a lot of money at Mississippi casinos. That money would have been spent somewhere else.

Even though the $29.7 billion represents only the amount bet-not the amount lost nor the revenues to casinos-it still reflects a phenomenal shift in spending habits. It's more than all the taxable retail sales in Mississippi last year—$27.6 billion. Some sectors of the retail economy are losing or will lose to the casinos.

Atlantic City, N.J., has had casinos since 1978 and offers a sample of the shift over time. Since the casinos opened, Atlantic City has lost 100 of its 250 restaurants, one-third of its retail sales, and all its supermarkets and movie theaters. A University of North Dakota study found the advent of gambling in Deadwood, S.D., resulted in a $60 million loss in taxable sales, primarily in apparel and accessory stores, recreation services, automobile dealers, service stations and to a lesser degree furniture stores and business services. Dr. Timothy Ryan of the University of New Orleans estimates that casino gambling in that city will drain an identical $60 million from retail businesses.

Obviously, casinos in Mississippi have brought temporary benefits: About 25,000 jobs chief among them. But the Mississippi Center for Policy Research and Planning reports that only Tunica County, one of the Nation's poorest counties, has seen an overall rise in wages since the casinos came to town. The $117 million in revenue to the State and $50 million to local governments is significant, but it has created an illusion of sustained prosperity. The jobs created by gambling will ultimately cost jobs in other sectors of the economy. That's the nature of gambling; it creates no new wealth; it simply drains off existing wealth.

Given the amount now bet in Mississippi casinos, that drain is turning into a giant gush.

Mr. WOLF. The Iowa State Fair, the visitations this year were down, they said, by 10 percent because of the horse track and the casinos and the slot machines nearby. This is something that we really ought to look at.

We ought to look at the potential with regard to political corruption. We see what happened in Louisiana, and in some of the other places, and it is in my testimony. We ought to really look at that. What is the impact? That is a national issue.

We ought to look at what Senator Simon said, the political contributions. In my State of Virginia, if you recall, reading the newspapers, 2 years ago, Disney wanted to come to Virginia. They happened to want to come to my area. I happened to look at the financial disclosure statements of how much they spent on lobbying the General Assembly. Disney spent about $440,000 to lobby the General Assembly. It is a big company; that is OK.

The gambling interests during that same period of time spent $1.1 million to lobby the Virginia General Assembly, and quite frankly, they hired almost every major political consultant in both parties in the State to represent their interests. I think that is something that the commission ought to look at. We ought to look at it, and a lot of these things are of national importance.

Also, and I will not go into more detail-this Committee has forgotten more about it than I know-the Indian gambling issue, which is clearly under the purview of Congress. There are six bills in Congress dealing with this issue.

So in closing, a bipartisan, impartial, objective study, I think, would add credibility to the debate. I do not see why anyone really is opposed to it. It is not a partisan issue. I might say in the House, we have 103 cosponsors. We have Congressman DeLay, the Republican whip, and Congressman David Bonior, the Democratic whip. We have editorials from the Washington Post, the Des Moines Register, the Dallas Morning News, the Philadelphia Inquirer, and etc., so it is a bipartisan thing.

Just in closing, to reiterate, it does not outlaw gambling. It does not tax gambling. It does not regulate gambling. It merely recognizes that because gambling is becoming so pervasive in our society, it needs a hard look, and I think we have a responsibility as Federal legislators to bring together all the relevant data so that governors and State legislators and citizens can have the facts.

They overwhelm a community because the studies are done by the gambling interests. Let us do something objective so that if they are coming into my community or your community, the boards of supervisors, the governors can look and get some objective data. So I strongly support it and I really want to personally thank all of you, and especially you, Senator, for holding the hearing. [The prepared statement of Mr. Wolf follows:]

PREPARED STATEMENT OF CONGRESSMAN FRANK R. WOLF

Chairman Stevens, Members of the Committee, I appreciate the opportunity to testify on S. 704, legislation which would create a national commission to study the effects of gambling. This legislation is simple. It would charge a blue ribbon panel with the job of making an objective and comprehensive legal and factual assessment of gambling.

This legislation does not impose new mandates on gambling. It does not outlaw gambling. It does not tax gambling. It does not regulate gambling. Its sole purpose is to study a $40 billion-a-year industry, which has grown by over 1,800 percent since 1976 and has some negative effects. It is our responsibility as Federal legislators to create a commission to bring together all the relevant data so that governors, State legislators, and citizens can have the facts they need to make informed decisions.

Why should this Committee and the Congress be concerned about gambling? There is growing evidence that gambling has harmful side effects. Members should be concerned about reports that the rapid proliferation of gambling has caused the breakup of families, suicides, an increase in teenage gambling, and the cannibalization of businesses.

Let me explain a few issues which I think need particular attention. The commission would study the impact of pathological, or problem gambling on individuals, families, social institutions, criminal activity and the economy. Gambling's social costs include direct regulatory costs, lost productivity costs, direct crime costs as well as harder-to-price costs such as suicide, and family disintegration. Here is an example. Within 2 years of legalizing video lottery terminals, the tiny province of Nova Scotia in Canada went from zero to 12 chapters of Gamblers Anonymous. Outraged over widely publicized reports of broken marriages and wrecked lives, Nova Scotians forced the government to remove 2,400 machines. The commission should also study why some, like Jason Berg, a 19-year-old from the small Iowa town of Elkander, ended his life because of his gambling addiction. How can this type of tragedy be prevented? Public officials need to know.

The commission should make detailed findings of gambling's impact on other businesses including the cannibalization of other businesses. Various studies indicate that income spent on gambling is not spent on movies, clothes, recreation services or other goods or services. An editorial from the Northeast Mississippi Daily Journal indicated that more money was bet in casinos ($29.7 billion) than was spent on all taxable sales ($27.6 billion) in the State. Recent news reports indicate that attendance and revenues at the Iowa State Fair declined by more than 10 percent this year due in part to the establishment of a horse track and a slot machine casino near Des Moines. We need to know what impact gambling is having on our econ

omy.

The commission should review the recent public corruption investigations, indictments, and convictions over the past years in Louisiana, Missouri, Pennsylvania, South Carolina, Arizona, Kentucky, and West Virginia. It should also review gambling's importance on crime and teenage gambling. These are important issues. Why should this study be conducted by a Federal commission? Many of these issues are Federal in nature, controversial, and need a thorough review and analysis. The commission will have the capability of pulling together all the relevant data and compile it into a coherent and usable form. Furthermore, the commission will issue recommendations which will help public policy makers come to a consensus on these important issues. One controversial issue is Indian gambling which is

clearly under the purview of Congress. There are currently six bills pending before Congress to reform the Indian Gaming Regulatory Act. There have been numerous court cases, a couple of which have made it to the Supreme Court. There are important issues of federalism, State and Indian sovereignty and the role of the Federal Government which the commission should flesh out.

Also, a bipartisan, impartial commission can bring credibility to the debate about gambling. Gambling interests claim that there are many studies upon which public officials and citizens may rely. However, many argue that most of those studies were commissioned by the industry itself. The commission will not have a vested interest in the outcome and will be able to produce an objective and reliable report. Mr. Chairman, this legislation has wide bipartisan support. In the House, H.R. 497 has 103 cosponsors and is supported by both the majority and minority whips. This legislation is supported by newspapers such as The Washington Post, The Des Moines Register, The Dallas Morning News, The Philadelphia Inquirer, The Cincinnati Enquirer, The Sacramento Bee, The Chicago Sun-Times and others. Moreover, the President recently announced his support for these bills.

Mr. Chairman, again I reiterate: this legislation does not outlaw gambling. It does not tax gambling. It does not regulate gambling. It merely recognizes that because gambling is becoming so pervasive in our society, it needs a hard look. We have a responsibility as Federal legislators to bring together all the relevant data so that governors, State legislators, and citizens can have the facts they need to make informed decisions. Why do the gambling interests oppose this legislation? Is there something to hide? Let's find out through this commission's comprehensive review. Again, I appreciate your holding this hearing and allowing me the opportunity to testify.

Chairman STEVENS. Thank you very much.

Senator Lieberman just came in. Do you have an opening statement, Senator?

OPENING STATEMENT OF SENATOR LIEBERMAN

Senator LIEBERMAN. I do, Mr. Chairman, very briefly, and I thank you very much for convening the hearing.

I have recently become a cosponsor of S. 704 and it is on my conviction that the bill simply calls for a study, as the colleagues in front of us have said, to sort out the conflicting claims and analyses about gambling's effects. But one thing is clear, which is no one can credibly argue any longer that gambling is an isolated phenomenon whose effects are limited to a small number of places or States that permit it. This has become in our time a huge multi-State industry which is run not only by private corporations but by most State governments and, of course, by many Indian tribes.

It is part of a pattern that is broader in our society, of taking activities that were formerly illegal or limited and making them legal and widespread. That is not always wrong. In some cases, the previous judgments we made may not have been correct. But it is happening in the case of gambling with such an explosive speed that it bears some review, and basically, I think that is what this commission proposal is. Let us just stop for a minute and take a look at what has happened and examine its implications before we go forward.

The bill, in my opinion, is not evidence, as I believe one of the witnesses may testify today, that those of us who are cosponsors of it have decided that gambling should be abolished, that all gambling should be illegal. I have not, I can tell you, as one cosponsor, reached that conclusion.

I was a member of the Connecticut State Legislature, Mr. Chairman, in the 1970's when we first considered these issues. We made a distinction there which at the time made sense-time will tell whether it was sensible-which was that we were going to legalize

gambling activities that we concluded were going on anyway. We knew that, for instance, there was the so-called numbers gambling going on, so we legalized the lottery. We did the same with other forms of gambling in that same regard.

But we did not legalize casino betting because there was no legal casino in Connecticut. Now later, as is widely known, through court action, the Mashantucket Pequot tribe established first legalized bingo and then gambling in what is now reputed to be the largest single casino in the world. It is now Connecticut's second-largest employer after the State itself, which is first. In that sense, obviously, it has had a positive effect. But the fact that it brings in more than $1 billion a year, and that is $1 billion that presumably would have been going to something else in the State, raises questions, as well.

I would say that just by way of reassurance about my lack of preconclusions that I certainly have not sponsored this study proposal with the thought that the Foxwoods Casino or any other gaming activity in my State should be immediately abolished. The State now is engaged in a debate about expanding gambling and it is a debate that I know is being repeated in State after State.

The bottom line is that the debate could be better informed by the kind of independent authoritative data that I think would come out of this study commission. I thank the sponsors for taking the lead. I am honored to be a cosponsor, and I look forward, Mr. Chairman, to this commission's progress on this bill. Thank you. Chairman STEVENS. Thank you.

Senator Brown is our new member. We welcome you, Senator Brown. Do you have a statement?

OPENING STATEMENT OF SENATOR BROWN

Senator BROWN. Thank you, Mr. Chairman.

The only comment I wanted to add was simply that it seems to me the question we need to respond to, at least identify as we go through the deliberations is what the study gives us that we do not already have. We have a very competent, thorough Congressional Research Service. We have a number of studies from the sector, and it could well be an additional study will provide additional information. Certainly, it probably will highlight the issue.

But at least my hope is the witnesses, as they share their thoughts with us today, will help us understand what it is the study will do that is not now available from other sources.

Thank you, Mr. Chairman. It is a pleasure to be with you.
Chairman STEVENS. Thank you.

Senator Simon, I am reminded of my first senior partner in Fairbanks, Alaska, who was a member of the first Territorial Legislature in Alaska. He told me once, when he was 80, that when we formed the territory, they put together a group of people that went to Juneau and there was not one consultant and not one study group. They just did their work.

Why, if gambling is such a problem, why does the Judiciary Committee not do something about it?

Senator SIMON. I am on the Judiciary Committee, along with Senator Brown.

Chairman STEVENS. That is why I asked. You have 10 times the money of this study in the Judiciary Committee. This $250,000 is up against a multi-billion-dollar industry. What good is that going to do?

Senator SIMON. The answer is there is no guarantee that it will do any good. I do believe, particularly with the Internet question that Senator Glenn brought up, there is the need just to step back and say, where are we?

I think Senator Lieberman spoke for all of us. I do not think there is a single sponsor who wants to prohibit legalized gambling in this country. I do think there is a concern with its rapid spread and a concern whether we are doing harm to our society. If you have an official commission looking at this, I think that is going to catch the attention of the public and then they can recommend what this Committee or the Judiciary Committee or another Committee can do.

Chairman STEVENS. One last question, being the devil's advocate. I assume you have read the first commission's report. What is there now in terms of Federal-State relationships that has changed that we should lead the public to believe that this Congress has the authority to deal with intrastate gambling at all?

Senator SIMON. The answer is, we clearly have the authority to look at anything that is a national problem.

Chairman STEVENS. No, we do not. The Tenth Amendment gave us specific powers and I do not see anything in the Constitution that says we have authority over other than interstate gambling. Senator SIMON. That Tenth Amendment does not limit what we look at, and we can make recommendations both to the Federal Government and to the States. Now, if you are talking about legislating, there, we have limits. I do not know what the commission is going to recommend, but I think it is strange that when we recommend a tiny commission, 18 months, $250,000, all of a sudden the gambling gentry in this country go berserk.

Chairman STEVENS. I am not one

Senator SIMON. No, I understand.

Chairman STEVENS [continuing]. But I do think we ought not to mislead the public into thinking we have authority we do not have. Senator Lugar, what do you think about that? Do you think we have authority to limit what the States would allow in terms of totally intrastate gambling?

Senator LUGAR. Probably not. I go along with Senator Simon's view that the purpose of this is that the States themselves, their legislators as well as city councils and what have you, badly need information as to what is the case in America today in the gambling industry. Even if they were to make the best deal, let us say that they were pro-gambling and they would like to have an inventory of questions. What do you ask of the gambling industry in terms of roadways and telephone lines and social services?

In other words, if you are coming into a small community, you are going to rearrange the entire deck. What is the best situation, given what others have done? I am not certain this is widely shared. The study 25 years ago certainly does not get into that. I think that we just have a different framework out there. My pur