An excerpt from:
Is There a Cure for America's Gambling Addiction?
By Bernard P. Horn
Mr. Horn is political director, National Coalition Against Legalized Gambling, Washington, D.C.
For years, lawmakers forgot why gambling was considered a "vice." In fairness to them, there weren't a lot of objective studies available on the consequences of legalized gambling. The many new gambling outlets sparked opportunities for social and economic research. By 1994, a considerable body of evidence showed that the expansion of legalized gambling destroys individuals, wrecks families, increases crime, and ultimately costs society far more than the government makes.
It is important to understand that gambling addiction is just as real, and its consequences just as tragic, as alcohol or drug abuse. The American Psychiatric Association and the American Medical Association recognize pathological (or "compulsive") gambling as a diagnosable mental disorder.
Experts on pathological gambling have shown that the prevalence of this disorder is linked closely to the accessibility and acceptability of gambling in society. Like alcoholism, just a small percentage of Americans are susceptible. As more people try gambling in its various forms, however, more of those prone to the illness are exposed. So, the more legalized gambling a state makes available, the more pathological behavior is triggered. Fast-paced gambling, which maximizes the number of wagering opportunities (like casinos and video gambling machines), also maximizes gambling addiction. In 1976, a national commission found that 0.77% of the adults in the U.S., about 1,100,000 Americans, were pathological gamblers. Today, the situation is far worse.
In Iowa, the legalization of casinos more than tripled the addiction dilemma. A study released in July, 1995, found that 5.4% of the state's adults (roughly 110, 000 residents) are lifetime pathological or problem gamblers. Before riverboats came to the state, 1.7% of Iowans fell into this category.
In Louisiana, four years after the state legalized casinos and slots, a study found that seven percent of adults had become addicted to gambling. In Minnesota, as 16 Indian casinos opened across the state, the number of Gamblers Anonymous groups shot up for one to 49.
Whether roulette, slots, or lotteries, the odds always favor the house. The more one gambles against these odds, the more certain it becomes that one will lose. When pathological gambling strikes, it rarely affects just one person. Family savings are lost, college education or retirement funds disappear, and home mortgages are foreclosed. Under the stress of losing everything, many problem gamblers commit domestic violence. Since casinos came to the Mississippi Gulf Coast, domestic violence has increased 69% and an estimated 37% of all pathological gamblers have abused their children.
Pathological gamblers lose all the money they have, then run up credit card debt. They sell or pawn possessions and plead for loans from family and friend. More than half end up stealing money, often from their employers. The average Gamblers Anonymous member will have lost all his or her money and accumulated debts ranging from $35,000 to $92,000 before seeking treatment. Thousands file for bankruptcy. Many addicts who can't be helped commit suicide.
Creating a generation of addicts
Researchers call gambling the fastest growing teenage addiction, with the rate of pathological gambling among high school and college-aged youth about twice that of adults. According to Howard J. Shaffer, director of the Harvard Medical School Center for Addiction Studies, "Today, there are more children experiencing adverse symptoms from gambling than from drugs... and the problem is growing."
Despite laws in Atlantic City restricting casino gambling to people 21 or older, a survey of teenagers at Atlantic City High School revealed that not only had 64% gambled in a local casino, but 40% had done so before the age of 14. Every year, Atlantic City casino security personnel report ejecting about 20,000 minors. Just imagine how many thousands more are never caught.
Numerous studies have focused on the link between gambling establishments and crime. Just as Willie Sutton robbed banks because, as he explained, "that's where the money is," so do contemporary crooks target large casinos.
Less well-known is the extent to which gambling addiction is turning people into criminals. More than half of all pathological gamblers will commit felonies to pay off gambling debts, particularly financial crimes like embezzlement, check kiting, tax evasion, and credit card, loan, and insurance fraud. Moreover, these tend to be people who never before have committed a crime. Pathological gamblers are responsible for an estimated $1,300,000,000 worth of insurance-relate fraud per year.
In 1994, the Florida Office of Planning and Budgeting conducted a study to project the costs of legalizing casino gambling in the state. The biggest potential government expense turned out to be that of incarcerating all the new pathological gamblers who turn to crime. According to the study, "Not counting the cost of prosecution, restitution, or other related costs, incarceration and supervision costs alone for problem gambler criminal incidents could cost Florida residents $6,080,000,000."
Proponents claim that casinos or slot machines will stimulate jobs and economic growth. The reality is that gambling steals customers from existing businesses, cannibalizing their revenues. As Prof. John Warren Kindt testified before the Small Business Committee of the U.S. House of Representatives, "Traditional businesses in communities which initiate legalized gambling activities can anticipate increased personnel costs due to increased job absenteeism and declining productivity. The best blue-collar and white-collar workers, type-A personalities, are most likely to become pathological gamblers. A business with 1,000 workers can anticipate increased personnel costs of $500,000 or more per year-- simply by having various forms of legalized gambling activities accessible to its workers." No wonder that, soon after casinos were legalized in the resort town of Deadwood, S.D., gambling became one of the top reasons for business bankruptcy in the region.
Certainly, the managers of gaming establishments, seeing these addicts every day, understand what is going on. In Atlantic City, for instance, after pathological gamblers lose all their cash, empty their ATM accounts from the casino's teller machines, and can borrow no more, they walk outside the casinos to sell their jewelry and other valuables. Selling jewelry is such a big business in Atlantic City that there are about three dozen "Cash for Gold" stores near the entrances to Boardwalk casinos. How many tens of thousands of people must sell their valuables each year in order to keep these three dozen establishments in business? (You can get about $15 for a man's gold wedding ring.) Why don't the Atlantic City casinos try to help these miserable customers?
A simple answer was suggested in testimony before the U.S. House Judiciary Committee. The casinos don't want to stop gambling addiction because they can depend on addicts for a huge percentage of their profits. Prof. Earl Grinols presented evidence that pathological and problem gamblers, representing four percent of the adult population, may account for as much as 52% of an average casino's revenues. "In this respect," he noted, "casino gambling resembles alcohol, for which 6.7% of the population consumes 50% of all alcohol consumed."
When an industry literally is exploiting the mentally ill for profit, one might expect government to intervene. However, governments have become addicted to winning the money that addicted gamblers lose. This irony carves a strange political landscape.
Legalized gambling enriches a small group of entrepreneurs, as well as the government, but does very little for average citizens. So, when there is a proposal to expand gambling, it never is the result of a popular movement. Rather, it is driven by self-interested gambling pitchmen with high-priced lobbyists or by the government itself.
Over the years, individual citizens began to question whether this "free lunch" program rationally could achieve its promise. As the guarantees of economic prosperity evaporated, state and local groups spontaneously sprang up across the nation to oppose the further spread of gambling. In 1994, these varied grassroots citizen groups created the National Coalition Against Legalized Gambling. The members of NCALG span the entire political spectrum from very conservative to very liberal. The coalition encompasses business and labor, religious and secular, with activists in every state.
Predictably, the pro-gambling lobby attempts to marginalize the coalition by painting it as a religious, moralist group. If NCALG's opposition to gambling were based on personal morality, it would lose in the political arena. After all, a large majority of Americans gamble.
NCALG does not preach the immorality of gambling. Rather, it seeks to stop the expansion of legalized gambling on public policy grounds that it harms individuals, families, businesses, and society in general. Since 1994, these arguments have been enormously successful in the political arena.
Despite furious efforts by the gambling promoters, not one state legislature legalized casinos or slot machines in 1994, 1995, or 1996. Virginia provides a good illustration. In Richmond, over a dozen casino companies pushed to legalize riverboat gambling. They hired more than 50 lobbyists, bought newspaper ads, and even aired television commercials. While the casinos spent more than $800,000 on direct lobbying in Richmond and millions more on indirect lobbying across the state, thousands of citizens, armed with the facts, mobilized at the grassroots level against the casinos. When the smoke cleared, the gambling bill was crushed in the committee.
Similarly, efforts to legalize new gambling establishments by referendum have been beaten back. As the industry's weekly newsletter complained in November, 1995, "It was a tough election day once again for the gaming industry last Tuesday, as virtually every major gaming issue went down to defeat. The results mirrored the 1994 November elections..."
Solutions on the Horizon
On Aug. 3, 1996, Pres. Clinton signed H.R. 497, the National Gambling Impact and Policy Commission Act, which set up a nine-member Federal panel to investigate all facets of gambling in America. This law, sponsored by Rep. Frank Wolf (R.-Va.) and Senators Paul Simon (D.-III.) and Dick Lugar (R.-Ind.), gives the commission a two-year mandate and sweeping subpoena powers.
The National Coalition Against Legalized Gambling worked hard to win enactment of this law, while the casino industry, represented by their Washington-based lobbying organization, the American Gaming Association, fought the gambling commission tooth-and-nail. First, the AGA tried to kill the bill outright. When that proved impossible, they tried to strip the commission of subpoena powers. Although AGA president Frank Fahrenkopf, called the subpoena power "unwarranted," "an intrusion," and "unprecedented," anti-gambling forces prevailed. The commission was granted an unrestricted power to subpoena documents, research, and computer data from the industry.
A national study will not solve the gambling problem, but it could be a turning point for the public, much like the 1964 Surgeon General's report on the hazards of smoking. In the meantime, Federal, state, or local governments should:
- Stop authorizing new gambling establishments and the expansion of existing ones.
- Re-impose a complete ban on television and radio advertisements for gambling.
- Require warning labels on all print advertisements for gambling (like cigarette ads).
- Crack down on illegal casino gambling and sports betting available through the Internet.
- Limit the amounts that can be bet or lost by individuals within a reasonable time period.
- Ban loans by gambling establishments, prevent borrowing on credit cards for gambling stakes, and prohibit ATM machines near gambling sites.
Some of this may seem like strong medicine, but we are facing a very serious societal illness. In 1996, for the first time in decades, there was a real battle over gambling policy in Congress. Pro-gambling forces are trying to recapture momentum by arguing that gambling revenues are imperative to replace massive cuts in Federal aid to states.
In 1997, gambling proponents will focus on referenda and persuading legislatures to legalize or expand casino games in many states, including Alabama, California, Hawaii, Illinois, Kansas, Kentucky, Massachusetts, Minnesota, Nebraska, New Hampshire, New Mexico, New York, Oklahoma, Pennsylvania, Rhode Island, Tennessee, Texas, Vermont, Virginia, and West Virginia.
This year will be a major test. Will America continue to ignore all the warning signs and continue to plunge down into the hole of legalized gambling, or will our nation see that it is time to start climbing out? Will we continue to belittle the epidemic of gambling addiction, or will we finally acknowledge that it has become a public health crisis that requires immediate attention? The stakes have grown alarmingly high.