The gambling scam on America's poor

What kind of government spends millions of taxpayer dollars peddling false hope to confiscate cash from its poorest citizens to fatten state coffers?

By Mark Lange

from the May 2, 2007 edition

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San Francisco - Some scandals don't involve illegal activity – they're just outrageous and unjust. Take gambling in America. Abetted by Congress, legislatures from 48 states now sponsor gambling operations and lottery monopolies to balance their budgets on the backs of their poorest and most vulnerable citizens – while basking in the virtue of fighting tax increases.

Three decades ago, there were no casinos outside Nevada, and only 13 states ran lotteries. Today 19 states support commercial gambling in densely populated markets near interstates, 28 states host Indian casinos, 41 run lotteries, and 43 allow track-side betting. Even so-called riverboat casinos have expanded rapidly as states lift wager limits to permit casinos they couldn't sanction on solid ground. Only Utah and Hawaii still ban gambling.

States have stretched legal loopholes to ludicrous lengths for the same reason Jack Abramoff wielded his influence: They want the money, and the money is there for the taking. US gambling interests have seen an eightfold increase in revenues since 1982. Last year, Americans legally wagered more than $1.1 trillion. Along the way they lost more than they spent on movie tickets, recorded music, spectator sports, video games, and theme parks combined.

Clearly, America's appetite for what industry officials benignly call "gaming" has grown. It's all legal, so what's the big deal? Here's the scandal: In 1999, the bipartisan National Gambling Impact Commission found that 80 percent of gambling revenue comes from households with incomes of less than $50,000 a year.

More remarkably, players with annual incomes of less than $10,000 spent almost three times as much on gambling – in aggregate, real dollars – as those with incomes of more than $50,000. With the aggressive encouragement of state governments, US gamblers – most of them scraping by on limited incomes – had to lose $84 billion last year in casinos and lotteries for the states to raise $24 billion in new revenues.

Consider Massachusetts, a typical example of a state under pressure to legalize casinos. With 16 percent of adults leaving the state to gamble in the past year, advocates argue that legalization would "recapture" lost revenue from these gamblers and generate $350 million in income to the state from slots alone.

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