The growing cost of gambling

A generation ago, Americans had to go to Nevada to play the slots or challenge a blackjack dealer, and the only lottery was in New Hampshire. Today, the chance to win big sums - or more likely to lose them - is as close as the corner store or the family computer.

Every state but Utah, Tennessee, and Hawaii has some form of legalized gambling. Thirtyseven states have lotteries, casinos are within a day's drive for most people, and even "Bible belt" states are being lured into adopting officially sanctioned gambling. In fact, Americans now spend more to gamble than they do on movies, sports, and music combined. In all, the industry has grown five-fold to more than $50 billion in gross revenues a year since 1982.

After two years of investigation and field hearings, a national commission next week will present to Congress and the president recommendations designed to slow the growth in gambling while mitigating its harmful impact on society and politics. Among other things, the panel will urge a moratorium on new casinos and lotteries, an increase in the minimum betting age to 21, more resources to address gambling addiction, a ban on collegiate sports betting, and stricter limits on the political influence of gambling interests.

The warning signs are clear.

Along with the growth in legal gambling, the number of people at risk of problem gambling has risen to about 15 million, and the list of Gamblers Anonymous chapters has nearly doubled since 1990.

Experts warn that the supposed economic boon from state-sponsored lotteries and other forms of gambling in fact may be a chimera when the social costs are factored in. One study by University of Illinois researchers found that states lose three times as much in social and criminal costs as they make in gambling profits.

Gambling boats

"Cruises to nowhere" - casino ships that steam three miles offshore into international waters to avoid state laws restricting gambling - now sail from ports in five states.

"Unless Congress acts soon," warns Rep. Frank Wolf (R) of Virginia, "almost all other states bordering the Atlantic Ocean, Pacific Ocean, or Gulf of Mexico could expect gambling ships to be docking very soon." In some places, "riverboat" casinos (most of which never leave their docks) are allowed to operate so long as they float in man-made bodies of water somewhere near a river.

Most distressing to critics of legalized gambling, general public acceptance of such "harmless" pursuits as buying an occasional lotto ticket has led to a large increase in the number of underage gamblers becoming hooked.

These days, any Web-wise kid with access to a credit card can wager big bucks on any one of several hundred unregulated Internet gambling sites. According to a recent report by the National Opinion Research Center at the University of Chicago, the rate of at-risk gambling among 16- and 17-year-olds "is about double the adult rate."

Since 1975, the NORC reported in April, the proportion of adult Americans who play lotteries has doubled to about 50 percent of the population, and the number of those who gamble in casinos has more than doubled to 29 percent - all of this with measurable social and economic costs.

"Pathological and problem gamblers in the United States cost society approximately $5 billion per year and an additional $40 billion in lifetime costs for productivity reductions, social services, and creditor losses," the NORC reported. "However, these calculations are inadequate to capture the intrafamilial costs of divorce and family disruption associated with problem and pathological gambling."

The gambling industry asserts that communities receive many direct economic benefits from casinos.

"The generation of hundreds of thousands of jobs, billions of dollars in tax revenues, and massive commercial development by the casino-gaming sector translates into generous social benefits for many Americans ... and not only those who work directly for the industry," Frank Fahrenkopf, president of the American Gaming Association, told the National Gambling Impact Study Commission earlier this year.

"This is too often lost in discussions that revolve around so-called 'social costs' of gaming," he said.

Industry officials also reject some evidence that legalized gambling brings an increase in crime. A recent study commissioned by the AGA, which lobbies on behalf of casinos, found that there were no increases in such white-collar crime as embezzlement, forgery, or fraud in large casino jurisdictions such as Nevada and New Jersey.

"It's become all too easy for people to point a finger at casinos as a cause for all kinds of social ills without the facts to back up their claims," says Mr. Fahrenkopf, a former chairman of the Republican National Committee. "What we also see in this study is that the reasons people commit these crimes are rarely as simple as gaming critics would like to believe."

But there are other kinds of social costs as well, gambling critics argue.

Nevada, for example, is at or near the top of the list among states in incidents of suicide and divorce, numbers of high school dropouts, and overall crime rate. The number of bankruptcies in Iowa nearly doubled in the years after riverboat gambling was allowed in 1991. Since Illinois first allowed casinos, the number of Gamblers Anonymous meetings has more than doubled there. In Oregon, the number of Gamblers Anonymous chapters jumped from three to 30 within five years of the introduction of video poker, which is considered to be one of the most addictive forms of gambling.

"Gambling often has terrible consequences for families and communities," says Sen. Jon Kyl (R) of Arizona, who has proposed legislation that would ban Internet gambling. "According to the Council on Compulsive Gambling, 5 percent of all gamblers become addicted. Many of those turn to crime and commit suicide. We all pay for those tragedies."

The gambling industry has begun to take steps to address such things as the increase in gamblers who become addicted.

"We in the casino gaming industry have declared that one problem gambler is one too many," says Fahrenkopf. "We are absolutely committed to working for the development and implementation of education, prevention, and treatment programs for disordered gambling."

Commission report

The gambling commission, which finished up its work last week in San Francisco, included nine members - three of whom had professional ties to the gambling industry.

For this reason, many of the recommendations - such as the one calling for a temporary halt in lottery and casino expansion - came on split votes. In other cases, measures to rein in the industry's influence were watered down. The measure urging restrictions on campaign contributions from gambling interests, for example, covers state and local officials but not members of Congress.

The commission's report now goes to Congress and the White House. Representative Wolf, Senator Kyl, and other lawmakers are expected to propose legislation addressing some of the commission's concerns. But many of the key issues can only be dealt with at the state level - where the pressures to expand gambling and the influence of the gambling industry are greater.

Thus, say gambling opponents, the fight to stem the steady increase in gambling around the country remains an uphill battle.