[Congressional Record Volume 143, Number 16 (Monday, February 10, 1997)]
[House]
[Pages H401-H404]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
GAMBLING ADVOCATES SHOULD NOT BE PART OF THE NATIONAL GAMBLING IMPACT
STUDY COMMISSION
The SPEAKER pro tempore (Mr. Collins). Under the Speaker's announced
policy of January 7, 1997, the gentleman from Virginia [Mr. Wolf] is
recognized for 60 minutes as the designee of the majority leader.
Mr. WOLF. Mr. Speaker, it has recently been reported that the
President of the United States and the minority leader of the House are
planning to appoint gambling advocates to the National Gambling Impact
Study Commission. Should this come to pass, it would prevent a
commission from doing any meaningful work. The President and the
minority leader should not appoint individuals with a vested interest
in the outcome of the report. They should appoint men and women of good
will, able to make an objective and thorough review of gambling.
Why? Because gambling is known to wreak havoc on small businesses,
families, and our governmental institutions, and it is time to learn
gambling's true impact on the Nation.
As the Washington Post editorialized today, the commissioners were
supposed to be appointed on October 2, 1996, prior to the election. Now
we have learned that the gambling interests that once gave millions of
dollars to both political parties also had a coffee with the President
of the United States as some of the infamous White House coffees.
{time} 1445
The Wall Street Journal reported last week that the Oneida Nation
donated $30,000 to the Democratic National Committee on the day that
Oneida Chairwoman Deborah Doxtator attended a White House coffee event.
This administration is being scrutinized for the campaign
contributions it has received in the campaign-related meetings it has
had within the White House. Americans are rightly concerned, Americans
of both political parties are rightly concerned, about the President
meeting with drug dealers in the White House. They are concerned that
China's biggest arms merchant, Mr. Wang, head of the Poly Corp. in
China, who was trying to sell assault weapons to street gangs in
California, was meeting with the President of the United States in the
White House. What a disgrace. The president of the corporation that was
selling assault weapons and even shoulder missiles to street gangs in
California was meeting with the President of the United States.
Their concern was favor-seeking Indonesian businessmen, and as
everyone knows, the Lippo Bank in Indonesia, and I just returned from
Indonesia 2 weeks ago where we went to the island of East Timor, where
the first Catholic Bishop ever in the history of the world, a winner of
the Nobel Peace Prize, and I might say he was appointed and recommended
by the gentleman from Ohio [Mr. Hall], from this side of the aisle, won
the Nobel Peace Prize. The feeling out in Indonesia and now in the
United States is that the Lippo Bank, which is an Indonesian bank,
through the Riady family, which is close to the Clinton administration,
gave money to the Clinton administration, which has now changed their
policy on Indonesia. And we know that in Indonesia, in a little island
of East Timor where 700,000 people of the Catholic faith are now being
persecuted and the military fear that runs through the island as they
are taking young people away in the middle of the night.
So the American people are concerned about this. They are concerned
about a reputed Russian mobster, Russian mobster in the White House
with coffee, and as this administration says they are concerned about
drugs, drug dealers at the White House. So therefore, they are
concerned about this whole issue of campaign financing.
Anything the White House does, rightly or wrongly, will be
scrutinized in light of these factors.
I call on the President to appoint three honest and decent Americans,
people the American people can trust
[[Page H402]]
to conduct a credible study of the gambling industry. I urge the
President to avoid the charge that his picks are political payola, mere
kickbacks for financial support during the election. I agree with the
gentleman from New York [Mr. LaFalce], who urged the President in a
February 6 letter in saying, ``to place the National Gambling Impact
Study Commission above politics and to consider appointments that the
public can rely on to conduct a comprehensive and fair review of
gambling.'' Because what we wanted in the commission, since gambling is
spreading rampantly through the country, is an objective group of men
and women who would study the issue of gambling and to see: has there
been a problem on corruption, has there been a problem on crime, has
there been a problem on addiction, whereby localities and State
legislators and Governors could come to an objective place to see. And
now we see that maybe the White House is talking of putting gambling
interests on as their appointments.
I am not suggesting, and let me say for the record, that the
President should appoint antigambling people to the commission. He
ought not appoint antigambling people, but the test should be whether
the appointees are objective, whether they are connected to the
industry in some way or any way, or are proponents of gambling. The
American people are watching; the editorial writers and the newspapers
of this country are watching in hopes that the President will do the
right thing.
In an October 31, 1995 letter to Senator Paul Simon the President
wrote the following:
I deeply appreciate your efforts to draw attention to the
growth of the gambling industry and its consequences. Too
often, public officials view gambling as a quick and easy way
to raise revenues without focusing on gambling's hidden
social, economic and political costs. I have long shared your
view about the need to consider carefully all of the effects
of gambling, and I support the establishment of the
Commission for this purpose.
I had an opportunity a year ago to be at the White House, where the
President came and said to me he supported completely what we were
trying to do on the National Gambling Commission. If the President was
saying what he believes to me and to Senator Simon, why are they now
talking appointing people connected to the gambling interest to be on
the commission? Is this White House out of control? Does the President
not know what his staff is doing? Is the President aware that his staff
is making these recommendations? Are these on his desk? Will he speak
out? Will he be involved?
Mr. Speaker, I take the President at his word that he supports the
need to consider carefully all of the effects of gambling. This can
only be done, Mr. President, by an objective group of individuals
willing to make a thorough and considered review of gambling. The
Congress and the President may join together to establish other
commissions in the future, to study issues such as Medicare and Social
Security. Those commissions should not be loaded up one way or another
so meaningful research is somehow thwarted. They should be above
politics.
If the President appoints gambling interests to this commission, can
you imagine who he will appoint to the Medicare commission? Can you
imagine who he will appoint to the Social Security commission? It will
destroy the confidence that the country will have in his ability for
objectivity and fairness.
Likewise, the National Gambling Impact Study Commission will not be
able to do its job if the panel is stacked with individuals linked to
the industry. And it should be above politics.
I urge the President, in the words of a February 5 Dallas Morning
News editorial, it says not to ``give henhouse guard duty to the
foxes.'' It says, do not ``give henhouse guard duty to the foxes.''
All the States that are holding referendums on this issue are all
turning gambling down but one this last time, and they passed it 51 to
49. The President's own home State of Arkansas has turned gambling
down, and now we hear that the White House is thinking of appointing
gambling-interest people to this commission.
I also would like to insert in the Record the Washington Post
editorial where it says,
The big money gamblers are betting a bundle on President
Clinton to do their bidding today. Maybe Mr. Clinton will
have some second thoughts, and well he should, about stacking
a Federal commission established to examine the impact of
gambling activities on the country. But that is not a very
safe bet, given the background situation.
Start with the guess-who's-coming-to-coffee list at the
White House. Last March, for example, one White House coffee
guest was the chairwoman of the Oneida Nation, an Indian
tribe with gambling interests. On the same day, according to
the Wall Street Journal, the Oneida Nation donated $30,000 to
the Democratic National Committee. Coffee guest lists show at
least 10 representatives of Indian gambling interests since
mid 1995.
Then it goes on to quote Mr. LaFalce, a supporter of our bill, to set
up the national commission, and he wrote to the President last fall
urging him to name individuals without vested interests in the outcome
of the commission. In the followup letter last Thursday, Mr. LaFalce
expressed his concern about the reported White House list urging the
President to place the commission above politics.
This is the end of the Washington Post editorial:
Given the squalid state of money-ordered politics pervading
Washington, that would be refreshing news.
Also, Mr. Speaker, in closing, I would like to insert the article
from the January 25 Economist magazine where it talks about the reality
of dawning in this Nation with regard to what is taking place on the
gambling interest. It says,
Many places have failed to understand that casinos, more
than other forms of gambling such as lotteries, cause what
economists call negative externalities. There is a price to
pay in the rising costs of such things as law enforcement,
street cleaning, and, some argue, the extra social services
needed when gambling leads to the breakup of families. When
these additional costs are taken into account, it is far from
clear that gambling benefits anyone except the casino
operators.
Now the President stands here to address the Nation and talk about
families. In fact, if you listen to both political parties, they talk
about families and family values. Would it be a family value for the
President to appoint three gambling-connected people to the Gambling
Commission? Of course it would not be a family value for this
administration to do that.
The article goes on to say,
Perhaps one-third of Americans never gamble, reckons Mr.
Grinols. Many people who do are cautious, but a small
percentage, perhaps 2 to 4 percent of the American adult
population, are problem or pathological gamblers. These
account for a disproportionately large share of the
activity's costs. One study in Minnesota found that 10
percent of bettors, 10 percent of bettors accounted for 80
percent of all the money wagered.
The article goes on to say,
Their numbers may be small, but their impact is not.
Problem gamblers have a high propensity to commit crimes, in
particular, forgery, theft, embezzlement and fraud. These
crimes affect both immediate family and colleagues at work.
The American Insurance Institute estimates that 40 percent of
white collar crime, 40 percent of white collar crime has its
roots in gambling. Gamblers often descend in a spiral of
increasingly desperate measures to finance their habit in the
hope of recouping their losses. Further, even before they
turn to crime, problem gamblers are unproductive employees,
frequently absent or late, and usually distracted. A 1990
study in Maryland estimated that the State's 50,000 problem
gamblers accounted for $1.5 billion in lost productivity,
unpaid State taxes, money embezzled and other losses.
It ends by saying, and I will insert the whole article in the Record,
All this is potent evidence that casinos are a bad bet. But
even if the effects of problem gambling are discounted, the
fact remains that casinos are not a development tool either.
The risk, which everyone was aware of at the outset, is not
paying off. Without resorting to moralizing and even without
mentioning organized crime, those who would clamp down on
gambling can now make a formidable economic case.
In closing, Mr. Speaker, I periodically will get calls from loved
ones in a family who call and say, my husband committed suicide or my
wife got addicted and committed suicide, and we will also hear from
other families. And has the President had the opportunity to sit down
and talk to some of the families who have lost loved ones because of
this addiction?
{time} 1500
He sits down with the Oneida Indian tribe, he sits down with the
gamblers from all around the United States, he takes their political
money, but he will not sit down with a mom who calls
[[Page H403]]
about her son, or the wife who calls about her husband, and all of
those who have been impacted.
So I call on the President, I call on the President today to make a
commitment to the American people not to appoint anti-gamblers; and let
there be no misunderstanding, I personally am not for gambling, but I
am not asking that anti-gamblers be on the commission. But I certainly
am saying that pro-gamblers and those connected with the gambling
interests in any way ought not be on the commission.
When I think of all the good, honest, and decent people in this
country, Republican and Democrat, liberal and conservative, who would
be outstanding appointments to this commission, I call on the President
to find three people like that, who have no connection, to demonstrate
that the political contributions in this fall's campaign have had no
bearing on it.
Because I will tell the Members, we will scrutinize who is appointed
to this commission. We will dig and we will follow it out. We will find
out, whether it be through subpoena power or whatever, if there has
been any connection. If there is any connection, we will demand that
this Congress act, and we will demand that this administration act.
Mr. Speaker, I include for the Record the following documents.
The material referred to is as follows:
[From the Washington Post, Feb. 10, 1997]
Gambling Payoff?
The big-money gamblers are betting a bundle on President
Clinton to do their bidding today. Maybe Mr. Clinton will
have some second thoughts--as well he should--about stacking
a federal commission established to examine the impact of
gambling activities on this country. But that's not a very
safe bet given the background situation.
Start with the guess-who's-coming-to-coffee list at the
White House. Last March, for example, one White House coffee
guest was the chairwoman of the Oneida Nation, an Indian
tribe with gambling interests. On that same day, according to
the Wall Street Journal, the Oneida Nation donated $30,000 to
the Democratic National Committee. Coffee guest lists show at
least 10 representatives of Indian gambling interests since
mid-1995.
Last week, the president's short list of choices for three
seats on the gambling commission included attorney Tad
Johnson, reportedly a registered member of an Indian tribe
that has a casino in Minnesota. But according to Saturday's
Las Vegas Review Journal, after some critical publicity on
the commission appointments, this nomination may be pulled.
Other names that have been topping the Clinton list are
former New Jersey state treasure Richard Leone, who is close
to New Jersey Rep. Robert G. Torricelli, a strong supporter
of the Atlantic City gambling industry; and Bill Bible,
chairman of the Nevada Gambling Control Board. According to
the Las Vegas Sun, Sen. Harry Reid of Nevada was assured by a
top White House aide last October that Mr. Bible's selection
was a ``done deal.''
The deals for these three commission seats and six others
chosen by Senate and House leaders were all supposed to be
done by Oct. 2, before the elections. Word last week was that
Mr. Clinton would announce his choices today. But if a second
look is in progress, that could be good news.
One of Speaker Gingrich's choices is the chairman and CEO
of a Las Vegas casino company. House Minority Leader
Gephardt, who gets one selection--and whose political
committees received at least $46,500 from gambling interests
along with another $4,500 from the three women listed as
homemakers from Las Vegas--reportedly favors the head of a
union representing casino employees.
In a letter to House and Senate colleagues, Rep. Frank Wolf
of Virginia, a sponsor of the commission bill, calling the
gambling leaders' effort to seek ``a return on their
investment'' a ``disgrace.'' Another supporter of the bill,
Rep. John J. LaFalce of New York, wrote to President Clinton
last fall urging him to name ``individuals without vested
interests in the outcome of the commission's study.'' In a
follow-up letter last Thursday, Mr. LaFalce expressed his
concern about the reported White House list, urging the
president to place the commission ``above politics.'' Given
the squalid state of money-ordered politics pervading
Washington, that would be refreshing news.
______
The White House,
Washington, DC, October 31, 1995.
Hon. Paul Simon,
U.S. Senate,
Washington, DC.
Dear Senator Simon: I deeply appreciate your efforts to
draw attention to the growth of the gambling industry and its
consequences. Too often, public officials view gambling as a
quick and easy way to raise revenues, without focusing on
gambling's hidden social, economic, and political costs. I
have long shared your view about the need to consider
carefully all of the effects of gambling, and I support the
establishment of a commission for this purpose.
My Administration is eager to work with you in designing
such a commission and ensuring that its work is completed in
a timely and effective manner. Your and Senator Lugar's bill,
S. 704, and Congressman Wolf's bill, H.R. 497, provide a very
sound basis for this process, which I hope will include
further discussion of the exact composition of the commission
and the exact scope of its duties and powers.
Again, I applaud your efforts to place this important
matter on the nation's agenda.
Sincerely,
Bill Clinton.
______
[From the Economist, Jan. 25, 1997]
A Busted Flush
how america's love affair with casino gambling turned to
disillusionment
In 1995, 177m Americans went to watch the baseball,
football, hockey and basketball matches, not to mention golf
tournaments and car races, that make up what most people
think of as away-from-home entertainment. Yet almost as many
Americans, 154m of them, walked through the doors of the
country's casinos. Americans in 1995 wagered an eye-popping
$550 billion on all forms of gambling, handing the gambling
industry a record $44.4 billion in profits, 11% more than the
previous year. Around 40% of that activity took place in
casinos. On the face of it, casino gambling has become the
most popular leisure activity--well, maybe the second most
popular--in America.
It is at least as popular with Wall Street and American
business. In the past year or so, Goldman Sachs and Morgan
Stanley, two blue-chip investment banks, have set up research
and banking teams to serve the ``gaming and leisure''
industries, as the gambling organisations like to be called.
Respectable firms such as Hilton Hotels and ITT have acquired
casino operators. Las Vegas and Atlantic City are expanding
faster than ever before. To all appearances, casino gambling
is a rich, successful and untroubled business.
It may seem strange, then, to argue that America's love
affair with casinos is essentially over. Strange, too, to
assert that the gambling industry is largely responsible for
ensuring its own eventual decline. But there is growing
evidence for both arguments. And the irony is that the roots
of gambling's failure lie not only where one might expect--in
moral objections--but in the consequences, expected and
unexpected, of the economic success which helped the casinos'
emergence into respectability.
Plenty of people are still willing to roll dice, draw cards
and, most of all, play slot machines. But there has been a
change of heart among the legislators whose tolerance of
casino gambling gave it legal sanction. Since mid-1994, anti-
gambling groups, led by the National Coalition Against
Legalised Gambling, have helped to defeat more than 30 state
legislative or ballot proposals to legalise or expand
gambling businesses. Despite spending a fraction of their
opponents' budgets on lobbying politicians and voters, the
lobby against gambling has proved remarkably effective.
The gambling industry is hitting back. In June 1995 it
organised itself into the American Gaming Association; it
spends serious money trying to limit further damage to its
fortunes. But it is likely to be a bruising and losing
battle.
In August 1996 President Clinton signed a law establishing
a national commission whose nine members will, for the next
two years, study the impact of gambling on American society.
That is quite a change for an administration which had
previously seemed to look on gambling simply as a source of
revenue. In 1994, Mr. Clinton floated the idea of a 4%
federal tax on gambling revenues to create a fund for welfare
reform. No fewer than 31 state governors replied that the
tax, by lowering their own tax-take, would do great damage to
their already stretched state budgets. The proposal was
shelved. Now Mr. Clinton, turning the other way, has set up
his commission, and most people reckon its questions will
make the casino firms squirm.
the false example
To understand the reason for casino gambling's coming
failure, start with the reason for its success. In the 1940s,
when Bugsy Siegel turned to Las Vegas as the place to set up
a gambling empire, he made a shrewd guess; if you build a
casino in the desert, people will flock to it. After a shaky
start, the experiment proved a success. That was in part
because Las Vegas at the time had a country-wide casino
monopoly (the next casinos, in Atlantic City, New Jersey,
were not approved until 1976).
The frenzied expansion of Las Vegas in the late 1980s and
early 1990s caught the politicians' eyes. So too did the
economic impact of casinos on equally isolated Indian
reservations. As sovereign nations, tribes were for a long
time allowed to run gambling operations when these were
forbidden elsewhere. In the early 1990s, the economy of many
parts of the country was stagnating, and state politicians
were under pressure either to cut services or to raise taxes.
Many suddenly had the same idea. Why not legalise casinos,
thereby creating employment as well as a firm base for future
taxes on the profits of the chosen local monopolist?
Gambling firms were quick to share the idea, promising
lavish improvements in the infrastructure of run-down urban
centers. Would-be operators of new casinos talked smoothly of
repaved streets, splendid shops
[[Page H404]]
and thriving ``eateries''. And the politicians, for their
part, found a further way to draw attention to the supposed
advantages of legalised gambling. They could earmark
gambling-tax revenues for some of the things voters wanted:
for example, by 1991 13 states, including New York and
California, had allocated some or all of their lottery
receipts to education.
Look at Connecticut. Few states have had more bruising
battles over whether to extend casino gambling. But since
1992 Connecticut has been home to America's most successful
casino, Foxwoods, which sits on land belonging to the
Mashantucket Pequot tribe of Indians. Thanks in part to the
fact that 22m people live within 150 miles of Foxwoods, the
casino gets around 45,000 visitors a day and makes an
estimated daily profit of $1m.
Not surprisingly, other gambling interests have sought a
share of the Connecticut pie. In the early 1990s, Steve Wynn,
chief executive of the Mirage Corporation, a big casino
operator, tried to win casino licenses in Connecticut's state
capital, Harford--which has suffered from the decline of the
big insurance firms that once dominated its economy--as well
as the decrepit town of Bridgeport. Despite generous
spending, and his gleaming vision of what gambling would do
for the economy, both of Mr. Wynn's attempts failed. Yet
casino operators are still seeking other places to expand. A
lively debate is going on at present over proposals to
legalize casinos in New York, specifically to draw ``the
gambling dollar'' away from New Jersey and Connecticut.
How the reality dawned
The trouble, as some New York legislators are pointing out,
is that the supposed casino miracle has two big problems in
practice. First, with few exceptions, legalizing gambling has
failed to stimulate the expected economic miracle. According
to Harrah's Casinos, which publishes an annual survey of the
industry, casinos employed 367,000 people in 1995, more than
half of them in Nevada. That was a 24% increase since the
start of 1994. But the jobs created by the arrival of casinos
are too often menial--money-counter, cleaners--and have all
too often been cancelled out by the jobs that are lost as the
newcomers drive older firms out of business. Moreover, bare
statistics that show the growth of gambling jobs ignore the
job creation that would have happened in the absence of a
casino.
Belatedly, the politicians who welcomed casino gambling for
its economic spin-offs have realised that it takes more than
a few superficial improvements to revitalise a struggling
city centre. Moreover, as more and more casinos have opened,
so competition has diminished the amount of business each one
can expect. The once-sunny economic projections have faded.
In Deadwood, South Dakota, for example, an initial flush of
profitability was destroyed by the speedy arrival of dozens
of competing casinos, so that bust quickly followed boom.
Second, many places failed to understand that casinos, were
more than other forms of gambling such as lotteries, cause
what economists call ``negative externalities''. There is a
price to pay in the rising cost of such things as law
enforcement, street cleaning and (some argue) the extra
social services needed when gambling leads to the break-up of
families. When these additional costs are taken into account,
it is far from clear that gambling benefits anyone except the
casino operators.
Both these problems were predictable. It was naive to
extrapolate from the success of Las Vegas a guaranteed
economic stimulus for any city that opened its doors to a
casino. Robert Goodman, a professor at Hampshire College in
Massachusetts who writes on the economics of the gambling
industry, argues compellingly that Las Vegas was a misleading
model for the rest of America. To experience the seedy
glamour of that city in the desert, most visitors have to
come from a long distance away. A trip to gamble therefore
becomes a full-scale holiday, complete with a stay in a
hotel, visits to local restaurants and no doubt a little
shopping thrown in. In Las Vegas, casinos genuinely support
the service economy.
Contrast this with, say, Atlantic City in New Jersey. The
place is a bus ride away from New York city, and perhaps 30m
people live close enough to visit its casinos for a day at a
time. Many even cut their own sandwiches at home; they are
the ``brown-bag gamblewr''. As is all too evident in the
seedy downtown area with its paucity of restaurants, Atlantic
City collects relatively few non-gambling dollars.
The contrast is greater still in places such as Joliet,
Illinois, or Gary, Indiana. There is little in such cities to
attract visitors from any distance away. It is the locals
upon whom the casinos have to rely. Earl Grinols, an economic
professor at the University of Illinois, points out what this
means. Because local people are spending money on gambling
that they would otherwise have spent of, say, buying clothes
or going out for a meal, many non-casino firms suffer from
reduced turnover and profits. This not only limits the number
of people they employ; it also means that they pay
proportionately less tax to local and state governments.
Similarly, many of the people employed by a casino live
outside the city where the casino is sited--and spend their
money outside it, too. Nearly 60% of the staff of Joiliet's
casino live outside the city, and half of those outside the
country. This does not mean that nobody benefits. In Joliet,
nine people paid some $7m for the town's casino franchise.
Their investment paid for itself in six months, and each now
collects a monthly dividend of some $900,000.
At last, it has started to dawn on the rest of the city's
people that the economic benefit from a casino depends
largely on where it is. Add the fact that, the more casinos
there are, the smaller the share of America's gamblers any
one of them will be able to attract, and it is plain how the
dreams have been punctured. Even the gambling industry, which
used to boast of the market's almost infinite potential, has
become more circumspect. Casino firms have begun to
consolidate as stronger competitors buy weaker ones. And
industry analysts say that these days the growth prospects of
many ``gaming'' firms come more from non-gambling sidelines
(such as food, shops and shows featuring well-known crooners)
than from gambling itself.
The price of gambling
As casinos have failed in many cases to revive local
economies, so something else has happened. The old moral
doubts about gambling, which were swept under the carpet when
it seemed to offer a key to success, have resurfaced. In the
process, whatever respectability gambling had recently
acquired has been eroded.
Gambling-related social costs are extremely difficult to
quantify. Nevada has the highest suicide rate in America; it
also has among the highest number of accidents per mile
driven, and deplorable crime and high-school drop-out rates.
New Mexico, however, which is almost free of casinos, can
rank alongside Nevada on all these counts. A causal link
between gambling and these indicators is hard to prove. But
it is becoming easier to establish that damage is done by
gambling in general and by casinos in particular, largely
because they contain slot machines, which are highly
addictive.
Perhaps one-third of adult Americans never gamble, reckons
Mr. Grinols. Many people who do are cautious. But a small
percentage, perhaps 2% or 4% of America's adult population,
are ``problem'' or ``pathological'' gamblers, and these
account for a disproportionately large share of the
activity's costs. One study in Minnesota found that 10% of
bettors accounted for 80% of all money wagered.
Their numbers may be small; but their impact is not.
Problem gamblers have a high propensity to commit crimes, in
particular forgery, theft, embezzlement and fraud. These
crimes affect both immediate family and colleagues at work.
The American Insurance Institute estimates that 40% of white-
collar crime has its roots in gambling. Gamblers often
descend in a spiral of increasingly desperate measure to
finance their habit in the hope of recouping their losses.
Further, even before they turn to crime, problem gamblers are
unproductive employees, frequently absent or late and usually
distracted. A 1990 study in Maryland estimated that the
state's 50,000 problem gamblers accounted for $1.5 billion in
lost productivity, unpaid state taxes, money embezzled and
other losses.
All taxpayers contribute towards the cost of policing,
judging and incarcerating criminals. Casino gambling
increases those costs. Since the Foxwoods casino opened in
1992, one police chief in a small Massachusetts town two
hours' drive away reckons that local crime related to the
casino has cost some $400,000. Multiply that figure by
thousands, and the national impact of casino gambling begins
to emerge.
Are casinos alone to blame? After all, gambling in America
extends far beyond crap tables and slot machines. State
governments themselves encourage gambling by spending
millions to advertise lottery jackpots on television. But not
all forms of gambling are equal: in Minnesota, for instance,
two-thirds of people seeking help for their gambling problems
blamed casinos for their addiction. A mere 5% cited
lotteries.
The casino industry itself acknowledges its role in the
problem. The American Gambling Association helps to finance a
national Centre for Problem Gambling. Several firms promote
programmes designed to help gamblers kick their addiction,
and most casinos post free telephone numbers where people can
find help. Gambling interests have also suggested that tax
revenues from casinos could be used to pay for treatment for
recovering gamblers. But even on conservative measures
(reached by assuming that the average casino visitor loses
$200 annually), problem gamblers would account for three-
eights of casinos' revenues. How badly does the industry want
to cure them?
All this is potent evidence that casinos are a bad bet. But
even if the effects of problem gambling are discounted, the
fact remains that casinos are not a development tool, either.
The risk--which everyone was aware of at the outset--is not
paying off. Without resorting to moralising, and even without
mentioning organised crime, those who would clamp down on
gambling can now make a formidable economic case.
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