As states are facing unprecedented budget shortfalls, a growing number of politicians are turning to legalized gambling with desperate hopes of an easy fix.
New York officials, hungrily eyeing the revenues pouring into the Resorts World slot-machine palace at Aqueduct Racetrack, are buying into the notion. Gov. Cuomo has become one of the state’s biggest gambling boosters, proposing in his State of the State address this month to amend the state constitution to allow for Vegas-style casinos from Queens to Buffalo to Saratoga Springs.
In December, Cuomo talked about pursuing a comprehensive gaming plan. “Through this plan we can promote job creation and recapture revenue that is currently being lost to other states.”
While Cuomo and other casino proponents in New York hype the economic benefits, however, they’re minimizing or simply ignoring the downsides — including the rising social costs that result when gambling is legalized.
Where gambling spreads, trouble follows. Since the 1970s, Indian tribes have renegotiated compacts in more than two dozen states to allow for new casinos. State governments have brought commercial casinos, card rooms and slot machines by the thousands into their jurisdictions. Forty-three states now each sponsor heavily promoted lotteries.
The recession has only increased reliance on gaming. In 2009-2010, at least 37 states sought to expand legalized gambling. The industry is aiming for 2012 to be its busiest and most successful year yet. Expansion proposals are already on the table in statehouses across the nation.
Which doesn’t even mention the US Justice Department’s legal opinion, released just last month, that reversed its decades-long position on the illegality of Internet gambling. The opinion is already spurring a resurgence of online gambling proposals in different states. Social gaming companies such as Zynga — famous for its Facebook game “Farmville” — also are talking about getting into the mix.
Because of this unrelenting growth, millions of Americans for the first time have been directly exposed to gambling. In 2007, Americans lost more than $94 billion gambling — almost nine times what they lost in 1982.
There’s an obvious proposition at work: When gambling is made available in a jurisdiction, new gamblers are created. Of this group, inevitably, a small subset develop problems with their gambling. Repeated independent studies have shown this to be true, as have separate gauges, such as the 50% increase in the number of Gamblers Anonymous chapters in the past decade.
What we gain in state revenues we lose in increased bankruptcy filings, divorces and gambling-related crimes such as robberies, domestic violence and, in the worst cases, suicides.
In a study, Earl Grinols, an economist at Baylor University, said that when a casino is introduced into a region that didn’t before have one, the long-term cost-benefit ratio is more than three to one because of things like rising crime, unemployment, addiction treatment costs.
States also lose economically, Grinols says, because gamblers aren’t using as much of their money to help local economies by buying normal amounts of consumer goods such as food, cars, clothing and the like.
Since Pennsylvania approved 61,000 slot machines in 2004, and soon after that, casino table games. From 2007-2010, monthly calls to the state’s toll-free problem-gambling helplines doubled.
What this means on a human level is that the most vulnerable are often hit the hardest — the addicted and addiction-prone, the poor, the old and the young. In the summer of 2010, at Parx Racing and Casino just outside Philadelphia, seven different customers left 13 children, including a 15-month-old, unattended in their cars while they rushed inside to feed a slot machine or play some craps.
Look at Illinois, where over the last decade, more than 8,300 people signed up for the state’s self-exclusion list, which bars them from casinos in the state, under threat of arrest for trespassing. These are gamblers who in many cases have lost tens of thousands of dollars, whose live are being turned upside down by gambling. That’s more than the 7,543 people employed by casinos in the state, according to the Illinois Casino Gaming Association.
Finally, look at Las Vegas. Not the pulsing neon and tourist hordes on the Las Vegas Strip, but the 2 million residents who surround it. Casinos inhabit virtually every neighborhood. More than 15,000 slot machines are planted at Kmarts and 7-Elevens, grocery stores, gas stations, bars and restaurants. This has resulted in higher gambling addiction rates in Las Vegas than anywhere else in the country, more Gamblers Anonymous chapters — 100 per week — and consistently higher gambling-related social costs.
When politicians promise jobs and economic growth while glossing over the costs, these promises need to be looked at skeptically.
More and more, independent academics (meaning those whose work isn’t funded by the gambling industry) and responsible officials are reaching the same conclusion: The truth needs to be told about the costs involved when gambling is legalized.
Sam Skolnik is the author of “High Stakes: The Rising Cost of America’s Gambling Addiction” (Beacon Press), out now.