[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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