ABCs of Gambling

A casino is not like any other business. There would be little concern over how much gambling we have in our state or community if it were not for the social problems and costs that gambling creates. Gambling comes with a high social cost — Addiction, Bankruptcy, Crime and Corruption.

Addiction:
In March, 1999 the National Opinion Research Center (NORC) reported to the National Gambling Impact Study Commission that the presence of a gambling facility within 50 miles roughly doubles the prevalence of problem and pathological gamblers. (National Gambling Impact Study Commission Final Report, June, 1999, p. 4-4)

The more accessible and acceptable gambling becomes, the more likely gambling addiction will increase. The state of Iowa commissioned a prevalence study as to the rate of pathological gambling prior to the beginning of riverboat gambling and five years after the casinos were operational. During that time the rate of lifetime pathological gambling increased 200 percent (from 1.7 percent prior to the opening of riverboat gambling to 5.4 percent five years later).

In a recent study pathological gambling was found to be greater among individuals with lower incomes and some minorities. The rate among Caucasians was .5 percent. Among African Americans it was 3.7 percent and for Hispanic-Americans, 4.2 percent. They also found that problem drinkers are 23 times more likely to have a gambling problem than individuals with no alcohol problem. (Journal of Studies of Alcohol, November, 2001)

Professor Earl Grinols and his colleague, Prof. David Mustard, determined the average cost to society per pathological gambler is $13,586 per year. For every dollar gambling interests indicate is being contributed in taxes, it usually costs taxpayers 1.9 dollars in social welfare, criminal justice, and regulatory costs. (Business Profitability vs. Social Profitability: Evaluating The Social Contribution of Industries with Externalities, The Case of the Casino Industry, Dec., 2000) Pathological gamblers adversely effect 10 to 15 other people including friends, relatives, and employers.

Bankruptcy:
According to a SMR Research Corporation study, gambling behavior may cause up to 14.2% of annual bankruptcy filings in the United States. SMR analyzed bankruptcy and gambling data by counties within the states. The seven casino counties in Illinois had a 10% higher filling rate than the 95 non-casino counties in Illinois. (SMR Research Corporation, Hackettstown, NJ, www.smrresearch.com)

A study funded by a grant from the U. S. Department of Justice’s National Institute of Justice focused on trends in eight new casino jurisdictions–two were located in Illinois in Alton, Peoria and East Peoria. “The most consistent trend among the cities occurred in personal bankruptcies. While comparable non-gaming cities showed an 11.5% increase in bankruptcies from 1989 to 1998, seven of the eight cities showed a larger increase. (Las Vegas Sun, Oct. 20, 2000)“The results tend to suggest that there is a direct and positive relationship between the length of time casinos have been in the community and bankuptcy rates, as those communities that have had casinos the longest tended to have the greatest increase in bankruptcy.” The largest increase came in Alton, where bankruptcies soared 50.3 percent. (Effects of Casino Gambling on Crime and Quality of Life in New Casino Jurisdictions, Final Report, 3/23/01)

Crime & Corruption:
The National Gambling Impact Study Commission reported that “a third of problem gamblers and pathological gamblers had been arrested, compared to 10 percent of low-risk gamblers and 4 percent of non-gamblers. About 23 percent of pathological gamblers have been imprisoned, and so had 13 percent of problem gamblers.(National Gambling Impact Study Commission, Final Report, June, 1999, 7-14)

In the study of eight new casino jurisdictions (noted above) drug violations increased after casinos opened in all jurisdictions. The largest increase in drug violations was in Alton, with an increase over 160%. In Peoria 9 of 12 offense categories showed increases from before to after the casino opened: sexual assault, robbery, aggravated assault, larceny, motor vehicle theft, arson, simple assault, prostitution, and drug violations. (Effects of casino gambling report)

Henry Lesieur, a nationally renowned expert on problem gambling said, “The evidence is pretty overwhelming. If a riverboat comes in, people show up in treatment for embezzlement.” A 1995 survey of 184 Gamblers Anonymous members in Illinois found 44 percent stole from their workplaces. (Peoria Journal Star, March 8, 1998)

Professor Earl Grinols, David Mustard, and Cynthia Hunt Dilley published the study, “Casinos and Crime” in June, 1999. They studied the connection between casinos and crime using county-level data for every county in the United States between 1977 and 1996. They found that “casinos increased crime after a lag of 3 to 4 years. On average, the overall crime index in casino counties was 8 percent higher in 1996 because of casinos.”

The Illinois Gaming Board originally rejected the Emerald Casino partly because two of the shareholders had links to the mob and a mob-connected construction firm worked on the casino project. The Illinois Gaming Board fined the Grand Victoria Casino in Elgin $3.2 million for allegedly giving a contract to install an air filtration system to a mob-linked firm.

The National Gambling Impact Study Commission called for a detailed impact study before states and communities move forward with any more gambling.

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