboy, on the other hand, is for “happy, heterosexual couples”. 

The channel, probably the softest of the genre, will be launched on November 1 by Flextech, BSkyB and the US Playboy Channel. 

It will be followed by the not-so-soft Penthouse which is being launched in the UK by a joint venture of Penthouse magazine owners General Media and Graff Pay-Per-View, which already owns the UK Adult Channel. 

Two other channels have received licences from the ITC – David (Sunday Sport newspaper) Sullivan’s Babylon Blue and the Adam and Eve Channel. With the Adult Channel and Television X already broadcasting, there could be six porn channels on offer to UK viewers. 

But two other channels are beamed into the UK for those willing to pay the cost of extra reception equipment: the continental pirates, Rendezvous and Eurotica. There is also the now-banned TV Erotica. 

Cable and satellite was bound to be an attractive medium for the porn channels, given the possibility of encrypting the signal and imposing a subscription fee and, as a consequence, benefiting from the lighter regulation that has seemed likely. Sex-channel executives say that the ITC has become increasingly flexible in what it will allow. 

Three other factors have fuelled would-be channels to turn to cable and satellite: 

  1.  The replacement of the independent high-street video store by big video superstores has robbed the porn industry of a key outlet. 
  2. New-media distribution should bring in consumers who are embarassed to hire a porn video from a shop. Yet buying a subscription to a porn channel may be a more embarassing act within the family environment. 
  3. The Adult Channel is regarded as demonstrating that there is an audience for porn in the UK: it is thought to have about 224,000 subscribers. 

Cable and satellite has far more potential for the porn industry than the traditional-format channel. The prize, which will make everything worthwhile, is pay-per-view (ppv). Bill Furrelle, Playboy Channel’s sales director, said that he had been asked by several UK cable operators about providing a ppv service next year. The operators want Playboy, the Adult Channel and Adam and Eve to contribute to the Home Cinema ppv service which they hope to put together. 

Do TV porn channels degrade and humiliate? 

By David South

Financial Times New Media Markets (London, UK), October 26, 1995

Susan Sontag, the renowned American essayist, described pornography as a “crutch for the pyschologically deformed and brutalisation of the morally innocent.” The Campaign Against Pornography in the UK believes that pornography exploits women and children “in a degrading and humiliating way, often with the message that we enjoy this and want to be abused.”

The campaign encourages its supporters to take direct action against any distributor of pornographic material as part of its wider campaign to put the industry out of business.

The porn channels dismiss arguments that they degrade women and encourage male violence against women. Playboy managing director Rita Lewis argues that “women are happy to consume erotic imagery like pin-ups. Women are not hung-up by this anymore, they are not threatened by the fantasy women we show in our programming. We hope Playboy will lead to couples’ making love together.”

Andrew Wren, financial director of the Adult Channel, also dismisses the link between pornographic programming and sexual violence. “I don’t think there is anything in programmes that would encourage men to go and rape. Women are interested in sex as men are.”

Television X’s (Deric) Botham says that porn programmes are “a bit of titilation” in the fine, upstanding tradition of the British Carry On films. None the less, he admits that “I wouldn’t want my daughter to get involved in pornography.”

He says that the women involved in the programmes, some of them housewives, are willing participants and enjoy the opportunity. “I don’t produce anything that is against the law. We speak to the individuals concerned. If you have a reluctant model, it doesn’t work – I just won’t buy the video.”

The Campaign Against Pornography sees it all rather differently. Ann Mayne, a member of the campaign’s management committee, was particularly critical of two programmes on Television X – Shag Nasty and Mutley and Fly on the Wall.

She said that Shag Nasty and Mutley, in which a presenter approaches women in the street or in supermarkets and offers them £25 to look at their knickers, or £50 to be filmed having sex with him, gave the message that women were simply objects and that it was acceptable to harass them.

“It is complete prostitution of female sexuality,” she said. “Botham wants full-on, across-the-board prostitution of women. In his view, every woman must have a price.”

Mayne said that Fly on the Wall, in which real-life couples are shown having sex, was an open invitation for men to coerce their partners into being filmed, possibly to the point of abuse.

UK laws on satellite porn among toughest in Europe

By David South

Financial Times New Media Markets (London, UK), October 26, 1995

UK regulations on what can be shown on sex channels are tougher than in most countries of the European Union. Channels such as the hard-core Swedish TV Erotica and the recently-launched French Rendezvous are licensed in their respective countries and transmit explicit scenes of sexual intercourse, straight and gay, featuring close-up shots of copulating genitals. 

Graff Pay-Per-View, the experienced US sex channel operator, consciously decided to exclude the UK as a market for its hard-core Eurotica channel which is licensed in Denmark and, like the other hard-core channels, transmits via a Eutelsat satellite. But pirate smart cards for the channel, as for the other channels, are available in the UK in specialist satellite shops. 

Graff’s seeming respect for the UK regulations may not be unconnected with the fact that it owns the Adult Channel and would be wary of upsetting the ITC. Broadcasting unacceptable material into the UK could provoke the ITC into seeing Graff as a body unfit to hold a licence, thereby threatening the Adult Channel. 

The ITC’s guidelines on sexually explicit material state that representations of sexual intercourse can be shown only after 9pm and that “the portrayal of sexual behaviour, and of nudity, needs to be defensible in context and presented with tact and discretion.”

There has been some relaxation of the rule. The ITC will, on an experimental basis, allow the watershed to be broken by a ppv or video-on-demand service. It is not, however, prepared to give this freedom to a porn channel, at least not in the early days, because it does not want to be seen to be licensing pornography. The relaxation will affect only general services. 

The ITC will also monitor any ppv service to ensure that there are no cases of children accessing the programming before deciding if the programme code should be revised. 

The transmission pf 18-rated films on terrestrial or new-media channels is not permitted before 10pm. Films with a 15-rating are not allowed before 9pm on terrestrial channels such as BSkyB’s Sky Movies or the Movie Channel. These are minimum requirements. Some 15-rated films, for instance those which show scenes of sexual intercourse or drug-taking, would not be deemed suitable for transmission even on an encrypted channel at 8pm. 

In practice, the ITC does not permit depictions of erect penises, anal intercourse, close-ups of genitalia or ejaculation. 

Where channels have overstepped the mark and gone abroad to get licences from less strict authorities – the late Red Hot Dutch and TV Erotica – the ITC has recommended that the channels be proscribed, action which has subsequently been taken by the Department of National Heritage. The ITC is now monitoring the Rendezvous channel, which shows a mix of gay and heterosexual hard-core pornography with graphic scenes of sexual intercourse. 

The DNH issues proscription orders under Sections 177 and 178 of the Broadcasting Act. The orders make it a criminal offence to supply equipment to receive the channels or to market and advertise them. 

The European Union directive on transfrontier broadcasting lays down that one country cannot prevent the reception of channels licensed by other European Union countries. However, it allows individual governments to take action against any broadcast which could damage the physical, mental or moral development of minors. 

Playboy ‘is not for sad and lonely single men’

By David South

Financial Times New Media Markets (London, UK), October 26, 1995

The Playboy Channel, due to launch in the UK on November 1, is trying to position itself as being a cut above the existing sex channels with which it will compete for subscribers. 

The channel, which is running an advertising campaign costing more than £1.5 million, believes that its big budgets and slick production values will attract viewers who have hitherto been uninterested in so-called “adult” entertainment. It hopes to win an audience among women as well as men. 

Managing director Rita Lewis dismisses the other sex channels as being aimed at people who are “a bit sad and on their own”. The channels promote “deviant” behaviour. 

Playboy hopes to attract happy, heterosexual couples who will treat the channel as an aid to foreplay: “We hope Playboy will lead to couples’ making love,” said Lewis, who believes that women, as well as men “are happy to consume erotic imagery like pin-ups.”

In the USA, according to Lewis, 70 per cent of the audience for the channel comprises couples. 

“We hope Playboy will lead to couples’ making love,” said Lewis, who believes that women, as well as men “are happy to consume erotic imagery like pin-ups.”

She said that the UK Playboy will run programmes that have more in common with programmes like Channel Four’s The Good Sex Guide. “These days, a whole bunch of people are sampling erotic programming like The Good Sex Guide. It is very sexy programming with mass-market appeal.”  

Playboy’s movies would have a high standard of production, she said, very different from what she claims to be the cheap programming made for the other channels, often home videos and often shot with hand-held cameras. 

Playboy’s programming will comprise sex films, interviews with “centrefold” models, documentaries on the sex industry and general-entertainment programming such as quiz shows. 

The rival channels claim that Playboy will not be a big threat to them. The Adult Channel’s Wren says that all the new channels “hype the market, which helps us.” In any case, adult entertainment consumers have already been weaned on a harder mix of programming and do not want something that offers little more than what Channel Four shows. 

The UK Playboy Channel, which is owned by UK programmer Flextech (51 per cent), British Sky Broadcasting (30 per cent) and Playboy Enterprises (19 per cent), will transmit from between midnight and 4am on the Bravo transponder on Astra 1c. 

Read more on the 1990s sex economy here: From Special Report: Sexual Dealing: Today’s Sex Toys Are Credit Cards & Cash: A Report On The Sex-For-Money Revolution

Special Report: Sexual Dealing: Today’s Sex Toys Are Credit Cards & Cash: A Report On The Sex-For-Money Revolution.

Update: It is over 20 years since this Special Report was published. The Internet now plays a significant role in the growth of sex content and the sex industry and vice versa. Here is an interesting overview of the situation in 2020. The Internet is for Porn – It always was, it always will be.

“One of the biggest and most interesting things happening in the consumer web right now is running almost completely under the radar. It has virtually zero Silicon Valley involvement. There are no boastful VCs getting rich. It is utterly absent from tech’s plethora of twitters, fora and media (at least, as they say, “on main”). Indeed, the true extent of its incredible success has gone almost completely unnoticed, even by its many, many, many customers.

I’m talking, of course, about OnlyFans.”

More from the Financial Times here:

“Opinion Inside Business

OnlyFans shows how the creator economy is shaping media 

Porn is a kind of paradigm for broader changes for publishers and musical labels”

https://www.ft.com/content/4be047b7-0517-403a-9374-c6ea317b1b7e?segmentid=acee4131-99c2-09d3-a635-873e61754ec6

ORCID iD: https://orcid.org/0000-0001-5311-1052.

© David South Consulting 2024

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Top Reporters Offer Military Media Handling Tips

Ryerson’s course on handling media has raised eyebrows

By David South

Now Magazine (Toronto, Canada), November 12-18, 1992

The whimsical Certificate of Military Achievement hanging in the offices of the Ryersonian newspaper at Ryerson journalism school is testament to the warm relationship between the armed forces and one of Canada’s top journalism schools.

But a two-month crash course in journalism for military public affairs officers hosted by Ryerson this summer has left a bad taste in the mouths of some participants and critics.

The course, which involved 18 soldiers, included two weeks of classes in each of print, radio and TV journalism, wrapping up with two weeks of “crisis management” training. The 60 instructures included such prominent journalists as Ann Medina and Pamela Wallin.

According to an administration newsletter, the course netted Ryerson more than $350,000. Organizers say the course was merely an exercise in familiarizing soldiers with the needs of working journalists. But given the often conflicting roles of the military and the media, some fear journalistic ethics may have taken some collateral damage.

“The course had nothing to do with national defence or the armed forces,” says course teacher and organizer Shelley Robertson. “They just wanted to understand the roles of journalists from the other side. The military didn’t ask us to teach what we teach our students.”

Robertson says the course also benefited the participating journalists by giving them contacts in the military.

But according to media critic Barrie Zwicker, the exercise blurs what should be the distinctly different interests of journalists and the military. “It’s similar to press and politicians. By getting close to the politician, journalists can get information they couldn’t normally obtain. The negative side is that the media can get sucked in and lose a larger perspective. The same tensions exist with covering the military.

Managing media

“It’s up to the media to break the rules and try and get the story. The military always wants to hide its victims. If a Ryerson journalist strikes up a friendship with a public affairs officer, will the reporter be true to their journalistic tradition?”

Colloquially known as spin doctors, hype-meisters and flak catchers, public affairs officers perform much the same tasks in the military as their civilian counterparts in industry and government – including managing information that gets to the public or media.

In the past, Canadian soldiers had to go to the US for special training at the Defense Information School at Fort Benjamin Harrison. But, according to Robertson, the armed forces were looking for a Canadian spin.

With 4,600 Canadian peacekeepers now stationed around the world, including a contingent in the dangerous and volatile former Yugoslav republics, the chances for conflict – and casualties – have increased.

Lieutenant-commander Glen Chamberlain, who helped coordinate the course, says the military’s increased profile means that the forces have to become more adept at media relations. “There is a great desire among Canadians to know what troops on peacekeeping duties are up to. We have a wonderful story to tell.”

Chamberlain says he works on journalists’ behalf with stubborn military commanders. “The armed forces are finding there is a real benefit to having specialized PA officers. We want to help journalists to tell our story well.”

The crisis management section of the course offered participants a hands-on approach to managing journalists. The officers were presented with two scenarios – a murder at Moss Park armoury and a highway helicopter crash – and then practised handling a group of journalists investigating the events.

Course lecturer Kevin Donovan, who covered the Gulf war for the Toronto Star, remembers the effectiveness and sophistication of PA officers in the field.

“When I was in Riyadh, Saudi Arabia, I walked into a hotel and on the wall were pool reports – news briefs written by US military public affairs officers – that journalists were encouraged to use for stories. There were some journalists going out into the field to cover stories, but a huge number just sat in this beautiful hotel.”

“Canadian journalists are ignorant of the military and could do with getting closer. You almost never find a full-time journalist in Canada who knows anything about them. The more you know about the military, the less you will be manipulated.”

Stop information

Donovan feels uncomfortable about teaching on the course.

“I was asked by Ryerson to give a talk on my experiences in Saudi Arabia, Kuwait and Iraq,” he says. “My initial reaction was no. I hate the existance of public affairs people with a passion. Their job is to stop information.

“I’m uncomfortable with Ryerson being hired by the department of national defence. One officer in the course got very upset when I told them to make contacts with the media and leak stories.”

Course organizer Clive Vanderburgh admits organizers had concerns about conflicts between the role of journalists and military officers. “There was a lot of discussion concerning the potential for conflict – especially that the people hired to teach might think they were there to help the department of national defence to avoid the media

“But we were trying to give a general understanding of the media’s needs. We didn’t sell the country down the drain.”

Another teacher was Robert Fulford, the well-known writer and lecturer on journalistic ethics. “I don’t have a problem with Ryerson teaching the military,” says Fulford. “It’s a way of spreading journalistic technique to people in the DND. It seems to be a natural extension of the work of Ryerson.

“Canadian journalists are ignorant of the military and could do with getting closer. You almost never find a full-time journalist in Canada who knows anything about them. The more you know about the military, the less you will be manipulated.”

But Gideon Forman, coordinator of the Canadian Peace Alliance, fears Ryerson may be helping the military mislead the public.

“Why do these guys practise handling the media so much of there’s nothing to hide? This is just better packaging for the military so they can get what they want from the public.

“I have problems with public money being spent teaching the military to be more effective with the media, while other organizations have their budgets cut or eliminated.

“Is there a similar program for food banks or women’s shelters?”

Note on story context: This story was researched and written after two key events involving Canada’s military: the first Gulf War from 1990-1991; and the Oka Crisis in 1990, where the Canadian Armed Forces confronted an armed group of Mohawk “Warriors” in Oka, Quebec.

More investigative journalism here: 

Peaceniks Questioning Air-Raid Strategy In Bosnia

Somali Killings Reveal Ugly Side Of Elite Regiment

Study Says Jetliner Air Quality Poses Health Risks: CUPE Takes On Airline Industry With Findings Of Survey

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This work is licensed under a
Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

ORCID iD: https://orcid.org/0000-0001-5311-1052.

© David South Consulting 2023

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False Data Makes Border Screening Corruptible

“Big Brother” system could violate rights of Canada’s visitors

By David South

Now Magazine (Toronto, Canada), May 21-27, 1992

New technology that can spew out a person’s life history in less than six seconds is now available to Canada’s customs and immigration officials.

And while Canada customs and immigration officers say this toy is a boon – replacing the need to memorize names of so-called undesirables – civil rights workers and refugee activists point out that the gizmo could have serious consequences, with little recourse.

The technology is called PALS, or primary automated look out system, and is already in operation at airports in Toronto, Montreal, Calgary, Winnipeg, Ottawa and Vancouver.

PALS’ operation is based on the use of computer-readable passports. Canada is one of several countries that have started including computer strips on passports and identity cards. Officers use PALS by either keying in a special number printed on the passport or identity card or using a scanning machine to read the strip.

The system went into effect at Toronto’s Pearson airport on January 20, after a three-year pilot project in Vancouver, adding Canada to the 11 countries that have machine readers for passports. Under the old system, customs officers combined judgement, questioning and the most-wanted list to decide if a passenger required further interrogation and search.

During a demonstration of the system, customs officials at Pearson airport boast about the system’s role in apprehending a drug smuggler in PALS’ first week of operation.

Sinister sign

But to civil libertarians with experience of such systems in other countries, PALS hasa sinister implication. Many say that PALS spews out what is fed into it. And depending on the country involved, what is fed into it may not necessarily be true.

While customs emphasizes PALS’ role in apprehending popular targets like drug smugglers, terrorists and child kidnappers, its reach also includes people who have smuggled in too many cigarettes or bottles of alcohol, convicted criminals who have finished serving their time, immigrants, refugees and a range of petty offenders.

All of these face a second interrogation and detention based on what their governments have decided to incorporate into the computer strip. And it is this that worries civil libertarians and refugee workers.

Consider the case of a legally sponsored Portuguese immigrant who arrived at Pearson just after PALS had been introduced. He was detained based on information stored in PALS. His immigration lawyer Ali Mohideen recalls how the man was held because of a cheque that he bounced in his native Portugal about eight years ago.

Ed Lam, director of research for the Canadian Ethnocultural Council, feels customs and immigration already have “too many powers.” He regularly receives complaints from visible minorities and immigrants who feel they are singled out for harassment at the airport.

“This is big brother. Legal protection is not enough,” he argues. “It leads to costly court battles with the government. I would like to see an ombudsperson or complaints bureau set up. As for refugees turned back at the border, we will never hear from them.”

False data

Other critics, especially those in the US, where a PALS-type system has been in operation for more than a decade, worry that the system will simply accept information given by tyrannical governments.

“It is hard to trace false information to a foreign government,” says Jeanne Woods, legislative counsel to the American Civil Liberties Union, which monitors abuse under the United States system.

“People have been accused of being communists or terrorists who have denied it. The El Salvadoran government is one example of a regime which has called prominent human rights activists and lawyers terrorists.”

She would like the Canadian Parliament to pass a law similar to one passed last November in the US requiring the state department to report to Congress when somebody is denied access because they have been called a terrorist, so that the origin of the information can be tracked.

“People have been accused of being communists or terrorists who have denied it. The El Salvadoran government is one example of a regime which has called prominent human rights activists and lawyers terrorists.”

The Canadian database draws its information from several sources, according to customs spokesperson Suzanne Bray. The sources include immigration records and the Police Information Retrieval System, which is a database shared between customs and the RCMP.

Bray refuses to divulge any other sources, citing security, but both RCMP and customs operate their own intelligence services, sharing information with their counterparts all over the world, especially the US. Information is also drawn from the Canadian Security Intelligence Service (CSIS) and its sister organizations such as the CIA. However, CSIS spokesperson Ray Boisvert says they have adequate safeguards against false information provided by countries known to be human rights abusers.

“CSIS does look at bias in intelligence reports,” he says.

The US equivalent of PALS has been criticized after several cases of abuse were detected. Gara LaMarche, executive director of the Fund for Free Expression, a project of US-based Human Rights Watch, has documented abuse on political and ideological grounds.

“The US public has a right to hear dissenting views under the first amendment of the Constitution,” he says. “I don’t think improving the technology of border control violates civil liberties, but keeping a massive database of information which includes people’s political associations is bad.”

Similar concerns are expressed by John Tackaberry of Amnesty International in Ottawa, which is only now beginning its own analysis of PALS. “We have concerns over data input, who controls information and basic civil liberties.”

Even as Canadian civil rights activists take stock of PALS, Canada customs is planning to use it to check cross-border shopping by expanding the system to all land entry points.

As for those visitors who feel wronged by PALS, they may have a problem seeking redress from such organizations as the Canadian Human Rights Commission. A spokesperson says the CHRC can only help those who have been admitted to Canada. And visitors turned back at the border are not considered admitted.

Sherry Gerstl, a customs superintendent responsible for the implementation of PALS at Pearson, says that people can also appeal to the Privacy Act to see information that is kept on them. But two fact sheets explaining how this can be done are located in a corner, pretty much out of public view.

Bray acknowledges that “honest” passengers could face the prospect of a search with PALS, but given its positive attributes, she says, passengers involved in such delays should simply “grin and bear it.”

Facial recognition AI software triangulates facial features to produce a recognition match.
“Computers Track Travellers” by David South. Now Magazine published investigative journalism from David South, Naomi Klein and others in the early 1990s.

More on biometrics:

https://davidsouthconsulting.org/2022/02/09/african-health-data-revolution/

https://davidsouthconsulting.org/2020/12/04/big-data-can-transform-the-global-souths-growing-cities/

https://davidsouthconsulting.org/2020/12/04/data-surge-across-global-south-promises-to-re-shape-the-internet/

https://davidsouthconsulting.org/2021/03/04/indian-id-project-is-foundation-for-future-economic-progress/

https://davidsouthconsulting.org/2021/03/31/new-weapon-against-crime-in-the-south/

Creative Commons License

This work is licensed under a
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 ORCID iD: https://orcid.org/0000-0001-5311-1052.

© David South Consulting 2023

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Casino Calamity: One Gambling Guru Thinks The Province Is Going Too Far

By David South

Id Magazine (Canada), May 16-29, 1996

Will Ontario become saturated with gambling? It is a question being asked more and more as the provincial government moves to allow unprecedented choice for gamblers.

Bars and hotels will soon have video one-armed bandits (known as video lottery terminals and slammed by the Addiction Research Foundation as video crack) and permanent charity casinos will be set up throughout the province.

Finance minister Ernie Eves’ budget may have brought joy to the hearts of the province’s gambling fanatics, but whether this is sound economic policy is less certain. Eves hopes to reap $60 million this year from the VLTs, or fruit machines.

Speaking to id under anonymity due to the sensitivity of his work, a private gambling consultant to the provincial government says the extended gambling could monkey-wrench the government’s on-going plans to build casinos to attract American tourists.

He says, “There is a maximum to any market area, to the number of people who will come. In Ontario, the idea was to have monopoly markets to create jobs and revenue for government. Spreading casinos out on the border areas would maximize jobs. But the introduction of VLT machines and permanent charity casinos means there will be a narrowing of the market. As soon as you set up the VLTs, there will be a permanent impact.”

He believes littering the province with casinos – both large and small – and VLTs, will be the equivalent of pissing in the wind for the government, arguing tourists will only be attracted to Ontario casinos if they consist of only a few, flashy must-see attractions based on the Las Vegas model.

Tourist temptation

The focus on tourists is key. Research has shown that gambling aimed at residents living near casinos can actually harm other local businesses like restaurants and movie theatres, as people spend more of their entertainment budgets on gambling. Add to this equation the fact that most of the profits go out of the community to Queen’s Park, and a casino can hurt local economies.

Knowing this, the government has instead focused on attracting tourists. In the case of the Windsor casino, it has worked – 80 per cent of gamblers there come from the US. The economic equation is simple: every dollar sucked in by the casino is a net gain for Canada that doesn’t hurt any other Canadian businesses (as for Detroit, that is anther story).

If the government keeps on its current course, Ontario could have 10 working government-owned casinos in the near future. By year’s end, the Windsor casino will be joined by Niagara Falls and the Rama First Nations casino near Orillia.

According to Anne Rappe of the government-owned Ontario Casino Corporation public outrage could change plans. “The government has been clear in its commitment to letting voters voice their view on casinos for other sites.”

Just a fad

Governments, like people, follow fads. The trend towards harder forms of gambling, like casinos and VLTs, as opposed to softer gambling like lotteries, represents a desperate move by local governments to hang on to tax revenues.

Even more than flashy schemes to build theme parks, art galleries and museums, casinos are seen as a sure-fire way to revive ailing communities by attracting tourists. Throughout North America, consultants and casino companies are telling government to turn to gambling if they hope to boost public treasuries and generate jobs. The pitch in these hard economic times goes down a treat with governments beseiged by voters to, on the one hand, reduce debt and deficits, and on the other be seen to be creating economic opportunity in the age of downsizing.

Casinos also serve another purpose. While taxes seem punitive, making money off of gamblers appears on the surface to be a win-win situation. The government gets the money it wants,while gamblers get the adrenaline rush they crave, and maybe some cash. The whole arrangement seems to be victimless – if you want to gamble, you pay the price.

For their part, gambling advocates envision Ontario as a Mecca for American gamblers chasing our low dollar, low crime, no tax casinos. They say we can have it both ways: a safe, low-crime Ontario in which islands of gambling fever suck in much-needed American dollars to prop up the provincial government treasury.

Gambling has been legal in Canada since 1969 (though the oldest casino is the gold rush-era Diamond Gerties in Dawson City, Yukon), but it wasn’t until the New Democrat government of Bob Rae that the idea of government-run or sanctioned permanent casinos became an option in Ontario.

The gambling consultant says the appeal of casinos is that they offer a sure-fire anchor to a local economy. He criticizes other developments like theme parks for being “too risky.” To make the most money, he says, casinos should avoid any pretensions to be slick, high-society affairs and instead go after the folks with “the family restaurant-style dress code.”

While the casino in Windsor is a lucrative success for the government – taking in a “win” of $500 million – local businesses have yet to report any of that money coming their way. Gambling experts say that isn’t about to change. With $400 million going directly to the government, and the rest covering expenses and the management fee paid to an American consortium running the casino, there will be little left for anyone else.

The Windsor casino is also drawing criticism for being a social parasite on Detroit, which supplies 80 per cent of the casino users. The influx of $1 million into Windsor means between 2,000 and 3,000 jobs are lost in Detroit, according to gambling expert William Thompson of the University of Nevada. Because of this, it is believed Detroit will soon set up a casino if voters say so.

A 1993 Coopers and Lybrand study commissioned by the government estimated Windsor’s win would be reduced by 60 per cent if Detroit were to open a casino.

That same study strangely found comfort in its findings that the average “pathological gambler” is male, under 30, non-Caucasian, unmarried and without a high school diploma.

It then goes on to say, “The typical US casino gaming patron earns thirty per cent more than the average of the US population, is between the ages of 40-64, is college educated and lives in a household of two or more members.” Just the kind of market that sends corporations into ecstasy.

Quebec example

The Quebec experience offers some valuable lessons for Ontario. Quebec’s three casinos were also looking to be a success until recently. The Quebec government and gambling advocates maintained the casinos (located in Montreal, Pointe-au-Pic and Ottawa’s sin-bin, Hull) were squeaky clean. Just like in Ontario, they remarked upon the impressive revenues – $1 million a day – and the huge influx of tourists. But closer scrutiny reveals the three casinos have not come without a cost.

Both Montreal and Pointe-au-Pic casinos have been criticized for preying on poor locals who spend the pittance out of their entertainment budgets on gambling. The casinos have also been involved in high-profile drug busts, money laundering scams and even murders committed by gambling addicts trying to extort money from relatives. At the Montreal casino, enterprising youth gangs targeted winners as they left the casino when it closed at three am. The robberies worked like this: A confidant would spot winners in the casino and then use a cellphone to tell accomplices waiting outside to mug the unsuspecting “lucky” ones still intoxicated by their good fortune.

All the rosy projections about casinos reviving the Ontario economy are based on several key assumptions: Americans will be the main users of the casinos, casinos in Ontario will not compete with each other or other sectors of the economy (restaurants, movie theatres, etc.), the social costs will be low and crime will not increase significantly, and most importantly, American casinos won’t lure away gamblers.

As for the gambling consultant, he doesn’t think the casinos slated to open later this year in Niagara Falls will drag the city down any farther. “Niagara Falls isn’t the nicest place now. The casino will finally give an economic reason to upgrade these places (hotels, motels and restaurants).”

And while the Niagara Falls casino will most certainly be popular, it will not be able to operate free of competition for long. Across the Rainbow Bridge at Niagara Falls, New York, preparations are being made to open a casino by 1997.

Windsor will also face competition from the American side. Voters in the state of Michigan will be asked to vote on whether to allow casinos at the next state elections. Several groups, including a local Indian band, have been pushing for a casino to be located in downtown Detroit. Canadian casinos must also compete with river boats from Illinois and Indiana.

The government has reached a watershed in its gambling policy, leaving it with few choices. It can either allow unfettered growth in casinos as more and more communities scramble to find any means necessary to generate jobs and tax revenues, or it can recognize there is a limit to gambling as a solution to economic woes.

As the source says, “The government is in a quandry: they like the revenue but hate the way it is raised.”

Id Magazine was published in the mid to late 1990s in Canada.

https://davidsouthconsulting.org/2021/07/20/case-study-3-id-magazine-1996-1997-2/

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Story cited in Schizophrenia: A Patient’s Perspective by Abu Sayed Zahiduzzaman (Author House), 2013. 

https://davidsouthconsulting.org/2020/11/17/land-of-the-free-home-of-the-bored/

https://davidsouthconsulting.org/2020/12/22/man-out-of-time-the-world-once-turned-on-the-ideas-of-this-guelph-grad-but-does-the-economist-john-kenneth-galbraith-know-the-way-forward/

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https://davidsouthconsulting.org/2021/01/20/pulling-the-plug-on-hate-rock-1996/

https://davidsouthconsulting.org/2021/01/16/redneck-renaissance-a-coterie-of-journalists-turn-cracker-culture-into-a-leisure-lifestyle/

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https://davidsouthconsulting.org/2021/02/03/swing-shift-sexual-liberation-is-back-in-style/

https://davidsouthconsulting.org/2022/08/13/truckus-maximus-the-big-boys-with-the-big-toys-do-some-hardcore-pogo-at-monster-truck-show/

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https://davidsouthconsulting.org/2021/09/13/will-niagara-falls-become-the-northern-vegas/

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