STATEMENT OF HON. FRANK R. WOLF, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF VIRGINIA

Mr. WOLF. Thank you, Mr. Chairman.

Mr. Hyde, Mr. Conyers and members of the committee, I appreciate the opportunity to testify on the legislation to create a national commission to study the effects of gambling. The legislation is simple. It would charge the Commission to make an objective and comprehensive legal and factual assessment of gambling.

This legislation does not outlaw gambling. It does not tax gambling. It does not regulate gambling. It merely recognizes that gambling is spreading throughout the country like wildfire, with some form of gambling now legalized in 48 States, and it needs a hard look. This 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 an informed decision.

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 and suicides and increased teenage gambling and a cannibalization of businesses.

When I read the story about Jason Berg, a 19-year-old from the small Iowa town of Elkader, ending his life after running up a large gambling loss and leaving a note that read, "I am out of control," I am concerned.

When I hear about a 41-year-old suburban salesman, Howard Russell, who shot himself in a parking lot of the Grand Victoria casino in Elgin, IL, after losing more than $50,000, I get concerned.

How many other compulsive gamblers turn to violence after losing their life savings? Congress should act now to investigate these reports instead of waiting, as it did with the budget deficit, until there is an almost insurmountable problem.

Critics of this Commission claim that gambling is a State issue and that Congress should not be involved in studying it. Let me dispel that myth up front.

First, gambling is commerce and, as such, is subject to Congress' commerce power under article I, section 8, of the Constitution. Also, public corruption and other criminal cases associated with gambling are investigated by the FBI. Furthermore, gambling is a nationwide phenomenon. Gambling in one State impacts the citizens of another. And, lastly, gambling interests can have their hooks into a State political structure, making it difficult for the State to make objective studies of gambling.

We recognize the States' role in this issue. That is why section. 3(a) of the bill states that one member of the Commission should be a Governor. It is time for the Federal Government to take a leadership role so that State and local communities have the facts when gambling interests come knocking on their doors.

Gambling interests criticize this legislation as the moral musings of the religious community. Supporters of H.R. 497 include 45 Republicans and 24 Democrats-Tom DeLay and Dave Bonior. Look at the list of supporters: The Washington Post, the Philadelphia In

quirer, and newspapers around the country, many States' attorneys general, Governors and others.

Let me just stress for the committee this is a bipartisan, nonideological coalition joined because of their sincere concern about the impact of gambling. It is not just the musings of some religious group. And I notice the opposition always says, in a demonizing way, it is the Christian Coalition. It is Mr. DeLay and Mr. Bonior and many in between.

Last year, Virginia blocked gambling interests' $1.1 million bid -to bring riverboat gambling to the Commonwealth. Voters in Florida rejected a $16 million effort to legalize gambling. And yet you see major political influence in every State being hired, including my State, to work on these issues.

Crime crime is a subject that the Commission will study. The Florida Department of Law Enforcement recently opposed legalized casino gambling because, and I quote, "Casinos will result in more Floridians and visitors being robbed, raped, assaulted and otherwise injured."

On April 11, a Washington Post article explained how law enforcement authorities uncovered, and I quote, "A sophisticated betting operation run by student bookies who not only mimicked the mob but worked with it." The article detailed how three New Jersey high school students "forced a 14-year-old schoolmate into a car, drove him to a housing project in Newark and dumped him there for failing to pay $500 in gambling debts."

Mr. HYDE. Mr. Wolf, could you bring your remarks to a close? Your time is up.

Mr. WOLF. I have so many others, Mr. Chairman. I would hope that I could have had 2 more minutes because I worked 7 months on this project, but I will bring it to a close.

Corruption-look at the list on corruption-from South Carolina, from Louisiana, from Missouri, from Arizona, from Kentucky, from West Virginia-and look at the statement and see all of the people who have been indicted.

Teenagers. We would make a demographic study. In Atlantic City in 1991 the New Jersey casinos ejected 21,838 persons under age from the casinos and prevented another 196 from entering. Read the Sports Illustrated piece.

The impact on business. Last year, and I am summarizing, in Mississippi, which has only had legalized gambling since 1992, $29 billion was gambled last year. And all of the retail sales in Mississippi were only $27 billion. More money was gambled than was spent on all retail sales. So we see what the impact has been on restaurants and legitimate business.

Pathological gambling-and I am summarizing-my goodness. You see the Gamblers Anonymous groups are spreading.

In conclusion, Mr. Chairman-and I summarized and I have left out four pages that I worked my heart out on for 7 months.

Mr. HYDE. Well, take all the time you want, Mr. Wolf. I am not going to be accused of shutting you up or anybody up. I am just trying to run an orderly hearing. Everybody has got a lot to say. Take all the time you want.

Mr. WOLF. No, Mr. Chairman, I am going to end.

Noted columnist William Safire recently called State-sponsored gambling "a $40 billion cancer, ravaging society, corrupting public officials and becoming the fastest-growing teenage addiction."

Government is supposed to be the protector of society, not the sponsor of its ruin. It is not supposed to be the predator or to invite the predator to come in and prey on its people. When I receive a phone call from a man whose wife committed suicide because she gambled her savings away, I get concerned.

And I reiterate again, Mr. Chairman, this legislation does not outlaw gambling. It does not. It does not tax gambling. I am not one who is a proponent, frankly, of taxing gambling. It does not regulate gambling. It merely recognizes that gambling is pervasive in our society and it needs a hard look. As legislators, we have a responsibility to take a look at it.

Mr. Chairman, I apologize for going over my time. I thank you very, very much. I yield back anything I have. Mr. HYDE. I thank the gentleman.

[The prepared statement of Mr. Wolf follows:]

PREPARED STATEMENT OF FRANK R. WOLF, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF VIRGINIA

Chairman Hyde, members of the committee, I appreciate the opportunity to testify on H.R. 497, legislation which would create a national commission to study the effects of gambling. This legislation is simple. It would charge the National Gambling Impact and Policy Commission to make an objective, comprehensive, and impartial legal and factual assessment of gambling.

Mr. Chairman, this legislation does not outlaw gambling. It does not tax gambling. It does not regulate gambling. It merely recognizes that gambling is spreading throughout the country like wildfire and it needs a hard look. This 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. When I read the story about Jason Berg, a 19-year-old from the small Iowa town of Elkander ending his life after running up a large gambling loss and leaving a note that read, "I'm out of control," I get concerned. How many other teenagers have taken their lives because of gambling debts? When I hear about a 41-year-old suburban salesman, Howard Russell, who shot himself in the parking lot of the Grand Victoria Casino in Elgin, Illinois, after losing more than $50,000, I get concerned. When the police found him he reportedly had $13 in his pockets. How many other compulsive gamblers' turn to violence after losing their life savings? Congress should act now to investigate these reports instead of waiting, as it did with the budget deficit, until there is an almost insurmountable problem. It is time this issue be given national attention through a comprehensive study.

Critics of this commission claim that gambling is a state issue and that the Congress should not be involved in studying it. Let me dispel that myth up front. First, gambling is commerce and as such is subject to Congress's commerce power under Article 1, Section 8 of the Constitution. Also, public corruption and other criminal cases associated with gambling are investigated by the Federal Bureau of Investigation. Furthermore, gambling is a nationwide phenomenon. Gambling in one state impacts the citizens of another. Lastly, gambling interests have their hooks into the state political structure making it difficult for states to make objective studies of gambling. We recognized the states' role in this issue, and that is why section 3(a) of the bill states that one member of the Commission should be a governor. It is time for the federal government to take a leadership role, similar to President Reagan's National Commission on Pornography, so that state and local communities have the

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facts when gambling interests come knocking on their doors.

Gambling interests also criticize this legislation as the moral musings of the religious community. Supporters of H.R. 497 include: 47 Republican and 23 Democrats, many states' attorneys general, governors, and newspapers such as The Washington Post and The Cincinnati Enquirer. This is a bipartisan, non-ideological coalition joined because of their concern about the impact of gambling.

Gambling is one of the fastest growing industries in the nation and is becoming America's pastime. In 1993, according to U.S. News and World Report, Americans made more trips to casinos than they did to Major League ballparks. At the turn of the century, gambling was prohibited. Today, however, there are 37 state lotteries, casinos operate in 23 states, and 95 percent of all Americans are expected to live within a three- or four-hour drive of a casino by the year 2000. Only two states, Hawaii and Utah, forbid wagering.

Last year, Virginia blocked gambling interests' $1.1 million bid to bring riverboat gambling to the Commonwealth and voters in Florida rejected a $16 million effort to legalize casinos. Voters in Minnesota, Nebraska, Rhode Island, and Wyoming did the same. Why are gambling interests willing to bet so much on legalizing gambling? Why, according to The Boston Globe, are they hiring politically connected consultants to convince state legislators that gambling is a sure bet? Why have they hired some Massachusetts lobbyists at $65,000 per month plus expenses to "consult" on the legalization of gambling? I am concerned that the flood of casino money into the states will drown out the voices of ordinary citizens, and overwhelm state public officials.

Crime is a subject that the Commission would study. The Florida Department of Law Enforcement recently opposed legalizing casino gambling because "casinos will result in more Floridians and visitors being robbed, raped, assaulted, and otherwise injured." Jim Moody, chief of the Organized Crime Section, FBI, in a "60 Minutes" interview stated, "[G]ambling itself is probably the biggest producer of money for the American La Cosa Nostra [that] there is."

Organized crime does not only target adults. An April 11 Washington Post article explained how law enforcement authorities uncovered "a sophisticated betting operation run by student bookies who not only mimicked the Mob, but also worked with it." The article detailed how three New Jersey high school students "forced a 14-year-old schoolmate into a car, drove him to a housing project in Newark and dumped him there for failing to pay $500 in gambling debts..." In another case, a 16-year-old "prostituted his girlfriend around school to raise money to pay his debts."

Political corruption is another problem and not one confined to gambling's tawdry history which the commission should review. Federal law enforcement agents are currently investigating possible political corruption in Louisiana tied to gambling. Four Louisiana state senators have reportedly stepped aside because of an FBI investigation into the legislative influence wielded by the gambling industry. Similarly, the speaker of the Missouri House of Representatives has resigned in a cloud of gambling related political corruption. In August 1991, FBI agents in Columbia, S.C., wrapped up "Operation Lost Trust," a sting that resulted in the convictions of 17 South Carolina legislators, lobbyists and other officials for accepting bribes during the 1990 legislative session in exchange for their votes to legalize horse and dog track racing. Six Arizona legislators pleaded guilty in 1990 for accepting bribes on a bill to legalize casino gambling. Seven Kentucky legislators, including the speaker of Kentucky's House of Representatives, were found guilty of accepting bribes, extortion, racketeering under RICO and making false statements. In 1990, a former West Virginia Governor pleaded guilty to taking a bribe from racing interests. In 1994, a West Virginia lottery director was sentenced to federal prison for rigging a video lottery contract.