TOPICS > Economy

The Mixed Blessings of State-Sponsored Gambling

April 28, 2005 at 12:00 AM EDT


ROB: I can’t even describe it.

JEFFREY KAYE: Compulsive gamblers like Rob tell a familiar tale of wallets emptied and lives ruined.

ROB: I’ve actually fallen to the floor from losing my last dollar saying, “How could this possibly have happened?” I’ve actually collapsed.

JEFFREY KAYE: But the growth in state-sanctioned betting has raised questions about government’s responsibility toward gambling addicts. With some form of gambling now legal in 48 states, governments have become increasingly dependent on lotteries, casinos, card clubs and race tracks to solve their budget problems.

In ten states, gambling accounts for more than 6 percent of the budget according to a recent study by the University of Nevada, Las Vegas. Americans bet over $70 billion a year — that’s more than they spend on movies, books, music and video games, combined. According to the National Council on Problem Gambling, between six million and ten million Americans could be diagnosed as pathological or problem gamblers. Rob says he lost over $200,000.

ROB: And then financially, I’ve also gone through a bankruptcy. I’ve tried to recover from that, but I’m back in debt again: Credit cards, cash. I don’t borrow money from people. I use my own money. So if I’m going to self- destruct, it’s on my own terms. But that’s — you know, instead of having a wife and a house, I have a big problem and some debt.

JEFFREY KAYE: And with gambling opportunities growing, the number of addicts also is sure to increase, says Bruce Roberts, director of the California Council on Problem Gambling.

BRUCE ROBERTS: If you bring a bottle of liquor into an alcoholic’s home, it’s going to make it a lot tougher for him to say “no.” So, if you build a casino where there’s people around, chances are more of those people who are predisposed to the problem are going to have a hard time saying, “I don’t want to play tonight.”

ROB: You have people that are being introduced to gambling for the first time because it’s so accessible, and these people have families, they have children. And whatever damage they do, it’s not only going to affect themselves, but it’s probably going to tear apart their families.

JEFFREY KAYE: The industry does what it can to make it easier for people to gamble. Seniors are especially attractive customers. Psychologist Suzanne Graupner Pike runs a center for gambling addiction.

SUZANNE GRAUPNER PIKE: They market to seniors who are lonely. So they can target them with a little lunch and a free trip, and very quickly exhaust a person’s total retirement fund. And I’ve seen that.

JEFFREY KAYE: At this San Diego parking lot, every half hour buses shuttle customers to an Indian casino 30 minutes away. Pam, who doesn’t want her last name used, is a regular on the bus. She says for her, gambling isn’t a problem, but she understand its allure for retirees.

PAM: It’s excitement. You know, am I going to win? Am I not going to win? It’s excitement. And if you win, you come home with a smile on your face. And if you lose, I’m not going to tell you the rest.

JEFFREY KAYE: Problem gamblers are valuable to the gambling industry. They bring in from 5 to 15 percent of revenue according to a University of Chicago study. Industry representatives say they are concerned about problem gamblers, but they argue their business deals out more benefits than problems, benefits such as jobs creation and the payout of millions of dollars in tax revenues. Gambling’s economic benefits have been most obvious on Indian reservations, which operate successful casinos.

ANTHONY MIRANDA: It has provided a vehicle that tribes have been able to use to develop economically and to actually create a taxing vehicle for their own tribal governments.

JEFFREY KAYE: Anthony Miranda chairs the California Nations Indian Gaming Association.

ANTHONY MIRANDA: We provide for our own members, we provide educationally, we provide for them. We provide for health services, we provide a school, we provide opportunities. I always like to say that we provide hope and opportunity for our tribal members.

JEFFREY KAYE: But gambling critics say the industry often uses its wealth to mute concerns about gambling addiction. Former California Lt. Gov. Leo McCarthy co- authored a congressionally financed survey of gambling in America.

LEO McCARTHY: Putting it as kindly as I can, many elected officials are neutralized by the volume of campaign contributions that are coming from the gaming industry. So they’re muted in effect. They don’t really do the research required to know how many pathological gamblers there are currently in their states. They don’t think they need to create a medical safety net for pathological gamblers who destroy their families.

JEFFREY KAYE: In California, gaming tribes have to provide the state with funds — now $3 million a year to tackle problem gambling. But after years of inaction, the state is only now starting to study the problem and has spent little of the money contributed by the tribes.

ANTHONY MIRANDA: Well, it’s very frustrating. It’s very frustrating to provide money to address an issue and knowing that the state has to set up a program to address the issue, and there really hasn’t been anything done.

JEFFREY KAYE: The highest profile response to problem gambling in California comes from the state’s council on problem gambling, an independent, nonprofit organization. It helps fund a national 800 number. If you call it, you’ll be sent some pamphlets about addiction and referred to Gamblers Anonymous meetings in your area.

BRUCE ROBERTS: After that, there’s not much to do because there’s no treatment centers in California. There’s no state funded treatment centers, and that’s the problem with gambling, compulsive gambling is that when a person is ready to quit, ready to get help, there’s no way he can get it on a paid basis because he’s broke.

JEFFREY KAYE: Roberts’ group, like other organizations across the country that address problem gambling, are financed largely by the industry itself. In exchange, they maintain a Swiss-like neutrality toward gambling.

BRUCE ROBERTS: We as an organization don’t take a stand for or against gambling. We’re totally neutral. And the reason we do that is because that’s the way we can maintain a position where gambling interests are willing to help fund what we try to do. So it’s very, very important to us to maintain that position.

JEFFREY KAYE: You don’t want to upset or anger the gambling interests?

BRUCE ROBERTS: You could say that, yeah.

JEFFREY KAYE: To fully appreciate the slow response to gambling addiction, critics point to that Mecca of betting: Nevada, where revenues from gambling account for more than 40 percent of the state budget; 74 years after the legalization of gambling here, the silver state is now considering spending public money for the first time to tackle gambling addiction. The grand total of the response? $100,000 a year over two years.