[Congressional Record Volume 141, Number 2 (Thursday, January 5, 1995)]
[Senate]
[Pages S521-S522]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                      WHEN GAMBLING COMES TO TOWN

 Mr. SIMON. Mr. President, during the last session of Congress, 
I introduced a bill to set up a commission to look at the whole 
question of where we're going in the United States on gambling and what 
our policy should be. This is a major cultural shift that is taking 
place that has an impact on our citizens and has an impact on 
government revenue.
  Recently, I heard reference to an article by Stephen J. Simurda in 
the Columbia Journalism Review, and I got a copy of the article. I ask 
to insert it at the end of my remarks.
  My instinct is that we should move with some caution in this field.
  The article mentions that the Center for Addiction Studies at Harvard 
University says that between 3.5 and 5 percent of adults exposed to 
gambling can be expected to develop into pathological gamblers. Even 
more disturbing, the percentage is higher, 6 to 8.5 percent, for 
college and high school students.
  I do not know what the answer is, but I know that Congress and our 
federal government probably should not ignore this phenomenon.
  The article follows:

                      When Gambling Comes to Town

                        (By Stephen J. Simurda)

       Just five years ago state-authorized casino gambling in the 
     United States was confined to Nevada and Atlantic City, New 
     Jersey. Today, casinos can be found in eighteen states. Many 
     are Indian-owned--as in New York, Connecticut, Minnesota, 
     Michigan, Arizona, and Oregon. Others are floating casinos--
     like those on the rivers of Illinois, Iowa, and Mississippi.
       And more are on the way. Missouri and Indiana have recently 
     approved casinos, and the biggest one in the world is being 
     built in New Orleans. Several more states, including Ohio, 
     Pennsylvania, Massachusetts, and South Carolina, are 
     considering various forms of legal gambling.
       ``All of a sudden it's like, bang! legalized gambling is 
     the biggest economic development force in almost every state 
     in the country,'' says Robert Goodman, an urban planner at 
     the University of Massachusetts at Amherst who recently 
     completed a two-year study of the gambling industry.
       The current gambling surge can be traced, in part, to state 
     lotteries, which have become a fixture in the American 
     landscape in the thirty years since New Hampshire started the 
     first public lottery of this century. Today, thirty-six 
     states have lotteries, and legislators would be hard pressed 
     to make fiscal ends meet without the millions of dollars they 
     generate.
       Taken together, these developments add up to a fundamental 
     shift in the role gambling plays in U.S. society. In 1992, 
     Americans spent a staggering $30 billion on legal gambling, a 
     figure The Wall Street Journal reports was more than was 
     spent on books, movies, recorded music, and attractions (such 
     as amusement and theme parks) combined.
       The transformation of America into a gambling society was, 
     of course, greatly accelerated by years of federal cutbacks, 
     compelling cities and states to generate more revenue at a 
     time when few politicians dare to prescribe an old-fashioned 
     formula--raising
      taxes. So State legislators, mayors, and governors are often 
     quite receptive to gambling promoters, a group that 
     generally includes deep-pocketed developers, prominent 
     local attorneys or financial consultants, and, in some 
     cases, powerful political colleagues. Armed with glowing 
     economic impact studies, promoters set out to convince 
     communities that casino gambling will provide a big boost 
     to their economy.
       Journalists across the country who are asked to cover 
     legalized casino gambling may find it a difficult and 
     confusing assignment, for a variety of reasons. ``It doesn't 
     fit easily within the framework of a beat that most 
     newspapers have, and there is a certain amount of technical 
     expertise needed,'' says Robert Franklin, who covers 
     philanthropy and charitable gambling for the Minneapolis/St. 
     Paul Star Tribune. ``There is no place from which to gather a 
     lot of information in a hurry,'' adds Steve Wiegand, who has 
     covered gambling for The Sacramento Bee. ``And so many of the 
     people I speak to are so self-serving it is hard to know how 
     much of what they tell me is true.''
       These and other problems and potential pitfalls were 
     mentioned by several journalists who have come up against one 
     of the biggest local stories of the decade. What follows, 
     then, is something of a field map for reporters and editors 
     who find themselves suddenly compelled to explore and explain 
     a complicated piece of terrain.


                              the proposal

       It promises a lot and has a strong marketing effort behind 
     it. In Bridgeport, Connecticut, a city that recently emerged 
     from Chapter 11 bankruptcy protection, Steve Wynn of Mirage 
     Resorts promised 12,000 new jobs, four million visitors a 
     year, and millions in tax revenues. And over the first half 
     of 1993 he and other casino promoters spent more than $2 
     million on lobbying, the most ever in Connecticut, to gain 
     approval of a casino bill.
       Legislators declined to act on the bill after the 
     Mashantucket Pequots--a tribe that operates a huge and hugely 
     successful casino on tribal lands in Ledyard, Connecticut--
     agreed to pay the State $113 million, an amount equal to the 
     State's budget shortfall for the fiscal year, out of slot 
     machine profits. (Indian-owned casinos nationwide enjoy tax-
     free status; their success has spurred efforts to legalize 
     corporate-owned casinos that would pay taxes.)
       Inevitably, casino proposals will promise lots of jobs and 
     tax money, among other incentives, but the promises are just 
     that, and the reality may not match the sales pitch.
       In Iowa, residents of Davenport--and the local media--were 
     dazzled in 1989 by promises of a $76 million investment by a 
     floating-casino developer, including the building of a 
     fifteen-story hotel, a shopping center, and an office 
     building. By last year it was estimated that less than $20 
     million had actually been spent, and nothing had been built. 
     ``The city was looking for bricks and mortar, land-based 
     development, and that's what we didn't get,'' says Clark 
     Kauffman, a reporter for the Quad-City Times in Davenport.
       As a city or state reacts to a gambling plan with its own 
     ideas about how the money might be spent, it's important to 
     examine who will benefit. In many states, lottery revenues, 
     for example, are supposed to contribute to education or 
     services for the elderly. But in California and Illinois, 
     among others, it's been shown that lottery funds have often 
     just replaced legislative appropriations, not supplemented 
     them, as many people thought they were intended to do.


                     getting a variety of opinions

       It's never hard to find promoters eager to make the case 
     for gambling. ``Reporters can expect to be showered with 
     attention'' by gambling promoters, says Daniel Heneghan, who 
     has covered gambling for the Atlantic City Press since 1979 
     and has been offered free trips to other gambling properties 
     by casino owners. (He declined the offers.)
       Meanwhile, ``informed critics of the industry are very hard 
     to find,'' says David Johnston, a writer and editor at The 
     Philadelphia Inquirer and author of Temples of Chance: How 
     America Inc. Bought Out Murder Inc. To Win Control of the 
     Casino Business. As a result, opposition presented in the 
     media often comes from the religious community, which makes 
     moralistic arguments against casinos--the kind of arguments 
     many people don't take very seriously. Last August 20, The 
     Washington Post ran a front-page story about gambling headed 
     d.c. considering casino gambling: option viewed as economic 
     booster. The only opponent quoted in the piece was an 
     assistant pastor at a Baptist church, who said, ``We don't 
     support gambling, because it's anti-Biblical and anti-
     Christ.''
       Reporters can usually get a more cogent analysis from 
     economists, planners, psychologists, and other professionals. 
     Pauline Yoshihashi of The Wall Street Journal, for example, 
     in researching a piece that appeared in the Journal last 
     October, asked a cultural anthropologist to explain the lure 
     of gambling, and an entertainment industry analyst from a 
     brokerage house to talk about the effect gambling may have on 
     other entertainment businesses.
       In a five-part series in The Boston Globe last September, 
     reporters Mitchell Zuckoff and Doug Bailey turned to an 
     architect and regional planner to discuss the government's 
     promotion of legalized gambling, and to a professor of 
     commerce and legal policy to address the parasitic nature of 
     legalized gambling on the economy.


                  looking out for financial conflicts

       ``Gambling interests suck up everybody,'' says Vicki Abt, a 
     professor of sociology at Penn State University and author of 
     The Business of Risk. Abt says that includes her co-author, 
     Eugene Christiansen, who is often described as a ``gambling 
     industry analyst,'' as he was in The Boston Globe's generally 
     first-rate series on gambling.
       In fact, Christiansen is a consultant who makes about half 
     of his income working for the gambling industry--a bit of 
     background 
     [[Page S522]] information he's rarely asked about. 
     ``Reporters are much less interested in exploring my ties to 
     the industry than they are in getting me to give the secret 
     as to why gambling is bad.'' Christiansen says. His 
     willingness to be critical of the spread of legalized 
     gambling, it should be noted, does not conflict with the 
     interests of some large casino companies that stand to lose 
     revenue if rivals move in on their turf.
       Then there's I. Nelson Rose, a professor at the Whittier 
     Law School in California, whose resume calls him the 
     ``nation's leading authority on gambling and the law.'' But 
     nowhere in his nine-page vita does Rose mention that for the 
     past three years he has been a partner in a plan to develop a 
     string of Indian-owned casinos in southern California.
       ``I have no trouble talking about it.'' says Rose when 
     asked about his business ventures, but he doesn't always 
     volunteer the information to reporters. (In the Globe series, 
     Rose was described as a professor ``who studies gambling 
     law.'' The Quad-City Times called him ``one of the nation's 
     top authorities on legalized gambling.'')
       It's worth noting that Christiansen and Rose are still good 
     sources for gambling stories, says David Johnston, ``but you 
     need to put them in the universe.''
       Almost no source is safe, it seems. A reporter calling the 
     National Council on Problem Gambling in New York City, for 
     example, might expect to get an anti-gambling perspective, or 
     at least a view that is cautious about the spread of 
     legalized gambling. ``That's not what my board wants me to 
     do,'' says Jean Falzon, the group's executive director. 
     Instead, the council, whose board includes several gambling 
     industry executives, focuses on raising money, often from the 
     industry, for research about, and the education of, 
     compulsive gamblers.
       What's a reporter to do?'' You flat out ask them'' if they 
     make money off the industry, says The Wall Street Journal's 
     Yoshihashi. (For the record, two of the experts quoted in 
     this story, Goodman and Abt, say they take no money from the 
     gambling industry.)


                    evaluating the economic benefits

       A casino proposal will offer enough numbers to confuse even 
     an experienced business reporter. And they're all soft. 
     Nevertheless, exploring the economic side of casino 
     development can offer some of the best stories about the 
     issue.
       ``Many real economic issues are not being discussed by 
     promoters or local politicians'' who are eager to get casinos 
     open and generating money, says Yoshihashi. One of these 
     issues involves how many of a projected casino's anticipated 
     customers will come from outside the immediate area. If most 
     of the gamblers are local, the dollars spent at the casino 
     represent money not being spent on other things in the local 
     economy, inevitably hurting some area businesses. Then, too, 
     there's the issue of jobs, which are
      usually touted as skilled and high-paying. In reality, the 
     skills are usually pretty minimal, as is the pay, which 
     generally anticipates generous tips. There's also a 
     history of racial discrimination and sexual harassment in 
     the casino industry.
       Another issue centers around the likelihood that a casino 
     will help a community turn its luck around. ``There can be a 
     lot of false expectations about long-term economic 
     development,'' says William Eadington, director of the 
     Institute for the Study of Gambling and Commercial Gaming at 
     the University of Nevada at Reno. ``It's all driven by a 
     myopic perspective that all that matters is economic, which 
     is bound to be disappointing.'' (Eadington, by the way, makes 
     money off the industry, running training sessions for casino 
     managers and sponsoring an international gambling conference 
     that draws from industry and academia.)
       Lastly, despite regular denials from gambling promoters, 
     there is abundant evidence that legalized gambling, 
     especially state lotteries, is regressive, with poorer 
     citizens gambling a disproportionate share of their income. 
     Information on this often-scanted subject has come from the 
     New Jersey Lottery Commission, The Heartland Institute in 
     Chicago, and Duke University, among others.


                      looking at the social costs

       Examining the social cost of gambling can be a fertile area 
     for an enterprising journalist. ``There's absolutely been an 
     explosion in the number of compulsive gamblers in Minnesota'' 
     since casinos began opening on Native American reservations 
     across the state, says Jim Kelly, assistant city editor of 
     the Star Tribune in the Twin Cities. The paper has attempted 
     to cover this issue, a notable example being a page-one 
     November 12, 1992, piece that examined increases in crime 
     related to compulsive gambling.
       Howard Shaffer, director of the Zinberg Center for 
     Addiction Studies at Harvard University, says that between 
     3.5 and 5 percent of those adults exposed to gambling can be 
     expected to develop into pathological gamblers. Even more 
     disturbing, the percentage is higher (6 to 8.5 percent) for 
     college and high school students, according to Shaffer's most 
     recent research. ``It's like crack was to cocaine. It's 
     becoming too easy to gamble,'' says Shaffer.
       New forms of legalized gambling may also contribute to an 
     increase in crime, or at least increases in the cost of 
     ensuring public safety. Meanwhile, there's the likelihood of 
     more white-collar crime when gamblers who lose too much in 
     the casinos try to make up their losses by stealing from 
     employers or institutions.


                       how will it be regulated?

       ``If you're going to have gambling as public policy, you 
     have to have regulation,'' says Yoshihashi. The Wall Street 
     Journal reporter suggests that communities consider imposing 
     a waiting period between the time someone leaves the industry 
     and the time the person can serve in a regulatory capacity, 
     and vice versa.
       David Johnston of The Philadelphia Inquirer adds that 
     reporters should find out, for example, whether a tax agent 
     will be required to be on hand when money is counted, and how 
     much casino operators will have to disclose about their 
     business relationships with those in the community. He also 
     suggests looking into whether the casino will permit credit 
     gambling, which he says creates a host of problems, and 
     whether there will be stiff penalties for casinos that permit 
     underage patrons to gamble.
       Regulation is a particularly big issue at casinos on Indian 
     reservations because their sovereign-nation status has put 
     them into something of a regulatory limbo. A recent article 
     in Gaming & Wagering Business, a trade magazine, raised 
     allegations of misuse of funds, ties to organized crime, and 
     sexual harassment at one reservation-based casino in 
     Minnesota.
       Chris Ison, one of five reporters at the Star Tribune who 
     cover gambling in an unusual team approach, says he is aware 
     of the allegations, but has yet to explore them in depth. 
     Ison has uncovered and reported on other forms of wrongdoing, 
     some of which involve the regulators themselves. Last year, 
     for example, he co-wrote a piece revealing that the area 
     director of the federal Bureau of Indian Affairs was 
     receiving cash vouchers with which to gamble when he made 
     regulatory visits to a casino.


                            The bottom line

       In general, gambling needs to be covered like other 
     economic development proposals--glitz and hype 
     notwithstanding. Journalists should not forget that they may 
     be the only ones able to cast a skeptical eye on plans to 
     expand legalized gambling in their community.
       ``Remember, this is an industry that's in the business of 
     selling illusion,'' says David Johnston. ``And it begins long 
     before the casino ever opens.''
     

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