Because of crime associated with casino gambling, regulatory agencies in New Jersey spend over $59 million annually to monitor the city's casinos. In 1992, the Wall Street Journal reported that since 1976, Atlantic City's police budget has tripled to $24 million while the local population has decreased 20 percent. During the first three years of casino gambling, Atlantic City went from 50th in the nation in per capita crime to first. Overall, from 1977 to 1990, the crime rate in that city rose by an incredible 230 percent. Organized criminal activity is so pervasive that the American Insurance Institute estimates that 40 percent of all white collar crime is gambling related. The Commission would make a demographic study of gambling including determining to what extent teenagers are gambling. In 1991 New Jersey casino security ejected 21,838 persons under the age of 21 from casinos, and prevented another 196,707 from entering. Research indicates that as many as 7 percent of teenagers may be addicted to gambling. Sports Illustrated recently ran a three-part series explaining that gambling has infiltrated college sports, is popular and pervasive on college campuses and is destroying young lives. Local Washington, D.C., area papers have chronicled the sad story of the University of Maryland standout quarterback who was suspended by the NCAA for betting on college sports events. Legalized gambling would increase pressure on students to place bets with money they often don't have. The Commission would make detailed findings of gambling's impact on 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. As gambling proliferates, jobcreating wealth is shifted from savings and investment. Gambling may cannibalize other businesses. For example, the number of restaurants in Atlantic City declined from 243 in 1977, the year after casinos were legalized, to 146 in 1987. In the four years following the introduction of casinos in Atlantic City, the number of retail stores in that city declined by about a third. Recent news reports indicate that attendance and revenues at the Iowa State Fair declined by over 10 percent this year due in part to the establishment of a horse track and a slot machine casino near Des Moines. One reason this objective study is needed is because states, using gambling generated studies, frequently overestimate the financial impact of gambling revenues. Professor Robert Goodman of the University of Massachusetts/Amherst found that of 14 state studies of gambling, most were written with a pro-industry spin and only four were balanced and factored in gambling's hidden costs. In New Jersey horse racing alone accounted for about 10 percent of state revenue in the 1950s. Today, despite the addition of a lottery and 12 casinos, the state earns only 6 percent of its revenue through gambling. In a study about casinos in Florida, the Executive Office of the Governor concluded that annual projected state tax revenues related to casinos are sufficient to address only 8 to 13 percent of annual minimum projected costs related to casinos. That means for every $1 in tax revenues, the costs to taxpayers to pay for gambling is $8 - $13. It also projects that crime and social costs attributable to casinos would total at least $2.16 billion annually. States considering legalizing gambling need to know the truth about gambling tax revenues. 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 (including apprehension, adjudication, and incarceration costs), as well as harder-to-price costs such as suicide, family disintegration, and even increased car accidents. Problem and pathological gambling is tearing at the social fabric of American families--much like drug and alcohol abuse. A recent article written by a Kansas City Star reporter told the tragic story of how gambling addiction led a mother of two to kill herself because she gambled the family savings and house away on Illinois casino riverboats. Within two 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. Evidence shows that pathological gamblers engage in forgery, theft, embezzlement, drug dealing and property crimes to pay off gambling debts. Various studies indicate that the mean gambling related debt of people in compulsive gambling therapy ranged from about $53,000 to $92,000. Compulsive gamblers in New Jersey were accumulating an estimated $514 million in yearly debt. They are responsible for an estimated $1.3 billion worth of insurance-related fraud per year which is borne by the rest of us in the form of increased premiums, deductibles, or copayments. The Commission should also review the costs and effectiveness of state and federal gambling regulatory policy, including whether Indian gaming should be regulated by states as well as the federal government. Indian gambling accounts for about 5 percent of all casino gambling and that figure is growing at an extraordinary rate. Unlike New Jersey and Nevada which have extremely costly, mature, and seemingly effective regulatory structures, the federal effort to regulate Indian gaming to prevent the infiltration of organized crime is scanty at best. There are less than 30 staff persons to regulate Indian gaming operations throughout the country. The Commission should recommend whether or not Indian gaming should be regulated by the states. Mr. Chairman, noted columnist William Safire recently called state-sponsored gambling "a $40 billion-a-year cancer ravaging society, corrupting public officials and becoming the fastest growing teen-age 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 invite the predator into America's communities. When I hear stories of mothers dragging their young children into casinos to plead with dealers to turn their husbands away from the tables, I get concerned. When I receive a phone call from a man whose wife committed suicide because she gambled their life savings away, I get concerned. And when I receive a letter from a Nevada man who is housing a young construction worker who gambled away his life's savings and whose gambling addiction led to drug use and divorce, I get concerned. 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 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 ask unanimous consent that my full statement and extraneous materials be included in the record. A18 FRIDAY, SEPTEMBER 22, 1995 The Washington Post AN INDEPENDENT NEWSPAPER T Social Roulette HE SPREAD of legalized gambling is the political issue that has yet to roar, but may do so soon-and should. In a decade, casino gambling has spread from two states to at least 35. Gambling is done on riverboats, on Indian reservations, in well-established downtowns. Native American tribes (including some that have rediscovered their existence for the primary purpose of setting up casinos) are the best publicized entrepreneurs in this field, partly because they can operate free of many regulations. Estimates on how much money is involved here are all over the lot, depending on what sorts of gambling are counted in, but a study by U.S. News & World Report concluded that counting state lotteries and the like, $330 billion was wagered legally in 1992, up 1,800 percent since 1976. Rep. Frank Wolf (R-Va.), along with Sens. Paul Simon (D-III.) and Richard Lugar (R-Ind.), thinks the country ought to take a long look as it hurtles toward turning itself into one gigantic open town. They have introduced useful bills to create a national commission that would undertake, as Mr. Wolf puts it, "an objective, credible and factual study of the effects of gambling" on communities, including its impact on crime rates, political corruption and family life, and also to examine its economic costs and benefits. Those pushing casinos into communities make large claims about their economic benefits, but the jobs and investment casinos create are rarely stacked up against the jobs lost and the investment and spending forgone in other parts of a local economy. The commission's study could be of great use to communities pondering whether to wager their futures on roulette, slot machines and blackjack. The Wolf bill wants a report from the commission in three years; the Simon-Lugar bill wants it in half that time. We're inclined to think the quicker the better. The "gaming industry," as it calls itself, is fighting these proposals. One hopes that at nextweek's House Judiciary Committee hearing on the Wolf bill, gambling's representatives will be asked why they fear a national commission. If all their claims about gambling's beneficial effects are true, a commission would presumably verify them. If critics of gambling are wrong in seeing it as being linked to crime, corruption and social breakdown, the commission would presumably find that out too. Could it be that those with an interest in the spread of gambling fear what a fair study will find? True to form, gambling now has its own trade association, and gambling interests-tribal and others-have stepped up their campaign contributions to both parties. To pick a few examples: Golden Nugget, the well-known Las Vegas casino, gave $230,000 in "soft money" to the Republican Party last year; Frank Fertitta Jr., chairman of Station Casinos Inc., also gave $230,000 to the GOP; the Mashantucket Pequot Tribe gave $365,000 to the Democrats in the 1993-94 election cycle and covered its bets with $100,000 to the Republicans in November of 1994. The country is in the presence of a powerful and growing industry and an important social phenomenon. At the least, the federal government should help the country figure out what is going on, which is why what Mr. Wolf, Mr. Lugar and Mr. Simon are doing is so important. The Boston Globe WILLIAM O. TAYLOR, Chairman of the Board and Publisher MATTHEW V. STORIN, Editor STEPHEN E. TAYLOR, Executive Vice President WILLIAM B. HUFF, Executive Vice President H.D.S. GREENWAY, Editor, Editorial Page HELEN W. DONOVAN, Executive Editor GREGORY L. MOORE, Managing Editor Founded 1872 CHARLES H. TAYLOR, Publisher 1873-1982 WILLIAM O. TAYLOR, Publisher 1928-1955 WM. DAVIS TAYLOR, Publisher 1955-1977 ***JOHN L. TAYLOR, President 1969-1975 LAURENCE L. WINSHIP, Editor 1955-1965 THOMAS WINSHIP, Editor 1965-1984 No dice on casino If Gov. Weld succeeds in making Massachusetts a gambling center, the state will have less chance of enriching itself than will the sad souls methodically feeding the 2,800 one-armed bandits he plans to install. We hope Weld, who has shown a refreshing capacity for reconsideration, comes to his senses *before signing an agreement tomorrow with the Wampanoag tribe and the owners of the state's four racetracks. If he does not, the Legislature :should kill the deal fast. In roulette, at least, one number out of 38 will be a winner. With the casino/slot machine proposal, every argument is a loser. Weld wants to let the Wampanoag tribe build a casino in New Bedford, for which it would pay the state an estimated $90 million a year. The horse and dog tracks would get 700 slot machines each. The core problem is simple: the resulting disruptions to the local job market, the local economy and the state economy would likely do far more harm than good. Promoters say 5,400 permanent jobs would be -created at a casino in New Bedford. But Illinois and Mississippi found job losses in nearby busi-nesses offset the new gaming jobs. Often, casinos -have turned the regional economy sour. Gamblers generally don't stray from the casino itself, so local businesses suffer, some severely. New Jersey and South Dakota casinos hurt retailers - and property values. The Massachusetts Restaurant Association opposed the New Bedford casino after completing a national study. “Gaming sucks discretionary income out of the economy," says Peter Christie of the MRA. "Our industry really gets hurt.” As for the state, the deal talks of $90 million from the tribe, less payments for Bristol County, Fairhaven and a board of regulators. The net to the state might be $75 million, plus an amount from the tracks of perhaps $50 million. Yet the new gambling, particularly the racetrack slot machines, would surely take revenues away from the state lottery, which last year sent $700 million to the state and municipalities. Even a drop of less than 10 percent would cut the state benefit by half, without beginning to figure lost revenues from other sources, such as restaurants. When the costs of increased crime, welfare and compulsive gambling were factored in, the results were shocking. Robert Goodman, who headed a national study, says the cost of casinos in Wisconsin was estimated at between $318 million and $493 million a year. State-promoted gambling has fed corruption in Louisiana. Problem gambling has tripled in Iowa and afflicts six percent of the population in Connecticut. Casinos and slot machines offer no rainbow for the gamblers, the governor, or Massachusetts. Boston Globe, Sept 28, 1995 CASINO GAMBLING It is time for an objective assessment For the past few years, casino gambling has been sweeping across America like a wind-fanned prairie fire. In less than a decade, the number of states that allow casino gambling has mushroomed from two to at least 35. And those states that haven't jumped on the bandwagon are being warned that neighboring states will steal their economic thunder if they don't get on board. So far, the Texas Legislature has decided against taking a bite from the tempting apple offered by gambling lobbyists. But the casino issue is certain to be raised again when state lawmakers reconvene in 1997. What's missing from the stampede has been an unbiased look at the overall social and economic impact of gambling on the states where it is permitted. Gaming companies tout the billions of dollars that casinos generate, while antigambling groups point to an accompanying increase in crime and decline in retail spending. Rep. Frank Wolf, R-Va., wants to cut through all the rhetoric and get to the facts. He has introduced legislation that would create a national gambling impact and pol icy commission. The nine-member commission would provide an objective, credible and factual study on the effects of gambling in this nation. Members of the panel would be appointed by President Clinton, House Speaker Newt Gingrich and Senate Majority Leader Bob Dole. And the panel would be dissolved after it finishes its assignment. Under Mr. Wolfs measure, the commission would have to complete its report within three years. A companion bill sponsored in the Senate by Richard Lugar, R-Ind., and Paul Simon, D-Ill., would place an 18month deadline on the panel. The casino issue has become too important to be resolved in a vacuum. States cannot and should not make decisions based primarily on anecdotal evidence. The House Judiciary Committee will hold a hearing today on Rep. Wolf's measure. We urge Congress to move quickly to establish this commission. It's time to take a thor ough, objective look at legalized gambling. |