How the Government Is Fueling America's Gambling Addiction

By Christopher Kennedy Lawford 01/09/12

43 states have legalized gambling to fund cash-strapped public schools. But casinos promote addiction, prostitution and record suicide rates. Are they worth the risk?

Workers prepare gambling machines at the new Resorts World Casino in Queens, NY. photo

As anyone who has watched late night television can attest, gambling in America used to be firmly controlled by the mob. When Nevada first legalized gaming in 1931, mobsters like Meyer Lansky and  Lucky Lucianno among the first ones to see the opportunity in the desert. During the next four decades, mob families like the Gambinos built luxurious, illegal casinos through the United States, earning millions in untaxed revenues every month while bribing local police officers to look the other way.  By 1965, the mafia controlled close to 70% of the revenues generated by nationwide gambling. But an FBI crackdown in the ’70s and '80s pushed organized crime to the sidelines. Since then, state, local and tribal governments have moved in to fill the gap, with results that are no less insidious. The rapid rise of gambling venues in the US over just the past decade has been simply breathtaking. So has the explosion in the numbers of “problem” gamblers—and the many social problems they spawn, starting with addiction and extending into poverty, violent crime, unemployment, divorce, drug and alcohol abuse and, all-too-often, suicide. 

At last count, 43 of our 50 states have started operating lotteries with daily and weekly numbers drawings. “Scratcher” and Lotto tickets promising million-dollar payouts are available in every community with a convenience store. Most lottery states earmark a portion of the money their citizens lose on these games to support public education, which has been decimated by recent budget cuts. But when you think about it, using gambling to finance the education of our children is downright bizarre. How did we arrive at the point where localities need to trick money out of people, turn them into addicts and impoverish them in order to fund the schooling of our children? 

Surely, no state government would promote the use of alcohol or cigarette sales in order to rake in revenue for public education or any other civic need (taxes on these vices are another story). Given the well-documented problems fostered by easy access to gambling, government encouragement of the building of casinos that promote this activity is very troubling. “I think it’s outrageous that government raises revenue by making losers of its citizens,” says Mark Andrews, a retired corporate executive who chairs a Florida watchdog group called Casino Watch. Needless to say, these problems may destroy the gambling addict and decimate his family, but they also cause steep collateral damage to entire communities, shredding the social fabric and leaving the next generation at risk—all of which is a high price to pay to bankroll public education.

At last count, Indian reservations were operating casinos in 47 states (including 49 casinos in California alone). These numbers are set to further explode following a recent decision by the US Interior Department to rescind a longstanding prohibition on tribes building off-reservation casinos. Shortly after the decision was announced, the Mississippi Band of Choctaws announced that it was building a new $375 million casino on land they purchased 175 miles away from their reservation, near Hattiesburg and a short drive from the Gulf coast. Thanks to the new ruling, a dozen new casinos are also in progress, in states from Montana to Maine.

After resisting gambling for over a century, New York City saw its first non-Indian gambling casino open in Queens last fall, next door to the crumbling Aqueduct racetrack. The project is estimated to bring in $1.5 million a day in revenues for the state. But not everyone is celebrating. Dr. Michael Bernstein, a psychiatrist with an office near the casino, told The New York Times that the new casino (age 17 and under excluded) would become “like a regressive tax, extremely addictive—and poor people will be disproportionately affected.”

A raft of recent studies has found that the nationwide surge in gambling may benefit casino owners and governments, but its costs, particularly related to addiction and poverty, far exceed any profits. A few examples:

           The number of problem gamblers in a particular city doubles every time a casino opens within 50 miles of a city’s limits. In fact, living within 10 miles of a casino increases a person’s chance of becoming a problem gambler by 90%.

           About 30% to 50% of the revenues earned by casinos and state-funded lotteries come from the pockets of pathological gamblers. 

          One out of five “problem gamblers” will eventually file for bankruptcy, become homeless or attempt suicide. In fact the suicide rate for problem gamblers is twice the suicide rate for drug addicts and alcoholics.

          About 60% of gambling addicts will eventually commit a crime to support their habit. Crimes such as robbery, assault, prostitution and public intoxication multiply three-fold in the vicinity of a casino. In a straightforward economic analysis, Baylor University’s Professor Earl Grinols, a pioneering researcher into the economics and sociology of gambling, found that the annual cost/benefit ratio of gambling is $3:$, with costs estimated at $219 per adult ($53-75 of which is from crime) and benefits estimated at $46 per adult. As the rate of gambling rises, society becomes poorer as dollars are transferred from one (disproportionately poor) pocket to another, with no goods or service to show for it, according to Grinols. “If everyone gambled to acquire their money, we would all starve,” he says.

Is this what we should be doing at a time of financial hardship for most Americans? Do we really want government policies in place that actively encourage the creation of ostentatious palaces designed to impoverish vulnerable citizens and encourage compulsive behaviors?

At the very least, state, local and tribal governments should be responsible enough to invest some of their cynically won revenues to address the many gambling-related costs to individuals, families and communities. A good start would be the funding and promoting of Gambler’s Anonymous chapters and treatment programs at the entrance to every casino nationwide. Yet for now, the gaming industry remains all too happy to line its pockets without even acknowledging the disease that the proliferation of casinos unleashes. 

This year, the psychiatric community will publish its 10-year revision of the DSM-V, on which all mental health and substance abuse diagnoses and treatments—and insurance coverage—are based. For the first time, a non-substance-related behavior will be included as an addiction, and that behavior is gambling. Will official medical status as a disease win gambling attention as a growing public health problem? Perhaps. But as long as financially strapped taxpayers find relief in being spared the expense of funding schools, they are likely to prefer the short-term benefit of a local casino to the much greater long-term costs of a national gambling epidemic.

Legalizing increased access to gambling, as more and more counties and states are intent on doing, amounts to legalizing a drug with vast public health consequences. Is this the best we can do as a nation? 

Christopher Kennedy Lawford is the author of two New York Times bestsellers, Symptoms of Withdrawal: A Memoir of Snapshots and Redemption (2005) and Moments of Clarity (2009). Lawford is a leading advocate for the recovery community, currently working with the United Nations, the White House Office on Drug Control Policy and the World Health Organization. This is his first column for The Fix.  

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