GAMBLING IS BAD FOR FAMILIES Legalized gambling triggers the mental disorder of pathological (or "compulsive") gambling. Pathological gambling destroys the lives of thousands of Americans and devastates their families, friends and employers. The most common argument in favor of gambling expansion is that it will yield government revenues which can be used for programs to "help" people. But helping some people by exploiting and destroying others is bad social policy, and simply unethical. More Gambling Means More Gambling Addicts Experts on pathological gambling believe that the prevalence rate of this disorder is linked to the accessibility and acceptability of gambling. In short, the more legalized gambling a State makes available, the more pathological behavior is triggered. And fast-paced gambling that maximizes the number of wagering opportunities (like casinos and video gambling machines), also maximizes gambling addiction. In Iowa, a study released in July 1995 found that 5.4 percent of the State's adults (roughly 110,000 residents) are lifetime pathological or problem gamblers. Before riverboats came to that State, only 1.7 percent of Iowans were lifetime pathological or problem gamblers. In other words, the legalization of casinos has more than tripled the addiction problem. The 1995 Iowa study concluded: "The hypothesis that increases in the availability of legalized gambling lead to increases in the prevalence of gambling-related difficulties in the general population is clearly demonstrated." Creating A Generation of Problem Gamblers Researchers now call gambling the fastest growing teenage addiction, with the rate of pathological gambling among high school and college-age youth about twice that of adults. According to Dr. Howard J. Shaffer, Director of the Harvard Medical School Center for Addiction Studies, "Today, there are more children experiencing adverse symptoms from gambling than from drugs and the problem is growing." Casinos Profit From Gambling Addiction In his testimony before the House Judiciary Committee in September, Professor Earl Grinols presented evidence that pathological and problem gamblers, representing only 4 percent of the adult population, account for 52 percent of an average casino's revenues. "In this respect, casino gambling resembles alcohol for which 6.7 percent of the population consumes 50 percent of all alcohol consumed." Chairman STEVENS. Thank you, Rev. Grey. Dr. Ryan. TESTIMONY OF TIMOTHY P. RYAN, Ph.D., DEAN, COLLEGE OF BUSINESS ADMINISTRATION, UNIVERSITY OF NEW ORLEANS Mr. RYAN. Thank you, Mr. Chairman, Committee Members. My name is Timothy Ryan. I am the Dean of the College of Business Administration and an economist at the University of New Orle ans. First of all, I would like to say I am neither an opponent or a proponent of gambling. I have tried to be independent and I have engaged in a great deal of analysis, hopefully independent analysis, of the gambling industry. I have recently been asked by the City of New Orleans to lead a consortium of universities to study the economic and social impacts of gambling in New Orleans. Let me just say a couple of things about that study, because I think it is relevant to what we are talking about here today. First of all, it is funded by the gambling industry. As part of the permitting, the zoning process that the City of New Orleans allowed the riverboats and land-based casino to operate, they required that they fund this study. Second, it is as comprehensive as we think we can get on a local level. Looking at the effects of gambling on existing business activity, will spending be diverted from other businesses? The effect on tourism, will gambling change the tourism industry in New Orle ans: Social problems, does the introduction of gambling into_the community increase problem or addictive gambling behavior? Does the introduction of gambling contribute to social breakdown? Third, are there any impacts of the gambling industry on crime rates direct gambling crimes, business-related crimes, others, prostitution, burglary, robbery? Does it divert police resources? The impact of gaming on land values, and finally, the impact of gaming on public facilities and services. Does the city have to pay for the gambling industry and are the revenues that the gambling industry brings in sufficient to offset those costs? That study is a 5-year study and is funded at about a level of $1.2 million, to give you an idea of the magnitude of this, just looking at it from the point of view of the City of New Orleans. I do not have a specific opinion on the overall value of a national study except that I do have-if a study is going to be done, I think the focus of the study should be correct. As an economist, we hear a lot of talk about gambling diverts spending from other uses. That is clearly true, but so do Wal-Mart, theme parks, non-gaming resort destinations, cable TV, etc. Any introduction of a new service into the economy is going to divert resources away from other busi nesses. I do not see Federal commissions and studies on each type of activity that comes into the economy, so from an economic point of view, I think we need to be fair and treat gambling like every other industry. However, there are some differences. I think the two that have been talked about a great deal, and from the point of view of Louisiana and the analysis I have done in gambling, we as a local government are not able to deal with these. One is the problem of political corruption. The things that have come to light recently about Louisiana legislators came to light as a result of an FBI probe. Whether we need more involvement of the Federal Government in looking at the issue of local and State political corruption is one that I think needs to be considered very carefully. The second is the problem of problem gambling or compulsive or addictive gambling behavior. The industry has acknowledged that it is a problem that they are looking at. Quite often, when we look at it in the context of one government, of a State or local government, they really cannot look at it because the argument is incrementally, if you introduce a casino into one jurisdiction, there are so many other opportunities. You can get on the Internet. You can get on the telephone and place a sports bet in the Bahamas or in other jurisdictions outside of this country. Will the introduction of a casino create more problem or addictive gambling behavior? I think that is a very difficult question to answer in any context but a national context. I think if we are going to focus a national study, and whether that can be done with existing Federal Senate and House Committees and panels is one that I am certainly not an expert on, but I believe from my analysis of gambling that if we are going to focus on it, I think we need to focus on the elements of gambling that are different from the elements of other business. I think we have to be very careful and the Federal Government has to be very careful in a free market economy to allow business to operate if that business does not harm other individuals and people, and that is where the two areas of political corruption and problem gambling or addicting gambling behavior, I think, are important. Mr. Chairman, thank you very much. [The prepared statement of Mr. Ryan follows:] TESTIMONY ON THE ECONOMIC IMPACT OF CASINO GAMBLING Prepared for: SENATE COMMITTEE ON GOVERNMENTAL AFFAIRS Prepared by: TIMOTHY P. RYAN, DEAN COLLEGE OF BUSINESS ADMINISTRATION The introduction of casino gaming into the economy has become one of the most hotly debated topics in economic development and public policy in America today. On the positive side, proponents promise new jobs, new state and local tax revenue, the ability to attract new visitors into a community, and revitalization of distressed economies. On the negative side, opponents point to increased crime rates, increased social problems such as addictive gambling behavior, negative influence on the political process, and only short-term and mostly illusionary economic gains. The one thing that both sides seem to agree on is that the gaming industry in the United States is growing rapidly as community after community and state after state turns toward casinos. From 1990 to 1994, casino revenue in the United States doubled, from $8.3 billion to $16.5 billion. In 1995, only two states Hawaii and Utah - - have no forms of legalized gambling. States like Louisiana and Mississippi have, in the past few years, legalized several forms of gambling -- lotteries, riverboat casinos, video poker, dockside casinos, and a land-based casino. Indian reservation casinos are growing at an enormous rate of growth. Out of all this activity, local, state and federal governments ponder public policy issues. The purpose of these committee hearings is to debate the wisdom of passing federal legislation establishing a commission to study the impact of gambling. I am an economist and have spent the last six years studying the economic impact of gambling on the local (New Orleans and Louisiana) and national economies. The city of New Orleans has recently signed a contract with a consortium of universities in the city of New Orleans to study the impact of gambling on the New Orleans economy over a five year period. I am one of the leaders of that project. That study will document the following aspects of the impact of gambling. II. III. iii. Will the casinos keep local residents and tourists in the city to gamble as opposed to travelling to other gambling venues A. B. Does the Introduction of Gaming into a Community Increase Problem or Addictive Gambling Behavior? Does the Introduction of Gaming Contribute to Social Breakdown? |