PRINCE.EDWARD.ISLAND (CBC) - The head of the P.E.I. Senior Citizens' Federation is appalled Charlottetown's government-owned casino gave nearly $100,000 in complimentary merchandise to its high rollers during the past year.

The Atlantic Lottery Corporation (ALC) operates the Red Shores Racetrack & Casino and provides Red Shores Rewards as enticements to gamblers who spend their money at the casino, a recent investigative report by the Globe and Mail newspaper said.

Such incentives hurt many innocent people, including seniors, said federation president Eric Hammill.

"This latest revelation of the gifts that Atlantic Lottery has given to they call it the 'high rollers' to encourage people to gamble it's very depressing to us because we know that there are a number of seniors who have run into problems as problem gamblers," he said.

"That's a government-sponsored program by the way, and we don't think that government, or anybody else, should be encouraging people to gamble."

The federation recently passed a resolution calling on the P.E.I. government to phase out video lottery terminals on the Island over the next two years, Hammill said.

The Red Shores Racetrack & Casino supplied $96,000 worth of merchandise in fiscal 2008-2009, according to documents obtained by the Globe and Mail under freedom of information legislation as part of a four-month investigation.

Government-owned gaming emporiums across the country are spending hundreds of millions of dollars to provide gamblers with "comps" from hotel rooms to hockey tickets to cruises feeding players' habits and leading some to financial ruin, the investigation found.

Gambling is a $13.67-billion business nationwide. Problem gamblers account for one-third of revenues, studies show.